Coworking has grown exponentially during the last years, as well as its approaches to different targets. One of its latest trends is coworking niches. These are coworking spaces focused on really specific industries that accept members from certain markets. For example, there are coworking spaces for musicians, some for designers and others where women are the only ones permitted. Let’s analyze this new business model.
Although many think coworking is one of those businesses where clients appear knocking at their doors, it is extremely difficult to be successful. One of the main reasons is because their revenues fluctuate while they have high fixed costs. Well, ironically, while they are offering flexible term leases and attractive amenities; they still have to pay a traditional lease for their space.
To solve this issue, coworking founders saw in niche communities a way out. They analyzed that a stronger sense of community could create a loyal client base that would want to stay together. That’s when they started to target specific markets and professional groups in an effort to generate loyalty among their renters.
Nevertheless, adapting to this new model had other implications. The first thing was to fully know the niche. This meant to understand its necessities, interests and most wanted amenities in a space. Knowing basic aspects of the market was not enough anymore. In other words, they had to become experts on the topic. Otherwise, they would be offering a “standard” coworking space down the road. Plus, they will also be excluding other members because they’ve focused on this niche.
Although this might seem a hard task, coworking spaces that have readjusted to this model have to offer unique services in order to retain clients and drive more value to them. For example, many provide special concierge services, discounts to local retailers, hotels and airlines and other ancillary offerings. Additionally, all of their programs and events must focus on the subjects that matter the most to every member. Therefore, the usual activities provided by coworking spaces don’t work. One thing to remember is that generic is not compatible with niche coworking spaces.
Another aspect that coworking founders evaluate is whether their space is in a big city and if this model is the best choice for their location. This is because coworking spaces that are open to all people have higher probabilities of being profitable, in cities with a million or more residents. A possible solution for coworking spaces that are considering this possibility is to first make a curation of its members. For example, to decide who can become a member based on the stage of their business or number of employees.
Here’s an example of how The Wing has made its approach to niche coworking spaces. Look at the importance of offering more than just a desk and free wifi!