April 23, 2019
1880 Bardo, an Optix client and members-only club in Singapore
Coworking is changing. Over the past decade, it has evolved from a largely foreign idea to a mainstream way of working. Today, coworking is positioned at the leading edge of workplace innovation.
As the coworking concept has gained traction, one of the trends we’ve observed is the establishment of more niche focused coworking spaces. Niche spaces appeal to members with specific interests and are focused on bringing like-minded people together. We see examples of this in the increasing number of female and industry focused brands and makerspaces. Beyond just finding a space that meets their functional needs, these niche-seekers are looking for their tribe. As an operator, focusing on a niche market and providing an experience tailored to their specific needs can help you retain customers for the long-term in a highly competitive market.
Zeroing in on your coworking niche
Many coworking niches are founded because there is a unique need that is unserved in the market or an element is missing in the mass market coworking formula being employed by major players such as WeWork. We see niches being carved out in a number of ways:
- Market sector or industry, e.g. AI and Blockchain focused spaces
- Profession, e.g. spaces targeted towards lawyers or realtors
- Business Type, e.g. social enterprises, non-profits
- Ways of Working, e.g. makerspaces, shared kitchens
Makerversity, a makerspace located in London
In order to successfully start and grow a niche coworking space, you’ll need to do some homework to decide on which niche to serve.
Here are three steps you can follow to identify a coworking niche:
1. Identify a unique need
CANOPY, a coworking space in San Francisco for the mature professional crowd
Many niche coworking space founders start out by understanding a gap in the market and identifying an opportunity to attract an otherwise underserved group. Steve Mohebi and Amir Mortazavi, Co-Founders of CANOPY, were wary that the majority of the coworking spaces in San Francisco did not host or attract the city’s mature professional crowd, like themselves. That’s when they decided to fill the void and build a community targeted to accomplished, mature professionals. According to them, exchanging ideas and conversations between people in the same walks of life and with the same years of experience allowed for deeper connections.
2. Research your market
Impact Hub, a coworking brand that inspires, connects and enables people across the world to sustainably impact society
Identifying a unique need also means doing your research. If you’re an indie game maker and would like to open a coworking space for other indie game-makers, you need to assess whether there would be a sufficient level of demand for this concept.
To kick off your market research, you can look at indicators such as location, niche group size and the feasibility of the idea. Understanding legislative and other socio-economic events could also be an opportunity for you to consider. For example, opening a coworking space for cannabis startups in Canada following the legalization of marijuana. Another instance is to open an AI-focused coworking space in a city after the local government invests in AI research. Tools such as LinkedIn can be valuable for helping you get an idea of your potential market size.
Not investing time on market research can be costly. Having failed to estimate its target audience, The Hive Philly closed down within a year. The natural pitfall to serving a niche community is that your offering will appeal to a smaller segment of the total market. And if there is competition in place, it will be that much harder to fight for an already narrowed target market. That’s why, in the niche coworking space, it’s advantageous to be novel and establish a first-mover advantage
Impact Hub is a coworking brand that inspires, connects and enables people across the world to sustainably impact society. When it first opened its doors in 2005, it was the first social impact-focused coworking brand. They have since scaled to over 100 cities, supporting over 16,000 members around the world.
3. Deliver superior value
When serving a niche market, it is still important to understand the competitive landscape of the coworking industry in your area. You will want to consider where the other coworking spaces are located, what markets they serve and how your offering stacks up against each of theirs. If the competition is serving the same community you are looking to serve in the same location, try to identify what you can do to create a superior offering than your competitors.
The Riveter, a women-focused coworking space in Seattle
Through this exercise, you will better understand how to fulfill the needs of your niche market. This could be for example providing additional programming and resources (similar to what an accelerator and/or incubator may provide). Alternatively, you could also consider collaborating with a competitor to offer joint value to your coworking community through a multi-brand alliance. By going through this exercise, you will be able to carve out a path for delivering true value to your current and future members.
Why serve a niche community?
One of the primary benefits of serving a niche community is that you can create a deeper connection and offer additional value to a group of coworkers looking for something more than what a traditional coworking space would be able to provide. If you succeed in creating a space that meets the unique needs of your niche audience, you’ll likely have more loyal members that are less likely to seek out alternative options and churn.