Coordination Problem

Coworking spaces are a rapidly growing feature of modern cities, and increasingly
popular with freelancers, knowledge workers, start-up communities, and others
engaged in non-standard creative urban work. Drawing on ethnographic data
gathered in a large case study of coworking spaces in Australia, we develop an
economic model of an important aspect of coworking spaces, and the economic
logic of their existence, in which a coworking space is a Schelling point. This
argues that the main margin of value a coworking space provides is not price
competition with serviced offices, or a more pleasant environment than working at
home, but as a focal (Schelling) point for finding people, ideas and other resources
when you lack the information necessary for coordination. Drawing on
ethnographic research, we test some specific predictions the model makes about
the organizational and institutional form of successful coworking spaces (strong
screening mechanisms, specific technology or problem themed, internal
institutions geared to search-and-match). Finally we raise questions about the
optimal business model for a Schelling point coworking space.