Ever hear of Uber, Spotify, or HootSuite?
Only a few years ago, these popular companies were just little startups few had heard of.
While each of these companies is unique, they do have have one thing in common: They each benefited from shared office spaces in San Francisco.
Today, startups are choosing coworking spaces over traditional work environments at lightening speed. There are several reasons for the phenomenon, some obvious and some not. On a broader scale, the trend coincides with what is happening nationwide — remote work is no longer uncommon:
- As reported by The New York Times, remote work rose 79 percent between 2005 and 2012.
- An estimated 40 percent of the workforce will be independent contractors by 2020.
- The number of U.S. coworking spaces rose from 1 to 781 between 2005 and 2013.
- The number of people who work in coworking spaces is projected to more than double worldwide by 2020 (3.8 million people)
But what makes coworking especially conducive to startup success?
We'd say it's the hassle-free maintenance, abundant networking opportunities, and flexibility (to name a few reasons). For the remainder of this article, we'll reveal seven super successful tech startups who all found success while coworking.
Looking for more key resources, advice, and tips for tech startups? Get The Silicon Valley Startup Guide.
Coworking in San Francisco: Seven Startups That Benefited from Shared Workspace
1. Hootsuite
Rewind to 2008: Agency owner Ryan Holmes found himself increasingly frustrated by having to log into a million different social accounts when executing marketing campaigns. After realizing he couldn't be the only one, Holmes set out to create an integrated platform for managing multiple accounts.
Soon after, Hootsuite was born. The online software supports social integrations for Twitter, Facebook, Instagram, LinkedIn, Google+, YouTube, and others. The service became so popular that even former U.S. President Obama was said to be using it.
What many don't realize?
Hootsuite gained momentum while coworking in San Francisco.
SaaS is an increasingly crowded market space. Only the best-executed ideas will ultimately become well-known names. Understandably, many SaaS startups struggle to gain brand recognition early on. Making the right connections, and procuring ample funding, is imperative to success — both factors that can be accomplished by coworking in the right space.
Hootsuite is now valued at more than $1 billion.
2. Duolingo
According to Duolingo, more than 1.2 billion people in the world are attempting to learn a language at any given moment. The problem? Learning a language has historically been an expensive endeavor, requiring either live instruction or a large investment in a software like Rosetta Stone.
Cofounders Luis von Ahn and Severin Hacker began thinking about how to solve this problem while working on an academic project at Carnegie Mellon. Several months, and a pretty awesome TedTalk later, and the company publicly launched to great acclaim.
Impressively, the company has never spent money on advertising. Like many of the businesses featured in this article, Duolingo combined the power of habit-forming tech, word of mouth, and tech-centric coworking (yep, Duolingo team members have worked at RocketSpace) to move ahead.
3. Weebly
Weebly empowers both individuals and small business owners to make their own websites. They do this by providing a simple platform for creating beautiful sites—no coding required. The company was co-founded in 2006 by Penn State students David Rusenko, Dan Veltri, and Chris Fanini.
After noticing several fellow students struggling to create online portfolios (a then university-requirement for showcasing resumes and coursework), the team decided to create a solution: A user-friendly platform allowing individuals to create personal sites quickly, cheaply, and easily.
In 2007, the company was selected for Y Combinator's startup program. The team coworked full-time to develop what soon became Weebly (Weebly had a team a RocketSpace back in 2013 and 2014). Since then, the company has continued to expand, releasing new features and opening offices around the world.
4. Uber
How did we ever survive without Uber?
East Coast and West Coast urbanites disagree on a lot of things: Who has the best hot dog? Is there such thing as too much sun?
But there is one thing they do agree on—Uber makes hailing a taxi way easier. The mobile ride-sharing platform has brought a level of spontaneity to car-free lives that was previously impossible.
After lamenting over the trouble of hailing a taxi, Co-founders Travis Kalanick and Garrett Camp asked themselves: could we do this better? Just a few years later, and Uber is now in 250 cities across 51 countries. To keep it lean, Uber chose to start off in coworking spaces to hit their stride. Uber's first team of eight people were among the first coworking members at RocketSpace in 2011. Later, the company managed to achieve backing from the likes of Google Ventures and Fidelity Ventures, which allowed them to scale quickly and successfully.
5. Instagram
Instagram started humbly and, as we all know, was recently acquired by Facebook for $1 billion.
Instagram has experienced the kind of success we all dream of having: an impressive 1 million users only two months after launching. Founded by Kevin Systrom and Mike Krieger, the photo-sharing platform became available to the public in 2010.
Who could have predicted that two years later, with only 13 employees, Facebook would acquire the company for $1 billion? Or, that The Oxford English Dictionary would name selfie "word of the year" in 2013? Undoubtedly, much of Instagram's success is due to a brilliant idea the public was ready for.
Staying lean, attracting key VCs, and working with the right team members allowed Systrom and Krieger to bring that idea to fruition. While the team has come a long way since their coworking days, working in a shared space provided the flexibility that allowed them to grow.
6. Indiegogo
Indiegogo is now the portal for budding entrepreneurs looking to test, crowdsource, and fund their ideas. What began as a crowdfunding platform for film projects has since morphed into the world's first equity crowdfunding platform.
In 2016 the company launched Equity Crowdfunding with four participating startups. Each raised more than $60,000 within the first week. Although CEO David Mandelbrot may not have gotten his start at RocketSpace (he worked from another coworking space in San Francisco), he did swing by to talk about what the future holds for startups and crowdfunding.
Until recently, startups were restricted to raising equity funding from accredited investors who met specific income or wealth requirements. With Equity Crowdfunding, any aspiring venture capitalist can invest in a startup in exchange for equity. Put simply, Indigogo is bringing more opportunity to the table. To date, Indiegogo has raised more than $800 million for over 600,000 projects in 223 different countries.
7. Spotify
Remember Napster? (Most people don't, and it often dates you if it does ring a bell!) But such was life before Spotify — stealing songs in the night. And then there was iTunes. Who wants to pay $1.99 for one song?
The nonsense ended in 2008 when Daniel Ek, former CTO of Stardoll, and Martin Lorentzon, co-founder of TradeDoubler, gave us Spotify — the music streaming service now used by more than 100 million people a month. Unlike download sales, which pay artists a fixed price per song or album sold, Spotify pays royalties based on the number of artist streams in proportion to total songs streamed on the service.
They distribute approximately 70 percent of total revenue to rights holders, who then pay artists based on their individual agreements. Spotify makes its revenue by selling premium streaming subscriptions to users, and ad placements to third parties. The company is valued at $8 billion, and yes, they also had "humble" beginnings coworking in San Francisco at RocketSpace.
Coworking — It's More Than Sharing Space
Ultimately, coworking is more than renting a desk. It's getting the chance to participate in a real community; a community that both personally and professionally enhances the lives of its members.
Many of the brands mentioned in this article worked at RocketSpace. While there are many coworking options available in San Francisco, tech startups should choose a coworking space that will help foster their ideas, build a community, and help them grow.
RocketSpace is a global network of technology campuses and services, including coworking, and only admits Seed to Series-C funded startups with MVPs. We select only the best startups in Silicon Valley to work here, and strive to provide not only a great place to work, but also an environment that can truly help launch the unicorns of tomorrow.
We're known for:
- Our selective coworking environment of top tech startups and entrepreneurs
- Our events and exclusive members-only workshops featuring well-known speakers
- Our network, including access to more than 150 global brands who look to RocketSpace to connect them with the best startups
- And, of course, our free Philz Coffee.
The coffee is great, but we think you'll find it's the relationships you build here that you will love the most. Once you're a member of RocketSpace, you're part of a life-long network.
Come and see for yourself, get a free day pass.
