How Coworking Spaces Are Transforming the Way Startups Work

For the budding entrepreneur, acquiring the right premises at the right cost is one of the major considerations when in the “startup stage.” These days, the ability to work from home has taken some of the urgency from this challenge. But for many startups, this creates its own issues.

Enter the coworking space.

These innovative environments offer more than just a desk and Wi-Fi. They provide a collaborative atmosphere, networking opportunities, and a solution to the isolation that can come from working remotely.

Let’s look at how the ascent of coworking spaces has reshaped how startups work.

The Challenges and Considerations of Modern Workspaces

A good first step in understanding why coworking spaces are transforming how startups work is to understand the challenges associated with traditional work arrangements.

  • Home offices: These offer cost-effectiveness and flexibility. However, they can lead to feelings of isolation, potential distractions from household chores or family, challenges in maintaining a professional image during meetings, and space limitations as startups grow.
  • Commercial office space: While these spaces provide a professional setting, they come with high costs due to long-term leases and overhead expenses. Additionally, they might lack the flexibility needed to accommodate fluctuating team sizes or needs, and being in isolated office suites can limit networking opportunities with other businesses or professionals.

In essence, coworking spaces offer the best of both worlds, with most good operations offering services and facilities that specifically target these challenges. For startups, this means there are a wide range of benefits from going down the coworking space route.

The Benefits of Coworking Spaces for Startups

The attributes required to succeed in today’s business environment include collaboration, cost-efficiency, and flexibility. In other words, all the attributes that don’t come easily to home and commercial office spaces.

Bridging this gap is a foundational aspect of what coworking spaces are. But how do they achieve this? We can understand this more thoroughly by looking at the specific benefits of coworking spaces:


Tight budget constraints are the norm for most startups, with business owners required to spend a considerable amount of their initial funding on establishing themselves in their industry, though only expecting to turn a profit in an average of 3-4 years. Considering that experts advise small business owners to spend anywhere between $300-$1230 per month per employee on leasing commercial offices, a considerable amount of funding is often dedicated solely to this need.

If startups could find a way to reduce this expense in any significant way, the likelihood of achieving profitability in a shorter period of time becomes much more realistic. This is where the growing popularity of coworking spaces begins to represent an economical solution for startups.

With access to much of the same amenities as business owners would expect in a traditional office space, though without the burden of a long-term financial commitment, startup owners can transform the way they approach their first few years of business. The potential benefits of this one simple change can be seen in the average lease terms for commercial and coworking offices, with the former landing anywhere between one to five years and the latter averaging out at six months.

Networking and Collaboration Opportunities

Startups thrive on connections, collaborations, and the exchange of ideas. Traditional office setups, while providing a dedicated workspace, often isolate businesses from the broader professional community. On a smaller (though arguably equally important) scale, staff working in traditional offices may be as much as 13% less productive than those engaged in alternative work models, with isolation from outside collaboration potentially contributing to this statistic.

Coworking spaces break down the barriers traditionally associated with commercial offices, bringing together a diverse variety of professionals who may approach their work in different ways. This ultimately helps to promote a vibrant ecosystem of networking and collaboration. 

In coworking spaces, startups find themselves surrounded by potential mentors, partners, and even clients, opening up new avenues for innovation that may give startups an edge over their competitors. Casual conversations by the coffee machine can evolve into fruitful partnerships, and shared challenges can lead to collaborative solutions. In essence, coworking spaces often become melting pots, driven by the collective expertise and experiences of all active members.

Flexibility and Scalability

One of the standout advantages of coworking spaces is their inherent flexibility, a benefit not commonly found within lengthy and restrictive commercial leases. Unlike the rigid structure of traditional offices, coworking spaces can offer:

  • Adaptable spaces: Whether a startup is a solo venture or a growing team, spaces can be adjusted accordingly. If business owners find their staff benefit from an open office layout, arrangements can be easily made to accommodate this desire, with equally simple options to adjust space, design, and technological needs.
  • Short-term commitments: Accurately predicting a startup’s growth rate is a notoriously difficult task, though the average forecast annual growth rate for a new company’s first year is almost 270 percent. Rather than committing to a space capable of accommodating this growth, coworking spaces can be gradually scaled as desired.
  • Flexible working hours: One of the benefits of running a startup is that teams can adapt their working arrangements to best suit their own needs. Traditional office leases usually outline the hours in which a workspace can be used for business activities, whereas many modern coworking spaces offer 24-hour access to active members.

This adaptability ensures startups remain agile, focusing on growth on their own terms without being bogged down by the inflexible workspace constraints associated with traditional offices. 

Helping Establish a Professional Image

Technology can undoubtedly improve the customer experience. However, while a cat wandering across your keyboard in a remote meeting might become a viral hit – it is unlikely to reflect well in the eyes of potential clients or investors. First impressions matter, especially for startups looking to establish credibility and trust.

While home offices have their advantages, enabling startups to reduce costs and provide staff with more freedom to work in an environment better suited to their needs, they might not always convey the desired professional image during critical meetings with clients, investors, or partners. Thankfully, coworking spaces can offer the best of both worlds with benefits such as:

  • Furnished meeting rooms: Startups gain access to professional equipment like smart boards, video conferencing tools, and remote collaboration software without needing to invest in these technologies themselves. This enables owners to promote a professional image while reigning in avoidable expenses.
  • Prestigious addresses: To some investors, the location of a startup’s business address can be a signifier of the company’s ambitions. Renting out a coworking space in a respected area can be a cost-effective way for smaller companies to gain this benefit.
  • Professional environment: While working from home has been shown to improve productivity and engagement in some employees, there are still benefits to working in a professional environment. Opting for a coworking space enables startups to foster a professional workplace culture while still giving staff some personal freedom.

Essentially, coworking spaces help startups transform the way teams develop a positive work environment, equally balancing flexibility and professionalism to best suit unique requirements.

Fostering Creativity and Innovation

Startups thrive on innovation and creativity. Coworking spaces are natural incubators that allow the seeds of ideas to flourish and blossom. Effectively, they can become part of the creative design process.

The open layouts and communal areas encourage spontaneous discussions, brainstorming sessions, and idea-sharing. Surrounded by individuals from various industries and backgrounds, startups can gain fresh perspectives, challenge their own viewpoints, and ignite innovative solutions. It’s an environment where creativity doesn’t just thrive; it blossoms.

The Takeaway

It is a sad fact that 90% of startups fail. While a coworking space is unlikely to be a magic bullet, it can alleviate many of the challenges that can trip up a fledgling business.

By reducing costs, creating a professional image, and nurturing business relationships, coworking spaces can be the difference between success and becoming an unwanted part of a depressing statistic.

This is ultimately why coworking spaces are transforming how startups operate, providing business owners with the tools they need to adapt workplace cultures in line with specific and potentially malleable requirements, offering more freedom and flexibility for innovation to thrive.