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April 23, 2009

New San Francisco Coworking Space Will Benefit Social Entrepreneurs
    by Robert Kropp

Social innovators rent space from HUBsf as needed, and share ideas with like-minded entrepreneurs and nonprofits. -- The phenomenon of coworking spaces has become increasingly widespread in recent years, as entrepreneurs, small nonprofits, and even employees of larger corporations who telecommute find that sharing rental space as well as printers, fax machines, and wireless Internet, can lead to considerable financial savings. By renting space for only the number of hours per month in which it will be needed, the start-ups and nonprofits realize savings over having to rent an actual office, which strengthens their bottom lines and increases the possibility of financial success.

Coworking arrangements also encourage social interaction with often like-minded individuals, which can motivate a more effective work ethic than what may be practiced in the isolation of a home office.

A new coworking space in the Mission district of San Francisco, scheduled to open in September 2009, has taken the concept of coworking and added to it a twist of social relevance. HUBsf is the first US-based affiliate of the HUB, a UK-based global network of thousands of social innovators who connect online or meet at one of the HUB's eighteen sites across the world.

What makes the business model of the HUB and its affiliates unique is that it focuses on a customer base of social entrepreneurs, who create ventures in order to effect meaningful social change. HUBsf describes its customers as "a diverse local and global community dedicated to building solutions for social, economic, and environmental sustainability." By sharing space, social entrepreneurs cut costs while lowering their carbon footprints by as much as two-thirds.

HUB members also gain access to a full calendar of concerts, art openings, lectures, and workshops, held in the theater located on site. Members are also invited to hold parties on the building's rooftop deck.

"Coworking forces a mode of ambient cooperation among the individuals sharing a workspace," said Kevin Jones, a HUBsf Board member as well as a founding principal of Good Capital, an investment firm whose Social Enterprise Expansion Fund provides growth capital to social enterprises. Good Capital identifies itself as a strategic partner in HUBsf, and is responsible for bringing the HUB model to San Francisco.

Jones continued, "When the sharing of resources is tied to a movement like the social capital market, then the opportunities for success increase," both for social entrepreneurs who interact in the coworking space as well as for the owner of the space itself.

In fact, according to Jones, real estate developers in metropolitan areas are becoming more interested in developing coworking spaces, as the revenue density that can be accomplished in a coworking environment leads to lower absolute costs for entrepreneurs, and better margins for the business operating the space.

"Coworking spaces are experiencing a boom, because it is good business to share scarce resources like office space in an economic downturn. For the landlord, the coworking model works well because of the density of usage of the space," Jones said.

"A space likeHUBsf helps social entrepreneurs get down the road fast, and provides a safe network shared with like minds," Jones said. "They're not swimming upstream and having to explain themselves and prove their points like they often have to do in the outside world."

"We are not an incubator, but a catalyst," Jones continued. "HUBsf will be staffed by hosts who have an idea of what each of its customers is working on. The host will be able to facilitate networks as well as identify those customers whose ideas draw the most interest from others."

For investors in HUBsf and similar ventures, the highest margin for success of the coworking business model is in learning how to effectively share resources. The more effective the support of the mission of the space, then the greater the likelihood of higher margins. Initial investment in HUBsf was provided by Good Capital, other social venture capitalists, and angel investors.

Jones told that the HUB will be expanding into Berkeley as well, where it will take up residence at the David Brower Center, a community center combining offices and program facilities in 50,000 square feet of space. The newly constructed Brower Center attained a Platinum LEED rating, the highest rating possible, from the US Green Building Council.

"Berkeley has deeply entrenched community nonprofits with large stakeholder bases and a lot of network capital, but they donít have a model like ours that maximizes space," said Jones. The Berkeley HUB is expected to open in July.

Many advocates for a sustainable global economy are claiming that the current economic crisis offers an opportunity for a significant paradigm shift in the ways in which to relate to business activity. Permanent scarcity and the imperative to deal with climate change encourage the kinds of initiatives that HUBsf plans to bring to a US customer base. With efficiency maximized and carbon output minimized, and with entrenched networking that serves to generate more ideas for social good, ventures such as HUBsf have the potential to reward both the entrepreneurs that rent their space and investors who find in such ventures a worthy cause for their missions.

As Jones told, "The highest margins will be enjoyed by those who learn how to effectively share resources. We arenít going to be able to rebuild a throwaway economy."

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