One year later, co-working space on Grain Exchange floor lives up to the hype [PHOTOS]

Categories: Nerdery
CoCo_pit.jpg
courtesy CoCo
The 40-foot ceilings and former grain trading pit, now outfitted with ottomans, are two signs of the history behind CoCo Minneapolis's new home.
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When CoCo took over the Minneapolis Grain Exchange's historic trading floor last summer -- a year ago yesterday -- the young business got a lot of attention. That hype only intensified in November, when Google executive chairman (and recently-departed CEO) Eric Schmidt stopped by the space, and brought Mayor Rybak and plenty of press with him.

But buzz is one thing; whether a cutting-edge concept is able to sustain a real business is another. Because CoCo is, very much, based on a concept: the idea that work is changing, and that as an increasing number of people freelance, innovate, or telecommute, they're going to need a workspace more dynamic than their couch and more stable than the corner coffee shop. CoCo, short for co-working and collaborative space, aims to bridge this transition. But is it working, and are the Twin Cities ready for it?

Signs point to yes. After one year on the grain exchange floor, and two-and-a-half years at a  space in St. Paul's Lowertown neighborhood, business is booming, say co-founders Don Ball and Kyle Coolbroth.

"I don't think we expected the rate at which CoCo grew, or where it is one year later," says Coolbroth. "The initial response was overwhelming, and the continual response has been unbelievable. We continue to get memberships on a daily basis."

CoCo works like this: Members pay different fees for different levels of space and access, starting at $50/month for a part-time membership, and going all the way up to $1,500/month for a 24/7 large group work space, or "campsite," that can house a team of eight. All memberships come with printer and copier use, a certain number of hours in the meeting rooms, and access to workshops and skill shares. And, of course, unlimited WiFi and coffee. (CoCo goes through eight to nine pounds of beans a day).

Then there are the intangibles. Proponents of co-working, Ball and Coolbroth among them, argue that the model is invaluable for networking, fellowship, and cross-pollination of ideas between creative people. (Think: The Jane Jacobs model of urban planning).

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A large campsite at CoCo Minneapolis.
For evidence, the co-founders point to "day-to-day commerce between members," says Coolbroth, as well as direct partnerships and businesses that have sprouted up at CoCo. Among these is Flat Rock Geographics, which was born when two companies at CoCo St. Paul realized the one's software skills complemented the other's geographic information experts, and they merged. Another example is Minnesota WordPress hosting, the combination of one internet service provider and one WordPress guru, which now specializes in WordPress hosting (i.e., support, skills and security and for the popular website platform) in the state.

Ball and Coolbroth first "hatched the CoCo concept," as Coolbroth puts it, in October 2009. At the time, there were no co-working spaces in the Twin Cities; months later, on the same day CoCo St. Paul opened, a similar business called 3rd Place kicked off in St. Anthony Park. WorkAround and ArtsHub at Intermedia Arts have since joined the growing number.

Because they were trying to bring this idea to the Cities, Ball and Coolbroth had to prime the pump. "This was not yet an established need people had," says Ball. "We were working just to get people to imagine that co-working was something they might want to do."

They started by gauging interest, setting up a trial co-working space in a coffee shop. Then they started spreading the word, talking to freelancers or entrepreneurs about the benefits of a shared workspace, and experimenting with price points and membership levels.

By the time CoCo was ready to expand into Minneapolis, the co-founders had hit on their business model. Plus, the grain exchange floor made selling easy. "The space itself ignited so much attention," Ball says. Between the attraction to the three-years-vacant, hundred-year-old, 18,000 square-foot location (now, that number is 20,000 square-feet), and a series of open houses, by opening day, CoCo Minneapolis had about 50 members.

Within two months, the new location was profitable, says Coolbroth. "Which is pretty telling, when you're competing against free."

In this first year, the number of members has jumped four-fold, to about 250. While the space has room for more individual memberships, there's a waiting list for group campsites. CoCo St. Paul, which occupies 12,000 square-feet over three floors, has another 100 members, bringing the total up to 350. And the members aren't just coming to test out the concept; they're sticking around. Arrivals at CoCo outpace departures five to one, says Coolbroth.

Many of those members are freelancers -- writers, designers, consultants -- and the space is home to non-profits, start-ups, and incubators, like Project Skyway and the Clean Tech Open's regional headquarters. But there are also part-time members who work, say, in an office most of the time, but want a different environment one day a week. One example is a group of "social innovators," who have a special membership that allows them to meet at the Minneapolis location on Wednesdays to share ideas.
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This tent offers usually offers additional workspace, but when Friday afternoon rolls around, it turns into a happy hour spot.
Now, Coolbroth and Ball are grappling with the growing pains. They say one of their biggest challenges is catching up on the admin side of the business. For instance, now that CoCo's growth has outpaced their ability to get to know all the new members, they're putting together a member directory -- which also helps the business, since they see increased social connectivity as key to the co-working model. "One of our strengths is this network," Ball says. "We want to make it easy for members to plunder it well."

Even as they continue to sort out the logistics, Ball and Coolbroth are looking to expand. They're focused on growing the "learning" side of the model, and building the kinds of skill-share workshops they already hold into an "institute," says Coolbroth, "with some of the members who are big thinkers."

There are also plans for more space and new locations, in the Grain Exchange building and elsewhere. And they're talking about another kind of intermediate space, designed for businesses who are too big for a shared workspace but too small for their own offices.

All the while, they're thinking big. "We intuitively know that what's happening in a space like this is related to how the world's changing," Ball says. "There's a revolutionary nature to this, based on a lot of trends and a lot of predictions. At big companies, the cubicles are half-empty. People are exercising their independence, and the people in charge are saying, 'Why do we have this much real estate?' Or they want their employees to be more entrepreneurial and innovative."

"We believe that we're staring down a flood of people coming into this lifestyle," he continues. "Our next step is to liberate the suburbs."

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