Global co-working giant WeWork started off as a side hustle for founders Miguel McKelvey and Adam Neumann.
"We were entrepreneurs ourselves in a really cool building in Brooklyn in New York that was full of small businesses not typical entrepreneurs in the tech start-up sense but everyone from hat makers to film makers to architects," McKelvey says. "The real estate model didn't support them."
The duo decided to create their own co-working space in 2010 when the concept was in its infancy.
"We started it as a side project while we were doing other things but the response was so strong so quickly that we quickly switched and put all our energy into it," McKelvey says.
What makes WeWork different
McKelvey was in Australia this week to officially launch WeWork at the opening of its second Sydney location.
WeWork also operates in Melbourne and has 2000 members in Australia who pay $45 a month for membership and $450 a month for hot desking access.
The co-working business operates in 130 locations in 14 countries globally and is estimated to be worth $US16 billion ($20.9 billion).
"At the time co-working was only people in tech and a big open room with a lot of engineers and very male dominated," McKelvey says. "The underlying generator of the idea came very organically and authentically. We saw a problem we wanted to solve."
McKelvey attributes WeWork's success to spotting a gap in the market.
"When we started we were so much more diverse and had so many different types of people and our community was so different," he says. "The design of space is very friendly to women and the companies we have invited into the community often have more women."
WeWork co-working spaces include media, public relations and fashion businesses which McKelvey says enables the business to approach an even balance of male and females in many locations.
"Having that breadth of industry across the board creates a balance," he says.
Co-working is becoming an adult. Just like grunge music one time it was a niche and now it's mainstream.
Taylor Tran
WeWork's global reach also helps distinguish the co-working business.
"That's an important thing for many members when you join one location you are a member of all globally," McKelvey says. "We are a community of 100,000 members. Internally our community management teams are good at getting to know our members and figuring out who our members are."
WeWork members connect via the WeWork digital platform and also in person at social events that are organised by community management teams and members at each location.
"That can be anything from a breakfast in the morning every Monday to perhaps on a Friday ending it with more of a happy hour to get your weekend started," McKelvey says.
A challenge to existing co-working spaces
Co-working is booming with 14,000 co-working spaces globally with 1.2 million members.
WeWork's arrival in the Australian market offers a challenge to existing co-working spaces which generally operate on a much smaller scale.
Taylor Tran, author and founder of Innovation Melbourne, says WeWork offers thousands of seats in contrast to 50 person co-working spaces.
"It attracts a different type of person," Tran says. "Co-working spaces have to get big or get specialised."
Tran says successful co-working spaces specialise in areas such as AgTech, FinTech, RetailTech, FashionTech, FoodTech, freelancers, early stage, middle stage and start-ups.
"WeWork's business model is to take long leases of 10 years and brings freelance businesses together and sub-lease," he says. "They do cram in members in. For example a space of 5500 square metres holds 1300 members including virtual members."
But Tran says WeWork's arrival shows maturity in the co-working market.
"The more the better," he says. "It proves the point that co-working is here to stay. Co-working is becoming an adult. Just like grunge music one time it was a niche and now it's mainstream."
The changing workplace
The increasing demand for co-working spaces is part of broader changes in the way we work, according to McKelvey.
"There's a trend for people wanting more meaning in their work and pursuing something in the day-to-day that is valuable rather than working as a means to the end," he says. "It's the journey that matters and that's something that is a real shift. Because of that the work environment is very important. It has to be collaborative and creative."
McKelvey's says WeWork is preparing to "really invest" in Australia in anticipation of ongoing growth in co-working on the back of this shift.
"We're excited to be here, but we are just getting started."