I wrote recently about a report from a UK based incubator, which explored the perspectives of British startups and the lure of the London based tech cluster. The general gist of the study was that startups were initially enthusiastic about their London home, but became less so as cashflow became more of an issue and the high rents in the city began to bite.
Co-working spaces are a natural answer to such challenges, with companies such as Hubble providing startups with a relatively cheap and flexible base for their venture. I sense however that co-working spaces need to go beyond providing affordable office space to stop the exodus of startups highlighted in the earlier study.
Innovation hubs
The co-working movement is tapping into a wider zeitgeist around both greater resource utilization but also a more open approach to innovation. We’ve seen this manifest itself in the tremendous rise of facilities such as TechShop and GenSpace, whilst big companies have also teamed up with innovation communities virtually, such as GE and Quirky, and Samsung and Marblar.
Most of these facilities have strong partnerships with a large, corporate backer, whether it’s in the provision of intellectual property or the manufacturing muscle to turn ideas into reality.
Whilst we’ve seen the likes of SAP’s HanaHaus open its doors in recent years, but you sense there is more that can be done to provide those using co-working spaces with a clear path for growth.
Connecting the dots
One such service would be in helping to support the kind of collaborations for which co-working spaces exist. It’s tempting to leave such encounters to serendipity, but the platforms themselves have a unique perspective on just who is doing what, and who therefore may benefit from connecting to one another.
A recent report from the Rockefeller Foundation proposed just such a function, but rather than the co-working platforms acting from their helicopter perspective, the report was aimed instead at venture backers.
After all, a Wharton study from last year found that the single most useful asset that venture backers brought to the startup was their connections. This was regarded as more valuable than the case they infused into the startup.
Business acumen
The Wharton paper also identified the business acumen that venture backers can bring to a project, and I’ve written previously about the vital role ‘2nd generation’ employees at a startup can bring.
A Cornell study found that a large number of PhD graduates are keen to join startups, but perhaps not as a founder themselves.
Indeed, Robert Siegel from XSeed Capital recently told Stanford Insights that getting HR talent on board at an early stage is crucial, both to ensure the talent pipeline is strong and also that the culture is right from the start.
The co-working platforms can perhaps do more to provide access to such talent, whether it’s by building relationships with the academic world or tapping into mentoring communities.
It’s easy to look at stories suggesting that startups are struggling due to high rents and think that it’s the rent that’s the problem, when in reality the problem is more to do with cash-flow and growth.
Providing more support to startups to help them grow therefore is likely to be the best route to underlining the true value of being in a tech cluster. In this regard, I suspect there is a great deal of potential for co-working venues to play a substantial role.