Start-up Co-Working: How to Collaborate With Other Businesses

Collaborate to innovate

By Mahesh Sharma
Monday, 19 September 2011

The age-old notion of artists collaborating in a central space has been given life in the 21st century as start-up businesses champion the practise of co-working with each other.


What started almost a decade ago in Silicon Valley – when lone freelance developers working from home sought to replicate the social and professional benefits of an office – has since gained traction in the US and, increasingly, Australia.


It is now becoming an increasingly popular way for start-ups to collaborate and looks set to become a key part of Australia’s start-up ecosystem.


From Fishburners in Sydney to The Hub and Inspire9 in Melbourne, there are a growing number options for entrepreneurs who want to collaborate with others rather than go it alone.


But is co-working truly different from a humble shared office space with WiFi? And what value does it really offer start-ups?


The co-working “a-ha” moment


Click PR founder Vuki Vujasinovic is the public relations go-to man for members of the Fishburners space in Sydney.


He recently had a co-working “a-ha” moment when he struck up a conversation with his neighbour, a software developer.


The pair realised they both shared a similar idea to develop a web-based hospitality service and within hours were working on how to get the idea off the ground.


It exemplified the value of co-working.


“Every start-up needs a hacker and a hustler,” says Vujasinovic.


“The hacker can develop the platform, code it and figure out inventive ways to build it, while the hustler will make sure people use the product.”


“For me, this serendipitous moment where a marketer and a developer joined forces captured the very essence of co-working.”


Kim Heras is very familiar with co-working spaces, having just returned to Australia after a lengthy start-up fact-finding mission in the United States.


Heras is the co-founder of mentoring collective PushStart and Australian representative for family social network MyHeritage and in New York he observed the unique co-working space General Assembly, which he described as the co-working petri dish in which the city's start-up community is cultivated.


The unique aspect here is that the majority of working spaces available is for drop-ins, where at any time of day people can come in, pull up a bean bag, access the WiFi, and start working.


This differs from other places (including Fishburners) where the space primarily caters to full-time, long-term customers and provides a small availability for drop-ins.


It attracts entrepreneurs and investors alike, perfectly exploiting the networking value of co-working, Heras says.


“At General Assembly you get different people dropping in, there's new people coming through, and investors would drop-in when they could and see exciting thing,” he says.


“It becomes more like Silicon Beach drinks and Open Coffee, you don't know what you're going to get because the crowd changes.”


He said the concept worked best when skills and workers were grouped around a particular theme.


Swimming with the Fishburners


Fishburners is the name of one of the ships in the First Fleet and the space promotes itself as a vehicle for 21st century, digital pioneers.


It was founded in March by the managers of recruitment start-up GradConnect and venture capitalist Pete Davison, whose Silicon Valley VC firm was one of PayPal’s earliest investors.


GradConnect’s owners had a vision for an office space for like-minded workers and companies in the tech space, and this vision has come to life as Davison has spread the Fisburners gospel.


It costs $250 a month for a desk and there is a range of cutting edge start-ups, from taxi booking application goCatch, gaming application IRLGaming, or social events app UniLife.


Other businesses provide specific skills such as legal and PR services; while other sites target niche communities including backpackers, photographers and logistics.


In its short life the space has already seen a number of its occupants and alumni take out the top prizes at the recent Tech23 showcase, and was recently awarded a $20,000 NSW government grant.

It has also started to run sponsorship on its website, in exchange for goods donated to the space.


One of the first members of the space was Peter Bradd, founder of postcard printing service ScribblePics, which has evolved by drawing on the knowledge of his peers.


“There's a lot of people in the room that know a lot more about things then I do and I've acquired a heap of knowledge which I can keep providing, and vice-versa,” he says.


“We're a software development company, which I didn't think when we were when we first started,” he said.


“I thought we were a marketing company, providing a marketing service but now I've had to teach myself how to make software.”


Being around other early stage businesses also provides a way for entrepreneurs to measure their progress, which is otherwise impossible if they were working from home.


“Sometimes if you're sitting at home you can feel a bit silly and don't know if you're doing the right thing,” Bradd says.


“But sitting with a bunch of other entrepreneurs, you don't feel so silly anymore. You’re just part of the crowd.”


Variations on the theme


Different groups have already started to iterate on the co-working concept, exploring the potential to achieve commercial and social outcomes.


An interesting experiment is from digital media not-for-profit ICE, which has recently embraced co-working as a way to provide a pathway for western Sydney migrants and residents to earn a career in the creative industries.


Fifteen entrepreneurs were handpicked to populate the space - including game developers, graphic designers, architects and artists - who not only are housed for free but also can access a range of services such as mentoring, training, business development, marketing and working one-on-one.


ICE creative enterprise manager Indu Balachandran said the goal is to create a hub of artistic activity in the western suburb of Parramatta which competes with the likes of the inner-city creative haven of Surry Hills.


“The hub emerged because we found a group of people want to make film and music their livelihood but would struggle to go from wanting it to doing it sustainable,” Balachandran says.


There are access issues in Western Sydney because much of activity occurs in the city.”


“At ICE we all come from a particular social experience, and the shape of the enterprise and practice is very heavily influenced by the journey traversed so far,” she says.


“We're putting it all together and encouraging individuals and hopefully Australia will see a new type of creative entrepreneur.”


Investing in co-working


Another experiment is leveraging the commercial potential of co-working, where VC firm Adventure Capital will soon launch the York Butter Factory space in Melbourne, which will recruit start-ups that are good investment prospects.


Prices range from $100 for a hot-desk access up to $600 for a permanent desk and co-founder Stuart Richardson says the co-working is not a profit driver but rather a way to activate the space and connect like-minded people.


It will target digital media and web 2.0 businesses but will tap into the best businesses by applying an incubator/seed accelerator investment model (similar to YCombinator).


“The incubator is an opportunity to access high-quality deal flow which has a higher potential of success when provided with active support and the ability to trial their offerings and pivot rapidly,” Richardson says.


“This is tapping into the energy the co-working space brings and the inspiration, talent and capability each of the individuals in the space brings.


“That will be aggregated to really provide opportunities to go through the venture accelerator program.”


Playing catch-up


These co-working experiments are different examples of how the concept can be leveraged as a way to boost the local start-up ecosystem, when combined with grants-funding, sponsorship and venture-backed investment.


There is a consensus among participants that it is helping to bridge the entrepreneur divide between Australia and Silicon Valley.


“In Silicon Valley there is a density of activity that occurs within a very small space,” Richardson says. “It is access to that eco system which enables entrepreneurs to advance ideas quickly, share and resolve challenges.


“It provides a streamlined pathway before them to connect with the right support at the right time to take businesses forward.”


“Co-working is a microcosm of that activity.”


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