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Why Do Corporates Want To Work Under The Same Roof As Startups?

Corporates want to follow the path of startups

6Oct

The startup community is driven by passion, so when it comes to working spaces, usually, entrepreneurs are not very picky. Mark Zuckerberg created Facebook in his university dorm, whereas Steve Jobs and Steve Wozniak found themselves comfortable in a garage. The right environment is important, but startups don’t look for fancy offices, it's a different type of comfort they are after. The last thing startups want from their working space is spending a fortune on the rent, so entrepreneurs are drawn to the idea of sharing the working space with each other.

Today, cities with buzzing startup communities offer facilities specifically designed for startups and freelancers, where aside from having an affordable working place, they get access to open innovation at its best. It doesn't take long to imagine what creative minds from the entire range of industries can come up with by working under one roof - innovation. In the co-working ecosystem, people can share solutions, ideas, and knowledge, without time-consuming phone calls and remote meetings.

After office sharing company WeWork skyrocketed in valuations and reached $15 billion, it has become clear that demand for the service is growing, whilst large organizations have also become interested. Office-sharing companies build their facilities with care by analyzing the profile of potential 'tenants'. WeWork, for example, offers a hip interior, jazzy wallpapers, free micro-roasted coffee, and craft beer - an essential pack for innovative minds. As for large organizations, according to Bloomberg, office-sharing companies also accommodate teams from giants including General Electric, KPMG, and Merck. Why exactly do large companies sacrifice fancy offices in favor of sharing their desk with others?

A large proportion of the younger generation no longer want to climb the corporate ladder but are still of interest to corporates, who have decided to reach them in their territory. From finance firms to tech manufacturers, companies essentially plant their staff in shared spaces to get closer to young innovators. Silicon Valley Bank, for example, has even managed to treat office-sharing 'tenants' like clients, offering banking solutions onsite. Mark Gallagher, the bank's Lead in Boston said in his interview with Bloomberg that there are situations where people just open the door and say: 'We need to open a bank account!'

It took many companies a while to realize that innovation can't exist in a vacuum or under pressure. By having a glimpse into the ecosystem of a startup community in shared spaces, corporates can create an innovative ecosystem internally. This consequently leads to less hierarchy at the workplace and a more transparent working environment - the main ingredients for healthy corporate culture. According to the PwC report on the future of the workplace, big businesses are predicted to move from their centralized HQs and opt for remote working, thanks to advances in digital technology and the fact that this approach can cut commute times and expenditures. Even though co-working is a relatively new trend, it has already managed to erase old-fashioned stereotypes of how the office should look, and essentially knocked down the walls standing in the way of creativity and innovation.

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