The most successful co-working company is not WeWork, and it might surprise you that the most successful co-working company is not a co-working company at all – it is Starbucks. Go into any Starbucks around the country and you will find numerous people with their laptops, maybe working, maybe hanging out, maybe waiting to run into a potential customer. Either way, they get a great atmosphere, cool experience, and it’s totally free, except for the $4 latte. SoftBank just made a $300M investment in WeWork which honestly, could go either way. It’s definitely a long-term play that capitalizes on the growing gig economy and the fact that people are hiring fewer and fewer employees. Current co-working spaces have been met with limited success, some have flourished while others have faltered. Branded companies like WeWork are getting a lot of local and independent competition from entrepreneurs who feel like they can simply buy a space and the people will come. And those people will pay. A lot. Per square foot. However, most gig economy workers don’t have the bank account, the wallet or the desire to spend a set amount each month on a place they almost certainly won’t run into future customers. Head into a Starbucks and you will network with almost everyone you want to and for free, and maybe even get some business out of it. To target and attract millennials in the near-term, I think the success of these co-working spaces hinges on (1) an urban location with a lot of foot traffic; (2) amenities offered within (think a premium branded coffee bar) and nearby; and (3) a free (or almost free) place to work. Instead of charging for a work space, let them buy other goods, services and experiences, a la Starbucks. If they want premium space or some peace and quiet, co-working managers will be able to charge a fee. Or when free space runs out, let them rent a table and chair by the hour. Unfortunately, the most successful co-working companies may have to give up charging for space until they successfully build their “it” factor, where millennials can see and want to be seen. Until then, you’ll find them at Starbucks.  Learn more about he SoftBank Investment Here.

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