The Future of Work

At my daily blog, Points and Figures, I have blogged a bit about the future of work.  I wrote about it here, and here, and here.  The reason I was blogging about it was because I had done a lot of research and wound up making two investments in the space.  One is Nextspace, a series of co-work spaces.  There are several things about Nextspace I like, but one of them is Nextkids.  The other one is Deskpass.  They also have software to power independent co-work spaces.  When Caroline Fairchild asked me to blog about how we will work, I gladly obliged.

There are two extremes.  

One example is a totally distributed workforce.  This is hard to pull off.  Jason Fried of Basecamp has pulled it off successfully.  He did a TED talk on it.  A totally distributed workforce is not for everyone.

The other example is the traditional hierarchy.  One centralized office.  One huge campus.  We know this example well.   Even startup tech companies when they get to scale build massive office complexes.  Google, Facebook, Apple and the rest of the tech titans that seem to have "alternative" work ideas are all on campuses.  

Each year, co-working grows.  I don't think this is a result of co-working being more efficient or better or some sort of hard business case.  Instead it's the result of underlying currents in the economy.  If we examine business growth and dissect it by size, we find that mega corporations with employees of more than 10,ooo are growing, and small nimble consulting type firms of 1-10 employees are growing.  It's the middle market that is getting squeezed.  

Mega corps can afford the big campus and long term commercial real estate leases.  Small nimble consulting firms are finding that sharing office space with other firms is very cost efficient.   Hence, co-working.

There are great benefits to not staying at home and working by yourself.  People are inherently social animals.  If you want to open yourself up to randomness, you have to get out of your home.  Powerful things can happen from random interactions.  Years ago a friend was at Stanford, they ran into a person pinning up a job on a job board.  They started a company and exited successfully.  

Home always seems to get in the way.  There are latent distractions just laying around to interrupt you.  My wife recently started a non-profit business with some friends.  She tries to work out of Nextspace when she isn't working with them.  Forget about a coffee shop to get meaningful work done.  Coffee shops are good for answering on the fly email, checking trivial things, first meet ups and that's about it.  

I also think that companies can benefit from some part time distribution if they manage it correctly.  For example, a big company that buys Deskpass for their employees can open the company up to new ideas.   There is power in diversity of ideas, and working out of the traditional office can free the brain, and change perspective.  Often, break throughs happen when you aren't constrained.

Big companies should always have feelers out in the market that collect information.  They should have a process to internalize that information, process it and either roll out new products/features or figure out how to service their customers better.  Getting intelligence from being away from the office and out in the community can allow big companies to be more nimble and find new markets to attack as well. 

Co-work spaces have their own vibe.  They have different people working on different things.  If they are managed correctly, they become a bee hive of creativity.  I have found that even companies that start out in a co-work space like to stay in co-work spaces after they grow.  They want their own private office adjacent to the open space.  The culture they have created can combine the best of both worlds. 

In places like New York and San Francisco, real estate is hyper expensive.  Co-working can help cut down on the cost since many times smaller firms aren't in their actual office.  They are out hustling.   In places like Chicago where real estate is less expensive, co-working can provide a support network so that you can take your business to the next level.  

It's clear to me that co-working is not going away.  It's an expanding space, and grows by large multiples world wide each year.  Millennials like co-working because they are used to it.  It also helps them with work/life balance in a lot of cases because they can find a co-work space close to home instead of traveling miles and miles to a central office.