Coworking spaces are the first rung on the ladder of success for many tech companies. They are inexpensive places where entrepreneurs and their nascent teams can collaborate with others who are building businesses.
These spaces are known for offering conference rooms and other amenities that growing companies need. But for the tech industry, there’s also an even bigger advantage: the cross-pollination of ideas and close proximity to others who are in the same boat, fostered by a stimulating environment. In addition, this camaraderie provides access to resources an entrepreneur working alone at home might not find.
In 2015 the New Jersey Economic Development Authority (EDA) supported coworking as an entry point into the tech ecosystem by providing loans to three existing homegrown spaces — Indiegrove (Jersey City), Cowerks (Asbury Park) and Mission 50 (Hoboken) — to help them expand their footprints.
Indiegrove received a $175,000 loan from the EDA for an expansion, and so far the addition of new facilities has been a success, according founder Zahra Amanpour. The coworking space is an easy walk from the Grove PATH station, in Jersey City, and offers everything from private offices to shared workspaces where many entrepreneurs gather to work.
In April, NJTechWeekly.com accompanied Melissa Orsen, CEO of the EDA, and Kathleen Coviello, VP of technology & life science investments at the EDA, on a tour of the expanded Indiegrove facility. We spoke to some people working at tech companies based there, including the startup EventCombo, whose employees were taking advantage of the standup desk option at Indiegrove as we spoke.
EventCombo, led by cofounder Saroosh Gull, received an investment from the Jumpstart NJ Angel Network (New Brunswick) and NJIT Highlanders Angel Network (Newark) as a result of the company’s participation in the Founders & Funders program, which the EDA had set up to connect tech startup founders with investors.
The startup had shifted its offices to New York for a time, but came back to New Jersey in December 2016. “I always wanted to work in New Jersey,” Gull said. “Legally, we are based out of Teaneck, but I could never find a convenient coworking space in New Jersey. When I did, I ended up here.”
He then mentioned that three of his team members were working at Indiegrove, with two more scheduled to join them shortly. “I have a distributed team. The other 12 or 13 people are all over the place,” he said. [NJTechWeekly.com will have an update of happenings at EventCombo in the near future.]
Coviello remarked that Meg Columbia-Walsh, CEO of Wylei, had taken space at Indiegrove for several months before the company opened up elsewhere in Jersey City.
“People use our coworking space that way too,” said Amanpour. “Sometimes people are in transition and they need a mailbox. If they have to have a meeting, they need professional rooms to do that in.”
Stephen Fiser, CEO, of software engineering company Blue Bear Digital, sat down with the group from the EDA to talk about his company’s business, which was doing very well. The company, headed by Fiser and his wife, Geraldine, started out in the Indiegrove coworking space, but then left for New York for a while. “We were in a coworking space and were hiring people. We needed an office, and you didn’t have any at the time,” he told Amanpour.
When the two came back to Jersey City, they found that Indiegrove now had offices they could use, and which “worked out perfectly for them,” Fiser said. The couple chose Jersey City because they wanted to live in a walkable city, he added.
Blue Bear specializes in developing lab and scientific software. The company has worked with startups in New York, but, said Stephen, “we honestly found the job we now have had for three years on Craigslist. The doctor we are now working with is hyper-successful and he has sold companies and labs. He is self-funding the project. It’s grown so much that we now employ two full-time engineers” who are located in Arkansas.
The EDA group also stopped by the local office of Auction.com (Irvine, Calif), a big online real-estate marketplace that houses its New Jersey-based employees at Indiegrove. Regional Manager Daniel Willsie made a video call to talk with the EDA representatives.
He told them that the company’s employees at Indiegrove have a mandate to educate the public regarding the foreclosures that are done at courthouses in each county. The foreclosure process is unique in each state, Willsie noted. The sheriff gets the information, and either he sells to someone who is physically there or the property goes back to the banking institution for sale.
“What we want to do is work with people to educate them about the process, so they can pick these properties up before they go back to the bank, so they can help the community and shift the tide a little bit. … A lot of people come in to buy foreclosures, and they don’t understand the process. We put ourselves in there as an education piece to hopefully get them to the next stage of purchasing the property.”
Amanpour said that, as of the end of April, Indigrove had 164 people with monthly memberships and 80 to 90 people using the meeting rooms. A total of 90 to 100 businesses were using Indiegrove, 35 percent of them tech or tech-related. “Tech companies do fluctuate,” she said. “We go anywhere from 35 percent to 45 percent of occupants that are tech businesses.”
Amanpour said that she had taken out the EDA loan because she didn’t have enough private offices to meet demand. “Coworking is this growing, ever-evolving thing. You can triple and quadruple sell seats because no one is ever here at the same time, and we still have lots of room to grow in terms of coworking.”
She explained the economics of coworking to Orsen, noting that “the thing about coworking that makes it appealing to entrepreneurs, but more risky for the operator, is that everything is month-to-month. Everybody here, even our offices, are month-to-month. … A good month is when you gain more than you lose.”
Amanpour said that Indiegrove has plenty of room for new companies in the shared coworking area. The offices are set spaces, however. They generate a more stable income, but when they are full, there is no more room to expand. When office occupants leave, they must give 30 days’ notice, whereas coworking participants need only give five days’ notice.
While office rentals provide economic stability for a coworking space, the shared coworking portion is actually where the money is made, Amanpour told Orsen. “I have more coworking people than I have seats. They come at different times and some are part-time, 10 days a month or even 10 days every three months. Some are here only at night because they work with Asian markets.” Indiegrove is a 24/7 hour facility, she added.
Startups like EventCombo (which has swapped old team members for new ones) have been able to change their staffs with no problem, reducing their teams when needed and adding part-time or full-time members ad hoc, Amanpour said.
The key to keeping Indiegrove a thriving business, said Amanpour, is that “we never let up on marketing. We’ve had some competitors open up in Jersey City in the last year, so we’ve been aggressively marketing in the last few months.”