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Is coworking the new incubator?

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The concept of the business incubator was born in an old factory divided up to house many small companies, including a chicken hatchery. Today incubators are facing challenges, especially those that exist on public funds. Their closed-door approach is contrasted with coworking’s open attitude. Does coworking now introduce a policy of openness to incubators? Or do coworking spaces even pose a threat to the concept of business incubation?

In this in-depth overview, writers Dave Bunnell and Jeannine van der Linden give a detailed history of both incubation and coworking, and explain how hybrids of both concepts are emerging. They submitted this guest post to Deskmag:

We live in a time where paradigms can shift so quickly that if you blink, you’ll miss it. And let’s be honest. Shift happens.

Let’s start with some history. For those who are providing ‘business incubation,’ and those receiving it, here’s how it all began. It was 1959. The Barbie Doll had just made her debut. The U.S. economy was at an all-time high. And yet in Batavia, New York, a conspicuous, warehouse-sized building stood completely empty.

Formerly a Massey-Ferguson plant of 850,000 square feet—the facility closed its doors in ‘56, driving local unemployment up to over 20%. A nearby family, the Mancusos, bought the building, then elected family member Joe Mancuso, owner of a local hardware store, to turn-things-around. After trying really hard, he said that finding one big tenant for the whole space was just “crazy.” So, he sliced it up into smaller spaces. That way small to medium sized businesses could afford to move in.

Joe also provided tenants with counseling and assistance on raising funds as part of the package. His new and varied clients included a charitable organization, a winery and (why yes...) a chicken company. It is said that the chickens were everywhere.

"We were out on the road a lot of the time, trying to interest investors and attract companies to the center," he once told the NBIA Review, "so, in a joking way, because of all the chickens, we started calling it ‘The Incubator.’" The Business Incubator was born.

The incubator was born as family solution not in a school of business

Now, many would like to believe that the “incubator” was the result of revolutionary thinking from the Wharton School of Business or maybe MIT. Nope. It was simply one family’s clever solution to entice not-so-big-tenants to move into an oh-so-big-building. But yes...it did steal its moniker from the raising of chickens.

The Business Incubator has since become the hallmark for growing business startups. In fact, the model can now be found all over the world. Those chickens of 1959 would be strutting about with real pride right about now.

Later, in 2005, an innovative workplace-concept with a less catchy name was born. Brad Neuberg opened the first “coworking space” in San Francisco. In expressing the idea, he borrowed the term, “coworking,” first used by Bernie DeKoven back in 1999 to describe “working collaboratively” in an online space. Except, what Brad added was real space, brick and mortar and the personal interaction so necessary for developing human trust.

'Coworking zones' as 'fourth places'

Coincidentally, today it is not at all uncommon for those working in a coworking space to do just that: actually communicate and collaborate on a daily basis with others in the many coworking spaces, online, across the globe. Heck. It’s how this article was written.

Coworking has since ascended from a single phenomenon to a full-fledged movement. From 2010 to 2011 the number of coworking spaces jumped worldwide by 100%. If coworking were a virus, it’s now gone pandemic. Fifty percent of that growth was in the U.S.

Paraphrasing from Wikipedia: coworking is a style of work which involves independent professionals sharing a work environment; usually in a “coworking space.” The concept has become increasingly attractive to work-from-home professionals, startups (high-tech and otherwise), entrepreneurs and independent contractors—all faced with working in relative isolation.

So, is coworking the new incubator? Yes and no. Perhaps, if the definition of “incubation” has changed. How could it not? The 1959 automobile survived the growing pains of high fins and too much chrome and thankfully has now evolved into something entirely different. The Barbie Doll underwent her stylish makeovers. And remember, the PC wasn’t even around when the “Incubator of ’59” was born.

Not every coworking facility has to be an incubator. However, it may be a perfect fit for many of today’s nomadic workers - and the “frugal startup” in particular. Many business incubators themselves are already taking advantage of this megatrend, and hybrids are starting to emerge. As witnessed here, perhaps the “startup” itself needs be redefined. Why not?

Is not any solo entrepreneur launching a new business a startup? Our cafés are full of them. Katie Couric on CBS asked Howard Schultz, Starbucks CEO, “When you look around a Starbucks, what do you see?”

"I see a deep sense of community," Schultz replied. "We've intended, from day one, to really kind of build a third place between home and work.”

Still, neither Katie nor Howard could have predicted a groundbreaking “fourth place.” A new dimension called (wait for it…) “the coworking zone.”

"Coworking will never wholly replace the business incubator"

Jeremy Neuner is co-founder & (r)evolutionary-in-chief at NextSpace, a coworking company in California, with four thriving ‘spaces’ in Santa Cruz, San Jose, San Francisco and Los Angeles. In an interview for this article, he said:

“Coworking will never wholly replace the business incubator. And yet, incubators per se are facing new challenges present day, as many of them exist solely due to public monies. And during this economy it’s becoming harder to prove quantifiable results with money-in-sustainable growth or job creation coming out. Whereas coworking redefines job creation. The independent professional has indeed created a job: their own. Later? If expansion looks like 1 to 4 more positions, those, too, are jobs.”

Neuner goes on to point out: “…Individuals coworking have concluded that ‘lifetime employment’ has simply gone away. So now they work at a job and future of their own making. You know? There’s this myth that those in coworking spaces are less driven than the individuals in, say, an incubator. But, I’ve never seen a more dedicated, harder-working group of people than those in (our) coworking spaces. It is inspiring.”

So whether sustainable growth manifests through the rigors of incubation or through the community vibe of coworking - courage is still going to be key. There’s no room for the faint-of-heart in today's innovation economy. And it is certainly no place for chickens.

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Co-written by: Dave Bunnell and Jeannine van der Linden. Dave is the Executive Director for a new Coworking Space: Dream Team Consortium, serving the Greater Lowell/Lawrence area in Massachusetts. Jeannine is the owner of Kamer52, a Coworking Space, in Oosterhout in The Netherlands.

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