What is a Coworking space?: Benefits, types and business model

The world of work has undergone a radical transformation in recent decades. The rigidity of the traditional office has given way to more flexible, collaborative models adapted to new ways of working. At the epicenter of this revolution is coworking, a concept that goes far beyond simply sharing a desk. It is a work philosophy, a vibrant community, and an innovative real estate solution that is redefining where and how we work.

Coworking constitutes an emerging form of social innovation within the context of the collaborative economy (González & Ruiz, 2020); and, it represents a new form of organization and business model innovation (Howell, 2022).

Coworking spaces and the associated practice of coworking have emerged in numerous forms and various urban contexts to challenge traditional concepts of the workplace (Brown, 2017), and it is a promising phenomenon in entrepreneurship (Howell, 2022) because it allows startups to save on operational costs.

Currently, coworking spaces have significant global diffusion and are growing at an unprecedented speed and scale (Leclercq & Isaac, 2016). Likewise, they can constitute an essential strategy for companies to attract talent and drive creation and innovation processes.

Furthermore, open innovation is facilitated in cooperative workspaces through their physical and social environment (Cabral & Van Winden, 2016). This article will explore the universe of coworking in depth, from its fundamental definition to its more specific nuances, answering key questions like “What is coworking?” and “What is a coworking space?“, analyzing its profitability and the emerging concept of think tank coworking.

What is coworking?

In its purest essence, coworking (sometimes translated as co-working or cooperative work) refers to the act of working independently, but in a shared environment alongside other professionals from diverse companies or disciplines. Unlike a traditional office where everyone belongs to the same organization, coworking brings together individuals (freelancers, entrepreneurs, remote workers) under one roof, fostering an environment of spontaneous collaboration and community.

The term was popularized by Brad Neuberg in 2005, who sought a solution that combined the independence of freelance work with the structure and community of an office environment. The idea was simple but powerful: create a space where people could work on their own projects, but without the isolation that often accompanies working from home or alone. Therefore, when we ask “What is coworking?”, the answer encompasses both the practice of working together independently and the underlying philosophy of community, openness, and collaboration.

Coworking is consistently described in terms of community and collaboration (Spinuzzi et al., 2019); however, in practice, they are traditionally conceived as office rental facilities where freelancers have access to a range of services they can hire at modest prices. Johns and Gratton (2013) and Leclercq and Isaac (2016) highlight coworking as a new form of work organization that enables collaboration opportunities and strengthens a sense of community within a shared space, bringing together workers from different companies or independent professionals with different profiles and goals.

For their part, Babb et al. (2018) define Coworking as an arrangement in which workers from different companies share an office space, allowing for cost savings and convenience through the use of common infrastructures, such as equipment, utilities, reception and custodial services, and in some cases, package reception and refreshment services.

Uda (2013) highlights that the concept of coworking points to a form of work where independents, small entrepreneurs, or member organizations, etc., who have different jobs, share a workspace and cooperate flexibly according to circumstances while communicating. According to Waters et al. (2016), the values of the diverse actors in the “coworking community” include: collaboration, openness, community, accessibility, and sustainability.

One of the most fundamental aspects of coworking, distinguishing it from other entrepreneurship support organizations (e.g., accelerators, incubators, makerspaces, innovation hubs), is the community aspect (Howell, 2022).

Coworking Spaces or Coworking Places

If “coworking” is the verb (the action), the “coworking space” is the noun (the physical place where that action occurs). So, what is a coworking space? Coworking spaces or coworking places are shared work environments used by different types of knowledge professionals, mostly autonomous or independent (Spinuzzi et al., 2019), who work with varying degrees of specialization in the vast domain of the knowledge industry (Gandini, 2015).

Thus, a coworking space can be described as a physical facility designed to facilitate the practice of coworking. These spaces offer a variety of memberships and services, from flexible desks (“hot desks”) used by the day or hour, to dedicated desks and private offices for small teams.

However, a coworking space is much more than just infrastructure. Its defining characteristics include:

• Flexibility: Adaptable membership plans, without the long-term lease agreements of traditional offices. It allows individuals and companies to scale up or down according to their needs.
• Community: The heart of coworking. The managers of these spaces (Community Managers) typically organize events, workshops, and activities to foster interaction, networking, and collaboration among members. It is this sense of belonging that fundamentally differentiates a coworking space from a simple shared office.
• Services and Amenities: Beyond the physical space, they offer essential services such as high-speed Wi-Fi, printers, equipped meeting rooms, kitchens with coffee or snacks, and often, additional services like mail handling, legal or financial consulting, and access to exclusive events.
• Professional Diversity: They bring together people from different sectors, professions, and career stages, creating a breeding ground for innovation, cross-learning, and unexpected business opportunities.

For their part, Waters et al. (2016) highlight that there are three interrelated characteristics that have historically distinguished coworking spaces from the serviced office industry:

• The profiles of the coworkers.
• The centrality of social interactions and collaboration. Roche et al. (2024) established that nearby startups are more likely to participate together in social coworking space events, knowledge diffusion is greater between startups that socialize but are different; and
• The aesthetic design of the spaces themselves.

Finally, in Table 1, we present a synthesis of the main characteristics of coworking spaces compared to classic work organizations.

Table 1. Differences between coworking places and classic work organizations.

Source: Leclercq & Isaac (2016)

The Evolution of Coworking: From Niche Idea to Global Phenomenon

Although the term was coined in 2005, the roots of coworking can be traced back to the ‘hackerspaces’ and artist centers of the 1990s in Europe. Neuberg’s initial idea in San Francisco (‘San Francisco Coworking Space’) was modest, but it resonated deeply with emerging trends:

• Rise of Independent Work: The exponential growth of freelancers, self-employed individuals, and the gig economy.
• Technological Advancement: The ubiquity of high-speed internet and cloud collaboration tools allowed work from anywhere.
• Need for Flexibility: Companies and workers seeking alternatives to the rigid and costly models of traditional offices.
• Desire for Community: The growing awareness of the negative effects of social isolation in remote work.

From these humble beginnings, coworking has exploded globally. Large chains like WeWork, Regus (Spaces), and Industrious, along with thousands of independent and niche operators, have opened spaces in practically every major city in the world. The COVID-19 pandemic, although initially disruptive, accelerated the adoption of hybrid work models, further consolidating the role of coworking spaces as a vital ‘third place’ between home and the traditional corporate headquarters.

Benefits of Coworking

Scientific research suggests that people who use coworking spaces report higher levels of job satisfaction and thriving. Why?

• Flexibility and Scalability: An important feature of coworking places is the flexibility of use; coworking spaces offer different plans based on the hours you need (Suarez, 2013). It allows users to choose when, where, and how to work, with plans that adjust to changing budgets and needs. Ideal for rapidly growing startups or freelancers with fluctuating projects.
• Community and Networking: Companies using internal coworking spaces could promote a suitable environment to strengthen quality and develop new and unique opportunities for connections and collaborations (Leclercq & Isaac, 2016) between their employees and independent workers. Sánchez (2020) highlights that an advantage of coworking spaces is networking; the contact list increases significantly, helping to build a broad network. This facilitates connection with other professionals, which can lead to new friendships, collaborations, clients, or even business partners.
• Productivity and Focus: The coworking environment and positive interactions have a positive influence on productivity (Bueno et al., 2018), because within the heterogeneity of the coworker community, startups might find the specialists they need. The structure and routine of going to a specific place to work can improve concentration and efficiency.
• Cost Reduction: For individuals and small businesses, using the services of a coworking space allows for cost savings (Carazo, 2019); a collaborative workspace is usually more economical than renting and maintaining one’s own office (avoiding costs for furniture, utilities, cleaning, security, etc.).
• Access to Professional Services: They offer high-quality infrastructure and amenities (fast internet, meeting rooms, printers) that can be expensive to replicate individually.
• Professional Image: Provides a business address and a professional place to meet with clients or collaborators, enhancing the brand image of freelancers and small businesses.
• Well-being and Work-Life Separation: Helps establish clear boundaries between work and personal life, something often blurred when working from home. Dell’Aversana and Miglioretti (2025) indicate that cooperative workspaces can be a supportive work environment and an inclusive solution for affiliated workers (remote employees), as they help them better segment their work and personal lives, contributing to their well-being and productivity. Many spaces also incorporate wellness elements (rest areas, social events, sometimes even gyms or yoga classes).
• Inspiration and Learning: Being surrounded by diverse people exposes one to new ideas, perspectives, and skills. Organized events and workshops further enrich this aspect.

Furthermore, Howell (2022) highlights the following implications of coworking spaces for the entrepreneur (Table 2) and for the community (Table 3).

Okay, here is the English translation of Table 2:

Table 2. Implications of the coworking space for the entrepreneur.

Source: Howell (2022)

Table 3. Implications of the coworking community.

Source: Howell (2022)

Yacoub and Haefliger (2022) studied the emergence of collaborative practices in coworking spaces and concluded that collaborative workspaces can limit creativity and innovation in startups. Finally, Sánchez (2020) describes the following disadvantages of working in a coworking space:

• Competition.
• Distractions.
• Bad coworkers.
• Schedule limits.
• Envy.

Types of Coworking Spaces: Finding the Right One for You

The coworking universe is not monolithic. There is a wide variety of spaces adapted to different needs and preferences:

• General Spaces: Open to professionals from any sector. They tend to be the largest and most diverse.
• Niche Spaces: Focused on specific industries (technology, design, legal, health), demographics (e.g., female entrepreneurs), or interests (sustainability, wellness). They offer a more specific community and often specialized resources.
• Large Chains: Global or national operators with multiple locations, offering consistency in design and services, and often, the ability to use different locations.
• Independent Boutiques: Unique spaces, often with a strong local identity and a more intimate community. They may offer a more personalized experience.

Membership Models:

• Hot Desk: Access to any available desk in the common area. Maximum flexibility and lower cost.
• Dedicated Desk: A reserved desk for exclusive use in the shared area. Offers more stability.
• Private Office: An enclosed, furnished space for individuals or teams. Combines the privacy of a traditional office with the benefits of the coworking community.
• Virtual Membership: Offers a business address, mail handling, and occasional access to the space or meeting rooms, without a permanent physical workspace.

The choice will depend on factors such as budget, the need for privacy, the type of work, and the importance of the specific community.

Think Tank Coworking

This term is less standard, but it suggests a coworking space specifically designed or curated to foster innovation, deep idea generation, and complex problem-solving. It might involve more specific member selection, ideation-oriented programming (workshops, expert talks), specialized resources (libraries, prototyping labs), or a design that promotes concentration and strategic collaboration. ‘Think Tank Coworking’ is a niche within collaborative work focused on ‘grey matter’ and high-level intellectual collaboration. It might overlap with aspects of incubators or R&D spaces, but while maintaining the flexible structure of coworking.

How does the collaborative workspace work?

For the success of a coworking place, the key person is the coworking space manager or administrator, as they help coworkers, look for opportunities among members, and build trust (Carazo, 2019).

Coworking space managers deploy a variety of strategies to foster collaboration and interaction (Cabral & Van Winden, 2016). Furthermore, coworking places are designed to host creative people and entrepreneurs striving to break isolation and find a pleasant environment that favors meetings and collaboration (Moriset, 2013). In this regard, Cabral and Van Winden (2016) analyzed four strategies (Table 4) that promote interaction in coworking spaces.

Table 4. Interaction strategies in coworking spaces.

Source: Cabral & Van Winden, (2016)

One aspect to highlight about coworking spaces is the proximity to other startups; Roche et al. (2024) report that proximity positively influences knowledge diffusion; and that this effect is greater for startups that are very close to each other and decays rapidly when they are separated by more than 20 meters on the same floor. Similarly, Banka et al. (2023) report that coworking spaces represent a valuable complement to startup acceleration programs, as they can help meet startups’ unmet expectations, especially regarding access to partner networks, capital funds, and support for attracting other clients.

Who Uses Coworking Spaces? The Target Audience

The demographics of collaborative workspaces are incredibly diverse:

• Freelancers and Self-Employed: Seeking structure, community, and an alternative to home isolation.
• Startups and Small Businesses (SMEs): Value the flexibility to grow, low initial costs, and networking opportunities.
• Remote Workers from Large Companies: Use spaces as an alternative to the central office, to reduce commutes, improve work-life balance, or have a professional space near home. Companies often subsidize these memberships.
• Digital Nomads: Need reliable, connected workspaces while traveling the world.
• Project Teams: Companies needing temporary space for specific teams or projects outside their main headquarters.
• Students and Academics: Seek a quiet, equipped place to study or research.

This mix is precisely what enriches the coworking experience, creating a dynamic ecosystem full of opportunities.

The Business Model: Are Coworking Spaces Profitable?

The question “Are coworking spaces profitable?” is crucial for both operators and investors. The answer is: they can be, but it’s not an easy business. Rådman et al. (2023) identified, formulated, and categorized 21 member needs in three coworking spaces in Sweden, using self-determination theory (SDT) as a theoretical framework, and grouped these needs into five main categories: social needs, business networking, knowledge sharing, productivity, and physical well-being. Therefore, you should consider these categories when formulating your cooperative workspace business model.

Main Revenue Sources:

• Memberships: The pillar of the business (hot desk, dedicated, private office).
• Meeting Room and Event Rentals: Additional income from the use of specific spaces.
• Additional Services: Premium coffee, advanced printing, lockers, IT services, event catering.
• Virtual Memberships: Revenue with low operational cost.
• Partnerships and Sponsorships: Collaborations with other companies to offer member benefits or sponsor events.

Key Factors for Profitability:

• Location: Accessibility, visibility, and neighborhood appeal are crucial.
• Occupancy Rate: Maximizing space utilization is fundamental. A half-empty space is not profitable.
• Cost Management: Controlling rent (the largest expense), utilities, staff, and marketing costs.
• Value Proposition: What differentiates this space? The community, design, unique services, niche. This justifies premium prices and attracts/retains members.
• Operational Efficiency: Good space management, technology for bookings and billing, efficient staff (especially the Community Manager).
• Competition: The market can be saturated in some areas, putting pressure on prices.
• Scale: Larger operators can benefit from economies of scale.

Challenges:

• High Fixed Costs: Especially rent.
• Member Fluctuation: Flexibility for users means potentially variable income for the operator.
• Need for Continuous Investment: In technology, furniture, and maintenance to remain attractive.
• Community Building: Requires effort and dedicated staff; it doesn’t happen automatically.

In summary, profitability depends on smart management, a strong value proposition, and a high occupancy rate. It’s not guaranteed, and many small spaces struggle to survive, while large operators have faced their own financial challenges (like the notorious case of WeWork before its restructuring). However, with the right model and solid execution, coworking spaces are indeed profitable.

How to set up a coworking place?

At the beginning of the coworking movement, the creation of coworking spaces were private initiatives (Moriset, 2013); however, currently coworking places are being incorporated into cities’ urban planning as spaces to promote collaboration and innovation among entrepreneurs.

According to Foertsch (2019), almost 90% of coworking places generate profit if they meet at least three conditions: having more than 200 members, being older than one year, and not subsidizing their operation through other businesses. However, these are not the only factors that make a profitable operation possible.

In this regard, Foertsch and Voll (2022) highlight that the COVID-19 pandemic had a significant impact on coworking businesses worldwide due to the restrictions imposed, and that meeting spaces were the services most in demand by users.

Howell (2022) describes that the simplified business model of companies providing coworking services is based on:

• Renting buildings from owners through long-term, multi-year lease agreements,
• Transforming the space by adding common areas, cafes, and other community-oriented features, and
• Renting the space fractionally to tenants (entrepreneurs, self-employed, etc.) at significantly higher prices and under more flexible lease terms, such as month-to-month.

However, if you wish to start a coworking business, Bacigalupo (2018) offers the following recommendations:

a. Gather information about the interests of potential users.

b. Try to achieve small victories: organize events.

c. Choose and seek a sustainable business model:

d. Get all the help you can

e. Be empathetic

f. Organize fun meetings.

How to choose a coworking space?

With so many options available, how do you choose the right coworking space? Below are some criteria recommended by Sánchez (2020):

• Location and Accessibility: Is it close to home or clients? Is it easy to reach by public transport or does it have parking?
• Culture and Community: Visit the space, talk to members if possible. Does the atmosphere fit your work style (collaborative, quiet, energetic)? Does the community seem active and welcoming? Are the events interesting to you?
• Price and Membership Plans: Does it fit your budget? Are the plans truly flexible? Read the fine print regarding access hours, use of meeting rooms, etc.
• Infrastructure and Amenities: Is the Wi-Fi fast and reliable? Are there enough meeting rooms or phone booths for private calls? Is the kitchen well-equipped? Are the chairs comfortable?
• Opening Hours: Do you need 24/7 access or are office hours sufficient?
• Noise Level and Privacy: If you need concentration, assess the noise level in common areas. If you need privacy, consider a dedicated desk or a private office.
• Reviews and Reputation: Look for online reviews to learn about other users’ experiences.

The best way to decide is to try it out. Many spaces offer day passes or free trials.

The Future of Coworking: Emerging Trends

Coworking continues to evolve. Some key trends include:

• Integration with Well-being (Wellness): Spaces incorporating biophilic design (plants, natural light), meditation zones, gyms, yoga/mindfulness classes. Likewise, Rådman et al. (2023) underscore the importance for coworking space providers to understand their members’ basic psychological needs to retain them and increase their satisfaction; similarly, Lukeš et al. (2025) determined that working from a coworking space is associated with higher levels of well-being, productivity, and work engagement compared to working from home.
• Sustainability: Focus on eco-friendly practices, recycled materials, energy efficiency.
• Greater Specialization (Niches): More spaces focused on specific industries or communities, including the potential rise of formats like think tank coworking.
• Corporate Adoption and Hybrid Models: Large companies using collaborative workspaces as part of their flexible and distributed work strategies (‘hub-and-spoke’).
• Integrated Technology: Apps for booking spaces, managing memberships, connecting with other members; smart buildings.
• Expansion to Suburban and Rural Areas: Bringing workspaces closer to where people live, not just in urban centers. Oleaga (2025) concluded that cooperative workspaces located in peripheral areas have the potential to establish business networks that stimulate knowledge exchange in regions where such networks are traditionally lacking.
• Coworking as a Service (Space-as-a-Service): Coworking operators managing flexible spaces within traditional office buildings for landlords.

Conclusion

The coworking movement is growing every day and has become an important trend in the business world, not only for those wishing to implement coworking spaces but also for urban planners as services offered by cities to foster entrepreneurship.

Participating in a coworking community offers many advantages for independent workers and startups, for establishing business relationships, finding potential allies, but above all, for promoting innovation processes.

Currently, coworking spaces can be found in many of the world’s major cities, and more of these services are offered every day. However, the success of coworking places is associated with the diversity of their members and the creation of value for the community.

Finally, shared workspaces can constitute an important element of the innovation ecosystems that an industrial sector, a city, or a country can promote.

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