The Co-Working Space Blueprint:
A Case Study on the Impact of Co-Working Spaces on Entrepreneurship
Date: 24 June, 2016
Supervisor: Prof. Roel van der Voort
Student: Shahar Graff
Student Number: 11085878
Education: MSc Business Administration, Entrepreneurship & Innovation Track
Institution: Faculty of Economics & Business, University of Amsterdam
STATEMENT OF ORIGINALITY
This document is written by Shahar Graff who declares to take full responsibility for the contents of this document.
I declare that the text and the work presented in this document is original and that no sources other than those mentioned in the text and its references have been used in creating it.
The Faculty of Economics and Business is responsible solely for the supervision of completion of the work, not for the contents.
ABSTRACT
Purpose: Understanding the role of the co-working space in the entrepreneurial process and determining which components of the co-working spaces provide value to the entrepreneurial members.
Design Approach: Mixed case study, based on nine semi-structured interviews. Units of analysis were the managers of the co-working spaces and their venture tenants. Sample was chosen using no-probability sampling. The research was conducted in both Amsterdam, the
Netherlands and Tel Aviv, Israel.
Findings: The areas of most value to the studied entrepreneurs are an impressive design and atmosphere, an extensive professional network and a dining area for socialization among members. Additionally, various components of the business model were analyzed, providing an understanding on the contribution to the co-working space members.
Research Limitations: The sample size was limited, which does not permit generalizations. Yet the findings show the contribution of various factors that may be further researched and analyzed.
Originality: The co-working phenomenon has appeared and grown in recent years and has not yet been thoroughly researched. Even more so, little empirical evidence places co-working spaces in the context of entrepreneurship and the entrepreneurial ecosystem. Additionally, this study was done within two cities, each with differently developed entrepreneurial ecosystems. In addition to providing more variation to the findings, a number of cultural differences seemed to arise.
Keywords: Co-working spaces, business incubation, entrepreneurship
ACKNOWLEDGEMENTS
Foremost, I would like to express my sincere gratitude to my supervisor Dr. Roel van der Voort for his guidance throughout the entire process of writing this Master thesis. I would also like to thank each of the participants that took the time to meet with me and provide me with valuable information for this study.
TABLE OF CONTENTS
Abbreviations ...... 7 List of Tables & Figures ...... 7 1. Introduction ...... 8 1.1 Overview ...... 8 1.2 Relevance of Research ...... 9 1.3 Outline ...... 9 2. Literature Review ...... 10 2.1 Introduction to Entrepreneurship ...... 10 2.1.1 The Entrepreneurial Ecosystem ...... 10 2.1.2 Definition of an Entrepreneur: ...... 14 2.2 Business Incubation ...... 16 2.2.1 Historical Background ...... 16 2.2.2 The Role ...... 17 2.3 Co-Working Spaces ...... 19 2.3.1 Introduction to Co-Working Spaces ...... 19 2.3.2 Characteristics of Co-Working Spaces...... 20 I Professional Services ...... 21 II Professional Networks ...... 21 III Physical Environment ...... 25 3. Methodology ...... 26 3.1 Research Design ...... 26 3.2 Research Sample ...... 28 3.2.1 Selection of Co-Working Spaces ...... 29 3.2.2 Selection of Tenant Ventures ...... 30 3.3 Data Collection ...... 31 3.4 Data Analysis ...... 34 4. Case Context ...... 35 4.1 Entrepreneurial Ecosystem of the Netherlands ...... 35 4.2 Entrepreneurial Ecosystem of Israel ...... 38
4.3 Background On Selected Co-Working Spaces ...... 40 4.3.1 WeWork ...... 40 4.3.2 B. Amsterdam ...... 42 4.3.3 SOSA (South of Salame) ...... 42 5. Case Analysis & Findings...... 44 5.1 Determining Contribution of Professional Services ...... 45 5.1.1 Business Services ...... 45 5.1.2 Venture Efficiency ...... 47 5.1.3 Benefits & Discounts ...... 47 5.1.4 Flexible Membership ...... 48 5.2 Determining Contribution of the Professional Network ...... 48 5.2.1. Member Interaction...... 49 5.2.2 External Contacts...... 53 5.2.3 Tenant Mix...... 54 5.2.4 Establishing Legitimacy ...... 55 5.2.5 Events...... 56 5.3 Determining Contribution of the Physical Environment ...... 57 5.3.1 Space Layout ...... 58 5.3.2 Dining Area ...... 58 5.3.3 Design & Atmosphere ...... 59 5.4 Leaving the Co-Working Space ...... 59 5.4 Identifying Cultural Gaps ...... 60 5.5 Summary ...... 61 6. Discussion ...... 61 7. References ...... 64 8. Appendices ...... 69 Appendix I Main Co-Working Spaces In Amsterdam & Tel Aviv...... 69 Appendix II Interview Guide ...... 71 Interview Template I: Managers of Selected Co-Working Spaces ...... 71 Interview Template 2: Selected Tenant Ventures of Co-Working Spaces ...... 74 Appendix III Extensive Interview Information ...... 76 Appendix IV Coding List ...... 79
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ABBREVIATIONS
CEO: Chief Executive Officer
CS: Co-working Space
CTO: Chief Technology Officer
GEM: Global Entrepreneurship Monitor
ICT: Information & Communications Technology
R&D: Research & Development
TEA: Total Early-stage Entrepreneurial Activity
LIST OF TABLES & FIGURES
Figure 1. TEA rate from 2001 to 2013 36
Table 1. Nine pillars of the entrepreneurial ecosystem 13
Table 2. Categorization of interview guide 32
Table 3. Interview Participants, Co-Working Space Managers 33
Table 4. Interview Participants, Co-Working Space Tenant Ventures 33
Table 5. Characteristics of chosen co-working spaces 43
Table 6. Main co-working spaces in Tel Aviv & Amsterdam 70
Table 7. Extensive interview characteristics, co-working space managers 77
Table 8. Extensive interview characteristics, co-working space tenants 78
Table 9. Coding list for data analysis 79
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1. INTRODUCTION
1.1 OVERVIEW
Co-working spaces, also referred to as collaborative workspaces, are flexible workspaces designed to encourage collaboration, creativity, networking, socializing and generating new business opportunities for small firms, start-ups and freelancers. They are flexible, shared, rentable and community-oriented workspaces occupied by professionals from diverse sectors.
Co-working spaces provide independent professionals with a building of community, a way to work better together than they do alone. The idea behind the concept is to serve as a ground for collaboration, community, sustainability, openness and accessibility (Spinuzzi, 2012).
The co-working movement started in the USA in 2005 and has spread globally, with over
700 spaces by the year 2011 (Foertsch & Cagnol, 2013). While co-working spaces appear to be growing quickly, little information is known regarding the value they provide. This thesis will look into the various co-working spaces in Amsterdam, the Netherlands and Tel Aviv, Israel, each with more than 15 co-working companies. Moreover, many of the companies have a number of spaces within each city, amounting to even more co-working spaces available in both cities.
In addition to defining co-working spaces and the environment they provide for their members, it is important to understand the contribution of such spaces to the entrepreneurial process and the growth of new ventures. There is a lack of empirical evidence to guide the co-working spaces in operating to best suit the entrepreneurial ecosystem and accelerate venture growth.
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1.2 RELEVANCE OF RESEARCH
Although there is research available on the subject of co-production, it is mainly from years past and, as a result, is not entirely in line with recent developments in the entrepreneurial ecosystem. Co-working spaces are one of the more recent developments, and have yet to be researched thoroughly. Moreover, there are few studies that relate the co-working spaces to the field of entrepreneurship and its impact on entrepreneurs. Scientific findings that may be relevant for understanding this phenomenon can be extracted from the study of business incubators.
Although the business model is not identical, the two are built on similar characteristics and core components. As state, co-working spaces are mentioned minimally in the literature although they are becoming more frequent around the world, which provides an opportunity for new research.
The study will observe co-working spaces from two angles, that of the managerial staff and of the entrepreneurs who are tenants. The following objectives will guide the research process:
(I) Understanding the role of the co-working space in the entrepreneurial process
(II) Determining which components of the co-working spaces provide value to the
entrepreneurial members
In order to meet the objectives, the research question of this study is as follows:
How do the components of co-working space business models contribute to the
entrepreneurial process.
1.3 OUTLINE
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This study will begin with a thorough overview of relevant literature in topics that contribute to the in-depth understanding of co-working spaces as well as the entrepreneurial process.
Following, will be an explanation of the method used to conduct the study, including the sampling size, research design and data analysis. After the first research-focused sections, a section on the case context will provide detailed information on all aspects of the case study.
Finally, the findings will be presented and discussed, along with the implications and limitations of the study.
2. LITERATURE REVIEW
2.1 INTRODUCTION TO ENTREPRENEURSHIP
2.1.1 THE ENTREPRENEURIAL ECOSYSTEM
There is yet to be a concrete definition for the term entrepreneurial ecosystem, however various studies use similar guidelines in effort to create one. At the root of the term you find two words, ‘entrepreneur’ and ‘ecosystem.’ Shane and Venkatamaran (2000) define entrepreneurship as a process in which opportunities are discovered, evaluated and exploited in order to create novel goods and services. Stam (2014) expands on the definition, claiming that it is the process in which individuals pursue opportunities for innovation, thus creating new value for society.
The second word of the term is ‘ecosystem,’ most commonly associated with biology. The definition of ecosystem, according to the Oxford Dictionary, is as follows: “A biological community of interacting organisms and their physical environment.” The sub-definition displayed for general use of the term is “a complex network or interconnected system,”
(Ecosystem, 2016).
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When bringing the terms together and into context, the entrepreneurial ecosystem refers to the interdependent network or community of independent actors, who focus on the impact of external conditions on a firm’s innovation and business progress (Stam, 2014).
Within Feld (2012: 186-187), Case and Harris detail the nine main attributes of a successful entrepreneurial ecosystem, also referred to as a startup community. The key actors and events listed are the following: leadership, intermediaries, network density, government, talent, support services, engagement, companies and capital.
The following table (Table 1) details the main attributes of an entrepreneurial ecosystem, as outlined in Feld, 2012:
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Attribute Description
Leadership Strong group of entrepreneurs who are visible, accessible and committed to the region being a great
place to start and grow a company.
Intermediaries Many well-respected mentors and advisors giving back across all stages, sectors, demographics and
geographies as well as a solid presence of effective, visible, well-integrated accelerators and
incubators.
Network Density Deep, well-connected community of startups and entrepreneurs along with engaged and visible
investors, advisors, mentors and supporters. Optimally, these people and organizations cut across
sectors, demographics, and culture engagement. Everyone must be willing to give back to his
community.
Government Strong government support for and understanding of startups to economic growth. Additionally,
supportive policies should be in place covering economic development, tax and investment vehicles.
Talent Broad, deep talent pool for all level of employees in all sectors and areas of expertise. Universities
are an excellent resource for startup talent and should be well connected to community.
Support Services Professional services (legal, accounting, real estate, insurance, consulting) are integrated, accessible,
effective and appropriately priced.
Engagement Large number of events for entrepreneurs and community to connect, with highly visible and
authentic participants (e.g. meetups, pitch days, startup weekends, bootcamps, hackathons and
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competitions).
Companies Large companies that are the anchor of a city should create specific departments and programs to
encourage cooperation with high-growth startups.
Capital Strong, dense, and supportive community of VCs, angels, seed investors, and other forms of
financing should be available, visible, and accessible across sectors, demographics and geography.
Table 1. Nine pillars of the entrepreneurial ecosystem
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Although the listed components are necessary for creating a successful entrepreneurial ecosystem, the amount of external involvement must be limited. According to Isenberg (2010), one key principle is to allow clusters to grow and develop naturally without over engineering their surroundings (Isenberg, 2010). In other words, it is important to provide a supportive environment that helps foster an entrepreneurial ecosystem, but also allow room for organic progress.
As suggested in its definition, the actors of the entrepreneurial ecosystem each play distinct roles that are interconnected and affect the ecosystem as a whole. According to Feld
(2012), it is important to note that government and support services are considered ‘feeders’ of the ecosystem. Entrepreneurs, on the other hand, are considered to be the ‘leaders’ of the ecosystem (Feld, 2012). Furthermore, Stam (2014) states that entrepreneurship is should not only be regarded as an outcome of the ecosystem but as a key player in creating and sustaining the ecosystem.
2.1.2 DEFINITION OF AN ENTREPRENEUR:
As mentioned in the previous section, at the core of the entrepreneurial ecosystem is the entrepreneur. An entrepreneur is defined as an agent of change who is able to identify an opportunity where there is a match between an innovation and its market. The entrepreneur must make use of resources to meet the customer needs and to deliver a product at competitive cost and quality (Lalkaka, 2002).
Assenza (2015) analyses the life cycle of entrepreneurial ventures. According to their research, the life cycle starts with an entrepreneur and their idea, which must be willing to take
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the risk of developing it and creating value. During this time they are most often solo practitioners who work on the idea part-time, in addition to their existing career. If the idea seems to have the potential of becoming a sustainable business, they may choose to commit to it entirely. Next, they will need to involve others and form a startup team. As they grow and add more employees, the venture will be considered a small business, with a main focus on creating stability in the business operations. If they are able to provide a unique offering or hold a competitive advantage in the market, the business will scale up and expand operations or exit (be acquired). At this point, the venture will become “fully engaged in economic activity with wide repercussions for success or failure,” (ibid.).
Drawing from this, in order to promote economic activity, the ecosystem’s pillars must pay attention to the needs of the solo practitioners and support them. There are many uncertainties and risks faced by entrepreneurs, through all stages of their ventures. And while entrepreneurship supports economic growth, it may also need support of its own.
Entrepreneurial research shows that there are certain traits shared by entrepreneurs. For example, tolerance for risk and uncertainty, inclination towards autonomous work and confidence in their resourcefulness. Nonetheless, starting a new venture requires many resources.
These include financial, human and social resources (Acs, Audretsch, & Lehmann, 2013). Teece
(1986) addresses this topic as well. He states that one of the main challenges for entrepreneurs when starting a new venture is obtaining the necessary resources. Building a resource base has great importance in helping the entrepreneur develop their innovation and enter the market (ibid).
However, following the market penetration, new ventures often face additional risks such as inexperienced management, a lack of relevant networks and use of immature systems
(Avnimelech et al., 2007).
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Although entrepreneurs may face many risks in the process of new venture creation, there are many business services made available to them in order to minimize risk and help overcome barriers. This will be further examined in the upcoming sections.
2.2 BUSINESS INCUBATION
2.2.1 HISTORICAL BACKGROUND
In the 1970s, the role of small and medium-sized enterprises appeared to play an important role in economic growth, regional development and technological changes.
Additionally, high-tech clusters such as Silicon Valley began to show success. This led to countries shifting the focus of their economic development to more entrepreneurial strategies and policies (Eisinger, 1988). In the years following, many states, regions and cities introduced economic development programs. One of the goals was to create new industries by helping support small and medium enterprises in the phases of starting the busienss, surviving the industry and succeeding in the market (Rice, 2002).
After various business development services began to appear, business incubators were developed and became more common and widespread during the 1980s. Lalkaka (2002) researched technology business incubators and their influence in building an innovation-based economy. The research shows that the role of business incubators is to assist in new venture creation by providing affordable workspaces, shared facilities, training and access to external entrepreneurial networks. As a result, research shows that the venture’s likelihood to survive in the market is higher after undergoing incubation (ibid.).
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One benefit of the business incubator, in comparison to the other programs and services offered at the time, was their ability to provide the enterprises with many forms of assistance, as well interact with them on a consistent basis (Rice, 2002).
Furthermore, business incubation also became a tool used by governments and academic institutions, used to develop various industry sectors, contribute to the creation of jobs and provide economic benefits such as wealth (Avnimelech et al., 2007).
2.2.2 THE ROLE
To understand the importance of business incubation, one must understand its role within the entrepreneurial ecosystem. A core principle of business incubation is to support new ventures temporarily, until they are able gain strength and become efficient (Avnimelech et al., 2007).
As previously mentioned, business incubators were introduced as a tool for economic development. According to Peters et al. (2004), the incubator must provide a supportive environment for new ventures. Often this includes flexible renting spaces, shared administrative services or equipment and access to a network of advisors.
Today, there are many variations of business incubators. Characteristics differ among them, however each must provide counseling, training, networking services, space and facilities.
In doing so they provide create a positive environment for new venture success and play a role in their professional development (Lalkaka, 2002).
Over time, the role of an incubator has transformed and is no longer a business center offering solely office facilities. The business incubator is considered to be “a vehicle for enterprise development,” as it assists entrepreneurs in lowering the costs of information and resources. Once entrepreneurs have formulated their idea, business incubators play a large role in
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gathering the necessary resources and then “harvesting the rewards.” On a wider scale, the incubator is also said to promote the surrounding economy by creating local jobs, supporting economic development and promoting the transfer of technology. Peters et al. (2004) list the following functions as factors for the success of an incubator: (1) establish clear metrics for success, (2) provide entrepreneurial leadership, (3) develop and deliver value-added services to member companies, (4) develop a rational new-company selection process and (5) ensure that member companies gain access to necessary human and financial resources (Peters et al., 2004).
Smilor (1987) declares that business incubators are useful in many industries, but are most effective for technology-based firms. Over 90% of new businesses fail annually (during the first five operational years), due to a lack in managerial skills or capital. Moreover, new ventures have little access to resources, where the incubator is able to fill this gap by helping connect the ventures with talent, technology, capital and expertise. The incubator provides access to resources through formal and informal network ties, which is a great benefit for technology- based ventures.
Incubators have been growing at a fast pace and, for this reason, Lalkaka (2002) suggests that there is a need for improved incubator variations. By introducing different business models, the entrepreneurs will be able to increase performance, relevance, efficiency, effectiveness, utility and sustainability (ibid.).
Co-working spaces present a new take on the traditional business incubator. By providing many similar services and characteristics, co-working spaces aim to promote new venture creation as well. The next section will look into characteristics unique to the co-working space, as well as its historic background and development.
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2.3 CO-WORKING SPACES
2.3.1 INTRODUCTION TO CO-WORKING SPACES
Co-working spaces are flexible workspaces that promote collaborations, networking and knowledge sharing, as well as create business opportunities. They provide a community for new ventures, small and medium businesses, startups, independent workers (also known as freelancers) and more by bringing together like-minded individuals of different industries and sectors.
Though studies have researched personality traits that characterize most entrepreneurs, additional factors come into play in new venture success. Other than entrepreneurial traits, entrepreneurial action demands a fitting environment: a productive business environment and a physical surrounding that allows a flow of creativity and innovation (Lee, Florida, & Acs, 2004).
An organizational trend that has begun in recent years is ‘collaborative knowledge work,’ referring to positions such as freelancing, co-production, virtual teams and independent contracting. Recent technological and mobile development plays a large role in the spreading of this trend, due to the promotion of less permanent work that can be conducted from remote locations. One of the outcomes of the trend is the creation of co-working spaces (Spinuzzi, 2012).
The origin of the co-working space has been traced back to the year 2005 in San
Francisco, USA. A startup employee, Brad Neuberg, started the ‘co-working movement’ by asking others to join him in sharing a workspace. Joining required paying partially for the office space rental, Internet fees and food. The motivation behind this concept was using the physical proximity of like-minded people to create a network, collaborate and inspire productivity and
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effectiveness in the workplace. By the year of 2011, over 700 variations of co-working spaces had opened globally (Foertsch & Cagnol, 2013).
Co-working spaces, as defined by Spinuzzi (2012), are paid open-plan office environments, where professionals are able to work alongside unaffiliated professionals. The co- working space can be classified as any of the following: an office alternative, a social hub, a possibility for collaborations, a barrier between the private and professional lives and a chance for like-minded people from diverse industries to work alongside each other (ibid.).
Since the creation of co-working spaces, they have spread on a global scale and provide a solution for a growing problem. The ‘collaborative knowledge work’ trend involves mainly independent work, outside of the traditional office space. This type of work presents a number of shortcomings, which Spinuzzi (ibid.) covers in his research of co-working activities. First, there is a need for a barrier between a person’s workspace and personal life. Working from home makes this a constant struggle, as there is no separation between the two. Additionally, working alone may cause professional isolation. The term ‘professional isolation’ refers to one of the downfalls of solo practitioners that do not have an office and choose to work from home. By sharing a workspace, a community of support is created, which has been found to stimulate business development. Additional benefits of working in a shared space, rather than at home, is being surrounded by like-minded individuals, having a professional network, creating a work-life balance and increased career satisfaction (ibid.).
2.3.2 CHARACTERISTICS OF CO-WORKING SPACES
The main concept of the co-working space is building a community with core values of collaboration, sustainability, openness and accessibility (Spinuzzi, 2012). The following
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components represent the core of the co-working spaces and their benefits within the entrepreneurial ecosystem.
I PROFESSIONAL SERVICES
Similar to business incubators, co-working spaces provide businesses with a flexible work environment that supplies office space, facilities and administrative services.
In studying the activities necessary for new ventures to succeed, Delmar & Shane (2004) stated that founders must go through a series of actions in order to create and sustain a new venture.
This includes buying or renting facilities and equipment, hiring employees, fundraising, gathering information, product development and more over time. By providing entrepreneurs with infrastructure and services, co-working spaces allow the tenant businesses to focus on the actions they need to take, dissolving the need to handle basic administration and office management tasks. Later in the study, we will go into further detail of the variety of services provided by the co-working spaces.
II PROFESSIONAL NETWORKS
One of the main characteristics of the co-working space is the professional network provided to tenants who join, which is critical to new venture success. The following studies present the added values of professional networks for new ventures.
Networks prove to be of high importance during the entrepreneurial process. One of the main benefits is providing entrepreneurs with resources such as information and advice, helping reduce the risk in their activity. This is relevant not only during the beginning venture stages, but throughout the entire process (Hoang & Antoncic, 2003).
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Delmar & Shane (2004) cite Arrow (1974) claiming, “Social ties are an important lubricant to all economic transactions.” The following section describes various ways in which social ties, or professional networking, come into play within the co-working spaces.
Information Gathering. Anhuja (2000) emphasizes the importance of networking for access to information resources. In business, a professional network is critical for the stages of information gathering and data processing. Firms can choose to make use of their network connections in order to gather this necessary information from the sources holding the information (Anhuja, 2000).
Additionally, the entrepreneur’s network serves as a social source of information necessary for opportunity identification. Relevant information can be obtained through working with mentors, participating in professional forums and creating informal professional networks.
Ozgen and Baron (2007) state that the more an entrepreneur participates in such activities, the more valuable information they will collect. As a result, they will also be more successful in identifying potential business opportunities for new ventures (Ozgen & Baron, 2007).
Not only is it important to understand professional networks, but also their structure is important in and of itself. Glasmeier (1991) refers to direct and indirect ties, presenting the potential downside in professional networks. According to the study, there is a limit to the effectiveness of direct ties. In other words, when a firm has too many direct ties, they experience information overflow and are not able to absorb it as well. With less direct ties, a firm is more flexible in their ability to make use of the information shared with them (Glasmeier, 1991). This should be taken into consideration when creating co-working spaces, as the tenants’ interaction may be affected negatively if there are too many members in the space generally, or too many members from complimentary industries.
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Legitimacy. Hoang and Antoncic (2003) determine that the environment of uncertainty surrounding entrepreneurial activity lead to the entrepreneur’s search for legitimacy. By establishing networks with well-regarded individuals or organizations, the entrepreneur may reduce the perceived risk associated with their new venture and increase their attractiveness to possible stakeholders. As a result of the network linkages, additional exchanges of resources may occur and benefit the entrepreneur in the long run. This is also referred to as signaling content, where the linkages between the firm and external figures signals to stakeholders that they have potential (Hoang & Antoncic, 2003).
Other studies dive into this topic as well. New ventures are not viewed as accountable as established organizations, thus creating a need for legitimacy. Once a venture can be well perceived, it will be easier to obtain the proper resources and survive in the market. Moreover, the success of ventures in early stages highly depends on stakeholders’ perceptions rather than financial performance (Delmar & Shane, 2004).
Co-working spaces are able to provide a company an initial form of legitimacy by providing them with an office space, meeting rooms, professional network linkages and more.
This may be perceived highly by potential stakeholders, and be especially helpful in the early stages of ventures.
Establishing Trust. A benefit of interconnected networks is the reduced risk of ‘deviant behaviour.’ When a company is connected to various networks and partners, they will likely act in a way that is not opportunistic in order to avoid damaging their reputation (Anhuja, 2000).
Hoang and Antoncic (2003) discuss the positive effect of trust on new ventures. When two parties have a trusting relationship, they can assume that the other party will act in a way that is acceptable. This minimizes the transaction costs of their activities, seeing as they require less
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negotiations and supervision. Additionally, it deepens their exchange relationship and paves room for more information sharing.
Therefore, by creating an environment of businesses working alongside each other, or an interconnected community, the co-working spaces are able to promote trust and help develop successful business relationships and transactions.
Knowledge Spillover. Anhuja (2000) researched collaboration networks within firms, discovering that collaborative links may be associated with two types of network benefits. One is the newly available combination of knowledge, skills and assets, which makes use of tacit knowledge. The other is the occurrence of knowledge spillovers, where more explicit information and ‘know-how’ is transferred between firms. Knowledge spillovers can be related to work methods, breakthroughs, insight or organizational information (Anhuja, 2000). Within the context of the entrepreneurial ecosystem, the presence of knowledge spillovers has been shown to create opportunities in entrepreneurship. A knowledge spillover occurs when there is access to knowledge that hasn’t been exploited or commercialized by others, and is therefore available for exploitation by a new venture. In the field of entrepreneurship, this process comes across in “The Knowledge Spillover Theory of Entrepreneurship.” According to this theory, creating new knowledge helps increase technological opportunities. Therefore, entrepreneurial activity requires that an entrepreneur exploit the information obtained through knowledge spillovers (Acs, Audretsch, & Lehmann, 2013).
In another study, this comes across in relation to innovative performance. Innovative performance is an outcome derived from combining multiple sources of knowledge. The knowledge must be dissimilar enough to create new combinations, but not too dissimilar that it is not possible to bridge between the information (Nooteboom, 2000).
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Additional research shows that a business’s innovative performance is influenced by numerous factors. According to Anhuja (2000), there are three dimensions: direct ties, indirect ties and connections between partners. Indirect ties bring access to knowledge spillovers, while direct ties take this to another degree by adding benefits of resource sharing. The third aspect, the partners’ network, has most benefits and provides novel information to the company by introducing knowledge from the partners’ partners.
Bringing this into the context of co-working spaces, the ties between tenants of the spaces likely drive innovative performance. The co-working spaces bring together like-minded individuals of various industries. This creates an immediate professional network, with new direct ties. The co-working spaces give them a place to make new direct ties and exchange information and knowledge within the community created. As a result, new indirect ties are made available to the tenants as well.
III PHYSICAL ENVIRONMENT
The innovation process is influenced by the space in which it takes place, with a connection between physical space and interaction. This allows workspaces to be designed in a way that promotes interaction, communication and effective group work. The physical space refers to the following: geography location, scale, real or virtual, flexibility, design values, IT resources, data, visualization resources, constraints and evolution (Moultrie et al. 2007).
Taylor and Spicer (2007) further discuss this topic, claiming that workplaces that choose to incorporate a layout and design supporting innovation are usually doing so with the intention of creating a ‘directed space.’ In other words, the physical space directs the interaction of the inhabitants in the space, which can also reinforce the organization’s structure and dispersion of control (Taylor & Spicer, 2007).
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Many organizations have started to focus on creating effectively designed workspaces in order to foster interactions and, in a broader view, innovation. Moultrie et al. (2007) emphasize the effect of infrastructure on work and communication. In addition, physical locality is considered to be a catalyst for creativity by use of visual materials, social activity and inspirational sources (Moultrie et al. 2007).
When it comes to the physical attributes of the workspace, there are a number of elements commonly found amongst co-working spaces. This includes open layouts, modern design and furniture, bright colors, architectural elements, kitchen amenities and games. By providing this, the designers are creating constraints on entrepreneurial activity. This can prove beneficial by promoting economic growth, which is the desired outcome, or instead act as a limitation on the entrepreneurial activities (Assenza, 2015).
To conclude this section, it is important to point out that there is much research available on the components that are found within co-working spaces as depicted above. It also becomes apparent that the professional network is of great importance to the entrepreneurial process.
Although there is relatively abundant studies that explore the business incubators, there is little research available that ties the listed components directly to co-working spaces. Moreover, little research has been conducted that connects the field of co-working spaces to entrepreneurship.
The next section will aim to outline the methodology used to connect said topics in this study.
3. METHODOLOGY
3.1 RESEARCH DESIGN
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As shown in the Literature Review, the field is lacking in research and for this reason, the study conducted used a Grounded Theory method. More specifically, in order to gain understanding on the co-working space concept and its growth, the research conducted is an inductive and qualitative mixed-case study.
The case study methodology is used with the purpose of examining ongoing phenomena within their natural setting, which is fairly common in new research fields. The use of multiple cases enables the researcher to observe in depth, as numerous settings are observed simultaneously (Yin, 1994)..
The following method was used to execute an exploratory study of entrepreneurial ventures in both Amsterdam, the Netherlands and Tel Aviv, Israel. Each of the ventures are current members of co-working spaces and have shown growth while working at the co-working space. These two cities were chosen with the following reasoning. First, both are main cities of relatively small countries. Second, both Amsterdam and Tel Aviv are showing growth in their entrepreneurial ecosystems and innovations, as determined in Section X. An asset to the study is the author’s background, having lived in both cities and being exposed to both of the ecosystems being studied. This was a point of advantage, as it broadened the scope of the research conducted and added a cultural context to the findings and discussion. By studying two distinct cultures, one can observe the differences in the co-working spaces themselves, but also in the different entrepreneurial processes and mindsets of the regions.
There are two units of analysis for this study: managers of selected co-working spaces and entrepreneurs of ventures working from the corresponding co-working spaces. In order to provide data triangulation, primary data in the form of observations was collected, as well as secondary data collected through reliable sources on the internet, such as official websites. The
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secondary data collected was in regards to the chosen co-working spaces and ventures, but also to additional co-working spaces in both cities.
By researching both units (co-working space managers and tenant ventures), the research may provide insight into gaps between the perception of both sides regarding the components of the co-working spaces. In a study conducted by Mian (1996), a similar technique was selected in regards to researching the value-added contributions of university technology business incubators to tenant firms. A multiple case-study was conducted by interviewing both the incubator proprietors (managers and staff) and the ventures that were tenants of their incubator.
As explained in Section 2, co-working spaces may be regarded as a variation of the incubator business model, providing limited incubation services. Therefore, using a similar research structure in this study may derive relevant insight on a new and rising business model.
3.2 RESEARCH SAMPLE
Selective sampling, a non-probability sampling technique, was used to select the tenant ventures and managers interviewed for this research. This method allows the researcher to conduct an information-rich case study, helping to better understand the issue of importance to the study (Patton, 2005). In this mixed-case study, the selective sampling was used to understand the important components of the co-working spaces and their business model, in effort to understand their impact on the tenant ventures.
Data saturation may be achieved by gathering data that can be grouped into different categories and used to conduct a thorough data analysis. This relies on the researcher’s perception of data saturation, which guides the selection of the sample size (Elo et al., 2014). In
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order to provide a trustworthy analysis for this case study, a number of entrepreneurs and co- working spaces were researched until the author had perceived that data saturation was achieved.
The total sample size consists of nine interviews. Five interviews were conducted with entrepreneurs working at one of the four chosen co-working spaces in either Amsterdam or Tel
Aviv. The remaining five interviewees were managers of the chosen co-working spaces:
WeWork or SOSA in Tel Aviv, Israel and WeWork or B. Amsterdam in Amsterdam, the
Netherlands. The author constructed the sample in two stages. First was the selection of the co- working spaces to be studied (leading to their managerial staff). Next, by using specific guidelines, the entrepreneurs were chosen through the nomination of the managers. The following two subsections will further detail the sampling criteria of this study.
3.2.1 SELECTION OF CO-WORKING SPACES
In order to select fitting subjects (co-working spaces) for the study, the author conducted primary research. An extensive list of the co-working spaces located in both Amsterdam and Tel
Aviv can be found in Appendix I. The selection of the cases (co-working spaces) was based on the following sampling criteria. First, the co-working spaces chosen were for-profit and privately owned businesses. Second, each one must provide the following: a paid membership for a flexible workspace, an element of design and professional networks (in correlation to the characteristics listed in the Literature Review and later reviewed in the study). Third, for each city, a global co-working space and local co-working space were to be chosen. The criterion selected aimed to broaden the scope, while maintaining similarities between the co-working spaces and thus providing more focused findings. After narrowing it down using this criteria, there were two local co-working spaces selected, both of which were large players in their local
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entrepreneurial ecosystem and both planning to expand globally in the upcoming year: B.
Amsterdam in Amsterdam and SOSA in Tel Aviv. When selecting the global co-working space, each city had two main players in their ecosystem. In Amsterdam, the two spaces were Spaces and WeWork. In Tel Aviv, the two spaces were Mindspace and WeWork.
Although all four co-working spaces were contacted, only WeWork locations responded and agreed to participate. Of the WeWork locations, the ones selected for the study were the pioneers of the region. Being the first to open in the corresponding cities, these spaces are more established and stable and therefore preferable for research. Despite having two WeWork spaces selected, both under one global corporation, the two were treated as separate spaces due to the complete separation in their management. This separation also comes across in the interviews with the managers of the two locations. Last, using a brand that operates in both countries also allows us to better compare the findings and understand cultural differences. As a result, four co- working spaces were chosen and then interviewed: WeWork Weteringschans, WeWork Dubnov,
B. Amsterdam and SOSA. See Section 4 for in-depth information regarding each of the chosen co-working spaces.
3.2.2 SELECTION OF TENANT VENTURES
Five entrepreneurs, each from separate ventures, were chosen for this study. In order to meet the research objective and understand how co-working spaces influence the growth of entrepreneurial ventures, it was crucial that the ventures chosen show growth during their time at one of the four chosen co-working spaces. Another factor was that all subjects have a full membership for a private office, ensuring a portion of similarity between them. A limitation for this research came across when selecting the tenant ventures. Co-working spaces are extremely
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dynamic workspaces, with tenants entering and exiting often. For this reason they do not list their tenants in any official resources such as their websites. In order to find promising ventures that have shown growth (in size & economic growth) while at the co-working space, managers were asked during their interview to list three of the tenant ventures that have done so. This was asked of them within Part D: General Information About Members (see Table 2). Following the gathering of this information, the tenant ventures were contacted and five of them were interviewed, where the author had felt that data saturation had been met. In effort to provide a variety of input for the research, each of the ventures was different in team size and field.
Additional details regarding the chosen ventures can be found in Table 4.
3.3 DATA COLLECTION
The research data was collected between March and May of 2016. The research subjects were contacted through email or social media platforms (specifically Facebook). The subjects located in Israel were interviewed by Skype whereas the subjects located in Netherlands were interviewed in face to face meetings at their office, within the studied co-working space. There was one exception where, due to injury, one interview in Amsterdam (Tenant 3) was conducted through Skype. One interview (Manager 3) was conducted in the Hebrew language, as a result of the co-working space location and the preference of the interviewee. The author speaks both
Hebrew and English fluently and has translated the transcript to English.
The interviews were developed based on previous literature and were conducted in a semi-structured form, with the purpose of allowing subjects to expand on their thoughts. A semi- structured interview guide was established, displaying the main topics covered in correspondence
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to the literature review (see Appendix II). More specifically, the interview guide has been divided into the following sections:
Managers Tenant Ventures
A. General Characteristics of the Co-Working Space A. General Characteristics of the Venture
B. Services Provided to Members B. Motivation Behind Choosing a Co-working Space
C. Physical Workspace Characteristics C. Conditions of the Co-Working Space
D. General Information About Members D. Services Offered
E. Network Structure E. Network Structure
Table 2. Categorization of interview guide
All interviews were recorded and transcribed, with additional notes and observations recorded at the time of the interview. The duration of the interviews was between 25 to 40 minutes, with an average of 29 minutes in length. This length provided each participant with enough time to expand on the topics they found to be important. The goal of the study was introduced before each interview, as stated in the Interview Guide (see Appendix II). Participants were asked if they agree to be recorded and all accepted to participate.
The following tables outline the characteristics of the interviews conducted for data collection, separated according to co-working space managers and their tenant ventures. Further information can be found in Appendix III.
Interviewee Position Gender Co-Working Location Duration of
Space Interview (in
minutes)
Manager 1 Community Female WeWork Amsterdam, 30
Manager Weteringschans Netherlands
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Manager 2 Facilities Male B. Amsterdam Amsterdam, 40
Manager Netherlands
Manager 3 Community Female WeWork Tel Aviv, Israel 25
Manager Dubnov
Manager 4 General Male SOSA Tel Aviv, Israel 25
Manager
Table 3. Interview Participants, Co-Working Space Managers
Interviewee Venture Position Gender Co-Working Location Interview
Space Duration
(in
minutes)
Tenant 1 Startup: Big Data Product Male WeWork Amsterdam, the 20
Analytics Designer Netherlands
Tenant 2 Startup: Software Founder & CEO Male B. Amsterdam Amsterdam, the 35
Development Netherlands
Tenant 3 Startup: Online CTO Male B. Amsterdam Amsterdam, the 30
Retail Netherlands
Tenant 4 Startup: Co-Founder Female WeWork Tel Aviv, Israel 30
Marketing
Agency
Tenant 5 Startup: Database CEO & Co- Male SOSA Tel Aviv, Israel 30
Management Founder
Table 4. Interview Participants, Co-Working Space Tenant Ventures
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3.4 DATA ANALYSIS
The data collected from the interviews was analyzed using coding themes. This is a core component of content analysis, which helps strategically categorize the research findings.
Coding categories are used to sort the descriptive data obtained in qualitative research and distinct between the types of information that arise. Organizational categories are often established before collecting the data, appearing as topics that later ease the process of further sorting the data for analysis (Maxwell, 2012).
In this study, organizational categories were determined based on the literature review.
This was then used to structure the interviews for both tenant ventures and co-working space managers. Such categories described motivation for joining the co-working space, network structure, venture characteristics, co-working space services and more (see Appendix IV for coding list). Following the interviews, inductive coding took place in order to further compartmentalize the findings of the research and ease the process of data analysis. Different codes were used to distinguish between managers and tenants of the co-working spaces researched.
Following the transcription and coding of each interview conducted, the data was analyzed and searched for recurring patterns and themes. Each case was analyzed independently for patterns, and later coupled with a cross-case search for patterns. The goal of the findings is to discover the components of the co-working space business model that impact entrepreneurs and their ventures’ growth, as well as spot potential gaps between the perspective of the co-working space tenants and management. Furthermore, the cross-case analysis was used to identify potential differences between the two cities, Tel Aviv and Amsterdam.
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4. CASE CONTEXT
4.1 ENTREPRENEURIAL ECOSYSTEM OF THE NETHERLANDS
When looking into the entrepreneurial ecosystem of the Netherlands, it is apparent that a transformation is underway. Research shows that over the past twenty years, the amount of new businesses and self-employers has increased drastically. Between the years 2002 and 2012, the rate of entrepreneurship1 has doubled to 10 percent of the economy (Global Entrepreneurship
Monitor 2012, Cited by Stam, 2014). This phenomenon is referred to as the “Dutch
Entrepreneurship Miracle,” as no other innovation-driven economy has seen such a steep growth rate in regards to entrepreneurship.
Entrepreneurship, according to Stam (2014), has made it possible for a country as small as the Netherlands to become “one of the most prosperous countries of the world for centuries.”
The country’s role in revolutionising entrepreneurship began with the invention of the VOC
(joint stock corporation) in the year 1602 and, soon after, the first modern stock exchange.
Throughout the years, entrepreneurship and innovation continued to develop and create national wealth with the founding of large multinationals such as Unilever, Philips and Shell.
The rate of entrepreneurship has continued to grow since the 1980s and accelerated since the internet bubble of the late 1990s. This can also be seen on the Global Entrepreneurship
Monitor (GEM), in which the Netherlands rate of entrepreneurship showed growth mainly during the years 2005 to 2012 (see following Figure 1).
1 Total Entrepreneurial Activity (TEA) rate, which reflects the percentage of the adult population currently involved in starting a new business (nascent entrepreneurship) or that owns a business less than 42 months old, see the Global Entrepreneurship Monitor 2012.
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Figure 1: TEA1 rate from 2001 to 2013
Source: Global Entrepreneurship Monitor 2012, cited by Stam (2014)
The GEM report for 2015 shows that 64.5% of society values entrepreneurs with high status, and 79% believe that entrepreneurship is a good career choice (Kelley et al., 2016).
In the research published by Stam (2014), it is recommended that the Netherlands support the entrepreneurial ecosystem creating ‘third spaces.’ These spaces are meant to bring together the different actors of the local ecosystem and enhance their interactions by lowering barriers between them. Entrepreneurs are then able to come together, meet and learn from each other
(ibid.). Incubators, accelerators and other workspaces, such as co-working spaces, can serve as
‘third spaces’ and support the growth of the local entrepreneurial ecosystem.
Focusing on Amsterdam. After understanding the growth of entrepreneurship within the
Netherlands, it is important to look into the capital city as well. Amsterdam itself is also considered to be an innovative region and was recently awarded the European Capital of
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Innovation award (also known as iCapital) of 20162. This was awarded to the city by the
European commission, for Amsterdam’s holistic vision of innovation and use of a bottom-up approach. The title of “European Capital of Innovation” relates to four areas: governance, economics, social inclusion and quality of life.
On a global level, Amsterdam is ranked as number nineteen (out of twenty) on the Global
Startup Ecosystem Ranking of 2015, with the fifth highest growth rate of the top twenty cities.
The city is also impressive in market reach, with most startups starting as global businesses and with an average of 50% foreign customers. However, one area in which the city is lacking is in startup funding, both seed and growth capital. Overall, the report states, “Amsterdam is an attractive location for tech startup founders due to its unique lifestyle aesthetic and great startup infrastructure, and while it’s not as big of a startup ecosystem as more prominent European counterparts like London or Berlin, it certainly has the ambitions to become like them.”
(Herrmann et al., 2015).
In addition, Amsterdam is home to over 1,100 startups and 136 investors, with assisting services from incubators, accelerators, corporations, universities and government. According to
StartupAmsterdam, a unit of the Amsterdam municipality that invests in the local entrepreneurial ecosystem, there are five requirements for startups to grow: (1) Talent; (2) Customers and users;
(3) Content; (4) Capital; (5) and Startup-minded environment. Based on the listed requirements, the StartupAmsterdam unit created measures to work by in order to boost the Amsterdam ecosystem (Who’s Who, 2016). This shows us that the entrepreneurial ecosystem of Amsterdam,
2 Amsterdam is the European Capital of Innovation 2016. (2016). Retrieved from: http://ec.europa.eu/research/innovation-union/index_en.cfm?section=icapital
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within the Netherlands, is highly valued and prioritized. For this reason, the city of Amsterdam was chosen to be studied in regards to the role of co-working spaces in entrepreneurship.
4.2 ENTREPRENEURIAL ECOSYSTEM OF ISRAEL
In under seventy years of existence, Israel has a country has developed at an unbelievable rate. Israel recognizes the importance of clusters for the innovation process, environments that support entrepreneurial ventures by increasing the mobility of resources such as talent, funding and information. Israel has developed to be a center for both innovation and entrepreneurship, specifically focusing on ventures in high-tech and investments in the ICT industry. The government supported this through use of public policies, R&D activities and enabling of labor mobility. (Engel & del-Palacio, 2011)
The innovation cluster, known as Israel, contributed to the commercialization of many innovations in telecommunication. For example, voicemail, instant messaging, VoIP telephony and more. Another strong field for Israel’s technology is biotechnology and medical devices, with approximately 65% of Israel’s patents. Another interesting fact is that as of the year 2008,
Israel became the country with the third largest amount of public companies listed on NASDAQ, after the Unite States and Canada alone (ibid.).
The success of a country as small as Israel is said to be a result of the cluster of world- class scientists, entrepreneurial engineers and technicians. Three factors being strong education, compulsory military service and a homogeneous culture. Cited by Engel & del-Palacio (2011),
Israel’s Ministry of Foreign Affairs declared that about 1,000 companies are created annually.
This is the second highest, worldwide, after the United States in startups.
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Today, Israel’s entrepreneurial ecosystem consists of more than 1600 technological startups, 88 investors, 72 accelerators, 44 co-working spaces, 88 research and development
(R&D) centers and 300 supporting services (Startup Map, 2016).
The IVC Research Center analyses Israel’s high-tech, venture capital and private equity industries. According to their annual report, in the year 2015 Israeli high-tech exits totaled in over $9 billion, which was 16% more than the previous year. The top ten exits all exceeded $200 million and involved global multinationals such as Amazon, Microsoft, Amdocs, Blackberry and more (IVC Research Center Ltd., 2016).
Israel’s society appears to value entrepreneurs with a high status, at a percentage of 86.2%
(higher than the Netherlands). On the other hand, when looking at the portion of society that values entrepreneurship as a goof career choice, the percentage is surprisingly lower at 64.5%
(lower than the Netherlands). Nonetheless, the rate of entrepreneurship continues to grow, as shown by the TEA measure of the GEM report. The rate has grown from 10% in 2013 to 11.8% in 2015 (Kelley et al., 2016).
Focusing on Tel Aviv. Tel Aviv, one of Israel’s most central cities, is considered to be one of the most prominent startup ecosystems on a global scale. In the Global Startup Ecosystem
Ranking of 2015, the city of Tel Aviv ranks number five out of twenty. Moreover, it is considered to be the third fastest growing ecosystem among the top ten, placing second in growth within Europe. With approximately 4,000 active technological startups, Tel Aviv is one of the largest startup ecosystems in the world, and was ranked second place in 2012 (first after Silicon
Valley). According to the report, the ranking has dropped by three spots is due to the de- emphasis of the density metric of startups per capita.
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Nonetheless, the city has a strong global presence and has a strong reputation among investors. The ecosystem is ranked number five in funding, with large amounts of capital for every stage of startup funding. Even more impressive is that 47% of the investment rounds include foreign investors, which is 38% more than European investment rounds on average.
When looking at the city’s global market reach, Tel Aviv placed number one, successfully reaching clients in the United States, Asia and Europe (Hermann, et al., 2015).
With a well-developed entrepreneurial ecosystem, the environment and culture of entrepreneurship in Tel Aviv is surely different than Amsterdam. By looking into both cities, it will be interesting to identify possible cultural gaps in relation to the topic at hand, co-working spaces and entrepreneurship.
4.3 BACKGROUND ON SELECTED CO-WORKING SPACES
The following section will provide details on the co-working spaces studied in this case study. Two of the co-working spaces, although working separately and in different countries, belong to one global brand. The remaining two co-working spaces chosen were unique to their city (Amsterdam and Tel Aviv), yet aim to become global entities in the upcoming years.
4.3.1 WEWORK
In the year 2010, WeWork opened their first location in the Soho district of New York
City, USA. Between the years 2012 to 2016, the company underwent seven funding rounds, amounting to $1.43 billion. In 2016, the company reached over 90 global locations in more than
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23 countries, with a valuation of $16 billion3. Also in 2016, the company launched ‘WeLive,’ a flexible-stay apartment building that is also built around the aspect of community (WeLive,
2016). The WeWork slogan is “Do What You Love,” which emphasizes the importance of the environment that the space provides for its members. The company invites designers, developers, marketing heads and entrepreneurs to collaborate in the co-working environment (WeWork,
2016).
WeWork in the Netherlands. There are currently two WeWork co-working spaces located in the Netherlands, both within the city of Amsterdam. Both were opened within six months of each other in the year 2015. The first to open was WeWork Weteringschans, which was selected for this study. This building supports around 350 members and is located in central
Amsterdam. The second location is WeWork Metropool, located East of Amsterdam’s center.
Although it was opened later in the year, WeWork Metropool is about three times larger in size and holds close to 1050 members. This study will examine the case of WeWork Weteringschans.
See Table 5 for more information.
WeWork in Israel. The first WeWork location to arrive in Israel was in Tel Aviv during
2014. Since then, three additional locations have opened up, one in Tel Aviv, one in Be’er Sheva and one in Herzliya. As stated, there are currently two locations with the city of Tel Aviv. The pioneer is WeWork Dubnov, located in the city center with the ability to host over 400 members.
The second Tel Aviv location is WeWork Sarona, nearby to the other, which is a bit larger and able to hold 500 members. This study will examine the case of WeWork Dubnov. See Table 5 for more information.
3 Financial information extracted from official CrunchBase profile. Retrieved from: https://www.crunchbase.com/organization/wework#
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4.3.2 B. AMSTERDAM
B. Amsterdam was founded in 2013 by three co-founders with the slogan “Building
Businesses.” The large 28,000 square meter complex aims to be one of the biggest startup ecosystems in Europe. The company defines itself as a creative working space for innovation, education and growth, bridging together startups, creatives and corporations. Although it is located outside of Amsterdam’s central area, it provides many services in order to be a city within a city with all the knowledge under one roof. In addition to having a co-working space available for its members, the building contains a gym, cafe, rooftop restaurant, event hall, school for entrepreneurship and cinema.
The building serves approximately 700 members at the moment. In order to increase this number, B. Amsterdam is expanding and adding a new building to the existing complex.
Furthermore, the company is planning a global expansion in the upcoming year. The first city for this expansion is New York, USA. See Table 5 for more information.
4.3.3 SOSA (SOUTH OF SALAME)
Founded in 2014, the SOSA workspace hold between 100 to 150 people at any given time. This amounts to approximately 20 to 30 startups, which is their target audience. This fits well with their slogan, “An innovator’s community, established for the startup ecosystem.” The space is located in a previously-industrial building in the Southern area of Tel Aviv and was designed with the mission of prompting interaction, creativity and collaboration among members.
The key factor is creating a vibrant environment to meet, work and socialize. (See Table 5 for more information.
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The following table details the key characteristics and business models of the chosen co-working spaces:
WeWork WeWork Dubnov B. Amsterdam SOSA
Weteringschans
Location Central, Amsterdam Central, Tel Aviv Non-Central, Non-Central, Tel
Amsterdam Aviv
Year Founded 2015 2014 2013 2014
Number of Members 350 400 700 100 to 150 at any
given time
Team Structure (on- Community Community 10 full-time Small team site) Manager, Associate Manager, Associate employees including
Community Community Operations, (no additional
Manager & Front Manager & Front Facilities & Events information
Desk Associate Desk Associate Managers; 15 interns available)
Purpose Building a large, Create a community To create a city Provide value for
connected within Israel’s within a city & large startups and Israel’s
community startup ecosystem startup hub high-tech industry
Target Members Community-driven Startups & 50% startups, 30% Early stage startups
people in need of a supporting actors of corporations, 20% with funding
flexible workspace the entrepreneurial creative and
ecosystem supporting industries
Services Flexible Flexible Flexible Full time flexible
memberships on- memberships on- memberships on- memberships;
demand or full demand or full demand or full Open workspace;
time; Open time; Open time; Open Private offices;
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workspace; Private workspace; Private workspace; Private Conference rooms;
offices; Dedicated offices; Dedicated offices; Dedicated Free drinks; On-
desks; Conference desks; Conference desks; Conference site industry
rooms; Free rooms; Free rooms; Free experts (also
drinks; Online drinks; Online coffee; Gym; referred to as
member network; member network; Cinema; Parking members)
Discount services; Discount services; spots
Weekly events Weekly events
Main Form of Customised member Customised member Emails, newsletter & Emails, Whatsapp
Communication with network & network & Facebook group group & newsletter
Members newsletter newsletter (customized member
network in
development)
Table 5. Characteristics of chosen co-working spaces
Source: Author’s construction, based on the primary research conducted
5. CASE ANALYSIS & FINDINGS
As identified in Section 1, co-working spaces present the consolidation of three main components: Professional services, Professional network and Physical Environment. Hence, the interviews conducted observed mainly these components amongst both managers and tenant ventures of the participating co-working spaces. See Table 2 for the categorization of the interview guide.
This section aims to present the findings of the multiple-case study, while identifying the factors that affect the entrepreneurial process of the co-working space tenants. To do so, the data
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is presented according to the main components listed in the following subsections. Within each component, the emerging themes and patterns are described for an in-depth understanding of the matter at hand. To properly understand the views of the managers versus the entrepreneurs, the two are presented separately within each subsection.
5.1 DETERMINING CONTRIBUTION OF PROFESSIONAL SERVICES
As demonstrated by Delmar & Shane (2004), new venture founders must go through many tasks in order to sustain a business, let alone grow their business. This includes taking care of the different facilities of said business. By providing entrepreneurs with administrative assistance and office maintenance, co-working spaces provide their members with more time and resources to overcome the remainder of the tasks at hand. The following subsections present data from the research that acknowledge this topic of professional services.
5.1.1 BUSINESS SERVICES
As described in Section 4, all four of the co-working spaces studied provide similar services for their tenants. Interestingly, only one of the managers claimed that their company provides services similar to business incubators. While the other focus on providing assistance with mainly office management, Manager 4 claimed that they also provide business development guidance:
“The space here is a platform to create value. […] And value means that the startups that are here […] are selected to be here. […] We work with them on their projects. We offer business development.” (Manager 4, SOSA)
For one of the managers representing the larger co-working space of the study, the size of the establishment greatly influences the level of expertise that becomes available to the members.
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Even so, he claims that this comes at the cost of the community feel within the space. As he states:
“How I see it is that co-working spaces come in different sizes and can be very small, which is fine and you can build a good community. […]. But here there is a much wider scale of expertise and if you have a question, the chance that you will be heard by someone who can help you is much bigger. We say size does matter.” (Manager 2,
B. Amsterdam)
It was interesting to understand the perspective of the co-working members on this topic as well. The following statement illustrates the importance of having a large selection of businesses and services in the immediate surrounding, which goes hand in hand with the manager’s goal (as illustrated above):
“For us, it’s very important that they have the philosophy of having a marketplace for everything you might need as an entrepreneur.” (Tenant 3, B. Amsterdam)
On the other hand, the importance of professionalism arose with one of the other members interviewed. We can understand from the following quote that the co-working space supplies its members with the necessary logistics for a professional company, which would not be possible if working for home. This also suggests that the facilities offered solve potential professional isolation for the entrepreneurs.
“This helped me set myself boundaries. You aren't relaxed and in your zone when you work from home. The co- working space makes you feel more professional.You have an office and meeting spaces to host clients and events.”
(Tenant 4, WeWork Dubnov)
The same tenant goes on to say the following, reinforcing the need for administrative office support that would now be available if working from home:
“We use the printing services & postal service. All of the stuff that I wouldn't have at home.” (Tenant 4, WeWork
Dubnov)
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5.1.2 VENTURE EFFICIENCY
Surprisingly, only one of the managers pointed out the fact that the co-working space enables the members the convenience of coming to the office and focusing only on their work.
This quote sums this up well:
“It’s a plug and play. You just need to sit and work, the rest is what we do.” (Manager 1, WeWork Weteringschans)
The entrepreneurs, on the other hand, were well aware of this factor which was, for some, a contributing cause to their decision of working within a co-working space. The following tenant emphasized the importance of the efficiency enabled by working at the co-working space.
“We want to focus on our product. Yes, we have an office here but we’re not a company to have an office and handle all of the administrations and headaches of the office. […] You don’t need to worry about it, just pay. That is, I think, what’s helping us as a startup because we have more time to do the things we need to do. Less time on the hassle, more time on the product.” (Tenant 1, WeWork Weteringschans)
Tenant 4, although also supporting this statement, had a slightly different outlook.
According to them, the ability to focus only on your work within the co-working space was the lead cause for leaving her previous corporate job and being able to become self-employed entrepreneurs.
“We used to do this type of work on the side, not as our main focus. The co-working space allowed us to switch to full mode, to a fully functioning agency.” (Tenant 4, WeWork Dubnov)
5.1.3 BENEFITS & DISCOUNTS
As suspected, all of the co-working spaces choose to create partnerships with other businesses for the benefit of their members. By doing so, the space may become more appealing and worthwhile for potential members.
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“We have many discounts. For neighbouring restaurants, [transportation] promotions, hotel packages. It always changes.” (Manager 3, WeWork Dubnov)
One benefit that arose in three of the four interviews involved transportation. Two of the four spaces provide discounts on parking, yet only one space provides an abundance of parking spaces free to use. Later, when studying the tenant ventures, the supply of parking spots in that same co-working space was mentioned as one of the main reasons for choosing that specific space.
5.1.4 FLEXIBLE MEMBERSHIP
This component is one of the core factors of co-working spaces in general. All participating co-working spaces have flexible membership options in which there is a “rolling contract,” meaning that it does not end until the member decides that they would like to leave.
The next quote illustrates the reasoning behind this method of flexible membership:
“The startups enjoy being able to leave within a month’s notice, because they don't know if they will succeed. If they don’t [succeed], they have to pick up and leave which is very easy to do.” (Manager 3, WeWork Dubnov)
As you can see, the flexible membership plans are thought to be most convenient for dynamic business ventures that are uncertain regarding their future growth and success. For this reason, it is a factor that influences the decision to join a co-working space, rather than commit to a long-term, private office space. This is also confirmed by the participating members interviewed.
“We knew that we are becoming a high growth company, we have very variable terms. With enough notice, I can leave when I want.” (Tenant 2, B. Amsterdam)
5.2 DETERMINING CONTRIBUTION OF THE PROFESSIONAL NETWORK
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In the Literature Review section, it became apparent that there is much research on the importance of professional networks, especially within the entrepreneurial context. The following subsection looks into the influence of these networks on the ventures within the co- working spaces.
5.2.1. MEMBER INTERACTION.
One of the main characteristics of co-working spaces, brought up by each of the managers, is the community created for members of the space. Although this term suggests closeness amongst members, it is not necessarily the case. For this reason, the form of interaction among members was closely studied. According to the following managers, the interaction between members is facilitated as a result of different factors. First, the space structure and events:
“The space itself supports the interaction among the residents. The layout, the architecture, the community activities, the happy hours, the events.” (Manager 4, SOSA)
Second, as a result of co-working space staff assisting with the facilitation. This is identified in the following two cases:
I “We know the whole community. So if someone comes to us, we know who to put them in contact with.” (Manager
1, WeWork Weteringschans)
II “Mainly by using the open spaces, supporting casual interaction and pushing people to attend events.” (Manager
3, WeWork Dubnov)
Something that appears to be a critical connecting point for members is within the
WeWork establishments. WeWork has an online platform that unites all of the WeWork members around the world, allowing them to easily find each other and connect. SOSA, a smaller co-working space, does not feel that this is necessary for their network. However, B.
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Amsterdam is large in both size and the number of members (which is currently growing in size), and the manager interviewed admitted that the WeWork community platform is a great advantage. Thus they are currently working on a platform of their own, in collaboration with two of their tenant ventures. To further understand the importance of the online network, managers of
WeWork stated:
I “Most of all it is the large global platform available to them. They can use it to connect with any other WeWork members around the world, and of course in the building.” (Manager 3, WeWork Dubnov)
II “The member network is a combination of Facebook, Twitter and LinkedIn. Its our online global community, which has around 60,000 members at this point. But this grows every day, as we grow. You can get in touch with each other, post updates, ask questions. You can also book conference rooms, get support from [your local WeWork team].” (Manager 1, WeWork Weteringschans)
In continuation to the irrelevance of the platform for the smaller co-working space,
Manager 4 clarified that choosing a smaller network, but more carefully, is an advantage and leads to a higher quality of interactions.
“[…] value goes in different directions. Our network works for us and we work for our network. That’s the beauty.
[…] We need to be very specific about the types of activities we hold here and the type of people we accept. This way the introductions and interactions are efficient.” (Manager 4, SOSA)
However, when it comes to co-working organizations larger in size, the member interaction seems to be more of a struggle. Even more so when there is not a member platform in place, such as the WeWork Member Network.
“So the unique thing is size, but that’s also the downside. Because the bigger you are, the harder it gets for members to connect to people who are relevant to them.” (Manager 2, B. Amsterdam)
After looking into the structure that enables members to interact easily, it is crucial to uncover the types of interactions that take place. In this example, we can see the role that the co-
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working spaces play for entrepreneurs in early stage startups. According to the next quote, the interaction is a key element:
“Actually, some of the members merged in the last couple of months. There are some that started working together and even some that left to join others’ startups. It’s very dynamic because they’re in the early stage, where a large percentage fail. So if that happens, they need to move onto the next thing.” (Manager 4, SOSA)
One important thing to keep in mind, according to Manager 4, is that the level of interaction solely relies on the members’ willingness to socialize and network with others. As he said,
“I would describe it like a communal building. […] It’s up to you. If you are a person that likes to interact with others, you’ll meet and speak with everyone. If you want to quietly develop something and keep to yourself, you can do that. So everyone knows everyone, but the level of interaction depends on the person.” (Tenant 5, SOSA)
When it comes to understanding the element of collaboration, all managers definitively stated that there are many new business partnerships and relationships that occur regularly within the co-working space. The following two examples mention the types of partnerships that arise:
I “There are many collaborations. From using the graphic designer in the building, to getting help with branding or opening a company together.” (Manager 3, WeWork Dubnov)
II “Members have partnered up and shared office space, started businesses together, used other members’ services.” (Manager 1, WeWork Weteringschans)
One manager, Manager 2, mentioned a different version of collaboration that takes place with the co-working spaces: Knowledge sharing.
“What you see a lot is that people don’t have to necessarily collaborate but they share ideas and help each other.”
(Manager 2, B. Amsterdam)
Looking into the cause of these partnerships, one of them seems to be the informality between the co-workers of the spaces.
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I “Their interaction is mainly informal. They go out on the roof, take cigarette breaks, meet in the kitchen.”
(Manager 3, WeWork Dubnov)
II “ […] the interactions happen on a daily basis during lunch, at the bar, on the roof.” (Manager 4, SOSA)
Tenants supported these findings as well, with each interviewee agreeing that the interaction between the members is very informal and not competitive. Furthermore, it appears that the members enjoy the community and see it as an advantage rather than competition. For example:
“I think it’s very informal. Because everybody is working on their own thing, in their focus area. And it’s not like there is a big competition within the co-working space, towards the same goal. They aren't clashing, more of seeing that they have similar goals and are able to keep working in the same space.” (Tenant 3, B. Amsterdam)
Not only is the communication between the members informal, but the interaction between the members and staff of the co-working space as well. This came across in all of the interviews, displaying that the relaxed and communal environment allows the members to simply approach the staff and even ask for help if needed. Regarding the interaction with the staff,
Tenant 3 stated:
“We went to the Facilities manager and asked [the manager] which companies would be helpful for us. And he just told us different companies to talk to.” (Tenant 3, B. Amsterdam)
After understanding the different types of interaction that takes place within the co- working space, it is interesting to observe how this interaction assists in accelerating the venture’s business growth. One such way that this occurs is due to the convenience of the proximity of location. When talking about a recent business transaction, Tenant 2 described the proximity as an acceleration of the time it would take to finalize deals and partnerships otherwise.
“If we wouldn't have that network effect, then we would have met them months later. But the co-working space has accelerated it.” (Tenant 2, B. Amsterdam)
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This network effect comes across once more in another member’s interview when talking about a recent collaboration within the space. This tenant adds that, outside of the co-working space, the process of reaching a potential client is very lengthy as compared to walking to your neighbor’s office.
“We actually had a commercial that was created by one of the companies here. We work with companies inside of the co-working space as well, because it’s easier and the quality gets better because you are literally next door neighbors. […] Literally, this month we’ve been talking to [a company] that is on the same floor as us, by simply walking into their space. The threshold to getting in touch with them is much lower than if you would get a company where you need to call, get past the receptionist and pass a few stages to get to the right person. You just walk in.”
(Tenant 3, B. Amsterdam)
5.2.2 EXTERNAL CONTACTS.
Many companies join co-working spaces as replacements for office space. However, for the managers of the co-working spaces, they feel that they play a larger role. One of the ways they enjoy contributing to members is by providing them with external contacts outside of the co- working community. All managers agreed that they are willing to put members in contact with external professionals if needed and do so if the member asks of them. This can range anywhere from service providers to investors. As one manager presented it:
“We facilitate the interaction between the different stakeholders in the industry. So that’s our role.” (Manager 4,
SOSA)
According to the managers, all of the people involved benefit from these connections.
The entrepreneur receives a contact, the external contact is exposed to potential business and the co-working managers provide value for both sides. The same manager continued to say:
“Startups here arrive looking for fundraising and within weeks are able to get it, through introductions in our network. And our network is happy because you get exposure and are open to new ideas.” (Manager 4, SOSA)
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To provide connections to external figures can also be thought of as connecting with the entrepreneurial ecosystem. One way that B. Amsterdam and SOSA do this, for example, is by trying to include the actors of the entrepreneurial ecosystem (see Table 1) through strategic partnerships. Both have created partnerships with local accelerator programs for startups and various entrepreneurship programs to lower the barrier between the members and the industry.
The two managers explained their reasoning as follows:
I “We’re building a startup ecosystem, so that’s why we also have corporate, capital government.” (Manager 2, B.
Amsterdam)
II “We don’t need big staff, we need a big network. […] Venture capitalists, angel investors, accelerators, incubators, academic innovation programs. International companies with a presence in Israel. Players in the industry.” (Manager 4, SOSA)
The main benefits for the entrepreneurs in these situations are the quality and speed of the introduction. Being that the manager is making the connection for them, this enhances the external figures trust in the member and increases the venture’s appearance of legitimacy.
I ”They help if I need to get in contact with people, making an informal introduction which is very helpful. They have connected us with a few people very quickly.” (Tenant 4, WeWork Dubnov)
II “If I email someone, rather than someone from SOSA doing an intro, the response of that person is completely different. That is something that they really help us with.” (Tenant 5, SOSA)
5.2.3 TENANT MIX.
During the interview process, the topic of tenant application processes was addressed.
The managers were asked whether or not they conduct any form of screening when a potential member applies to join. In WeWork Weteringschans, they emphasised that everyone is welcome to join, as long as they are community-driven. The manager of WeWork Dubnov similarly said
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they require a community-driven person, some one that isn’t always traveling. However, the difference is that they initially targeted startups to join their space. Currently they are looking to bring in members that are not only startups but other actors of the entrepreneurial ecosystem.
B. Amsterdam treats their tenant mix differently by thinking of their co-working space as a “flagship store” that must represent it well. Also, they would like to become the main hub for the local entrepreneurial ecosystem. Both factors cause them to select the tenants a bit more carefully, with the aim of having only two or three members of a certain type of venture and making sure that they are of high regards or potential for success. Quality also comes across as important for SOSA, where the startups they accept are selected thoroughly. As he stated: “We screen them like a Venture Capitalist would screen a startup for investment,” accepting only promising ventures.
When asked about the professional mix within the co-working community, the following tenant emphasized the importance for startups to be surrounded by other startups. In doing so, they are able to learn from other people’s mistakes, minimizing the level of their risk in the entrepreneurial process.
“The co-working part is important here, because everyone around us is a startup and they all are going through what you’re going through. […] Building a startup has very distinct stages, with general guidelines that you need to fit with your specific case. But this is very general, so the co-working helps you consult to see how you should go about it without making the mistakes that others made. I am always talking to the founders of other companies.
Getting tips, knowledge.” (Tenant 5, SOSA)
5.2.4 ESTABLISHING LEGITIMACY
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Legitimacy is important for both sides, the co-working space and its members. For the co-working space, they believe that it is important to have reputable companies representing them. This signals to others that it is a ‘successful’ co-working space to be a part of.
“They know what kind of value we offer their co-working space. They need to have legitimacy and have companies that show others that it’s a good place to be.” (Tenant 3, B. Amsterdam)
For new ventures, beginning their journey as entrepreneurs or a new company, associating themselves with an impressive co-working space may signal to potential stakeholders that they are a viable organization and it may increase their business.
“Since day one, we’ve become official WeWorkers and you can see this impact the perception that others have of us. People think WeWork members must be doing well in order to be there, it’s an exclusive club.” (Tenant 4,
WeWork Dubnov)
5.2.5 EVENTS.
Events are undoubtedly seen as means for supporting networking amongst members and external participants. Moreover, each of the co-working spaces also organize social events for members only, in order to create a closer community and thus enhance the work environment.
Social activities include sport teams, breakfasts, dinners, after-work drinks, television show screenings and more. When looking into the purpose of the events, the following beliefs came up.
I “The networking events are for developing the community and potentially attracting new members.” (Manager 3,
WeWork Dubnov)
II “We just have to bring them together with something fun and then things happen. The whole idea is that you put the stakeholders in the same space and the rest happens and works.” (Manager 4, SOSA)
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Although there are many events to choose from at each of the spaces, with events taking place on a weekly or bi-weekly basis, there are also struggles in reaching significant member attendance.
“We are trying very hard to facilitate more networking, trying to host events that will keep them after work. The problem is we need to make them stay especially after work for our events.” (Manager 3, WeWork Dubnov)
All managers agreed that the events must be relevant to the members. Yet seeing as there are hundreds of members per co-working space, it may be problematic to meet the needs and preferences of every member. One manager had a positive outlook on this, stating:
“If you have a good piece of content, they will come.” (Manager 4, SOSA)
When speaking with the members about their take on the events that are hosted at the co- working space, the responses were positive. Nonetheless, their perspectives differed depending on their needs as a company.
I “That is another great thing, the events being organized. It’s quite often and it’s actually the way that we meet the most people.” (Tenant 1, WeWork Weteringschans)
II “We’ve all been in high senior management and have our own networks. […] Friday at 6:00, we want to go back to our families. It’s different for us.” (Tenant 2, B. Amsterdam)
III “It’s good for networking. There are a lot of drink events and parties for members, where you basically just go and talk to everyone.” (Tenant 3, B. Amsterdam)
IV “If I’m there, I go to the events. How it usually works is that if the content is relevant to you and interesting, you stay. […] If it is something I can learn from or a good place to meet people, I will go.” (Tenant 4, WeWork Dubnov)
V “We go to what seems to be relevant to us, I would say once a month. Most of it is for networking. That is the industry, you need people to know you.” (Tenant 5, SOSA)
5.3 DETERMINING CONTRIBUTION OF THE PHYSICAL ENVIRONMENT
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Many work places choose to design their space with elements that promote creativity, innovation and collaboration. Among these elements are open layouts, modern design, architecture, games and more (Assenza, 2015). This section will review the impact of the physical environment within the studied co-working spaces.
5.3.1 SPACE LAYOUT
All of the co-working spaces of the case study make sure to supply a kitchen and lounge area on each of their floors. The following managers explain the reasoning for this, which comes down to the socialization aspect.
I “On every floor, we have an open space, offices, a kitchen and lounge. This helps the members of each floor to get to know each other very well. They’re all friendly with each other and socialize.” (Manager 3, WeWork Dubnov)
II “The first floor is mainly open space, with a kitchen and couches. The members gather there for lunch and drinks.
We also have kitchens on each of the floors, so they are constantly seeing each other.” (Manager 1, WeWork
Weteringschans)
III “You can see people having lunch together, companies doing football table competitions, members bumping into each other at the coffee machines. The layout and feel of the space makes it very easy to meet and interact.”
(Manager 1, WeWork Weteringschans)
5.3.2 DINING AREA
One of the areas of the co-working spaces that came up in all of the interviews, both managers and tenants, is the kitchen and dining area. To everyone it is considered to be the area in which most of the social activity and interaction takes place, either getting reacquainted with members or meeting new ones.
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I “[The dining area], it’s sort of a connecting space as well. For example, seeing people you haven’t stayed in contact with, and it gives you little touch-up moments which you wouldn't have otherwise.” (Tenant 3, B. Amsterdam)
I “I go and sit with others who bring lunch, join other people. I always speak with people in the shared space. It feels kind of like a canteen in a high school.” (Tenant 4, WeWork Dubnov)
5.3.3 DESIGN & ATMOSPHERE
Of all the managers, only one pointed out the importance of the design and architecture of the building. In the following statement, they explain this is a competitive advantage for the co- working space:
“The facilities are high end. Compared to other players, more money was invested which you feel in the look, feel and finish.” (Manager 4, SOSA)
Two tenants go on to relate this to the atmosphere of the co-working space and how it impacts their choice of co-working space.
I “People feel less welcome [at other co-working spaces]. Here it was different, and I still think it’s different. […] I think it’s the design part, it just looks good here. The openness, it’s all glass which makes it less of enclosed spaces.
It just makes it more friendly I think. You also get more contact with people.” (Tenant 1, WeWork Weteringschans)
II “People always want to come here. It sets up a nice environment and everyone who comes here is impressed. The interior and the surrounding area is very beautiful, and gives off a great vibe to everyone who comes by.” (Tenant 4,
WeWork Dubnov)
5.4 LEAVING THE CO-WORKING SPACE
Another interesting point that came across in all of the interviews, both managers and tenants, was that the reason for leaving is usually dependent on the growth of the company. This, of course, can go in two ways. Either the company does not grow and can no longer afford the space (which is the reason for the flexible memberships, as mentioned previously) or they grow
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to a point where there is no room for them or it is not worth it financially to stay in the space.
Overall, it was interesting to see that despite the differences in the co-working spaces
(community, environment, location, benefits, network), all of the tenants interviewed are content with their co-working space and only see themselves leaving if forced to when reaching a certain size. The following quotes show this:
All agree that the reason for leaving would be when they outgrow the space. As Tenant 1 mentions, there is a point where the size of the larger office needed reaches the price of getting private offices of their own. Then it is more economic to switch to own offices.
“At some point our growth will be a limitation for staying. […] We would like to stay. But I think that either it won’t be possible to stay because of our growth or because it will be too expensive.” (Tenant 1, WeWork Weteringschans)
“There is a moment where you want to disconnect and get your own office space. When you grow.” (Tenant 5,
SOSA)
5.4 IDENTIFYING CULTURAL GAPS
Not many signs of cultural differences appeared throughout the research. However, the manager of WeWork Dubnov explained that Israeli members tend to participate less in the events hosted at the co-working space, further explaining that this is true of all of the WeWork locations in
Israel. This hints that there may be a difference between Israel and the Netherlands in regards to event participation. From additional comments, it seems that this is due to Israel, Tel Aviv in particularly, being very startup and innovation-oriented. Being so centralized and focused, this may minimize the need to attend networking events because most people are already acquainted with other members of their industry. Also, with so many events going on throughout the cited, it proves difficult to maintain high attendance for the events that are hosted. These points are illustrated in the following remarks:
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“The startup community in Israel is very small, so most people know of each other somehow beforehand.”
(Manager 3, WeWork Dubnov)
“We have our media. A newsletter, a weekly update. The content has to be very relevant and efficient. The industry in Israel is flooded with events, and we’re very selective. (Manager 4, SOSA)
“[Helping with external contacts is] not really needed because the ecosystem is so small here in Tel Aviv, everyone knows […] how to connect with them through their own connections.” (Manager 3, WeWork Dubnov)
5.5 SUMMARY
In this section, all themes and factors of importance that arose from the interviews were outlined in order to provide a better understanding of the various components of the co-working space and their influence on their entrepreneurial members. The next section, the discussion, will provide additional insight into the findings.
6. DISCUSSION
The findings of this study revealed interesting insight on the areas in which co-working spaces provide value for their tenants, especially when looking into entrepreneurs and startups.
The various elements of the findings should be considered in order to develop improved business models for co-working spaces, aimed at contributing to the entrepreneurial ecosystem. By using semi-structured interviews with two units of analysis, the study was able to gain a holistic view of the co-working space and its contribution to entrepreneurs of new ventures.
The following characteristics were shown to be of highest contribution to the members, according to the results of the interview: a good atmosphere and design, an extensive
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professional network and a dining area for interaction with other members. Surprisingly, a business model that revolves around supplying office space and administrative services, proved to be of higher contribution in the two areas other than Professional Services. Rather, two of the most influential factors that emerged of this study are from the Physical Environment and one from Professional Network. As shown by Hoang & Antoncic (2003), the professional networks is one of the most important elements needed by an entrepreneur. However, it seems that the role of design, architecture and the physical environment in general play a crucial role in business development. Whether it is creating legitimacy, creating professional structure or other results.
Co-working spaces are growing quickly and on a global scale. In order for these establishments to accommodate their tenants to the best of their abilities, it is important that they pay attention to every component of their business model, from practicalities such as office administration, to social construct and physical environment. Even when deciding on the application process for the memberships, it is important to know what criteria they are looking for in their members. Moreover, it is important that the proprietors of said co-working spaces create a business model that suits their target tenants, for example technological startups versus graphic designers. The co-working space is not a ‘one size fits all’ model, and this must be taken into consideration.
An important note is that the co-working space is based on the relationship between the staff of the space and the members. To allow a productive business environment, the co-working space must ensure that the interaction between the two is valued. In all of the interviews, an informal connection between the two sides was shown to be of importance. This also spreads and creates an informal, collaborative environment throughout the entire community.
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In continuation to the importance of communication, the communication channels between members has shown to be of high importance. Establishing a channel, either customized or other, that is especially for the members to be aware of eachother will increase the community feel and also promote interaction, collaboration and partnerships.
Additionally, global co-working space brands must acknowledge that there are differences between their market, depending on the country in which they are operating. Of course, local management helps in this situation, but a better understanding of the cultural influence on local entrepreneurship and business relations is necessary.
Although this research produced much valuable insight and information regarding both parties involved in the co-working spaces, future research must be conducted in order to further understand the topic. First, research may be further directed towards the influence of co-working spaces on all members, not solely entrepreneurs within startups. More specifically, it is important to understand the relative influence of the different factors which may require a qualitative study with a larger sample. Also, rather than expand unit of investigation, it would also prove interesting to further research the entrepreneurs. This may also be studied according to the startup or new venture life cycle, providing an understanding as to which of the co-working components should be emphasized and during which stage. Additionally, it seems that there is a cultural difference amongst entrepreneurs of different countries, such as Israel and the
Netherlands. More research may be useful in understanding how the co-working spaces cater to the needs of their culture’s entrepreneur.
The author is aware of the possible limitations of this research. One of the shortcomings was the limited amount of time and resources available to conduct the study. During the stage of the interview, it is possible that the researcher influenced the results despite trying to remain
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neutral. Finally, due to the limited sample size, the findings cannot be generalized, but the insight can be used to construct future extensive research in the topic.
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8. APPENDICES
APPENDIX I MAIN CO-WORKING SPACES IN AMSTERDAM & TEL AVIV
Main Co-Working Spaces in Tel-Aviv, Israel & Amsterdam, the Netherlands
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Tel Aviv Amsterdam
The Library Tel Aviv B. Amsterdam
Mazeh 9 - The Social Lab Bouncespace
Atidim Center for Technological Boven de Balie
Entrepreneurship
Diaghilev Hotel and Hub Deskovitz
Hamifal A Lab
Techloft The Thinking Hut
The Hub Tel Aviv Workspace 6
Mindspace (2 spaces) ImpactHUB
WeWork (2 spaces) WeWork (2 spaces)
Coworkbay.com The CoWorking
SOSA Het Warenhuis
Misanthrope JamWorkspace
The Junction Berlage Meet & Workspace
Urban Place Rockstart Spaces
Merkspace Spaces
Table 6. Main co-working spaces in Tel Aviv & Amsterdam
Source: Constructed from author’s preliminary research
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APPENDIX II INTERVIEW GUIDE
The main objective of the interviews is to gain a deeper understanding on the various characteristics of co-working spaces and how they influence the process of entrepreneurship. The findings of the interviews conducted will provide knowledge for an existing literature gap, on a topic that is lacking in prior research. In order to minimize the amount of bias in the interviewees’ responses, more detailed information regarding the study was provided after answering the questions. Therefore, the introduction provides little information regarding the purpose of the study. Due to the disclosure of private information within a competitive field, the names of the interviewees and tenant ventures have been concealed.
Two interview templates were created: one for managers of the selected co-working spaces & one for entrepreneurs of the tenant ventures selected within said co-working spaces. The interviews were semi-structured in order to allow interviewees to expand on different topics of interest. Additionally, this allowed the interviewer to direct the conversations in order to receive more relevant information and achieve data saturation within each interview conducted. The interviews were constructed according to a number of themes (detailed below), based on the main topics that arose from the literary research (see Section 2). Details of the interviews conducted can be found below in Appendix III.
INTERVIEW TEMPLATE I: MANAGERS OF SELECTED CO-WORKING SPACES
Introduction of the Interviewer: Thank you for agreeing to participate in this study on co- working spaces and their impact on entrepreneurship. The interview will take between 20 to 45 minutes, where I will ask you a number of questions regarding your co-working space and the
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services provided to tenants. Do you agree to have this interview recorded? This will later be used to transcribe our conversation and the data collected will be used for my Master thesis in
Business Administration, focusing on Entrepreneurship and Innovation. If you would like to conclude the interview or refrain from answering any of the questions, please say so.
A. General Characteristics of the Co-Working Space:
• When was SPACE founded? And this location?
• How is the team structured?
• How would you describe your company’s purpose?
• Who do you consider to be your main competitors?
B. Services Provided to Members
• What do you think makes your co-working space different than the competitors?
• How do you contribute to the members’ professional success?
• What services and facilities do you provide your members?
• Can you tell me about your membership options and process?
C. Physical Workspace Characteristics
• What is the size of this space? How many offices are there?
• What is the layout of the space?
• Is there an area for the members to gather?
D. General Information About Members:
• How many members do you currently have?
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• What are the different sectors of the professionals that choose to work here? Do you
know what percentage are startups, freelancers and established organizations?
• Do you target any specifically?
• Are the members specifically selected or screened?
• Do members have a specific timeframe for their stay?
• Which companies have shown the most growth while working at your co-working space?
E. Network Structure:
• How would you describe the members’ interaction?
• Have you seen any collaborations take place?
• Regarding networking, does your team play a role in facilitating networking among
members? How so?
• Does your team put members in contact with external networks?
• Do you have staple events that you organize or host?
• How many events take place weekly at your co-working space?
• How do you encourage members to attend and how often do they do so?
• How are these events selected? What is their purpose?
• Does your co-working space have any partnerships or collaborations with other figures of
the entrepreneurial ecosystem?
Conclusion of Interview: Thank you very much for your participation, it was great talking to you. If you are interested, I would be happy to send you the conclusions of my research.
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INTERVIEW TEMPLATE 2: SELECTED TENANT VENTURES OF CO-WORKING SPACES
Introduction of the Interviewer: Thank you for agreeing to participate in this study on co- working spaces and their impact on entrepreneurship. The interview will take between 20 to 45 minutes, where I will ask you a number of questions regarding your venture and experience as a member of a co-working space. Do you agree to have this interview recorded? This will later be used to transcribe our conversation and the data collected will be used for my Master thesis in
Business Administration, focusing on Entrepreneurship and Innovation.
A. General Characteristics of the Venture:
• Can you tell me about your venture?
• What stage is your venture currently in? What stage was it in when you arrived at the
co-working space?
• How many team members did you have when you arrived at the co-working space?
• How many team members do you currently have?
• Were any of the team members found through the co-working space?
• How long have you been working at a co-working space? (remark: refers to the
company & the entrepreneur)
B. Motivation Behind Choosing a Co-working Space:
• What was the reason you decided to work from a co-working space?
• How would you define success for your company?
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• How does the co-working space contribute to this? Do you believe it has helped you
succeed thus far? How so?
• What was the reason for choosing this co-working space specifically?
C. Conditions of the Co-Working Space:
• What is preventing you from leaving the co-working space?
• When, if at all, would you consider leaving the co-working space?
• Which membership do you have? (length, type of office, number of desks, additional
features)
• Is there anything lacking in your opinion? Any problems that you would like to see
solved?
D. Services Offered:
• What services are available to you at this co-working space?
• Please name the characteristics or services you find most beneficial to your company.
• Which facilities and services do you make use of on a regular basis?
E. Network Structure:
• Where do you interact with other members? What type of interaction do you have?
• Did any collaborations arise as a result of the workspace? Any collaboration
opportunities that came your way?
• What is the estimated number of events (at the co-working space) your company
attends on a weekly or monthly basis?
• Why do you attend (or not attend) these events?
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• What would make you join them more often?
• To what extent does the staff of the co-working space assist your company?
• Have they (the staff) provided you with external contacts, outside of the co-working
space?
• Do you find the mix of members to be beneficial to you company? How so?
• How would you describe the level of trust between the co-working members?
• Is there anything you feel is lacking in the co-working space?
• Would you like to add anything?
Conclusion of Interview: Thank you very much for your participation, it was great talking to you. If you are interested, I would be happy to send you the conclusions of my research.
APPENDIX III EXTENSIVE INTERVIEW INFORMATION
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Participa Position Gender Co- Location Duration Interview Interview nt Working of Languag Location
Space Interview e
(in
minutes)
Manager Communit Female WeWork Amsterda 30 English Co-
1 y Weterings m, Working
Manager chans Netherlan Space
ds
Manager Facilities Male B. Amsterda 40 English Co-
2 Manager Amsterda m, Working
m Netherlan Space
ds
Manager Communit Female WeWork Tel Aviv, 25 Hebrew Skype
3 y Dubnov Israel
Manager
Manager General Male SOSA Tel Aviv, 25 English Skype
4 Manager Israel
Table 7. Extensive interview characteristics, co-working space managers
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Parti Venture Positio Gen Co- Location Duration Interview Interview cipan n der Working of Language Location t Space Interview
(in
minutes)
Tena Startup: Product Male WeWork Amsterda 20 English Company nt 1 Big Data Designe Wetering m, the Office
Analytics r schans Netherlan
ds
Tena Startup: Founder Male B. Amsterda 35 English Company nt 2 Software & CEO Amsterda m, the Office
Developm m Netherlan
ent ds
Tena Startup: CTO Male B. Amsterda 30 English Skype nt 3 Online Amsterda m, the
Retail m Netherlan
ds
Tena Startup: Co- Fem WeWork Tel Aviv, 30 English Skype nt 4 Marketing Founder ale Dubnov Israel
Agency
Tena Startup: CEO & Male SOSA Tel Aviv, 30 English Skype nt 5 Database Co- Israel
Managem Founder
ent
Table 8. Extensive interview characteristics, co-working space tenants
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APPENDIX IV CODING LIST
Codes for Description Codes for Tenant Description
Managers Ventures
Man_Location Importance of the CS Ten_Venture Characteristics of
Location the Venture
Man_Offering Main Services & Ten_Growth Growth of the Team
Facilities Offered While at the CS
Man_Mission Mission of the Co- Ten_Duration Duration of Time at
Working Space the CS
Man_Competitors Main Competitors Ten_Partner Have Any
Partnerships or
Collaborations
Resulted From
Working at the CS?
Man_Advantage Competitive Advantage Ten_Goal Venture’s Goals &
(compared to How the CS Helps
competitors) Achieve Them
Man_Layout Layout & Design of the Ten_Motivation Motivation Behind
Co-Working Space Joining a CS
Man_Application Structure of Application Ten_Choice Reason For
Process for Potential Choosing Specific
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Members CS
Man_Membership Available Membership Ten_Membership Type of Membership
Options Chosen
Man_Target Target Market of the Ten_Application Application Process
Members They Underwent
Man_Interaction How Members of the CS Ten_Service Which Services Are
Interact Most Useful For the
Venture?
Man_Facilitation CS Staff Facilitation of Ten_Interaction How Do They
Networking Interact With Other
Members?
Man_Partners What Types of Ten_Events Event Participation
Partnerships Does the CS (Types, Reasoning)
Have?
Man_Communicate How Does the CS Staff Ten_Leaving Reasons To Leave
Communicate with CS
Members?
Man_Events Which Events Are Held
at the CS & How Often?
Table 9. Coding list for data analysis