The True Cost Of Working In A Glass Cube

by Knotel: Mar 09, 2018

There is a time and a place for coworking. When you’re just starting out and you don’t have the funds or the people to warrant investing in something of your own, sharing space with other startups may make sense. To companies at this stage, coworking seems like an ideal way to launch a business. You get flexibility and community, and you get to work out of a modern workspace, so the thinking goes.

But there definitely comes a time working in the glass cube of coworking starts to show serious disadvantages, many of which fly under the radar at first.

 

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Just ask Adam Gorode, the CEO of AGW Group, a Brooklyn-based marketing firm. Gorode pulled his company out of WeWork because the atmosphere there was hurting team morale, which made it harder to recruit talent.

“In WeWork it felt like there was something suffocating or holding our culture back from taking off,” Gorode said in a recent interview. “We were losing some of the dimension that was making the company unique. With WeWork, their culture is so pervasive and clear that it was kind of preventing us from getting ours to solidify, it really had its own gravitational pull. It was an existential threat to the company.”

Here are five of the biggest disadvantages of coworking, whether you’re a startup or an established business:

1. Your sales team won’t make as many calls.

Imagine you’re sitting in a tiny cube filled with people who are all working on different things at the same time.

How quiet is this environment?

With so many competing voices and ideas, it comes as no surprise that coworking spaces are prohibitively distracting. No matter how big or small interruptions are, they add up over time.

Let’s say you have a 20-person sales team that’s working next to 15 engineers in the same cube. The boisterous atmosphere causes each one of them to make two fewer phone calls every day.

That might not sound like a lot at first. But add it up over an entire year: 10,400 potential sales calls disappear. If 1% of those calls translate into opportunities and your team closes 20% of them, that’s 21 fewer customers.

Can your growing business afford to lose 21 customers?

2. Your engineers won’t ship updates as quickly, either.

The same holds true for your developers.

When your engineers are constantly getting disrupted by every sales conversation, sneeze, cough and phone call, how can you expect them to ship as many updates as quickly as you’d like?

Let’s hope that your slower-moving DevOps team doesn’t translate into dissatisfied users of your product or frustrated investors as you miss milestone after milestone.

3. You won’t be able to hire some great candidates.

Being headquartered in a coworking space doesn’t exactly project permanence, which can make it difficult to hire key executives.

Top talent—like a potential CMO or a 10x engineer—may think twice about interviewing with you or accepting an offer if you’re based in a coworking facility. Odds are these folks will have other opportunities to work in more permanent, professional settings.

How much does it cost to miss out on hiring an incredibly talented person for a crucial position at a critical time?

4. You’ll struggle to create any kind of unique company culture.

As Adam Gorode found out, coworking facilities often have their own cultures.

As for the startups operating out of them? Not so much.

If you’re working out of a coworking space that has a pervasive toxic bro culture, you will have a very difficult time building your own inclusive and diverse culture inside of it.

Culture is critical to the success of any startup. Not only can a great culture make it easier to attract and retain top talent, it can also build brand identity and pique the interest of investors.

5. Your intellectual property might get stolen.

If there’s one thing missing at coworking spaces, it’s privacy. Someone’s always looking at your screen or keeping an ear open when you talk on the phone.

Businesses that work out of coworking spaces are uncomfortable putting sales dashboards up because they never know when someone from another company might steal a glance. They also hesitate to have a board prep meetings because they want to protect their proprietary information and internal data from wandering eyes. Coworking can also affect sprint planning and product roadmap meetings because no one wants to put critical information on a whiteboard for the same reason. The list goes on.

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It’s not uncommon for companies to lock down private rooms at other locations for these important business functions. That, of course, costs money. You’ll also lose a lot of time due to travel.

What’s the point in paying for your “own space” when it’s not sufficient for even the most routine business needs?

 

Add up all of the above, and you miss your targets and fall short of projected milestones—all of which adversely affects fundraising.

Initially, coworking spaces may seem enticing.

But when you factor in these five hidden costs, you begin to see the true TCO of working in glass cubes, no matter how big they are. All of a sudden, any money you thought you might save disappears. And it may get even worse than that.

The good news is that there’s another way forward: flexible workspaces designed specifically for your company made possible by Knotel. 

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