NextSpace Coworking + Innovation | The (r)evolution of Work

America: A Nation of Permanent Freelancers and Temps.
 

 
The debate over telecommuting that Yahoo has spurred raises an important issue, but it’s not simply about workplace flexibility. It begs questions about the fundamental nature of work itself. By 2020, more than 40 percent of the US workforce will be so-called contingent workers, according to a study conducted by software company Intuit in 2010. That’s more than 60 million people.

We are quickly becoming a nation of permanent freelancers and temps. In 2006, the last time the federal government counted, the number of independent and contingent workers—contractors, temps, and the self-employed—stood at 42.6 million, or about 30 percent of the workforce. How many are there today? We have no idea since 2006 was the last year that the government bothered to count this huge and growing sector of the American workforce.

Following the recent economic downturn, the employment rate has recovered at a frustratingly slowly pace, except in one area: temporary, contingent, and independent workers. Between 2009 and 2012, according the Bureau of Labor Statistics, the number of temporary employees rose by 29 percent. A survey of the 200 largest companies found that temporary workers represented, on average, 22 percent of their workforce, and that percentage is growing. Workers from all different industries (not just tech) are discovering that they’re able to be productive outside of the corporate office and without a long-term employer. At my company, NextSpace, we provide membership to contingent and independent workers from industries as varied as marketing, law, media, accounting, entertainment, construction, art, architecture, and healthcare, along with hundreds of programmers and developers.

The forces behind this sea-change are many: the rapid adoption of mobile technology, ubiquitous internet access, and a general sense of malaise powered by the vague yet nagging notion that we’re just not meant to work all day sitting in a cubicle. Add to that the waste of time, energy and brainpower that commuting engenders, and it becomes apparent that our definition of “workplace” will never be the same. It may seem like a tug of war between companies and workers, but in fact they share common goals: using technology and mobility to maximize productivity, innovation, and well-being.

Given these trends, companies need to proactively create what I call “approved workplace ecosystems” that will likely include the corporate campus, home office, co-working spaces, the corner coffee shop, client/vendor sites, or any place with a decent WiFi or 4G signal. But a real ecosystem is about more than just a collection of places. It’s about the norms, the culture, and the vibe that knit these places together.

At NextSpace, we foster a culture and community among these independent disaggregated workers by creating common ground. Brown bag lunches and informal lectures bring people together over ideas. Member happy hours bring people together over food and drink. And when all else fails, our community curators often literally drag people together based on common personal or professional bonds (the community March Madness pool works, too!)

Traditionally, being self-employed used to come with a social stigma; you were self-employed if you couldn’t get a “real job.” Work was inconsistent and so was the pay. Today, the opportunities for contingent, project-based work are exploding, as is the development of tools that allow people to work independently across industries like software, design, marketing, legal services, architecture, healthcare, and engineering.

As this trend accelerates, problems will arise since the current system is heavily geared toward people working in conventional ways. Those who have full- or part-time work with established companies receive a regular paycheck, employer-sponsored benefits (if they’re lucky), and get a tidy IRS W-2 form at the end of the year for taxes. What people find when they leave the system is a confusing, byzantine, and slightly scary world of health insurance, taxes, pensions, and regulations.

Like it or not, companies and the systems that serve them are going to have to change because the workforce evolution is already underway.

This post originally appeared on Quartz, an Atlantic partner site.

Jeremy Neuner is the CEO and cofounder of NextSpace, a company that builds co-working communities. He is the co-author of the forthcoming book The Rise of the Naked Economy due out in July. All posts »

America: A Nation of Permanent Freelancers and Temps.

Posted in Jeremy's Blog

Last month, I had the pleasure to speak on a panel at the International Economic Development Council (IEDC) in St. Louis. Here’s what I learned: when it comes to economic development, small is beautiful.
   
First, what is economic development?  It’s the art and science—usually practiced by local governments, chambers of commerce, and public-private partnerships—of recruiting, attracting, and retaining businesses in a specific city or region.  For example, municipalities try to attract retailers to their town because of the jobs, shopping opportunities, and sales tax revenue that retailers bring. Or they try to attract big companies because of the high-paying jobs that bring new dollars into the community.  Economic development is a long-standing profession (despite the sometimes seedy underbelly of, say, unfair tax breaks that favor national chains over local businesses) that has done plenty to help cities and towns of all sizes grow and thrive.
   
Many economic developers have staked their careers on big, high-visibility wins. When a big new business comes to town, hundreds or maybe thousands of jobs come with it. Hundreds of thousands of square feet of commercial real estate gets filled up. The mayor shows up for a big ribbon cutting. And everyone in the community—from the local schools to the local merchants—hopefully gets a nice economic bump.  Sounds good, right?
   
But there are flaws in this “big win” model.  As the economy continues to limp along, large companies are less inclined or simply unable to make a big play in a new market.  Even as the economy recovers, large companies may not need to establish a big new footprint, opting instead for allowing their employees to work remotely.  Or, in their zeal to bring new businesses to town, governments may give huge public subsidies to companies that eventually go under, taking their public money with them (um, Solyndra, anyone?).
   
At IEDC in St. Louis, I had a chance to explore a different model: rather than trying to recruit or attract, say, one 200-person company to town, what if economic developers could recruit or attract 200 one-person companies?  Mark Lautman, one of my fellow panelists at IEDC, is a 25-year veteran of the economic development trade and the head of Lautman Economic Architecture.  In Albuquerque, NM, Mark piloted this idea of building an economic development strategy around telecommuters, independent consultants, freelancers, entrepreneurs and other “location-neutral workers.”  Mark created a space along with a set of programs designed to help these location-neutral workers grow and thrive.
   
Those of you familiar with NextSpace won’t be surprised to learn that Mark’s creation looks a lot like a coworking space. Indeed, for the past several years, NextSpace and the other 500+ coworking spaces across the country have been quietly doing the kind economic development work that Mark advocates, often without knowing it.  But Mark is the first guy in his profession that I know of that is using the coworking model as an overt tool for economic development.  Even better, he’s spent a year telling his colleagues that their profession is changing before their eyes, that the old “big win” model of economic development is under stress, and that aggregating “small wins” is the way of the future. 
  
At NextSpace, we couldn’t agree more.  Nothing makes us prouder than watching our members—now over 700 strong across all five of our locations—survive and thrive in this tepid economy.  Economic developers, take note:  that’s 700 people who are gainfully employed, often creating cutting-edge products and services for the global marketplace, who are a rock-solid part of their local economies.  Individually, they don’t create the headline-grabbing “big win” that economic developers often look for.  But by aggregating the “small wins” that our members create every day, the NextSpace community is an enviable force for economic development.   
  
Want to tap into the combined economic potential of the NextSpace community? Give us a call, drop us a line, or just stop by. We’d love for you to join us.
  

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Great news! Your brain is shrinking. More on that in a minute…

First, I’d like to welcome all of you—current NextSpace members, former NextSpace members, fans of NextSpace, and others who are involved in the future of work—to the first installment of my monthly message/column/random musings. As the CEO of NextSpace, I spend a lot of time thinking about the (r)evolution of Work. There is a once-in-a-century shift in the how’s, why’s and where’s of working, and it’s happening now. I hope to share some of the things that I’ve learned in these monthly messages. Of course, I’m hoping that my words spark a conversation or two, so please chime in with your own ideas, solutions, and musings. And don’t be afraid to be a bit snarky and provocative. I know I won’t….

Right, so, your brain is shrinking. In fact, all of our brains are. You don’t need to look much further than Congress, the executive offices of all the major banks, and most AM radio talk shows to see the evidence of this reduced brainpower. Current trends aside, this reduction in brain size isn’t new. As Wall St. Journal columnist Matt Ridleyrecently pointed out, the size of the human brain peaked about 20,000 years ago at about 1,500 cubic centimeters. Since then, our brains have shrunk a good 10%, down to about 1,350 cc’s today.

So why is this good news? Ridley gets it right when he says, “We ceased relying on individual brain power tens of thousands of years ago. Our civilization now gets all of its inventive and creative power from the linking of brains into networks. Our future depends on being clever not individually, but collectively.” If we’re to continue to survive and thrive as a species (and get ourselves out of this economic mess), we’re going to have to do it together.

Here’s the problem: when it comes to work (presumably, the place where all of this collective cleverness will happen), more and more of us are working alone. We work alone in our homes (your cat doesn’t count). We work alone in coffee shops (that creepy dude eyeing you while licking the latte foam from his lips doesn’t count). And we even work alone at work, our employers lovingly stashing us away in our cubicles. Hardly conducive to the network of brains that Ridley talks about.

Sure, technology can help. Smart phones, ubiquitous wifi, Skype, LinkedIn, Facebook, and Twitter are all wonderful tools that connect us virtually. But technology evolves way faster than people do. And, despite the power of our virtual connections, I firmly submit that people are at their creative and productive best when they are in physical proximity to each other. I believe in the power of real, live, genuine physical community so strongly that I co-founded a company—yep, NextSpace—based on this age-old idea. So far, so good.

About a month ago, we asked our members to share their best stories of the NextSpace Effect, the collective cleverness that results from being part of the NextSpace community. My team and I were blown away by the stories that our members told us. Here are a few highlights:

• Barbara Feder Ostrov, an online magazine editor, told us that being part of the NextSpace community “saved my sanity, restored my confidence, and made me better at my job.”
• Peter Myers, a social media entrepreneur, told us, “Because of the NextSpace Effect, we launched our company 10 months ahead of schedule and saved close to $100,000.”
• Because of the support he found among his fellow NextSpace members, John Wolanin quit his day job and founded the mobile company Live Nite. We teared up when John told us, “Thank you NextSpace for being the stepping stone to my career and helping to change my life.”

So thank goodness for these shrinking brains of ours. It’s what drives us to seek out the connections, support, and collaboration that all 650 (and growing) NextSpace members provide to each other every day. If you’re a NextSpace member, thank you for the dedication you have to your individual and collective success. If you’re not a member, please consider joining us. If you’re a politician or policymaker that purports to care about creating jobs by creating the conditions of creativity and innovation, keep a close eye on NextSpace and companies like ours. We are the(r)evolution of work.

What are you doing to foster collective cleverness?

Thanks for believing in NextSpace. Thanks for being part of the (R)evolution of work. And thanks for believing in each other.
Jeremy Neuner

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Last month, NextSpace celebrated its first birthday.  I’m equal parts thrilled and humbled by what NextSpace and our community have accomplished in the last year.  We’ve created a community of over 150 members, we’ve helped stimulate the local economy, we’ve developed a strong relationship with UC Santa Cruz, and we’ve helped reshape the landscape of work.  Not bad for a year’s effort.  I’m grateful to the hundreds of members, supporters, evangelizers, mentors, investors, and teammates who have made our first year a huge success.

But given the current state of the economy, I think I’m most proud of this accomplishment: over the past year, NextSpace, Inc. has created five full- and part-time jobs.  And that number doesn’t take into account the jobs that our members and their companies have created.  At a time when the national unemployment rate is at its highest point in a generation and as the specter of a “jobless recovery” looms large, NextSpace and our members are doing something remarkable:  we’re creating jobs.

How?  By creating the infrastructure and the community that freelancers, independent consultants, and start-ups need to make their businesses successful.  The economic downturn has forced a lot of people into these employment categories and NextSpace has been there to provide a safe haven.  Even better, we’ve provided the networking and collaboration opportunities that many of them needed to land their first gigs, close their first deals, and connect with their first teammates.  And through our sponsorship of Freelance Camp, Hope Foundry, Girls in Tech, and the UC Santa Cruz Business Plan Competition, we’re providing the training that these new entrepreneurs need to make their ideas fly.

Over the past year, we’ve noticed an interesting trend:  many of the people who have been forced into entrepreneurship (make no mistake, a freelancer is an entrepreneur and I’ve begun using the terms interchangeably) have no intention of ever getting another “real job.”  Sure, they’ve been able to make a living and pay the bills.  But they’re finding that entrepreneurship has a bunch of intangible benefits.  These entrepreneurs like their newfound professional flexibility as opposed to the daily grind.  Many have ditched their daily commutes.  And they’ve become more engaged with their communities and their families.

For many of our members at NextSpace, freelancing and entrepreneurship have ceased to be a stop-gap measure or a “career of last resort.”  Instead, they’re using freelancing to take control of their lives and their careers.  Our members work when and how they want, on projects that make the best use of their skills and passions, and in a way that allows them to more fully integrate work, family, and the environment.

Companies like NextSpace are providing the community and physical infrastructure these entrepreneurs need.  Companies like Elance are creating new marketplaces that connect freelancers with clients and provide a virtual space to find, manage, and complete high-quality work.  And (slowly!) policymakers are beginning to consider revamping the outdated legal and regulatory infrastructure that governs the “old” way of working (check out this op-ed that my co-founder Ryan Coonerty and I wrote on healthcare and entrepreneurism).  Collectively, we’re creating a new landscape that allows NextSpace members to choose entrepreneurism as their job, rather than instead of their job.

Which brings me back to job creation.  When Ryan and I were doing our business planning for NextSpace in the spring of 2008, we made a remarkable discovery.  More than 6,000 businesses are licensed to operate in the City of Santa Cruz and nearly two-thirds (dude, two-thirds!) of those businesses have exactly one employee.  So Santa Cruz is a town full of freelancers numbering nearly 4000.  And that number doesn’t count the hundreds of freelancers that haven’t bothered to get a business license.  As Ryan has brilliantly observed, if half of those businesses were able to bring on one more employee, it would be the largest job-creation phenomenon in the history of Santa Cruz.  Imagine replicating that phenomenon in hundreds of communities across the country.  We’d chase away the specter of a “jobless recovery” pretty quickly.

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By now, almost everyone in the entire known universe has seen the Huffington Post’s mashup of Sarah Palin vs. That Crazy Santa Cruz Lady. Whatever you may think of the former Veep candidate, the young Santa Cruzan in the video ranting to the city council about pesticides and slavery in an attempt to, um, participate in our local democracy doesn’t do much to dispel a popular stereotype of Santa Cruz: that ours is a quirky, un-serious town.

I won’t try to deny that Santa Cruz is a quirky place. In fact, I wouldn’t want it any other way. What the rest of the world may see as quirky, most of us Santa Cruzans see as tolerant, welcoming, creative, and innovative. Still, I’m troubled by the possibility that the viral spread of the Huffington Post video is giving our fair seaside town a bad rap. So in the interest of providing a more complete version of the character of Santa Cruz, please take a spin through the following few items:

–In this short video, Greg Gumble (yep, THE Greg Gumble) from The Economic Report shows why Santa Cruz is a unique ecosystem that boasts a balanced lifestyle, a history of innovation, a strong entrepreneurial spirit, and a highly educated workforce. These are the exact ingredients for a strong, vibrant economy and we’ve got more than our fair share of those ingredients in Santa Cruz.

–Santa Cruz is loaded with creative designers, scrappy entrepreneurs, and savvy business people. This video, produced and directed by NextSpace member Dusty Nelson, features a who’s who of local educators, engineers, bankers, designers, government officials, and CEOs, all offering their pitch on why Santa Cruz is a great place to work, live, and play. Take 10 minutes and watch the whole thing. It’s an awfully damn impressive piece of filmmaking and showcases some of the world-class talent in this town.

–Speaking of world-class talent, check out this Business Week article about Santa Cruz-based Plantronics and Altec Lansing.  Together, these companies racked up six innovation awards at this year’s Consumer Electronics Show.  Tens of millions of people all over the world use their award-winning products and every one of those products was designed right here in Santa Cruz.

–What about the money? You need a pile of it to build great companies, not an easy task in these cash-strapped times. But local social networking start-up UserVoice recently landed $800,000 in seed stage capital. AlgaeOMEGA, a bio-fuels company spun out of research at NASA and UC Santa Cruz, received another $800,000. NextSpace member Carmen Kubas led her company, Lightfoot Industries, to a third place finish in a regional venture capital competition.  And local heroes 12seconds.tv are luring investors with their new iPhone app and their huge community of users. Want to invest in some of the hottest new companies across a range of industries? Look no further than quirky Santa Cruz.

Like any city, Santa Cruz has lots of faces. We’re a surfing town, a tourist town, and a university town. Despite our depiction in the Huffington Post Santa Cruz is a town that’s building an enviable ecosystem of business, lifestyle, and innovation. What’s our secret? We take ourselves seriously, just not too seriously.

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As you probably know by now, our mission at NextSpace is (wait for it!) to catalyze local talent, local ideas, and local capital in Santa Cruz to create products, services, and solutions for the global marketplace.  A hugely important repository of talent and ideas and, indirectly, capital is right in our backyard and is, in my humble little opinion, completely underutilized as a community resource:  the University of California Santa Cruz.

I won’t go into all of the recent and longstanding town-gown issues between the city and UCSC.  Instead, I’ll simply assert that NextSpace cannot reach its full potential as an entrepreneurial catalyst and Santa Cruz cannot claim its rightful place as a world-class innovative community unless we take positive steps to access the wealth of talent and ideas resident in the faculty, students, and staff at UCSC.  So, here are a few examples of what NextSpace and UCSC have done together to build some bridges:

UCSC Business Plan Competition

Last month, UCSC held its first-ever business plan competition.  The inspiration of Steve Bourdow from the Baskin School of Engineering and a group of entrepreneurial undergrads, the competition was a huge success.  Mostly, the competition proved that there is a nascent spirit of entrepreneurship at UCSC.  I served on the competition’s advisory board and helped screen the semi-finalists. And NextSpace was proud to host the semi-final event.  The energy at NextSpace shot up on the day of that event as we were flooded with enthusiastic, eager competitors.  I’m not shy to say that I was incredibly impressed and deeply moved by the passion and the smarts that these kids displayed.  A few of the finalists will be pitching for capital at an event at NextSpace next week, and a couple of the competitors have joined us a members.  It’s safe to say that the competition exceeded everyone’s expectations, marking the beginning of a new era of entrepreneurship at UCSC.  Yeah, that sounds kind of lofty.  But I think it’s true.

Senior Design Competition

Twice a year, seniors in the Computer Engineering and Electrical Engineering programs at UCSC participate in a Senior Design capstone course.  Students work in cross-disciplinary teams to complete a significant interdisciplinary design project.  At the end of the course they compete for cash prizes and street cred.  This year, NextSpace and the Soquel Group have partnered to offer a prize for the Most Commercializable project.  You can read our fancy press release here.  Last week, I spent some time with David Munday, who was the winner in 2007.  He’s now a Ph.D. candidate and the TA for the Senior Design course.  He gave me a quick rundown of the projects that the students are working on this year.  I was blown away.  The competition is tomorrow, June 12th, so stay tuned for results.  I’m prepared to be amazed.  So should you.

Pilot Project for Innovation and Entrepreneurship

Now almost a year old, PPIE is a collaboration between the City of Santa Cruz and UCSC.  And from what I can tell, it was one of the first positive steps between the two entities after the settlement of their mega-lawsuit.  PPIE gives undergraduates an opportunity to put their classroom training in business and economics to practical use by working on projects in fields such as alternative energy, medical devices, and transportation systems.  Many of the PPIE students also served as interns for companies at NextSpace such as Quiddities and Open Spectrum.  And I had the honor of speaking to the students at their end-of-year wrap up.  Make no mistake:  the undergraduates at UCSC are smart, serious, and ready to contribute to the Santa Cruz economy.

NextSpace and Shakespeare Santa Cruz

We’ve had a special relationship with Shakespeare Santa Cruz a world-class reparatory theater company resident at UCSC for a while now.  A couple of SSC board members were among our very first NextSpace members and we’ve supported the organization by providing space for some of their staff and board meetings.  But we’re most proud of the fact that SSC chose NextSpace to host the kickoff of their emergency fundraising campaign.  At that event, I had the pleasure of meeting Marco Barricelli, SSCs artistic director, who gave the simplest, most impassioned, most articulate defense of the arts and why the arts are a critical part of any community.  Tonight, Marco will be our special guest at a roundtable discussion about the intersection of the arts and technology and how those two sectors overlap.  Along the way, we hope the conversation will broaden into a discussion of the essential ingredients of a world-class creative and innovative community.  But I’m sure of this:  the world-class talent at SSC is an absolutely essential part of the creativity and innovation in Santa Cruz.

So that’s a quick snapshot of what NextSpace and UCSC have done together.  What do you think?  What opportunities might be ahead?  I’ll say it again:  NextSpace in specific, and Santa Cruz in general, cannot reach its full potential unless we work together to unleash the talent, ideas, and capital resident at UCSC.  I’d love to hear your ideas.

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