Research Policy 51 (2022) 104447

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Research Policy
journal homepage: www.elsevier.com/locate/respol

Coworking spaces: An overview and research agenda

Travis Howell *
University of California, Irvine Paul Merage School of Business, 4293 Pereira Dr, Irvine, CA, 92697, USA

A R T I C L E I N F O A B S T R A C T

Keywords: In the past decade, coworking spaces have emerged as a new and promising phenomenon within entrepre­
Entrepreneurship neurship. Due to its prevalence, popularity, and potential for disruptive change, coworking is increasingly
Coworking Spaces relevant to theory, practice, and policy in entrepreneurship, yet its implications are largely unstudied given the
Entrepreneurial Support Organizations
rapid rise of the phenomenon. Overall, more research is needed to inform owners, policy makers, and entre­
preneurs regarding the effects of this new organizational form. This study takes an exploratory empirical
approach with the goal of shedding light on the current landscape of coworking. By so doing, I provide an initial
foundation for research on the coworking movement in entrepreneurship and the various research streams it can
enrich.

1. Introduction significantly higher prices and under more flexible lease terms, such as
month-to-month1. These tenants typically include entrepreneurs, free­
Real estate frequently acts as a constraint for entrepreneurs. Tradi­ lancers, remote workers, and other independent or nontraditional
tional office space is often too expensive, especially for entrepreneurs workers who cannot otherwise afford their own office space. In addition
with few if any resources at hand. In addition, traditional office spaces to providing workspace, coworking also offers a community of other
typically require tenants to sign multi-year leases, often a 3 to 5-year entrepreneurs, all working separately on their own ventures, but
minimum commitment. Given the nascent and unpredictable nature of working together in the same location. Overall, coworking represents a
new ventures, entrepreneurs are understandably hesitant to make such new organizational form and business model innovation, and provides
long-term commitments, as it is impossible to know how quickly they unique solutions that are only possible due to the concentration of en­
will grow and need to upgrade their office space, or whether they will trepreneurs in one physical space.
even be in business after a few months. As a result of these challenges, Though coworking holds considerable promise, the concept is still
many entrepreneurs opt to start in a home office, dorm room, kitchen, or relatively new. Mostly unheard of ten years ago, the global number of
garage. Yet, while these spaces are inexpensive and convenient, they are coworking spaces has grown dramatically in recent years. For example,
also limiting in that they do not provide an ideal space to manage a team the Global Coworking Survey (Deskmag, 2019) estimated that only
of employees or host clients. In addition, entrepreneurs working at home about 160 coworking spaces existed worldwide in 2008, whereas in
also tend to experience loneliness and feelings of isolation, which 2018 there were close to 19,000 (see Fig. 1). As entrepreneurs (espe­
amplify the emotional ups and downs of founding a new venture. cially millennials) flock to these spaces in droves, investors have taken
In the past decade, however, a relatively new and promising phe­ notice. Many of the world’s largest landlords are investing heavily in
nomenon has emerged. I refer to coworking spaces, or subscription-based these spaces, as they have been one of the “few bright spots in the
workspaces in which individuals and teams from different companies work in office-market during the economic recovery,” making them “one of the
a shared, communal space. The coworking business model is essentially few sources of demand” (Wall Street Journal, 2018). As coworking has
rental arbitrage. Coworking companies (1) rent buildings from property become more popular, countless entrepreneurial websites, blogs, mag­
owners under long-term, multi-year leases, (2) transform the space by azines, and other news sources have addressed the recent trends in
adding common areas, cafés, and other community-oriented features, coworking and discussed what it might mean for entrepreneurship and
and then (3) rent the space out more fractionally to tenants at the future of work. Overall, many consider the rise of coworking to be

* Corresponding author at: Travis Howell, Strategy Area, Paul Merage School of Business, University of California, Irvine.
E-mail address: [email protected].
1
Although membership fees represent the main source of revenue, coworking spaces also offer other services for a fee, such as snacks/drinks, car rentals, events/
trainings, conference room reservations, and other à la carte amenities.

https://doi.org/10.1016/j.respol.2021.104447
Received 26 June 2020; Received in revised form 22 November 2021; Accepted 26 November 2021
Available online 13 December 2021
0048-7333/© 2021 The Author(s). Published by Elsevier B.V. This is an open access article under the CC BY license (http://creativecommons.org/licenses/by/4.0/).
T. Howell Research Policy 51 (2022) 104447

Fig. 1. Global Number of Coworking Spaces and Members by Year.

Note: Source: Deskmag (2019).

one of the most prevalent trends in recent entrepreneurial activity industry will likely experience consolidation (Klepper, 1996). Many
(Kreamer, 2012). coworking spaces are currently funded either fully or partially by local
Due to its prevalence, popularity, and potential for disruptive governments, universities, and corporations, and these stakeholders will
change, coworking has potential implications for many different orga­ be forced to decide whether these spaces are worthy of continual
nizational theories, yet its implications are largely unstudied given the funding.
rapid rise of this new organizational form. Although some work ad­ Overall, more work is needed to inform owners, policy makers,
dresses the implications of accelerators and incubators (Cohen et al., practitioners, and researchers regarding the effects of coworking for
2019; Hallen et al., 2020; Rothaermel and Thursby, 2005a, b), cow­ entrepreneurs. Given the urgency of studying the coworking phenome­
orking spaces are different in fundamental ways, and thus require non now, I follow the example of past studies examining early-stage
separate attention. For example, whereas accelerators and incubators entrepreneurial phenomena such as crowdfunding (Mollick, 2014), ac­
typically have a central organizing hierarchy and are structured in terms celerators (Cohen et al., 2019), and the maker movement (Browder,
of programming or length of stay, coworking spaces have little to no Aldrich, and Bradley, 2019) by taking an exploratory empirical
programmatic structure, and thus the sense of community that prevails approach. An exploratory method such as this is appropriate for an
in the space is created from the bottom-up rather than the top-down. evolving topic in the evolving field of entrepreneurship (Mollick, 2014;
This causes organizational boundaries to be blurred and more fluid in Aldrich and Baker, 2000; Busenitz et al., 2003; Cornelius et al., 2006), as
coworking spaces, with entrepreneurs identifying not only as members it serves as a useful foundation to better understand the role of cow­
of their own ventures, but also as members of the coworking space and orking in supporting entrepreneurship, which is relevant for future
community in which they are nested. Furthermore, gathering people studies using coworking as a context to test other theories, as a phe­
that are self-employed or working for small firms in close proximity has nomenon encountered while studying entrepreneurship more broadly,
many important implications for theories of interdisciplinary collabo­ or for studies using coworking spaces as a sampling strategy. Overall, the
rations, knowledge sharing and spillovers, and job mobility. Overall, goal of this paper is to (1) shed light on the ways in which coworking
coworking spaces offer an interesting and potentially fruitful context to spaces operate, how they vary, and how they differ from related phe­
study new questions and develop new theory in these areas. nomena (e.g., accelerators, incubators, etc.), (2) examine different ways
In addition to being relevant to several major organizational the­ in which entrepreneurs might (or might not) benefit from participating
ories, understanding the impact of coworking on entrepreneurship is in coworking spaces, and (3) explore which entrepreneurs benefit the
necessary as it has important policy implications. Because the coworking most.
industry as we know it is relatively new, it has not yet gone through a full A necessary clarification is that although coworking spaces are home
economic cycle. Once a recession or other shock occurs2, the coworking to a variety of participants (e.g., freelancers, remote workers, and other
nontraditional workers3), this study is focused specifically on the use of
coworking spaces by entrepreneurs. I do, however, take a more inclusive
2
One recent example is the case of the COVID-19 pandemic, which forced view of entrepreneurship relative to recent literature. As explained by
many coworking spaces to close their doors temporarily as various governments
issued “stay-at-home” orders. While the fallout from this virus is still evolving at
time of writing, it will likely force many owners and sponsors to decide whether
3
coworking spaces are worthy of continual funding. In addition, there are also In 2019, Coworker.com performed a study of 7,432 coworking users and
some predictions that coworking will be even more necessary and prevalent in found that 73% of coworking members were in startups or small businesses,
the post-pandemic world, as more companies will shift to remote work and thus 19% were freelancers or digital nomads, and the remaining 8% were employees
more individuals will need alternative workspace options. of corporations who were working remotely (Coworker.com 2019).

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Aldrich and Ruef (2018), entrepreneurship research has recently been coworking spaces because they see their work as meaningful, have more
focused on the “black swans” of entrepreneurship, referring to the job control, and feel part of a community. Spreitzer et al., 2015b, in
startup companies that receive venture capital funding and go public. contrast, focus on how large corporations can benefit from coworking,
These authors criticize this narrow focus and suggest that scholars finding it can help employees tap into new ideas, reduce real estate
should focus more on the more “mundane” or “ordinary” types of costs, and improve employee job satisfaction. Although these studies
business startups, which number in the hundreds of thousands. Cow­ validate the coworking phenomenon as a new organizational form and
orking spaces are an excellent context in which to do this, as they are provide valuable insights to practitioners, they focus exclusively on the
generally full of new ventures of variable type and quality, including coworking experiences of freelancers and remote workers, rather than
some black swans (and those striving to become one), consulting entrepreneurs. Their third study (Garrett et al., 2017) explores the for­
agencies, small businesses, and other "every day" entrepreneurs. mation process of a coworking space in the Midwestern United States.
The structure of this paper is similar to that of Cohen et al. (2019) Through qualitative interviews, they identify three important types of
and proceeds as follows. I first begin by reviewing the existing literature collective actions (endorsing, encountering, and engaging) that
on coworking spaces. I then describe the data sources used in the study, contributed to a sense of community within the coworking space.
which include a dataset of over 16,000 coworking spaces worldwide However, the authors readily acknowledge the limited data and scope of
collected by the online platform Coworker.com, as well as a their study, and express hope that future studies will explore “the
hand-collected dataset (including both quantitative and qualitative in­ growing trend of coworking” (Garrett et al., 2017:839).
formation) from Coworking Central, a large coworking space in the A handful of conceptual studies also discuss the implications of
eastern United States. Relying first on the Coworker.com data, I map the coworking (Bouncken and Reuschl, 2018; Parrino, 2015; Spinuzzi,
emergence of the coworking phenomenon and its key drivers, design 2012). For example, Bouncken and Reuschl (2018) develop a conceptual
choices, and differences from other entrepreneurial support organiza­ model of coworking that assumes entrepreneurial performance is
tions. Then, analyzing data from Coworking Central, I lay a conceptual improved by the learning process among coworking users. Similarly,
groundwork for how founders and their ventures might (or might not) Parrino (2015) discusses how physical proximity in coworking spaces
benefit from working in coworking spaces, and which types of entre­ might lead to knowledge exchange. In addition, Waters-Lynch and Duff
preneurs might have a better coworking experience than others. For (2019) explore the "sense of ambivalence" found among peers in cow­
example, I find that the primary motivation for joining a coworking orking spaces, and suggests that coworking spaces act as an "affective
space is not for the space itself, but rather for the community within the commons." In a more recent study, Resch et al. (2021) apply a Lacanian
space. These communities provide entrepreneurs with unique benefits framework to collaborative work in coworking spaces, and theorize how
that are only possible due to the concentration of entrepreneurs in one this trend is underpinned by affect-laden fantasies of community-driven
space. These advantages include connections (to potential customers, cocreation. While these studies offer valuable insights into some of the
hires, investors, etc.), solutions (ranging from important issues around micro processes of individuals in coworking spaces, they are primarily
product development to more mundane issues like setting up payroll), limited to anecdotes or conjectures, and often end by calling for more
energy/motivation (emanating from the passion and purpose with empirical research on the coworking phenomenon.
which the community pursues their projects), and social support Though few studies examine the coworking phenomenon directly,
(providing friendship and encouragement when times get tough). I also some studies examine it indirectly by collecting data on entrepreneurs
find that some entrepreneurs have better coworking experiences than within coworking spaces to answer other research questions (e.g.,
others. Specifically, minorities appear to have a better coworking Vandor and Franke, 2016; (Giudici, Combs, Cannatelli and Smith,
experience than non-minorities, women more than men, non-local en­ 2020); Engel et al., 2019; Kollmann et al., 2019). For example, Vandor
trepreneurs more than local entrepreneurs, founders more than em­ and Franke (2016) study whether the cross-cultural experience of en­
ployees, and entrepreneurs with a nonmarket logic more than those with trepreneurs affects their ability to recognize opportunities, and do so
a market logic. These findings, though correlational rather than causal, using a sample of entrepreneurs in two coworking spaces. Another
suggest that coworking spaces are especially beneficial for example is Kollmann et al. (2019), who study the work habits of en­
less-advantaged entrepreneurs, and provide clear indications of patterns trepreneurs using a sample of entrepreneurs in various coworking spaces
in coworking spaces that should generate and guide future theory and in Germany. These studies use coworking spaces simply for sample se­
empirical work. I conclude with several specific implications and sug­ lection, and the research questions do not focus on coworking itself or its
gestions for future research directions in the area of coworking. implications for entrepreneurs.
Though not specific to coworking, other relevant literature addresses
2. Prior literature how social interactions at work affect individual, team, and firm per­
formance (Hasan & Koning, 2019; Chan et al., 2014). In particular, prior
Despite the explosive growth of coworking, very little academic studies suggest that spatial proximity is one of the main drivers of peer
research addresses how this new organizational form might (or might effects, and that individuals located near each other are more likely to
not) assist entrepreneurs in structuring their social relations. One recent form social ties and share information (Marquis, 2003; Rosenkopf et al.,
exception is Clayton et al. (2018), who provide a discussion of how 2001; Stam, 2010). This effect has been shown at various levels and
various support organizations (including coworking spaces) advance the scales, including in the same room (Boudreau et al., 2017), same
commercialization of science. These authors suggest that coworking buildings (Allen and Cohen, 1969), and same region (Agrawal et al.,
spaces provide services that complement those of other intermediaries 2017). Social theory pays particular attention to social foci – a “social,
within entrepreneurial ecosystems. However, they also note that psychological, legal, or physical entity around which joint activities are
“research on the contribution of co-working spaces to science entre­ organized (e.g., workplaces, voluntary organizations, hangouts, fam­
preneurship is limited thus far”, and that “future empirical work will be ilies, etc.)” (Feld, 1981: 1016). These foci provide members with occa­
important for this field” (Clayton et al., 2018:111). sions for structuring their social relations, and can bring together people
The little research that directly addresses coworking has largely been who otherwise would remain unconnected. Coworking spaces represent
performed by Spreitzer and colleagues (Spreitzer et al., 2015a; Spreitzer a new type of social foci, and one that is worth studying.
et al., 2015b; Garrett, Spreitzer, and Bacevice, 2017). Two of these Overall, while these studies once again validate coworking as an
studies are published in practitioner journals and focus on the job increasingly important and new organizational form, we lack an in-
satisfaction of freelancers in coworking spaces (Spreitzer et al., 2015a) depth exploration of the coworking movement and its implications.
and advising large corporations if coworking is right for them (Spreitzer This paper takes steps to address this gap.
et al., 2015b). Spreitzer et al., 2015a find that freelancers thrive in

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3. Data and methods entrepreneurs expressed interest, the founders began to see commercial
potential and hired a staff with the goal of making the space profitable.
Given the lack of prior research and data on coworking, this study Currently, the majority of Coworking Central’s operations are covered
aims to provide a foundation for the study of coworking by taking an through rents, though a small portion is covered through corporate
exploratory empirical approach. Other recent papers that follow similar sponsorships. Membership is not limited to a specific sector, and there
exploratory approaches include Mollick (2014) who studies the are ventures from many different industries (software, biotech, con­
crowdfunding phenomenon, Cohen et al. (2019) who study the accel­ sumer products, etc.) working together in the same space. Although
erator phenomenon, and Browder et al. (2019) who study the maker there is no formal application process, there is an informal vetting
space phenomenon. process in which the space only accepts “entrepreneurs.” Conversations
I rely on data from two primary sources. The first is data from the with the space operators indicate this is mainly meant to exclude free­
online platform Coworker.com, which includes a large listing of cow­ lancers and remote corporate workers, so that the space can be filled
orking spaces around the world. This dataset is used to address the first with the founders of new ventures and small businesses. As a result, the
research question of this paper (i.e., to map the current landscape of space primarily attracts nascent entrepreneurs who have recently star­
coworking, and to provide details on its history, timeline, and key ele­ ted a new venture or small business.
ments). The second is a hand-collected dataset, including both quanti­ In terms of location, Coworking Central is located in a mid-size
tative and qualitative information, from a large coworking space in the metropolitan area that is frequently (though not always) included on
eastern United States. This dataset is used to address both the second various lists of “best places in the US to start a business.” That being said,
research question (i.e., to analyze the implications of coworking for the entrepreneurs I interviewed had mixed opinions on whether the area
entrepreneurs) as well as the third research question (i.e., to analyze had a strong entrepreneurial ecosystem. Some were unimpressed, saying
which entrepreneurs have the best coworking experience). I describe “there’s not enough funding here” or “there’s very few software guys here, in
both of these datasets below. general.” Location is thus one of the boundary conditions of these data, as
coworking experiences may differ for entrepreneurs located in strong vs.
3.1. Coworker.com data weak entrepreneurial ecosystems.
From 2017 to 2020, I worked with the managers of Coworking
Coworker.com is an online platform founded in 2015 that allows Central to collect data from a variety of sources, including:
users to search and review coworking spaces around the world. The site Surveys: From 2017-2020, I administered an annual survey to all
is currently the most comprehensive list of coworking spaces available, 800+ individuals working in the space. The survey focused on why they
and includes information on 16,169 coworking spaces in 172 countries chose to work at the space, what aspects of the space were most
on six continents, with more than 200,000 people using its services to important, what types of connections they had found through the space,
book coworking spaces. I scraped data (on prices, offerings, amenities, how actively involved they are in the coworking community, and the
reviews) from Coworker.com’s website on all spaces listed on their number of hours they spend at the space per week. Table 1 provides
platform as of May 2021. To supplement this quantitative data, I also information on the response rate from each year.
draw on 280 articles and reports (1,490 pages in total) published on Interviews. I performed 64 semi-structured interviews with entre­
Coworker.com that contain a rich overview of the history, current state, preneurs in the space. These interviews lasted 45 minutes on average,
and future of coworking. and focused on why they had initially chosen to work at the space, where
they had worked before coming to the space, what would make them
3.2. Coworking central data leave the community, what they viewed as the primary advantages of
working there, and what they viewed as the downsides of working in the
To supplement the Coworker.com data, I also performed a deep dive space.
analysis in one large coworking space that I refer to as Coworking Archival documents. I relied on archival documents obtained from
Central (pseudonym). Located in the eastern United States, Coworking various sources, including conversations that occurred in roughly 2,000
Central began operations in 2010 and rents space across four floors of a emails on the coworking space’s listserv. Analyzing these emails gave
downtown office building. Each floor consists of a mix of common areas me a better understanding of how the community was interacting. In
(wide, open spaces with couches, chairs, and tables) as well as small addition, I relied on documents obtained from the space’s website, local
private offices (holding between 2-10 people). Tenants can pay a small and national news articles written about the space, and internal reports
monthly fee for the right to work anywhere in the common areas, or for a from the coworking space’s management.
higher monthly fee can rent a private office designated only for their Other. Fourth, I spent over 100 hours working on-site and attending
team. Each floor also has conference rooms that groups can schedule for events at the space. Spending time in the space myself gave me a better
meetings, and small call rooms that individuals can schedule to make idea of what it is like for entrepreneurs to work there, and to a certain
phone calls. In terms of other amenities, a Coworking Central mem­ degree, it allowed me to experience what they experience.
bership comes with free coffee, WiFi, facilities maintenance, security,
and a stocked snack bar. 4. The coworking movement
Coworking Central was founded by two serial entrepreneurs with the
philanthropic goal of revitalizing the city’s economy. However, as more In this section I rely on the data from Coworker.com to illustrate the

Table 1
Coworking Central Survey Response Rates.
Survey year

2017 2018 2019 2020

Individual response rate 357 / 884 = 40% 259 / 781 = 33% 209 / 612 = 34% 115 / 528 = 22%
Company response rate 102 / 247 = 41% 88 / 224 = 39% 63 / 157 = 40% 34 / 135 = 25%

Note provides information on the survey response rate for each year the survey was performed. For example, in 2017, the survey was sent
to all 884 individuals working in the space, and I received responses from 357, for an individual response rate of 40%. Of those 884
individuals, they were working in 247 different companies, and I received company-level information (reported by founders) for 102 of
them, for a company response rate of 41%.

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emergence of the coworking phenomenon and its key drivers. I then widely recognized brand in coworking, their locations represent only
focus on design choices made by coworking spaces and why they are 3% of the 16,169 spaces listed in Coworker.com, and is significantly
important. I then discuss how coworking spaces differ from other smaller than its less-known rival Regus (18% of spaces), which began
entrepreneurial support organizations (e.g., accelerators, incubators, operations several years before WeWork was founded. The remaining
etc.). spaces listed in the Coworker.com data are owned and operated by much
smaller companies, with the next largest being Spaces (2% of spaces)
4.1. History, emergence, and growth of the coworking movement and Servcorp (0.5% of spaces). Of the 16,169 spaces listed in Coworker.
com, 64% of them are coworking spaces that have only one location.
In 2005, entrepreneur Brad Neuberg was struggling with social
isolation as he started a new venture from his home office. Neuberg is 4.2. Design elements
generally credited with introducing the formal concept of coworking
when he organized Spiral Muse in San Francisco that same year (Desk­ On the surface, all coworking spaces appear relatively similar as they
mag, 2013). In an interview with Neuberg in 2018, he described the all bring together a mixed group of entrepreneurs and other nontradi­
founding story. He explained how as a software developer, he craved tional workers in a shared, communal space. However, this definition
“the community and structure of a job, but the freedom and independence of masks a wealth of variation within the coworking concept. A variety of
working for myself.” Therefore, he decided to experiment with a new coworking spaces now exist that differ in terms of resources, atmo­
form of organizational workspace and rented a small room and fur­ sphere, and other important criteria. This means that the selection of a
nished it with a few simple desks and chairs. He then placed an ad on coworking space is not simply a matter of proximate location to the
Craigslist and handed out flyers at coffee shops, encouraging people to founder, but also one of fit between a founder’s needs and the oppor­
show up and work on their own projects in the same physical space as tunities made available by the space. In this section, I discuss various
him. As the space and the concept grew more popular, Neuberg part­ design features of coworking spaces and how they might affect entre­
nered with Chris Messina and Tara Hunt – two well-known authors, preneurs’ coworking experience. These design features are my own
speakers, and influencers – to start a coworking conference, Wiki, and categorizations based on my analysis of the different types of coworking
mailing list, all of which are still active today. The purpose of these spaces in the Coworker.com data, as well as my review of the various
initiatives was to “evangelize coworking and sort of spread this idea,” and to articles and reports described in section 3.1 of the paper. Table 2 pro­
encourage others to start their own spaces and share ideas and best vides a summary of these design choices, along with descriptive statistics
practices. Messina and Hunt began forming meetups around the country from the Coworker.com Data.
to discuss the coworking idea with other like-minded individuals. These Space. Coworking spaces differ in their physical layout in many
events, along with the wiki and mailing list, began attracting interest ways. First, coworking spaces differ widely in terms of size (i.e., square
across the country and across the world, and helped spark a coworking footage). This choice is important, as smaller spaces are often associated
movement. As Neuberg described it, “this community sort of spontaneously with a more tight-knit community where all members have strong ties,
started organizing itself, and the [wiki] and email list ended up becoming a whereas larger spaces offer a wider network of opportunities where
really important way for people who were starting spaces to start working members can have many weak ties (Granovetter, 1977). Second, cow­
with each other.” Neuberg encouraged others in the community to “steal orking spaces vary in the type of space they offer. Most coworking spaces
this idea, make it your own, and remix it.” Several individuals followed (92% of spaces in the Coworker.com data – see Table 3) have "hot desks"
through on his suggestion and started their own coworking spaces in – i.e., large, open areas with desks, tables, chairs, and couches, where
various cities throughout the country. seating is “first come first serve.” Many (65%) also have "dedicated
As the idea of coworking began to catch on, the coworking move­ desks," where a member can pay more for a desk of their own on a
ment became more structured and cohesive. In 2009, the Global Cow­ permanent basis. In addition, many spaces (54%) also have private of­
orking Unconference Conference (GCUC) began holding coworking fices available for rent. The ratio of open space to private office is a key
conferences throughout the globe in an effort to bring coworking space design choice, as it can affect the frequency of interaction among com­
operators together to network and share ideas. WeWork began opera­ munity members and determine what type of culture prevails in the
tions in 2010, and quickly became the most well-known and valuable space. Third, spaces differ in terms of ambiance or “vibe.” Though some
coworking company, raising public awareness of the coworking concept spaces are designed like traditional corporate offices and meant to look
and prompting many new entrants to copy their strategy and style. As and feel professional, many are designed to represent a “Silicon Valley”
the coworking concept became more widely known, large corporations startup culture and include stereotypical startup features such as
such as Microsoft, IBM, and others took notice. They began to experi­ ping-pong tables, beanbag chairs, and arcade games. This is meant to
ment by sending groups of their employees to work in coworking spaces, contrast sharply with corporate offices, and thus appeal more to entre­
in hopes of increasing worker satisfaction and opening up networking preneurs and other nontraditional workers who often value a more
opportunities with people outside their domains (Spreitzer et al., creative and individualistic environment.
2015b). Offerings. Coworking spaces also vary in terms of offerings. First,
Noticing these trends, as well as the large shift from traditional to spaces differ in lease terms. Most (i.e., 95% - see Table 3) offer month-to-
nontraditional work, investors began rapidly piling money into new month leases, allowing tenants the flexibility to cancel at any time, often
spaces. Coworking also began to geographically diffuse throughout the attracting early-stage startups and individual workers. Some also offer a
world. Fig. 2 uses data from Coworker.com to depict the distribution of daily rate, often attracting freelancers or "digital nomads" – i.e., remote
coworking spaces as of May 2021 in the United States. As shown, cow­ workers who travel to different locations to work. Other spaces offer
orking spaces are now not only located in key entrepreneurial hubs (e.g., multi-year leases, which generally attract more corporate clients.
Silicon Valley, New York, Boston, and Los Angeles), but also in all other Table 4 presents detailed data from the Coworker.com data about the
states and most metropolitan areas. Also, as Fig. 3 illustrates with data average prices of these various coworking memberships. Second, spaces
from Coworker.com, coworking is clearly an international phenomenon vary in terms of amenities, which can include office furnishings, access to
with the substantial majority of coworking spaces being outside of North conference rooms, WiFi, printing, 24/7 access, exercise equipment, and
America. Specifically, as of May 2021, 25% of all coworking spaces were free food and beverages. Some also offer childcare or on-site living ac­
located in North America, 31% in Europe, 30% in Asia, 6% in South commodations. Third, coworking spaces vary in the types of events and
America, 5% in Africa, and 3% in Oceania. trainings they offer. This can include professional networking opportu­
In terms of industry structure, the coworking industry remains nities, social get-togethers, and trainings or workshops on topics that are
relatively fragmented. Though WeWork has become the most visible and of interest to their tenants, such as how to fundraise or how to acquire

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Fig. 2. Coworking Spaces in the United States.

Note: This figure is based on the list of all coworking spaces in the United States listed on Coworker.com’s platform as of May 2021. I mapped individual coworking
spaces to the closest city.

Fig. 3. Coworking Spaces Worldwide.

Note: This figure is based on the list of all organizations listed on Coworker.com’s platform as of May 2021. I mapped individual coworking spaces to the closest city.
Areas with darker shades indicate a higher density of coworking spaces.

customers. Once again, the focus of these events, trainings, and other First, spaces differ in the number of individuals working in the space. As
amenities will affect selection into the space. Table 5 provides additional discussed above, spaces with fewer members often have a more tight-
information from Coworker.com on the prevalence of various offerings. knit community, whereas larger spaces provide a wider network of op­
Members. Coworking spaces also differ in terms of their members. portunities. Second, spaces also differ in the composition of its members.

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Table 2
Design Choices for Coworking Spaces.
Design choice Options Why important Select descriptive evidence from the Coworker.com data

Space

Size of space Square footage Small spaces often have a more tight-knit community, Average space has 7,308 square feet.*
whereas large spaces offer a wider network of opportunities.
Composition of Open space vs. private offices The ratio of hot desks vs. dedicated desks vs. private offices 92% of spaces include hot desks, 65% of spaces include
space can affect the frequency of interaction among community dedicated desks, and 54% of spaces include private offices.
members and determine what type of culture prevails in the
space.
Ambiance Startup culture vs. traditional Spaces designed to represent a “Silicon Valley” startup 37% of spaces report having stereotypical startup features
corporate office culture that appeals more to entrepreneurs and other such as ping pong tables, beanbag chairs, hammocks, etc.
nontraditional workers who value a more creative and (see Table 5)
individualistic environment.

Offerings

Lease terms Month-to-month vs. long-term The flexibility of month-to-month leases often attracts early- 95% of spaces offer a monthly lease option, and 55% offer a
lease; prices stage startups and individual workers. Multi-year leases daily option (see Table 3). The average price is $200.39 for a
generally attract more corporate clients. monthly hot desk lease, $285.73 for a dedicated desk, and
$599.19 for a one-person private office (see Table 4).
Amenities Type of amenities offered (e.g., Different amenities attract different groups of people (e.g., Percentage of spaces that offer select amenities: WiFi (99%),
conference rooms, WiFi, printing, free alcohol attracts younger members, childcare attracts coffee (78%), Kitchen (74%), gym (5%), childcare (2%). See
childcare, free food) more mature members). Table 5 for additional information.
Events/ Type of events and trainings Spaces that offer trainings, events, or workshops on topics 71% of spaces offer events, 16% offer pitching events
trainings offered within the space such as how to fundraise or how to acquire customers are specifically, 33% offer workshops, 14% offer mentorship
more likely to attract startups. programs (see Table 5)

Members

Community The number of members in a Spaces with fewer members often have a more tight-knit Average space has a capacity of 83 members*
size space community.
Member Broad vs. focused by industry or A homogenous community may mean a smaller applicant 81% of spaces describe themselves as catering to
composition member characteristics pool, but the similarities among members may also create entrepreneurs and/or small businesses, 55% to freelancers,
more interaction and thus facilitate community-building. and 7% to remote workers (see Table 3)

Partners

Sponsors Governments vs. universities vs. Sponsorships can add a level of prestige or legitimacy to the Coworker.com does not collect information on this for the
corporations space, and can open up a broader community that members spaces on their platform; rather it is something that emerged
can tap into. from my review of the various articles and reports described
in section 3.1 of the paper.
Local Type of local partnerships Partnerships with other local organizations help increase the 10% of Coworker.com spaces report partnerships with
partnerships value-add of the coworking space by providing more incubator programs, and 9% with accelerator programs (see
resources and interactions for members. Table 5).

Note: Table 2 provides information on several design choices for coworking spaces, the various options for each choice, and why the choice is important. The final
column provides relevant descriptive statistics from the Coworker.com data. These design elements are my own categorizations based on my analysis of the different
types of coworking spaces in the Coworker.com data, as well as my review of the various articles and reports described in section 3.1 of the paper. *=Coworker.com
collects information on this variable, but I was not able to obtain access to the data. Thus, for this particular variable, I am relying on a recent report published by
Coworker.com (Coworker, 2020).

Some spaces allow anyone to join as long as they can pay rent, resulting 4.3. Differentiating coworking from other entrepreneurial support
in a mix of startup companies, small businesses, remote workers, and organizations
freelancers. Other coworking spaces choose to focus, perhaps on a
particular group (e.g., startups or freelancers) or on a particular industry Although some relevant studies address the implications of acceler­
such as media, healthcare, or software. A homogenous community may ators, incubators, and maker spaces (Cohen et al., 2019; Hallen, Cohen,
mean a smaller applicant pool, but the similarities among members may and Bingham, 2020; Browder et al., 2019), coworking spaces are
also create more interaction and thus more community. Table 3 provides different in fundamental ways. Table 6 summarizes the key differences4.
summary statistics on the number of spaces catering to these various One of the primary distinctions is the type of participants. Accelerators
groups. and incubators have formal application processes in which startup
Partners. Coworking spaces also differ in terms of their external companies are selected based on their potential for growth, with ac­
partners. First, many coworking spaces do not collect enough rent to celerators typically having a more stringent application process than
cover their expenses, and thus must seek out funding from sponsorships incubators. As such, accelerators and incubators tend to admit
by local governments, universities, or corporations. These sponsorships high-growth startups that have ambitions to raise venture capital
can add a level of prestige or legitimacy to the space and open up a funding and go public. Coworking spaces, on the other hand, have no
broader community that members can tap into. Second, many cow­ such selection process – anyone who can pay the rent is able to rent a
orking spaces create partnerships with other organizations to provide space. As a result, coworking spaces are generally full of a much more
extra services or resources to members. These include local, purpose- diverse set of participants, including startups (of variable quality), small
driven organizations such as associations or meet-up groups, local ser­
vice companies, other coworking spaces, local government, and real
estate firms. These partnerships increase the value-add of the coworking
space by providing more offerings and interactions for members. 4
Table 6 (as well as section 4.3 of the paper) provide a comparison of ac­
celerators, incubators, maker spaces, and coworking spaces. However, an
important point to keep in mind is that these are generalizations. Incubators, in
particular, occur with a wide variability in structure.

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T. Howell Research Policy 51 (2022) 104447

Table 3 entrepreneurial support organizations. Although founders in accelera­

Summary Statistics from Coworker.com Data. tors and incubators can benefit from their relationships with the other
Variable Mean SD Min Median Max N founders in their cohort (Cohen et al., 2019), this is typically a periph­
eral instead of primary motivation for applying to one of these programs.
Hot Desks Available 0.92 0.27 0 1 1 11,439
Dedicated Desks Available 0.65 0.48 0 1 1 11,439 With coworking spaces, however, a primary motivation for joining is to
Private Offices Available 0.54 0.50 0 1 1 11,439 work among a community of peers. If workspace is all a founder needs,
Monthly Lease Available 0.95 0.21 0 1 1 11,439 many are more inclined to simply work from home or from a coffee shop,
Daily Rate Available 0.55 0.50 0 1 1 11,439 library, or other public space. However, as many of the entrepreneurs we
Yearly Lease Available 0.20 0.40 0 0 1 11,439
Private Office Capacity 4.98 8.44 1 4 200 6,130
interviewed stated (discussed next), these spaces typically do not pro­
Total Amenities 14.7 7.25 3 13 37 10,492 vide the same sense of community that exists in a coworking space.
Open 24 Hours 0.59 0.49 0 1 1 11,439 Overall, community represents the key aspect of coworking, and I
Number of Meeting Rooms 2.36 2.54 0 2 14 11,439 discuss it in much more detail in the section below.
Meeting Room Capacity 10.81 8.93 1 8 55 9,032
Space hosts entrepreneurs 0.81 0.40 0 1 1 6,908
Space hosts freelancers 0.55 0.50 0 1 1 6,908 5. The implications of coworking for entrepreneurs
Space hosts remote workers 0.07 0.25 0 0 1 6,908
In the sections that follow, I rely on data from my interviews,
Note: Table 3 presents various summary statistics from the Coworker.com data.
The first five variables are indicator variables equal to 1 if the coworking space
archival documents, and observation at Coworking Central to discuss
has the specific offering (e.g., Hot Desks Available is an indicator variable equal the various implications of coworking for entrepreneurs, and to lay a
to 1 if the coworking space offers hot desks). Private Office Capacity is the conceptual groundwork for how founders and their ventures might (or
average number of people that can fit in a private office at the space. Total might not) benefit from working in coworking spaces. I first describe the
Amenities is equal to the number of amenities (listed in Table 5) offered by the various implications of the space itself, which are summarized in Table 7
space. Open 24 Hours is equal to 1 if space is open to members 24 hours a day, along with representative quotations from my interviews. I then discuss
and 0 otherwise. Number of Meeting Rooms is equal to the total number of the various implications of the coworking community (i.e., the other
meeting/conference rooms that members can book for meetings. Meeting Room people in the space), which are summarized succinctly in Table 8.
Capacity is the average number of people that can fit in a meeting room at the
space. The last four variables are constructed from the description of the space
5.1. Implications of the coworking space
on Coworker.com (e.g., for Space Hosts Entrepreneurs, I search for keywords
such as "entrepreneur," "startup", etc. to assess whether the space accommodates
entrepreneurs). N= 11,439 for most rows; though Coworker.com’s platform Benefit: Efficiency: Entrepreneurs sometimes pay more per square
includes information on 16,169 ventures, 4,730 were dropped due to missing foot at a coworking space than they would in a traditional office space.
information. Observations vary for some rows, as not every variable is applicable However, this is misleading, as founders are buying more than space –
to each space (e.g., only 6,130 spaces offer private offices; only 6,908 spaces they are also buying convenience. In a coworking space, a founder
specified the groups they catered to). spends less time worrying about utilities, internet, security, furnishings,
etc., and more time focused on building their company. For example,
businesses, freelancers, and remote workers from larger corporations. one founder who had previously founded two other successful com­
This is also different from the participants of maker spaces, who are panies in a traditional office space said, "I wasted so much time at my first
generally individual inventors, hobbyists, or tinkerers (Browder et al., two companies, [designing] these super cool offices. I shudder to think how
2019). Whereas people use maker spaces for a few hours at a time to much money I wasted on that, and more importantly time.” In addition to
build a product or experiment with different designs, people use cow­ the convenience factor, coworking spaces also give founders access to
orking spaces for office space in which to work on their full or part-time conference rooms, shared workspaces, free amenities, and other re­
jobs. sources that otherwise they would not be able to afford by themselves.
Other major differences include the amount of structure, payment As one founder put it, "It provides really nice access to things like cool
required, and resources provided. For example, accelerators are limited- conference rooms, cool furniture, plants, coffee, etc. Startups don’t have a lot
duration programs, typically lasting 3-6 months, in which cohorts of of money for these things. It’s shared, but it makes it all accessible."
entrepreneurs are expected to attend trainings, meet with mentors, Benefit: Flexibility: Prior studies suggest that one of the main ad­
complete assignments, and meet certain milestones (Cohen et al., 2019). vantages entrepreneurs have over large organizations is flexibility, or
Participants are required to give the accelerator an equity stake in their the ability to be nimble and adapt quickly (Grimes, 2018; Hampel et al.,
business, and in exchange, receive substantial resources including seed 2020). However, this adaptability is threatened when entrepreneurs are
capital, intensive mentoring/training, access to service providers, and forced to sign multi-year leases for traditional office space, making it
office space. Incubators are also often limited in duration, though en­ difficult to grow quickly. Coworking provides a solution to this dilemma
trepreneurs typically spend more time in them (often 6-12 months). by offering month-to-month leases and flexible arrangements. As one
Although incubators do not offer formal programs, they generally have founder said, "Real estate is so frequently a constraint for entrepreneurs...
mentors, trainings, service providers, and space available on a coworking just about takes that off the table, because the commitment’s so
fee-for-service basis. Maker spaces are different in that there is no minimal..." Part of this flexibility is the modularity of the space. In other
structure; rather, the space offers a wide variety of hardware and soft­ words, founders can start out by renting one or two desks, and then
ware tools which members are free to use. These spaces are often free to slowly add more desks or private offices as they grow. This can work in
a certain population (e.g., university-owned maker spaces are often free the opposite direction as well, in that if a company needs to shrink its
for faculty and students), but several for-profit maker spaces exist which headcount it can simply take away an office or desk. Thus, although real
charge a membership fee (Browder et al., 2019). estate is frequently a constraint in entrepreneurship, the modularity and
Coworking spaces, however, are distinct. They are not limited flexibility of coworking spaces helps mitigate these issues.
duration, in that tenants can stay for as long as they continue to pay rent. Benefit: Legitimacy: Past research finds that relative to established
Also, other than the amenities discussed earlier (e.g., WiFi, coffee, etc.), organization, new ventures often suffer from lack of legitimacy with
coworking spaces usually provide no hard resources such as seed capital customers, employees, and other key stakeholders (Zimmerman and
or intensive mentoring. Instead, entrepreneurs rely on coworking spaces Zeitz, 2002; Siggelkow, 2001; Gavetti and Rivkin, 2007). This is
for (1) working space, and (2) community. The community aspect is particularly true when founders work from home or out of a garage, as
perhaps what distinguishes coworking the most from other they have no setting to host meetings with potential customers, in­
vestors, or hires. Oftentimes they are forced to take these meetings at a

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Table 4
Average Prices of Coworking Memberships in USD.
Panel A: Global Summary Statistics Mean SD Min Medan Max N

Hot Desk - 1 Day $20.94 $18.66 $1.36 $16.53 $115.87 6,240

Hot Desk - 1 Month $200.39 $140.56 $21.53 $162.66 $727.92 8,830
Dedicated Desk - 1 Month $285.73 $188.19 $30.40 $250.00 $995.00 7,115
One-Person Private Office - 1 Month $599.19 $416.67 $36.46 $525.00 $2,574.97 1,952
Four-Person Private Office - 1 Month $1,283.67 $928.82 $62.72 $1,051.49 $4,233.71 2,211
Ten-Person Private Office - 1 Month $3,754.74 $2,632.92 $26.75 $3,532.89 $11,097.76 858

Panel B: Mean Values by Region Means by Region

North America Europe Asia South/Cent America Africa Oceania

Hot Desk - 1 Day $28.96 $25.49 $12.07 $14.33 $10.79 $33.22

Hot Desk - 1 Month $237.85 $230.84 $148.26 $140.86 $113.35 $332.67
Dedicated Desk - 1 Month $362.75 $330.05 $191.66 $188.57 $174.63 $423.01
One-Person Private Office - 1 Month $668.83 $684.95 $452.37 $377.23 $313.30 $782.69
Four-Person Private Office - 1 Month $1,640.39 $1,469.73 $958.68 $631.99 $679.23 $1,867.98
Ten-Person Private Office - 1 Month $4,671.19 $4,510.97 $2,632.31 $2,451.67 $2,087.21 $4,781.65

Note: Table 4 presents the average prices of coworking memberships as of May 2021 (when the data were scraped) for all coworking spaces listed in Coworker.com. All
non-USD prices were converted to USD before calculations were performed. As described in detail in section 4.2 of the paper, "hot desks" refer to open areas where
seating is “first come first serve,” dedicated desks refer to desks that members can rent for themselves on a permanent basis, and private offices refer to offices that
members can rent for themselves on a permanent basis. Spaces can also offer different lease lengths, such as 1 day, 1 week, 1 month, 1 year, etc.). Table 4 presents the
most common offerings and lease terms. The number of observations varies in each row, as not all spaces offer each particular offering (e.g., 6,240 spaces offer a Hot
Desk – 1 Day membership). Panel A presents summary statistics for all spaces globally, whereas Panel B shows means by region.

Table 5
How Prevalent are Various Amenities and Offerings in Coworking Spaces?.
Amenity Percent of Spaces Amenity Percent of Spaces Amenity Percent of Spaces

WiFi 99% Pitching Events 16% Organized Sports 4%

Printer 86% Library 16% Recording Studio 4%
Air Conditioning 85% Facebook Group 15% Yoga Studio 4%
Water 85% Microphone 15% Pool Table 4%
Coffee 78% Nearby AirBnB 15% Hammocks 3%
Scanner 78% Mentorship Programs 14% Bosu Ball 3%
Lounge 77% Community App 12% Toast Masters 3%
Kitchen 74% Incubator Programs 10% Green Screen 3%
Events 71% Accelerator Programs 9% Screen Printer 3%
Photocopier 71% Chromecast 8% Free Wine 3%
Ergonomic Chairs 51% Ping Pong 8% Laundry Service 3%
Heating 49% Free Beer 8% Massages 3%
Standing Desks 43% Board Games 8% AR Equipment 2%
Personal Lockers 38% Apple TV 7% VR Equipment 2%
Outdoor Terrace 35% Retail Space 7% Swimming Pool 2%
Workshops 33% Maker Space 6% Childcare 2%
Projector 32% 3D Printer 5% On site AirBnB 2%
Skyperoom 26% Photo Studio 5% Darts 2%
Community Drinks 25% Nap Room 5% Karaoke 2%
Community Lunches 24% Meditation Room 5% Arcade Games 2%
Phone Booth 21% Gym 5% Drone 1%
Bean Bag Chairs 16% Art Gallery 5% Mini Golf 1%

Note: Table 5 lists all possible amenities that Coworker.com tracks on its platform. The "Percent of Spaces" column indicates the percent of spaces on Coworker.com’s
platform that reported this amenity or offering.

coffee shop or restaurant, but this is seldom ideal since the founder has but interviewees also spoke at length about one concern that would
no control over the environment, and the professional perception of the apply to most if not all coworking spaces: distraction and loss of pro­
business is decreased. Coworking provides a solution, as it allows ductivity. Coworking spaces can be crowded and noisy places. People
founders to hold these meetings in a conference room in a professional will make calls, talk to each other, move around, and eat food within the
setting. This extra degree of legitimacy can have a significant impact. working space. One interviewee was considering moving out of cow­
For example, one founder said, "I don’t know where we’d be if we didn’t orking and into a private office for this reason and said, “The space isn’t
work here... Honestly, it would have really constrained our growth potential ideal for what we do. It can be very loud. It’s not an ideal working space
because we couldn’t have taken our client meetings at a home office or in a because of the traffic and noise.” This is consistent with past literature on
garage or at a coffee shop." In fact, a few of the founders I spoke with paid open office designs, which suggests that employees in these spaces
the monthly coworking fee for the sole purpose of using the conference experience increased noise and distractions and decreased satisfaction
rooms for client meetings. and productivity (Oldham and Brass, 1979; Shalley, 1995). Similarly,
Drawback: Distraction and loss of productivity. Though coworking although entrepreneurs can benefit from the events, trainings, and other
offers several benefits, there are also potential downsides. I asked my amenities within the space, these can also become distracting if the
interviewees what these might be, and they offered several insights. entrepreneur engages in too many of them. As one founder put it, “You
Many of them were specific to Coworking Central (e.g., lack of parking can get distracted pretty easily. There’s a lot of folks that I’ve seen take
options, office décor, the process for scheduling conference rooms, etc.), advantage of every one of the happy hours and events and so forth. Those

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things are great, but maybe don’t do all of them.” Overall, while the space

Note: Table 6 provides a comparison of accelerators, incubators, maker spaces, and coworking spaces along several dimensions. An important point to keep in mind is that these are generalizations. Incubators, in
and community provide benefits, they are also full of distractions that

No (individuals come and go as they please)

Individual inventors, tinkerers, or hobbyists

Medium (hardware and software tools, and

can potentially decrease productivity and venture performance if the

Often free for certain community, but

Innovation, creation of products

founder is not careful.

sometimes a membership fee

particular, occur with a wide variability in structure. Some may not have application processes (especially not to the degree of accelerators), and firms may sometimes stay in incubators for several years.
sometimes mentors)
Maker spaces

5.2. Implications of the coworking community

Low

No
Benefit: Connections: Extant research suggests that entrepreneurs
use both strong and weak ties to mobilize resources (Aldrich and Zim­
mer, 1986). Many of these studies also suggest that entrepreneurs tend
to not search beyond their pre-existing networks (i.e., family, friends,
former co-workers, etc.), meaning entrepreneurs are often constrained
by their personal background (Clough et al., 2019; Ruef et al., 2003).
However, when entrepreneurs join a coworking space, they automati­
Startups, small businesses, freelancers, independent

cally join a community of weak ties. Coworking spaces offer unprece­

Low (space, amenities, and occasional events)
No (tenants stay as long as they can pay rent)

dented opportunities for networking just by being in physical proximity

to other startups, and by offering events and other formal opportunities
to meet people. These interactions often lead to referrals for new clients,
workers, remote workers

employees, investors, and service providers. One founder said:

Space, community
Coworking spaces

Monthly rent

"We’ve gotten multiple clients through Coworking Central… It’s just they
Low

No

know us, they respect us, and they’re willing to refer people to us. That
openness, that willingness to help, it’s kind of an ethos that I haven’t seen
anywhere else."

Many founders cited the ability to make connections as a key benefit

of coworking. Without being able to rely on others in the coworking
community, many expressed how lost they would feel. As one said, "I
honestly feel that we probably would not be anywhere near as successful if it
weren’t for this place. We’ve had a lot of clients come from other people here
through some sort of network effect."
Medium (mentoring, service providers,
Fee for service (sometimes equity)

Benefit: Solutions: Entrepreneurs often do not have the experience

Yes (typically stay 6-12 months)

or knowledge to navigate the complexities of a new venture (Stuart and

Nurturing development

Abetti, 1990). As such, many rely on help from other members of the
co-working space)

community to solve problems and answer questions. For example, one

Incubators

Medium
Startups

founder said, "The community is big for entrepreneurs, and I feel that you
Yes

can reach out to anybody here, if you need to know something, learn some­
thing, and that’s huge when you’re a startup." The community listserv was
especially useful for this purpose, with founders constantly asking
questions (e.g., “anyone have suggestions on writing a press release?” or
“what do you use for payroll?”), and other founders responding with
suggestions and solutions. As entrepreneurs developed relationships
with other people in the community, they gained a better understanding
High (seed capital, intensive mentoring/ training, service

of who had what knowledge or skillsets, and were able to take advantage
Comparing Accelerators, Incubators, Maker Spaces, and Coworking Spaces.

accordingly. As one founder said, “For us to be able to go up a floor to solve

a problem or down a floor to ask a question, is invaluable.” Overall, the
Yes (program lasts 3-6 months)

coworking community can resolve many of the every-day practical

providers, co-working space)
Takes portion of equity

challenges that entrepreneurs face when starting a new venture.

High-growth startups

Benefit: Energy/motivation: Past studies on entrepreneurial careers

Rapid growth
Accelerators

find that founders often experience feelings of isolation while working

High

Yes

on their new ventures (Dyer, 1995). These feelings are exacerbated

when working from a garage or home office, where it is easy to feel
disconnected from the rest of the world (Shepherd and Patzelt, 2015).
Many of the entrepreneurs I interviewed mentioned the “buzz” or the
“vibe” of the coworking community as being an intangible yet important
reason for working in the space. For example, one founder said, “It seems
silly, but the excitement, like getting to come to a place that looks like this,
where there is a buzz about it is something that I think helps motivate our
people.” The passion and intensity with which most entrepreneurs go
about their work is usually energizing, motivating, and contagious. One
Application process?

Amount of resources
Amount of structure

founder shared: “It’s inspiring. It’s nice to see so many people also so
Payment required
Dimension

passionate about what they’re doing. That’s the common thread. It doesn’t
Limited time?

matter what it is they’re doing, they’re just passionate about it. And that feels
Participants

provided

good.” This energy pushes entrepreneurs to work harder and gives them
Purpose
Table 6

a sense of purpose.
Benefit: Social support: Past research suggests that the

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Table 7
Implications of the Coworking Space.
Category Pos. or Explanation Representative quotations
neg.

Efficiency + Founders spend less time worrying about utilities, internet, furnishings, • "It was really nice to come in and just not have to worry about a lot of
office design, etc. and more time focused on their company. It also that practical stuff. And just be able to come in and really focus on
provides access to conference rooms, shared workspaces, free trying to grow our business and reach towards our purpose in the
amenities, and other shared resources that entrepreneurs are often not company."
able to afford by themselves. • "I don’t have to worry about anything. It’s just a monthly rent and
everything is taken care of...I don’t have to worry about maintenance
or worrying about when the Wi-Fi goes out."
• “The price per square foot is higher, but the difference is convenience.
I can walk in and start working without having to worry about
utilities, internet, cleaning, etc… it’s worth it.”
Flexibility + Traditional office spaces often require tenants to sign multi-year, • "It’s so modular and flexible, right? If you need more space, you add a
inflexible leases. Coworking removes this commitment by offering new office. If you need to shrink, you get rid of one of your offices."
month-to-month leases. It is also modular, in that if a venture grows it • "The leases are super flexible for a start-up. Month-to-month. Any­
can add a desk, or if it shrinks it can downsize a desk. where else, it’s such a commitment, especially for a start-up that feels
like every week is under pressure."
• “When a bunch of my team moves to another location, I’ll be able to
downsize without any stress. That kinda thing, for me, is really
valuable”
Legitimacy + Coworking spaces can help new ventures appear more legitimate and • "We’re always having folks come like partners, come visit us, and it’s
professional. When companies host potential clients, investors, or just so nice to have, be like, "Oh, yeah, I booked this conference room."
hires, they are able to hold these meetings in a conference room in a • "The space was huge for recruiting. So when we were bringing people
professional setting, rather than a home office, garage, or coffee shop. in and selling them on this vision like ’our company is gonna be huge
someday. You wanna be part of it and this is really a cool place to
work.’ That was huge."
• "It adds some validation, and it’s not like I’m working on a project in
my garage. And I think that’s really important…as much as you
wanna say you don’t care what other people think. It does matter
sometimes."
Distraction and loss - Coworking spaces can be crowded, noisy, and distracting spaces, and as • “Sometimes if you’re trying to take late calls and if they’ve got a game
of productivity such, may decrease satisfaction and productivity. Similarly, although night or something popping up, that can be a little bit disruptive.”
entrepreneurs can benefit from the events, trainings, and amenities • "Sometimes you need to really, really focus on solving a problem, but
within the space, these can also become distracting if the entrepreneur then you might have somebody come to you with their own problem
engages in too many of them. they want to talk to you about.
• “It’s a little distracting. The most distracting part is when it’s
lunchtime, and people bring their food out, and you’re like, ‘Oh my
gosh, that smells amazing, I have to move.”

Note: Table 7 provides a summary and representative quotations of the three primary benefits of working in a coworking space. These categorizations are based on my
interviews and other data from Coworking Central.

entrepreneurial process can take a psychological toll on founders, as failure, suggesting that it is part of exploratory learning and is an inte­
founding a new venture is an enormous task that requires countless gral part of the entrepreneurship process (Khanna et al., 2016). These
hours of hard work, stress, ambiguity, and at times utter hopelessness studies suggest that failure provides valuable feedback, and can improve
(Patzelt and Shepherd, 2011; Wasserman, 2012). However, the friend­ the chances of success for future entrepreneurial efforts (Eggers and
ships developed between entrepreneurs in a coworking community can Song, 2015). Consistent with these notions, past studies find that high
help alleviate some of these stresses. For example, one founder said, failure rates of startups actually go hand-in-hand with the economic
“When I’ve been able to sit down and have conversations with other entre­ growth of a society (Birch, 1979; Lee et al., 2007), and that many failed
preneurs…you could say it’s a little bit like a therapy session, talking about all entrepreneurs eventually succeed and become the sources of entirely
the ups and downs.” Another shared: “For me, it’s really the social support... new industries (Aldrich and Fiol, 1994; Lieberman and Montgomery,
having other people to vent to if you have a project that’s really frustrating or 1988).
a client that’s giving you trouble, or I’m just mad at my cofounder for some In coworking spaces, however, my interview evidence suggests that
reason.” In addition, the community can help validate what the entre­ entrepreneurs may actually fail slower. Several of the entrepreneurs I
preneur is doing. Many entrepreneurs have family and friends who do spoke with explained how other members of the coworking community
not understand why someone would work in a startup as opposed to a became their best friends, and how these friends encouraged each other
high-paying and stable corporate job. This lack of support and under­ to not give up and to keep persisting. On one hand this can be beneficial,
standing can make entrepreneurs doubt themselves. However, working as it gives entrepreneurs the social support they need to persist and
alongside other like-minded entrepreneurs helps them feel validated, succeed as described above. At the same time, however, it can have the
reminding them that they are doing something important and impactful. unintended consequence of causing entrepreneurs to delay abandoning
As one founder shared, a failed venture. They are more hesitant to do so as it would require
leaving the community and disappointing their friends within the space,
"It’s been helpful just psychologically to not feel like I’m off on my own
many of whom are telling the entrepreneur, “don’t give up, you can make
doing some crazy thing, but that there are other people going through
it if you just keep going!” More data and analysis are required to better
this... All my family and friends have stable jobs and are on a track. Those
understand the effects of coworking on venture survival and time to
people are supportive, but they also might think you’re a little bit crazy.
failure, but this initial exploratory analysis suggests that in some cases it
It’s nice to be around the people who get it and don’t think you’re crazy."
may prolong the venture’s life, for better or worse.
Drawback: Failing slow. When creating new ventures, many entre­
preneurs follow the mantra “fail fast, fail cheap, and move on” (Saxenian,
2014). Similarly, past literature takes a relatively positive view of

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T. Howell Research Policy 51 (2022) 104447

Table 8
Implications of the Coworking Community.
Category Pos. or Explanation Representative quotations
Neg.

Connections + Coworking spaces offer networking opportunities due to physical • "With fundraising, we’ve gotten to know people who know people,
proximity of companies, as well as events and other formal activities and then we can reach out to them."
offered. These interactions often lead to referrals for new clients, • "I think just the physical proximity to other people who are doing
employees, investors, service providers, etc. what you’re doing... nothing will ever compare to those spontaneous
connections you make in the kitchen, or walking in the hall... it’s just
been great networking, just by physical proximity."
Solutions + Entrepreneurs often lack the experience and knowledge to navigate the • "If you don’t know how to do this or you don’t know how to do that,
complexities of starting a new venture. Many rely on help from other there’s somebody around here who has an idea and people are super
members of the community to solve problems and answer questions. generous with their time. It’s truly a community..."
• "It’s great, because if I have a development problem, I can go ask other
developers like, ’Hey, can you look at this?’"
• "The mailing list that they have here is a gold mine. If you have a
problem, people have a solution for you or if they don’t, they know
someone, so it’s a great tool."
Energy/ motivation + Being surrounded by other entrepreneurs is often energizing and • "There is a contagious energy to being around other people. Just being
motivating. The passion and intensity with which most entrepreneurs around other people, working where they are, makes you work harder
go about their work is usually contagious. and gives you energy"
• "Definitely as a sole founder, if I am working alone somewhere, it’s
better to work around a lot of other companies and kind of feed off
their energy."
• “Just seeing people around you who are fighting the same fights you
are, can make it feel like you’re part of something bigger”
Social support + Entrepreneurship is sometimes isolating and lonely. The friendships • "When I moved to this area, I wanted to put together a community of
developed between entrepreneurs at coworking spaces provide social people to support me because it’s hard to go it alone. Just
support when times get tough, or simply make the entrepreneurs’ work psychologically. You kind of need to feel like you’re doing a real
more enjoyable. thing, not you’re a crazy person working on your own thing."
• "I feel like I’m around other people doing something similar to what
I’m doing, and it makes me feel better about myself. It’s like the very
psychological feeling that there is a shared experience happening
around me, and that’s really important. It gets me out of my house."
Failing Slow - Entrepreneurs are often encouraged to fail fast and move on. Yet, a • "[I talk to people and say] ’ it was a rough day, and I suck at this, and I
coworking community may make entrepreneurs fail slower, as it may don’t even know how this is gonna work’, and we have those
make them more hesitant to abandon a failing venture if their friends in conversations…I’m susceptible to, the type of encouragement I need.
the space are encouraging them to continue persisting against all odds. And that’s one of the main things for me. That’s super important to
me."
• "All my friends are here… some of my best friends are here, my
buddies…and there is no contingency plan, this has gotta work."

Note: Table 8 provides a summary and representative quotations of the four primary benefits of a coworking community. These categorizations are based on my
interviews and other data from Coworking Central.

5.3. Summary: coworking space vs. community away by how giving the community is." A coworking community provides
many benefits that have historically not been available to entrepreneurs,
Overall, working in a coworking space can provide many benefits and they embraced it wholeheartedly. One founder summarized it this
that include efficiency (by saving entrepreneurs time and money), flexi­ way:
bility (by allowing new ventures to grow or shrink on an as-needed
"There’s this idea that you are the average of the five people you spend the
basis), and legitimacy (by providing a professional setting where entre­
most time with. I think sometimes as a startup, it’s almost similar, you’re
preneurs can take clients, investors, or hires). At the same time, how­
the average of the five startups you surround yourself with the most. So, I
ever, working in the space can also lead to distraction and loss of
think the opportunity to be a part of a growing successful community is
productivity (largely due to the open-office design).
that opportunity to surround yourself with other companies that are going
In addition to the space itself, the coworking community also pro­
after a lot of the same things. And so I can’t imagine doing it another
vides value. The advantages include connections (to potential customers,
way."
hires, investors, etc.), solutions (ranging from important issues around
product development to more mundane issues like setting up payroll),
energy/motivation (emanating from the passion and purpose with which 6. Which entrepreneurs have the best coworking experience?
the community pursues their projects), and social support (which can
provide beneficial friendship and encouragement when times get Having established the benefits and downsides of coworking, the
tough). However, it is possible that this social support can also cause natural follow-up question is whether some entrepreneurs might have a
founders to fail slower (by making them more hesitant to abandon a better coworking experience than others. In this section, I discuss evi­
failing venture). dence from the Coworking Central survey data to provide insight into
Intriguingly, my interview evidence seems to suggest that the pri­ this question. These data provide a rich set of variables that allow me to
mary reason most founders choose to work in a coworking space is not document associations between individual characteristics and the sense
for the space itself (despite its many advantages, as described above), but of community they feel. However, these associations are simply that;
rather for the community. For example, one founder acknowledged the given the lack of exogenous variation, I am unable to make causal claims
benefits of the space but shared “I think the big advantage is… this kind of with these data. A fruitful area for future research will be to further test
community.” Similarly, another briefly mentioned the benefits of the and explore the causality behind the correlations presented here.
space but then said "The biggest value of [coworking], has been the friends In deciding which variables to include in the model, I rely both on
you make along the way, would be the way to frame it. I’ve just been blown prior theory as well as my interview evidence. In terms of prior theory, I

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T. Howell Research Policy 51 (2022) 104447

keep in mind prior studies which suggest that some entrepreneurs may minority entrepreneurs possess fewer average resources at time of
have an easier time forming ties in a community than others (Hallen founding relative to non-minorities (Fairlie and Robb, 2007). In addi­
et al., 2020). These studies generally take one of two perspectives. The tion, past studies suggest that it is also more difficult for minority en­
first is that of structural localism, meaning that entrepreneurs are more trepreneurs to obtain resources post founding, as many investors hold
likely to form ties with those similar to them, who are in or close to their implicit or explicit biases against racial minorities making it harder to
existing network in which they are already socially embedded. This obtain both credit (Freeland and Keister, 2016) and investment (Youn­
perspective suggests a “rich-get-richer” process of accumulative kin and Kuppuswamy, 2018).
advantage, where initial network positions are amplified over time. As In light of this prior research, it is unclear whether minorities or non-
such, I include in the model several individual characteristics (e.g., age, minorities will have better experiences within a coworking community.
race, gender) which have been shown to influence the probability of tie On one hand, minority entrepreneurs may face some of these same
formation (Hallen et al. 2020). The second (and more recent) perspec­ biases within the coworking community, making it harder to form
tive is that of “agentic network change,” which suggests that entrepre­ connections with other community members and take advantage of
neurs can proactively break out of their social structure constraints and everything the space has to offer. On the other hand, it is possible that
pursue new connections through networking (Vissa, 2012; Stuart and minority founders will engage more with the community as they may be
Sorenson, 2007). Coworking spaces may provide a unique opportunity less likely to have other founders within their informal networks, and
to do this, given the mix of individuals working together in one physical thus may need and benefit more from the coworking community.
space. Thus, I also searched my interviews to identify the main causes of The results of Table 10 support the latter view, and suggest that
why some individuals reported certain advantages and others did not. minority founders have a much different community experience than
To do so, I compared informants across a variety of individual and non-minorities. Specifically, minorities are more likely to feel a sense of
environmental characteristics, as well as their history and position community (p=0.01; b=0.3532, or 32% of a 1 S.D. change), to be
within the space. I looked for the emergence of similar themes and engaged in the community (p=0.090; b=0.2401, or 21% of a 1 S.D.
constructs across multiple informants, and employed the use of charts, change), to place importance on the community (p=0.031; b=0.2624, or
and tables to compare several categories at once. I also wrote extensive 30% of a 1 S.D. change), and to find a greater percentage of their in­
field notes after each interview that I then used to document main vestors from the community (p=0.023; b=0.1408, or 38% of a 1 S.D.
themes and reoccurring topics. From the patterns that emerged, I formed change). One African American founder I interviewed discussed his
propositions about the set of factors that appeared to influence in­ underprivileged background and challenges he faced as a minority
formants’ coworking experience the most. It is these factors that I ulti­ entrepreneur, and then shared this:
mately include in the model.
“Having had a difficult time finding affordable financing…I don’t come
In terms of dependent variables, I rely on four different measures of
from a background with a ton of resources, and so to be able to experi­
coworking members’ experience within the community. The first is
ment under this type of roof… is invaluable. You are able to vet your ideas
Sense of Community, which is a three-item scale measuring the extent to
if you have them. You are able to partner with different companies... You
which the respondent feels a part of the community. Second, I look at
are able to take part in events…There are so many different ways to plug
Engagement in Community, a three-item scale measuring the extent to
into the ecosystem, all under one roof.”
which the respondent is actively engaged in interacting with other
members of the community. The third is Importance of Community, a Overall, minority founders appear to engage more in and benefit
three-item scale measuring how important a sense of community is to more from the coworking community. This is broadly consistent with
the respondent. The fourth variable, Investors from Community, measures other prior studies which suggest that minorities tend to exhibit higher
the tangible benefits gained from the community. Specifically, it is an levels of collectivism (orientation toward the well-being of the larger
indicator variable equal to 1 if at least one of the entrepreneur’s current community), and thus place more of an emphasis on and spend more
investors was introduced to them by members of the community. I time within the community (Gaines et al., 1997). This is further reason
provide more detail on these and the various independent variables in to study the effects of coworking, and future research should continue to
the Appendix A. examine whether coworking communities can help address the trou­
Table 9 presents descriptive statistics for these variables. Table 10 bling low rate of business ownership among disadvantaged groups
then includes an OLS regression for each dependent variable. Given that (Fairlie and Robb, 2007).
individuals are nested within companies in the coworking space, I use
company and year fixed effects and robust standard errors clustered at
6.2. Women vs. men
the company level5. The subsequent sections describe the primary
insights.
Prior studies find consistent evidence that female entrepreneurs tend
to face more challenges when starting their companies relative to male
6.1. Minority vs. non-minority entrepreneurs entrepreneurs. In terms of investment especially, several studies find
evidence that investors disproportionately choose to fund male entre­
Past research suggests that racial minorities are underrepresented in preneurs (Lee & Huang, 2018; Kanze et al., 2018; Malmstrom et al.,
entrepreneurship, as they face additional hurdles that non-minority 2017; Balachandra et al., 2019). Brooks et al. (2014), for example, find
founders do not experience. For example, past studies suggest that that even when women and men pitch startup ideas with similar content,
investors demonstrate a preference for male-led companies. Other
studies find similar evidence, and suggest that this may be a function of
5
I also considered including fixed effects at the individual level, as there are
personal biases (Gafni et al. 2021), stereotypes of what a “successful”
some individuals who appear in multiple waves of the survey. However, one- entrepreneur looks like (Bird and Brush, 2002), and/or homophily, in
time respondents represent 41% of the observations, and thus it is not which male investors build relationships more easily with male entre­
possible to include fixed effects at the individual level without omitting a large preneurs (Greenberg and Mollick, 2017). Several of the women in my
portion of the data. While the inclusion of company fixed effects omits obser­ sample expressed their experiences with these biases. One founder
vations that were the sole respondent for their company (11% of observations), shared:
it represents the most granular fixed effects possible in order to include the
majority of the data. It also helps account for the fact that the sense of com­ “There’s one thing that has been consistently challenging and is the fact
munity an individual feels in a Coworking space is likely influenced by their that I am a middle-aged woman. It automatically puts me outside of the
company affiliation. regular ecosystem of startups… It’s like ‘what is mom doing here now?’

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Table 9
Descriptive Statistics from Coworking Central Survey Data
All respondents

Variable Name 1 2 3 4 5 6 7 8 9 10 11 12 13 Mean S.D. Min Mdn Max

Sense of Community 1 1.00 0.07 1.11 -3.32 0.15 2.33

Engagement in Community 2 0.82 1.00 0.03 1.17 -2.93 0.04 2.57
Importance of Community 3 0.46 0.43 1.00 0.01 0.87 -3.63 0.11 1.15
Founder 4 0.17 0.19 0.08 1.00 0.31 0.46 0.00 0.00 1.00
Minority 5 0.25 0.19 0.24 0.02 1.00 0.24 0.43 0.00 0.00 1.00
Female 6 -0.04 0.02 0.13 -0.29 0.06 1.00 0.35 0.48 0.00 0.00 1.00
Market Logic 7 -0.06 -0.05 -0.20 0.21 -0.18 -0.12 1.00 0.28 0.45 0.00 0.00 1.00
Moved 8 0.08 0.11 0.15 0.05 0.11 -0.06 -0.07 1.00 0.18 0.39 0.00 0.00 1.00
Team Size 9 0.02 -0.04 -0.01 -0.45 0.06 0.16 -0.13 0.00 1.00 8.20 4.94 1.00 8.00 15.00
Startup Years 10 0.09 0.07 -0.01 0.38 -0.10 -0.24 0.19 0.03 -0.16 1.00 5.42 4.76 0.00 4.00 17.00
Age 11 0.05 0.07 -0.06 0.29 -0.15 -0.20 0.15 -0.09 -0.18 0.43 1.00 35.46 8.03 23.00 34.00 52.00
Full Time 12 -0.01 -0.07 -0.02 -0.02 -0.05 -0.09 0.08 0.08 0.03 -0.07 -0.10 1.00 0.88 0.33 0.00 1.00 1.00
Tenure at Space 13 0.21 0.17 0.03 0.31 -0.07 -0.14 0.12 0.00 -0.07 0.36 0.19 0.07 1.00 6.06 1.16 0.94 6.35 8.00
Office Worker 14 -0.10 -0.10 -0.08 -0.20 -0.01 0.06 -0.04 0.08 0.41 -0.07 -0.12 0.10 -0.08 0.86 0.35 0.00 1.00 1.00
14

Founders only

Variable Name 1 2 3 4 5 6 7 8 9 10 11 12 13 Mean S.D. Min Mdn Max

Sense of Community 1 1.00 0.35 1.08 -2.93 0.45 2.33

Engagement in Community 2 0.82 1.00 0.40 1.09 -2.82 0.49 2.57
Importance of Community 3 0.41 0.35 1.00 0.10 0.84 -3.25 0.17 1.15
Investors from Community 4 0.29 0.33 0.20 1.00 0.16 0.37 0.00 0.00 1.00
Minority 5 0.31 0.19 0.33 0.24 1.00 0.25 0.43 0.00 0.00 1.00
Female 6 0.08 0.17 0.09 0.20 0.01 1.00 0.17 0.38 0.00 0.00 1.00
Market Logic 7 -0.13 -0.13 -0.22 -0.23 -0.29 0.08 1.00 0.42 0.49 0.00 0.00 1.00
Moved 8 0.07 0.11 0.25 0.18 0.13 -0.10 -0.18 1.00 0.22 0.42 0.00 0.00 1.00
Team Size 9 0.18 0.14 0.09 0.17 -0.14 -0.06 -0.06 0.09 1.00 5.12 4.39 1.00 4.00 15.00
Startup Years 10 -0.07 -0.17 -0.04 -0.15 -0.11 -0.11 0.04 -0.05 0.12 1.00 8.05 4.88 0.00 7.00 17.00
Age 11 -0.16 -0.14 -0.15 -0.25 -0.23 -0.11 0.14 -0.07 -0.03 0.31 1.00 39.03 7.00 23.00 39.00 52.00
Full Time 12 0.00 -0.07 -0.01 -0.02 -0.02 -0.05 0.05 0.09 0.19 -0.13 -0.17 1.00 0.88 0.33 0.00 1.00 1.00
Tenure at Space 13 0.23 0.12 -0.01 -0.09 -0.10 0.00 0.07 0.02 0.20 0.33 0.01 0.26 1.00 6.56 0.98 1.52 6.75 7.98
Office Worker 14 -0.11 -0.09 -0.05 0.01 -0.26 -0.14 -0.08 0.11 0.48 0.00 -0.16 0.21 0.08 0.75 0.44 0.00 1.00 1.00

Note: See Appendix for variable definitions.

Research Policy 51 (2022) 104447

T. Howell Research Policy 51 (2022) 104447

Table 10 change). Several of the female founders I interviewed expressed how

OLS Regression Using Coworking Central Survey Data important the community was to them, and how it helped overcome
Sense of Engagement in Importance Investors some of the challenges of founding a company as a woman. For example,
Community Community of community from one founder shared:
community
Variable (1) (2) (3) (4) “[People in the community] spent hours with me trying to help me un­
Name derstand how you build spreadsheets and budgets. That was on their own
time, that wasn’t during work hours. They’d stay after and help me. That
Minority 0.3532** 0.2401* 0.2624** 0.1408** community is huge…[they’re] so passionate about helping female entre­
(0.010) (0.090) (0.031) (0.023) preneurs. To see the diversity of this place grow as well, has been
Female -0.0144 0.1681* 0.3023*** 0.1379*
wonderful, because you feel more at home. Sometimes I still look around
(0.864) (0.070) (0.004) (0.052)
Moved 0.2659** 0.3849*** 0.2176 0.0499 and I’m the only woman here, but that doesn’t mean that 10 more aren’t
(0.040) (0.002) (0.114) (0.449) gonna show up throughout the day, and that’s a good feeling to have.”
Founder 0.3474*** 0.4381*** 0.3127**
(0.009) (0.001) (0.023) Overall, the results of the survey suggest that coworking spaces may
Market Logic -0.2267** -0.2273** -0.1641* -0.0992* be more beneficial for women relative to men. This is again further
(0.040) (0.029) (0.089) (0.077) reason to study the effects of coworking, and future research should
Team Size 0.0386* 0.0289 0.0104 0.0186**
(0.065) (0.255) (0.526) (0.043)
continue to examine whether coworking communities can help address
Startup Years -0.0060 0.0033 0.0018 -0.0036 some of the unique challenges that female entrepreneurs face.
(0.587) (0.800) (0.860) (0.546)
Age 0.0097 0.0151* 0.0043 -0.0018
(0.217) (0.054) (0.529) (0.647) 6.3. Local vs. non-local entrepreneurs
Full Time -0.0074 -0.0230 -0.0861 -0.0518
(0.968) (0.913) (0.491) (0.487) Prior research suggests that entrepreneurs who are new to the local
Tenure at 0.1905*** 0.1267*** 0.0523 0.0512** area may experience competitive disadvantages (Zaheer and Mosa­
Space
kowski, 1997). This is primarily due to the entrepreneurs’ lack of fa­
(0.000) (0.003) (0.222) (0.021)
Office Worker -0.6742** -0.1736 -0.2740 -0.0682 miliarity with the local market and a lack of local networks (Zaheer and
(0.037) (0.669) (0.132) (0.269) Mosakowski, 1997). Prior research suggests that entrepreneurs seem­
ingly recognizing this, as they (even more than other workers) tend to
Year fixed Included Included Included Included
locate in regions in which they have deep roots (Mueller and Morgan,
effects
Company Included Included Included Excluded
1962). These location decisions can have major impact on venture
fixed effects performance. For example, Dahl and Sorenson (2012) analyze a
Observations 839 839 511 169 comprehensive set of Danish start-ups and find that ventures perform
R-squared 0.412 0.431 0.415 0.188 better (i.e., survive longer and generate greater profits) when located in
Note: Table 10 measures the association between an individual’s characteristics regions in which the founders have lived longer. The effect was sub­
and their experience within the community. The dependent variable is noted stantial, and similar in size to the value of prior experience in the
above the model number in each column. For variable definitions, please refer to industry.
the Appendix. I received 940 total individual responses across all years. How­ Given these advantages of founding in a founder’s local area, en­
ever, given that I use company fixed effects, 101 observations were dropped trepreneurs who are new to the area are often at a disadvantage in terms
because they were the sole respondent from their company. Thus, N=839. I also of network and connections, and may need to rely on the coworking
performed various robustness checks, including additional OLS regressions in
community more. Consistent with this notion, the results of Table 10
which I only include each individual’s first survey response (thus, no repeated
suggest that entrepreneurs who moved to the area to start their business
observations), and other robustness checks in which I apply random effects at
the individual level (thus allowing me to retain all 940 observations). Results
report a greater sense of community (p=0.040; b=0.2659, or 24% of a 1
from these analyses remain consistent with the results presented in Table 10. S.D. change) and greater involvement in the community (p=0.002;
N=511 for Column 3 as it includes only respondents from the 2018-2020 sur­ b=0.3849, or 33% of a 1 S.D. change). This is also consistent with the
veys, as the Importance of Community variable was not collected in the 2017 evidence from my interviews, in which many of the non-local founders
survey. N=169 in Column 4, as it provides results for founders only, as they are expressed how essential the community was for them. For example, one
the only respondents to fill out company-level information including Investors founder moved across the country and had very few connections in his
from Community. I am unable to include company fixed effects in this model, as new area. He shared:
roughly half of all companies only appear in the dataset once. Thus, I only
include each company’s first response in the analysis. I performed additional “I decided to move to [current city], and when I moved down here, I knew
robustness checks with random effects at the company-level and including all my roommate from college, and his girlfriend, and that was it. I didn’t
company observations, and results remained similar to those presented in know anyone else… we needed space, and [Coworking Central] was very
Table 10. I include P-values from two-tailed tests underneath each coefficient. *, attractive… it was the best decision we made. We’re constantly sur­
**, and *** indicate significance at the 10%, 5%, and 1% levels, respectively. rounded by the ideas, the people, the energy, the clients. All of this,
[Coworking Central] brings.”
Right? That’s one thing. The other thing is that because I am a woman…
the assumption is that I don’t know anything.” Overall, entrepreneurs who are new to the area are more likely to
need and want help from the community relative to entrepreneurs who
Given these biases and forces of homophily working against female have resided in the area before and may have more of the community
entrepreneurs, it is possible that women may need to rely more on the they need.
community when seeking funding and building their ventures. The re­
sults of Table 10 support this assumption, and suggest that women have
6.4. Founders vs. employees
a different coworking experience than men. Specifically, women are
more engaged in the community (p=0.070; b=0.1681, or 14% of a 1 S.D.
As discussed previously, coworking spaces have a variety of different
change), place more importance on the community (p=0.004;
people. Some of these individuals are founders creating their own ven­
b=0.3023, or 35% of a 1 S.D. change), and are more likely to find in­
tures, whereas others are employees who are working for those foun­
vestors through the community (p=0.052; b=0.1379, or 37% of a 1 S.D.
ders. These two types of people – founders vs. employees – are different

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T. Howell Research Policy 51 (2022) 104447

in many ways (Roach and Sauermann, 2015). For employees, the job is "You build a lot of connections, just people that you talk to when you’re
often just that; a job. Founders, however, are often personally, finan­ going to get coffee, things like that... a lot of those connections come to pay
cially, and emotionally invested in their ventures, which can lead to high off over time where somebody knows an investor you want to meet with.
levels of stress and anxiety (Wasserman, 2012). As such, it is likely that They introduce you, or they talk to a potential customer about your
founders are more likely to seek out and rely on the community more product. I think for me… the collaboration is one of the exciting things, so
than employees. being able to help people out and see them succeed is very motivating."
This is consistent with the evidence of Table 10, which suggests that
Entrepreneurs with a nonmarket logic are much more likely to
founders are more likely to feel a sense of community (p=0.009;
engage in these types of regular and spontaneous interactions, and more
b=0.3474, or 31% of a 1 S.D. change), to be engaged in the community
likely to spend time helping other community members. It is often
(p=0.001; b=0.4381, or 37% of a 1 S.D. change), and place more
during these times when stronger bonds are made, and new opportu­
importance on the community relative to employees (p=0.023;
nities arise. Thus, while founders with a market logic get the solutions
b=0.3127, or 36% of a 1 S.D. change). My interview evidence suggests
they need for pre-existing problems, founders with a nonmarket logic
that by simply bringing together a group of founders experiencing many
tend to create more previously non-existent opportunities from their
of the same challenges, coworking spaces can offer a welcome relief. For
relationships in the community. The results of Table 10 support this
example, one founder who had employees shared the following:
reasoning. Specifically, entrepreneurs with a market logic are less likely
“As a CEO founder, you’re on an island. Being in a place like this, you’re to feel a sense of community (p=0.040; b= -0.2267, or 20% of a 1 S.D.
not on an island anymore. Well, you’re on an island, with several other change), to be engaged in the community (p=0.029; b= -0.2273, or 19%
people around you. You can wave at each other, bump into each other, of a 1 S.D. change), to place importance on community (p=0.089; b=
kind of be able to share that energy. That optimism. And then actually -0.1641, or 19% of a 1 S.D. change), and to find more of their investors
literal ideas, tactics. So one of the most valuable things for me is having through the community (p=0.077; b= -0.0992, or 27% of a 1 S.D.
some kind of cadence of meetings with other CEO founders that are change).
approximately the same stage as my company, or maybe a step ahead. It’s
just the most valuable interactions that I have. I have something where I’m 6.6. Summary: coworking as an equalizer?
getting groups of founders on a regular occasion. I have no specific ask or
agenda when I show up there, but it just helps.” Overall, I find that some entrepreneurs have better coworking ex­
By simply listening, supporting, and sharing the emotional highs and periences than others. Specifically, minority entrepreneurs appear to
lows with the founder, other founders in the coworking community can have a better coworking experience than non-minorities, women more
provide much of the emotional and psychological support that founders than men, non-local entrepreneurs more than local entrepreneurs,
crave during the founding process. Employees, who do not face the same founders more than employees, and entrepreneurs with a nonmarket
challenges and pressures as founders, are likely to want and need the logic more than those with a market logic. These findings, though
overall coworking community less. correlational rather than causal, provide clear indications of patterns in
coworking spaces that should generate and guide future theory and
6.5. Entrepreneurs with market vs. non-market logics empirical work.
One of these overarching patterns is that less-advantaged entrepre­
Institutional theory has recently focused on institutional logics – neurs appear to benefit more from participation in coworking spaces. As
taken-for-granted understandings of what is meaningful and appropriate discussed in the preceding sections, prior research finds that entrepre­
in a setting – as an explanation for organizational and individual actions neurs who are racial minorities, women, or not local to the area face
(Pahnke et al., 2015). In the context of entrepreneurship, past research many biases, hurdles, and liabilities that other entrepreneurs do not
broadly categorizes entrepreneurs as following either a market logic or face. Yet, these are also the entrepreneurs who report having the best
nonmarket logic (Clough et al., 2019). A market logic refers to action coworking experience. Thus, in the terms of prior literature, coworking
guided by economic rationality and self-interest. Entrepreneurs with this spaces appear not to follow a "Matthew Effect" in which resources flow
logic generally view the purpose of their startups through the lens of to high-status actors helping them to accrue more status (Merton, 1968),
profit maximization, and focus mostly on financial metrics (Almondoz, but rather a "Mark Effect" in which lower-status actors benefit from re­
2014). Individuals with a nonmarket logic, in contrast, engage in action sources, thus helping to tighten the distribution of rewards (Bothner
that is motivated by and oriented toward a higher goal than self-interest, et al., 2011). Coworking may, therefore, help improve equality within
such as family, religion, or community (Friedland and Alford, 1991). entrepreneurship and benefit those who need help the most. Or, as one
Entrepreneurs with a nonmarket logic are less likely to view their founder put it:
startups exclusively through a profit-maximization lens, and more likely "I don’t think we would have the same opportunities. I don’t think we
to view it through the lens of their ongoing social relations and cultural would have the advisors we have. I don’t know if we would be a thing if it
context (Almondoz, 2014; Clough et al., 2019). weren’t at [Coworking Central], honestly. I don’t know how it would’ve
On one hand, founders with a market logic may try harder than worked out."
others to be involved in the community if they believe that involvement
will impact their start-up’s success. However, my interview and survey
evidence suggest this is only partially true. While entrepreneurs with a 7. Implications for future research
market logic do indeed interact with others in the community, they
typically only do so when they have a specific purpose, question, or I close this paper by proposing a research agenda to advance our
need. They spend less time helping others in the community, and are less understanding of the implications of coworking for both research and
likely to spend time in spontaneous interactions with others while practice. In addition to further research on coworking itself, coworking
walking down the hall, in the kitchen, at events etc. Instead, they spaces offer researchers a host of opportunities to advance many the­
attempt to minimize these “distractions” so they can focus on their ories in management, entrepreneurship, and organizations.
venture. However, it is often these spontaneous interactions (when there Social capital theory in particular may find coworking a useful
is no pre-specified purpose) that result in the most opportunities for the context in which to generate new insights. Social capital theory is an
entrepreneur. For example, one interviewee shared: important analytical lens for understanding strategic actions and out­
comes in entrepreneurial firms, as an entrepreneur’s network can in­
fluence the identification of opportunities, facilitate innovation, confer

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T. Howell Research Policy 51 (2022) 104447

status, and assist in mobilizing resources (Aldrich and Kim, 2007; plans to become "all-remote" organizations in which they have no cen­
Davidsson and Honig, 2003; Shane and Stuart, 2002). As mentioned tral office or headquarters, but rather allows their employees to work
earlier, recent research portrays entrepreneurs as proactive actors who wherever they want. As part of this, some companies are considering
attempt to break out of their social structure constraints and pursue new offering their employees a coworking "stipend," in which employers
connections through networking (Vissa, 2012; Stuart and Sorenson, offer employees who do not want to work from home a certain amount
2007). Coworking spaces provide a unique opportunity in which to of money each month to purchase a coworking membership (CNBC,
study how entrepreneurs do this. In addition, while prior research 2021). This suggests that entrepreneurs in coworking spaces will soon be
typically examines how entrepreneurs build ties with investors, part­ mingling with remote workers from a more diverse set of organizations,
ners, and other resource providers, there is little research on ties among both large and small, leaving many open questions as to what types of
entrepreneurs themselves. It is possible that coworking spaces can act as spillovers and knowledge sharing will occur. Potential future research
a new source of social capital, in which a community of entrepreneurs questions include: How (if at all) do entrepreneurs benefit from cow­
interacts with and engages in helping each other succeed by providing orking with remote workers of large corporations? Do entrepreneurs
referrals and introductions to key stakeholders (e.g., customers, in­ benefit from more knowledge sharing in a coworking space focused
vestors, employees). Possible future research questions include: How specifically on entrepreneurs, or in a coworking space with a more
does the social capital generated from a coworking community interact diverse set of participants? How is knowledge sharing and spillovers
with or substitute for other types of social capital in relation to new within coworking spaces affected by the region in which the coworking
venture performance? To what extent do coworking spaces act as social space is located?
foci that bring together individuals who might otherwise be uncon­ Future research should also pay careful attention to the limitations
nected? Which design features of coworking spaces (see Table 2) are and drawbacks of coworking for entrepreneurs. Though some are
associated with stronger connections among community members, and described in this paper (distraction, loss of productivity, etc.), more
entrepreneurial performance outcomes more broadly (see Cohen et al. work is needed to understand the types of entrepreneurs who would
2019 for example)? Also, given the preliminary findings that coworking suffer rather than thrive in a coworking context. In particular, future
tends to help historically less-advantaged entrepreneurs (i.e., minority, studies should further pursue the idea of "failing slow," in which a
women, and non-local entrepreneurs), future research could further coworking community encourages founders to pursue their ideas longer
examine how coworking spaces help advance network change and than they should. This stands as an intriguing contrast to startup ac­
mobility for these groups. celerators, whose purpose is to speed up the process of entrepreneurship
Coworking can also be used to study new question around organi­ (Cohen et al., 2019; Hallen et al., 2020). Yu (2020), for example, finds
zational design and boundaries. Organizational boundaries are defined that accelerators help startups fail faster by resolving uncertainty around
as the demarcation between the organization and its environment company quality sooner, thus making them more efficient investments.
(Santos and Eisenhardt, 2005). These boundaries are a central focus in Future work should more carefully study whether coworking has the
strategy and organizations research, as they represent the social struc­ opposite effect, in which friends in the coworking community shroud a
ture that constitutes an organization and have a substantial influence on founder’s ability to make appropriate exit decisions.
how the organization processes information. Recently, more studies Finally, in addition to providing new insights for the theories above,
have examined socioeconomic changes that blur organization bound­ coworking spaces can also act as a useful context in which to collect data
aries, including open innovation, crowdsourcing, online communities, for other entrepreneurship studies. Data on early-stage entrepreneurs is
and the rise of the sharing economy (Ashford et al., 2007; O’Mahony & notoriously difficult to collect, as new companies are constantly forming
Ferraro, 2007; O’Mahony & Beckhy, 2008). Coworking is a similar and dissolving before entering any database, thus making them invisible
phenomenon in which organizational boundaries are blurred. Entre­ to researchers. This results in a left-censoring problem in which startups
preneurs often identify not only as members of their own ventures, but are mostly studied in the later stages of their life cycle, and relatively
also as members of the coworking space and community in which they fewer studies examining startups at the youngest stages of development.
are nested (Garrett et al., 2017). This collective identity ties community Coworking spaces, however, offer an excellent location in which to find
members together, despite formally working for separate organizations. and collect data on these early-stage entrepreneurs. These spaces are full
Overall, coworking spaces offer an interesting and potentially fruitful of entrepreneurs of variable quality and stage of development, poten­
context to study new questions around organizational design and tially offering a much-needed window into the startup process. Thus,
boundaries. Potential future research questions include: How is a col­ future studies could benefit from going to coworking spaces for sample
lective identity built and sustained in coworking spaces? When in­ selection (by first developing good relationships with coworking staff
dividuals are nested within teams within a coworking community, how and obtaining the proper permissions), even if the research question
are organizational boundaries blurred, and at which level do they does not focus on coworking itself.
identify the most? In addition, a future study could examine the rise of
coworking as a new organizational form and the process by which it was 8. Conclusion
diffused and driven proactively by entrepreneurs.
In addition, coworking also has implications for theories of spatial Coworking spaces represent a novel type of workspace for entre­
proximity and its impact on innovation, knowledge sharing, and spill­ preneurs. Given the rapid rise of this new organizational form, its im­
overs. Prior studies suggests that location is a key parameter influencing plications are largely unstudied. This paper takes an exploratory
exposure to knowledge spillovers, as knowledge is inherently tacit and empirical approach and sheds light into what coworking is, how it
localized, and thus the transfer of knowledge requires frequent inter­ works, and what implications it might have for entrepreneurs and
action which is facilitated by proximity of location (Alcacer and Chung, entrepreneurship research. By so doing, it provides an initial foundation
2007; Audretsch and Feldman, 1996; Jaffe et al., 1993). Coworking for studying the coworking movement, the conditions under which it
spaces offer an interesting context in which to study localized knowl­ may improve entrepreneurial outcomes, and the various research
edge sharing and spillovers, and how new ventures’ co-location affects streams it can enrich. Specifically, it suggests that one of the most
innovation, knowledge sharing, and knowledge spillovers among fundamental aspects of coworking, which sets it apart from other
entrepreneurial peers. This may be especially true in coming years, entrepreneurship support organizations (e.g., accelerators, incubators,
given reports of large companies sending more of their employees to maker spaces) is the community aspect. The community helps founders
coworking spaces. This trend is being accelerated by the recent solve problems, give feedback and new ideas, or just simply provide
COVID-19 pandemic, which has forced companies both large and small friends and social support when times get tough. Results also suggest this
to reevaluate their workspace plans. Many have recently announced may be especially true for less-advantaged entrepreneurs. Overall, the

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T. Howell Research Policy 51 (2022) 104447

data suggest that coworking spaces are providing unprecedented ways • Moved – Binary variable taking the value of 1 if the entrepreneur
for entrepreneurs to form communities with each other and thus interact moved to the area from another city to start or work on their busi­
with and learn from their peers. ness, and 0 otherwise.
• Startup Years – Number of years the individual had worked in start­
CRediT authorship contribution statement ups at the time of survey response.
• Office Worker – A binary variable that takes the value of 1 if the
Travis Howell: Conceptualization, Methodology, Software, Valida­ respondent worked in a private office, and 0 if they worked in the
tion, Formal analysis, Investigation, Resources, Data curation, Writing – "hot desk" area.
original draft, Writing – review & editing, Visualization, Supervision, • Sense of Community – This is an adaptation of the Peterson et al.
Project administration, Funding acquisition. (2008) scale for sense of community, and measures the extent to
which the respondent feels a sense of community in the coworking
Declaration of Competing Interest space based on three survey items (each on a Likert scale of 1-7): (1) I
feel connected to the Coworking Central community; (2) I feel
The authors declare that they have no known competing financial accepted by others in the Coworking Central community; (3) People
interests or personal relationships that could have appeared to influence at Coworking Central are good at influencing each other. I first
the work reported in this paper. performed a CFA and confirmed a strong fit for the data. Using these
factor loadings, I then generated a continuous variable influencing
Acknowledgements the probability of the 3 ordinal items.
• Team Size – Number of team members in Coworking Central working
The data collection for this research was funded in part by the Ewing for the same company as the respondent.
Marion Kauffman Foundation. Grant Number: G-201806-4485. The • Tenure at Space – The number of days the individual has been a
contents of this publication are solely the responsibility of the author. member of the coworking space. I take the natural log of this variable
to adjust for the skewed distribution of tenure at the space.
Appendix A. Variable definitions

• Age – The individual’s age (in years) at the time of the survey. References
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