China’s coworking space industry has exploded over the past few years, matching the fast growth of the country’s startup ecosystem. According to the Wall Street Journal, there were 3,200 coworking space companies in 2014, compared to 400 in 2008.
Not all coworking spaces are connected with startups, however. China Vanke, a real estate company, launched UR Work in April 2015. Hotel development and management company naked Retreats opened their first coworking space naked Hub in Shanghai last November. As the coworking space market continues to saturate, companies will have to offer more than a polished, beautiful space to be unique.
Founded in 2010 by Bob Zheng, People Squared (P2) is one of the oldest coworking spaces in China. P2 has offices in Shanghai and Beijing and plans to expand to other cities such as Shenzhen. Before founding P2, Mr. Zheng founded another startup, liuxueok.com, a social platform for Chinese high schoolers with western universities. In addition to being P2’s CEO, Mr. Zheng is also a mentor at Chinaccelerator.
TechNode had a conversation with Mr. Zheng about his view on coworking spaces in China, specific challenges, and what P2 has planned for 2016.
1. How can a coworking space remain unique in China as more competitors move in?
I actually think that China doesn’t have enough coworking spaces. [For example], Shanghai has a very mixed and cosmopolitan culture. People who work have their own requirements for different working styles. Currently, a lot of coworking spaces are just for startups because the environment exists. But actually, coworking spaces don’t have to be just for internet companies. Every coworking space has a different audience.
For example, New York City has General Assembly. Their model is about teaching workshops to their clients. That’s their business model. A lot of coworking spaces [in China] are very limited or homogeneous.
2. What’s the biggest difference between coworking spaces in the US and coworking spaces in China?
In San Francisco, there was an owner of a night club who was very successful, but didn’t know what to do with the upper levels of the building. They rented it out to other offices. WeWork opened across from them, which brought them a very different option for making profit. Now, the basement is still a nightclub but the upper levels are a coworking space for artists. At the same time, there are internet companies who work inside as well.
There are more of these kinds of coworking spaces [in the U.S]. You can find more inspiration there. In China, there are still too many spaces that only serve one purpose. It’s a pity. We still haven’t given the [most creative] people the chance to interact in a community, know each other, and encourage new ideas.
3. How do you create a community that’s open to both foreign and local Chinese startups?
This is something that P2 decides. Our users in China are 80% to 90% Chinese. P2 had a lot of events like Startup Weekend, Startup Grind. We discovered that if you want to combine or merge the Chinese ecosystem with the foreigner circle, it’s always hard. For example, if you want to enter the internet industry, you have to either choose the Chinese community or the foreign community.
During some period of time, especially in 2013 – 2014, our spaces had a lot of foreigners. You know, foreign and Chinese communities don’t talk in China. It’s like you have two communities in one space. It’s a very strange thing. And it’s not clear where everyone stands.
We thought, well, we’re in China after all. If we want to make coworking spaces, we need to make spaces for Chinese people, let them realize their value in our spaces. Just how spaces select their people, people select their spaces. This is a very natural phenomenon.
At Techyizu events [an organization in Shanghai that organizes startup, design, and tech events], for example, you’ll see that there are a lot of Chinese people. Most of them are returning from abroad, or they want to practice their English, or they want to learn more about overseas and international culture. It’s very different from ITJuzi and 36kr events. Their purpose is very clear, they want to understand venture capitalists, etc.
4. In your opinion, can community be scaled, and if so, how?
You’re right. Scaling community is really hard. We’re very lucky at P2 because we grow with the community, we’re not just scaling [it]. Like you mentioned, the internet, this whole wave of “innovation” and “startup culture” – the scale has grown bigger and bigger.
To build a community, there are a few parts. It has to be open yet exclusive. In our spaces, we have a lot of rules. We’ve even pushed a few teams out of our spaces because startups are kind of a mentality. If you invite teams that only need physical space, they not only don’t help the community grow, they can hurt it.
Startups need to understand our space and why we need to have a community. You need to be selective. P2 has a long wait list. We even have a special team called “community” to choose the right teams.
5. You mentioned that P2 is launching a coworking space for artists this year. Can you tell me more about that?
This year, we’re opening a new space in Baoshan, Shanghai. This space will be used for musicians, photographers, and artists. It will be their working and living space.
The recording studio, etc. and office space will not be separated – it’ll be shared among all users. The dormitories will be open as well. They’ll be on Airbnb. Anyone can come in and enjoy this space. We’re calling it “Ocean 10.” We hope that ten artist groups will live there and lead the culture. They will develop the artistic atmosphere around the area.
This will make the space even more interesting. It will have a core group of artists, as well as “living water.” The space needs “living water,” a group of people who are attracted by the community, can interact with the artists, understand their products, their work.
Artists will also be able to invite their friends, as many of them will be from London, the U.S, etc. They can invite them over and live with them for a period of time. The nature of the space will still be exclusive [like other P2 spaces], but we wanted to add a more open part.