Twenty years ago coworking spaces were virtually non-existent. The idea of shared open floor plans that are filled with entrepreneurs and multiple startups was a concept that was foreign to many. In today’s society coworking spaces have become trendy and the new way to conduct business in. As a result, companies such as WeWork, Impact Hub, and District Cowork have become massive players in the coworking space with coworking offices in every major market in the country. But, what about the smaller markets?

Why Is Coworking Thriving in Smaller Markets?

The Increase In Small Coworking Chains

While more and more coworking spaces continue to pop up in these major markets, smaller cities across the country are showing their interest and growth in coworking locations. Bob Hinrichs from Lincoln, Nebraska runs a boutique coworking space that contains about 150 workers in it. After residing in San Francisco for many years, he decided to bring the coworking business model to Lincoln where it has flourished, thanks in large part to distinguishing itself from the larger companies and making it align more with the people and culture of Lincoln.

Off Season Activities

One of the selling points for the increasingly thriving trend of coworking spaces in small markets is many of these smaller cities and town reside in areas that offer plenty of things throughout the season. South Lake Tahoe, for example, boasts summertime fun where entrepreneurs have a chance to enjoy hiking and swimming during the hot summer days. In the winter these same folks can then hit the slopes at some of the nearby mountains.

Increase in Suburban Population

According to the United States Census Bureau, between the years 2016 and 2017, more than 2.5 million people moved away from city centers for suburbs and smaller towns and cities. Cities like Tampa, Austin, and Raleigh saw a considerable increase in their suburban population, but coworking spaces have not grown to match this growth.

“In the markets we’re going to, like a Pittsburgh or Cleveland, these types of markets are still relatively undersupplied,” said Matthew Ciccone, the founder and CEO of coworking operator Beauty Shoppe. “Coworking is still a new sort of offering.”

Beauty Shoppe is a smaller coworking chain, with eight locations in Pittsburgh, one in Cleveland, and is planning a new space in Detroit. The benefits of working in a coworking space have attracted both individual workers and companies like Facebook-owned Oculus and hardware accelerator AlphaLab as tenants.

Will Big Coworking Spaces Take Over Small Markets?

WeWork is one of the biggest coworking chains in the world. It has a combined 12 million square foot workspaces in 19 markets, and it has locations in New York City and Los Angeles. However, it is also started to branch out into smaller markets like Minneapolis, Nashville, and Kansas City.

However, the success of WeWork moving into small coworking markets is questionable. Coworking tenants in smaller markets have come to expect personalized service instead of a huge brand name. Companies like Workbar, a Boston-based small coworking chain, believes that by focusing on individual service, they will be able to survive WeWork entering into the smaller markets. They aim to know every member’s name when they come into the space. At Workbar, they use the 80-20 model, where 80% of the space is what WeWork calls a hot desk, or a desk you rent for the day or month, and the other 20% is for private offices.

Many small coworking chains like Workbar anticipates that they will do more business in smaller markets because they are able to personalize and fit the needs of their customers more than the big chains.