The Netherlands has one of the highest proportions of independent workers in the European Union. About 44% of employees work part-time, compared to the EU average of 18%. It’s also a crowded country where people live in tiny apartments.
These factors combine to create a huge supply of independents needing a place to do their work. It might seem like the perfect environment for coworking. But the intervention of a big meeting room rental company has completely altered the environment.
That company is called Seats2Meet.com. It started out twenty years ago renting meeting rooms to companies that wanted to interact outside of their offices. The idea proved popular; meeting centers sprung up all across Holland, and were operating on healthy margins.
Four years ago Seats2Meet expanded their concept. They created large open working areas and invited individuals to drop in with their laptops. Even more, they offered their visitors a buffet lunch and free tea and coffee. All for the grand price of nothing at all. Instead, users are expected to pay with “social capital”: "We offer them (facilities) in exchange for their knowledge and added value,” said Vincent Ariëns from Seats2Meet Utrecht.
Paying with social capital means users are expected to interact with other visitors, share their knowledge and ideas, and bring buzz to the space. Vincent said the free model (or “social capital seats”) is not a threat to coworking spaces. Rather, it could work alongside desks paid for with “economic capital”.
“We believe in the combination, and the social capital seats mean buzz for your location, and buzz is business,” Vincent said.
Crowded benches, no dedicated desks, pricey meeting rooms
The business model is based on renting meeting rooms at a premium price. The freelancers who work for free are encouraged to book out meeting rooms to hold important conversations, and for that they pay handsomely.
The company also asks for your data. Visitors must create a profile within the Seats2Meet online networking software, which collects a trove of information about the user, their jobs and interests, and their connections.
A Seats2Meet location feels like a crowded university lunch hall. There are rows of long tables, all packed with individuals of all ages hunched over their laptops. Carpet and dropped ceilings muffle the noise somewhat, but the space is throbbing with activity as people move about and chat.
At lunch the buffet area is opened. There’s a spread of breads, cheeses, cold meats, salads, pizza, served on disposable paper plates. A push-button coffee machine squirts out hot drinks, and there are water taps in various spots around the room.
Part of the floor space is given over to these open halls. But the majority of the space is devoted to meeting rooms, which are the way Seats2Meet generates revenue. By all reports, they are turning over a very significant profit, with an occupancy rate of over 90%.
Meeting space doesn’t come cheaply. To test it out, we tried to book a room for the following business day. For two people, two hours, coffee and tea, and the buffet lunch, our meeting would have cost €100.
Unlike most of coworking spaces, there are no dedicated desks at Seats2Meet. If it is full, it's full. There's one alternative: for workers who would like a quieter place to work, Seats2Meet offers a desk in a silent workroom for €10 a day. This option isn’t particularly popular; during our visit, there was only one lonely person in the silent room, while over a hundred crammed into the open free work area next door.
Changing the market?
Providing differentiated workspace has become the business model for all other coworking spaces in Holland. Since Seats2Meet altered the market with their free option, other providers have had to focus on creating high quality locations with stronger and more focused communities.
“People see the difference,” said Ivana Kowsoleea of the Lev Kaupas coworking space in Amsterdam.
“Seats2Meet is a place you go to work, but the difference is that the people who come here (to Lev Kaupas) and are members do share a lot of interest, help each other, give feedback, they can tell a brilliant idea and the others are all prepared to help by offering their own experience, or connecting with the right people in the network.”
Lev Kaupas is a not-for-profit space run by its members, some of whom volunteers to undertake certain duties. It is this focus on a strong community that sets it apart from a catch-all free workspace. There are currently over 40 members, too many for the current space, pushing Lev Kaupas to search for a bigger location.
As Ivana tells it, prospective members don’t even ask why they should pay to join; they understand it once they see the location and are told about the operational structure. The difference between the two concepts is so stark that Ivana feels no threat from the Seats2Meet model.
“We don’t have to compete. We are doing this as a collective. If the coworking space has a good community, and good interaction with their workers, a good atmosphere, then there are no worries at all.”
Other coworking spaces are forced to become more creative in their business model. In the city of Nijmegen, the Wals Wonen & Werken coworking space doubles as a showroom for Italian furniture. Everything in the space can be bought – even bags of coffee. Wals Wonen & Werken co-founder Louis Verhagen said that giving away free space might attract a lot of visitors, but creates a certain working atmosphere.
“It all has to do with the experience you are providing,” Louis said, “Charging for workspace filters the audience. We would rather have serious members who pay for a place to work.”
Some spaces adopt a middle-ground approach. Igluu is a small chain of coworking spaces, with locations in three cities. Its Utrecht workspace matches Seats2Meet in offering some free workspace, while renting out permanent desks and meeting rooms. It competes on quality, promising to offer a smaller, more focused community.
“People here are more serious self-employed who pay for a fixed desk,” said Igluu community manager Felix Lepoutre, “There are different groups, and different levels of coworking. Those who are just starting out go to Seats2Meet. Then they might move to Igluu when they get a bit of success. Eventually they might move to their own office. Through that growth period there are a lot of different people at different levels, who need different things.”
The last point might be the most crucial one. As the Global Coworking Survey shows, the majority of coworkers are former home workers. They graduate from the home office to the coworking space. The incidences of coworking spaces snaring members from each other is quite low. A “freeworking” model such as Seats2Meet might actually be more of a risk to the home office or the wifi-enabled coffee shop.
The limitations of the model might even serve as a way for smaller, stronger coworking spaces to demonstrate their strengths.
Expanding internationally
There are certain local factors that favour the Seats2Meet model. Yet they are also expanding to other countries. A pinboard on the wall shows locations under consideration across Europe, and even some in Africa. The question is how first-generation coworking spaces can respond if the “freeworking” model arrives in their cities.
One response is to learn from the alternative, and adopt some of its successful practices. That’s what Nomadz coworking space in The Hague has done. Three weeks ago, a Seats2Meet location opened in close proximity to Nomadz, causing some consternation. However, Nomadz host Suzanne Gerbenzon decided to take a positive approach.
“I’ve learned a lot from them,” Suzanne said. “We have a meeting room because of them, we rent it out a lot, and I market it to big companies. That’s how we make a profit.”
She also believes there is more value in emphasising the collaborative spirit of her space.
“People come here because they like it, it’s quiet, we all know each other, we help each other out and connect to each other. All coworking spaces have their own personality. Here it’s more like a family.”
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