The State of Coworking in Tbilisi, Georgia (February 2016)

Introduction

As part of a series of workshops about the sharing economy, a presentation of lessons learnt about CospoT and a discussion about coworking took place at the Generator 9.8 on February 2nd, 2016.

The meeting focused primarily on coworking initiatives open to all, including freelancers and remote workers. By contrast, incubators also promote coworking but usually focus their means on selected start ups.

The present article summarizes the presentation and the discussion for any reader interested in the topic of coworking in Georgia and the Caucasus.

 

Part I. Lessons learnt from CospoT – Coworking Space of Tbilisi (09/2014 – 09/2015)

I’m writing this as the founder of CospoT. The coworking space of CospoT (www.cospot.ge) opened doors at the beginning of September 2014 in the Karvasla building on Tsotne Dadiani street near the train station, and closed at the end of September 2015.

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Lesson #1: Regular members bring the most coworking value to your space.

I’ve been lucky to meet and work side by side with great coworkers at CospoT, people that helped me, that I helped and with whom I’ve had many interesting discussions. This happened with regular members of CospoT. One-day visitors often came because they needed a desk and good working conditions for a short period of time: the coworking space for them was more a shared office solution than a place to interact with new people. Meaningful exchanges with short term visitors were rare.

This was my experience as a coworker at CospoT. As a manager of the place, I was more concerned with paying the bills. When the space didn’t get the following I expected, when fewer people than planned came to the space, I realized that coworking belongs to this kind of industry where you you can end up waiting for others to finish doing whatever they are doing… far less glamorous than one may imagine.

Lesson #2: Is Alex Hillman right when he hammers “Create the Community First”?

If you’re thinking about creating or running a coworking space, Alex Hillman is a name you should know. He co-founded Indy Hall (www.indyhall.org), one of the earliest and most successful coworking spaces in the United States. Alex runs a blog and a podcast, he gives talks, contributes to forums and even answers you if you write to him. He’s not shy about sharing his experience of coworking and his views about the development of the coworking industry. Some of his observations include: “You can’t create the culture, you can only create the system”, “It’s the members of the community who create the majority of the value to each other” and most notably “Create the community for your space before you actually open it”.

This last precept makes sense. It’s so easy to understand that it now ranks as a best practice of the industry. In practice though, examples of spaces which open without a community to sustain them from day 1 are many.

A positive example – one that goes Alex’s way – is CollabMiami (www.collabmiami.com): George Cuevas organizes coworking meetups in various locations throughout Miami. He created the community first and still hasn’t opened a space of his own. That’s a vibrant community that doesn’t pay rent! But there are negative examples too, and I’d like to propose that of Utopian Lab that Vachagan opened in Erevan in the autumn of 2015. It was his second try. It was a place first, and then only did the bulk of his member base coalesce around him.

Had I been trying to assemble a community first in Tbilisi, my view is that I would still be trying today. Opening was an irreplaceable experience (and a welcome one for someone who wanted to go “back to work”). But doing so, I learnt with CospoT that you shoudn’t expect people to join your coworking space just because it’s open.

Do we really know what makes the success of a coworking space in Georgia? I will argue that Alex Hillman has a rather North American (or Western) approach to coworking. Getting it right in Georgia might be a somewhat different game (read on!).

Lesson #3: Coworking is Hard to Explain

The result of a search for “Coworking in Tbilisi” on Google Trends (www.google.com/trends) is empty. Not enough Internet users look for those terms because most of them don’t know about coworking. Alex described coworking as “experiential”: you have to be there and see it happening to understand and believe it.

People liked the idea of coworking when we explained it to them and they liked the events which we organized at CospoT but they didn’t come back to work there. They obviously didn’t see the value. I don’t blame them: we didn’t have enough members for the community to be interesting every day. And because we didn’t have enough members, we couldn’t attract enough new members to reach critical mass.

We’re back to the question of creating a community for the coworking space. Like you need to confine enough fissile atoms in a small space to trigger a nuclear chain-reaction, you need to “confine” enough people in your new coworking space for long enough for the sustained coworking reaction to occur.

How long is long enough? Check this view that coworking is about building “just right” communities and achieving a “non overbearing sense of belonging to those who want to be part of the community” (http://time.com/money/3586004/coworking-why-it-works/). It’s tricky.

So as it happened, CospoT was alone on its market and that wasn’t cool. I didn’t expect us to want competition so much. Competition helps grow a new market in a way that a start up with limited means cannot do.

Lesson #4: Is isolation the problem that coworking spaces solve in Tbilisi?

Coworking spaces everywhere solve the problem of isolation of freelancers and remote workers. But is this a relevant issue in Tbilisi?

It’s notoriously easy to get to know new people in Georgia. This happens in the street, at any (free) event, at cafés, restaurants, friends’ places… Locals are by default connected through their families or university peers. Expats quickly go around their communities. If you’re a remote worker who has had a long day in front of the computer, going out after work is so easy and convenient it’s pretty much effortless.

The numbers aren’t big (statistical significance?) but CospoT seemed to do better with newcomers in Tbilisi, i.e. people who didn’t have strong networks and connections in the city prior to joining. When CospoT was part of their routine from the start, these members stuck with us. Established residents on the other hand seemed not to want to change their habits of working at public libraries, the Mediatek or cafés to participate to the creation of a new community, one that cuts across traditional networks and brings people together in new ways.

The isolation of freelancers and remote workers may not be as acute in Tbilisi as it is in other countries, and thus the intrinsic need for coworking places might not be as strong in Tbilisi as it is elsewhere.

Lesson #5: Location is really important

CospoT wasn’t located right in the center. The office itself was fitting for work, but two metro stops away in a neighborhood people perceive as a shopping district didn’t make the trick, this notwithstanding the presence of other companies in the business center whose employees like that they are next to a major hub of public transport. Had we had a sustainable community making a collective decision to settle there, this wouldn’t have been an issue.

IMG_0107_960Opening an office in a business center has its advantages but also its drawbacks: you may have limited control over the conditions in your space (access hours, HVAC systems). I was surprised to note that the reliability of the Internet (CospoT used 2 providers), if a plus, didn’t appear to be a decisive factor for most members. Workers in Tbilisi often use the 3G data stream from their smartphone or simply wait for the Internet to come back where they are. Some used CospoT as a backup place, whenever Internet would run out at their usual place of work.

Lastly, there must be a market for flexible and reasonably priced office furniture in Tbilisi. An Ikea type of outlet in Georgia would have saved us much time at the beginning.

Lesson #6: How to be profitable with a coworking space in Tbilisi.

The cost of renting space in the center of Tbilisi is high when compared to the disposable income of a majority. Georgia is a lower middle-income country. Who will pay for the service you offer? At CospoT, I thought I would grab more of the foreign expat’s community than I did. I also learnt that fixing prices for a new service in a new country is a difficult exercise.

Here are possible solutions to break even soon after you open your coworking space:

  • Combine your coworking space with other services (e.g. the social bar at the Generator 9.8) ;
  • Have a large and successful community and following right from the start ;
  • Unfair competitive advantage. In Georgia, where trust is a family thing, get your uncle to give you the keys to that huge empty space he does nothing with right on Rustaveli avenue. He doesn’t care so much and won’t pressure you for much of a rent.
  • Get someone to invest to grow the market for as long as it takes for the market to grow, like a large private or public organization.

Note that some coworking spaces in other countries make a substantial part of their turnover from members who never cowork. Those are members who want to attend events at the space but also want to support and be part of the cool community you’ve initiated.

 

Part II. Coworking Updates

Here are noteworthy elements from the discussion about coworking which took place at the Generator 9.8 on the evening of February 2nd, 2016. The proposed topic was “How to create a market for coworking in Georgia and the Caucasus?” with, as a sub-question: “What opportunities for cooperation or coordination between coworking spaces?”.

Current Coworking Initiatives in Tbilisi

The participants listed current initiatives promoting coworking in Tbilisi:

  • Generator 9.8 (www.generator98.ge and facebook page)
  • Institute of Italian culture (www.istitutoculturaitaliana.org, to open shortly for coworking)
  • ALC Work Space (www.alctbilisi.org/co-work.html ; it closed as a coworking space only two weeks after opening because the whole space was rented as a private office)
  • Vere Loft (ref. the article of Feb 1st, 2016 in “Georgia Today” [1])
  • Creative Café (www.cdc.org.ge and facebook page)
  • Technopark and FabLab of GITA (incubator, www.gita.gov.ge) [2]
  • Game Lab (www.gamelab.iliauni.edu.ge) and FabLab (www.fablab.iliauni.edu.ge) at Ilia State University
  • VegaLab incubator (www.vegalab.ge)
  • Startup Nest, incubator of the University of Georgia (www.startupnest.ge)
  • Geolab at Georgian American University (www.geolab.edu.ge)
  • IBSU Idea Lab incubator of the International Black Sea University [3]
  • Sakpatenti IT incubator (?) [4]

Libraries, and cafes compete with coworking initiatives in Tbilisi because they provide comfortable premises at a low cost, and most don’t mind that you sit there forever during the lower seasons when business for restaurants and cafés is low. There are also anticafés in Tbilisi (e.g.: anticafe “Corner”, www.anticafetbilisi.wordpress.com and facebook page).

Working and Coworking: what difference?

Humans have collaborated and supported each others for thousand of years. Coworking spaces aren’t inventing anything radically new. One of the things that can be said is that the coworkers of a single company (a.k.a. “employees”) are recruited by it to fulfill a same end goal. The professional goals of members of coworking spaces remain independent to a greater degree. This shapes how employees and coworkers interact together in their respective environments.

Potential for Collaboration between Coworking Spaces and Universities

Running a coworking space is “cool”, and because everyone wants their own, managers and owners of coworking spaces might be reluctant to cooperate.

Data Gogia describes how a university (or universities) and coworking spaces could agree to create a network of spaces across the city. Members would have the benefit to access the different spaces the coworking network with a single pass. Universities would benefit in terms of image and voluntary contributions of the coworkers (giving talks, sharing experience with students, etc.). The cost for universities would be low because they often have spare space available for use. Partnering coworking spaces would offer more attractive deals and build more visibility.

Profitability of Coworking Spaces in Georgia

It emerges from the discussion that the immediate future of coworking spaces in Tbilisi probably hinges on making it cheap for the coworker. Sponsorship or grants could help spaces offer cheap passes and thus contribute to developing a market for coworking in Georgia. The “Gangplank” model is cited as an example (www.gangplankhq.com and www.whatisgangplank.com, “We do not charge a monetary fee, but rather ask that you give back through time, talent, and relationships.”). The principle of time banks is also mentioned (see https://vimeo.com/63034955).

 

Conclusion

Many thanks both to the Generator 9.8 for hosting the event of February 2nd and to the participants for attending.

CospoT has definitely been an enriching experience for me and hopefully for my collaborator Nino whose support has been invaluable. If it didn’t come out as a commercial success, it has at least had value as a demonstrator for some of the coworking initiatives that have emerged since September 2015 in Tbilisi.

 

Bonus

Don’t miss that piece by Alex Hillman about the cost of opening and running a coworking space: http://dangerouslyawesome.com/2012/01/how-much-does-it-cost-to-start-a-coworking-space/

Sources and References

[1] http://georgiatoday.ge/news/2837/Vere-Loft-%E2%80%93-Offering-Space-to-Create
[2] http://architecturalforum.net/first-technology-park-will-open-in-the-late-2015/
[3] https://www.ibsu.edu.ge/en/media-ibsu/news-en/939-business-incubator-ibsu-idea-lab-demo-day#
[4] https://www.facebook.com/IT-%E1%83%98%E1%83%9C%E1%83%99%E1%83%A3%E1%83%91%E1%83%90%E1%83%A2%E1%83%9D%E1%83%A0%E1%83%98-%E1%83%A1%E1%83%90%E1%83%A5%E1%83%9E%E1%83%90%E1%83%A2%E1%83%94%E1%83%9C%E1%83%A2%E1%83%98-IT-INCUBATOR-SAKPATENTI-673883005982111/?ref=ts ; http://ip4all.com/sakpatenti-introduced-it-incubator/