Chris Aberle and Austin Storm can’t talk about their new business, Brick and Mortar, without repeating one word: community.
Brick and Mortar, located in downtown Moscow, is a co-working space. Independent professionals or small businesses – such as IT consultants, graphic designers, poets or startups launched via Kickstarter – pay membership fees to use the desk or office space within Brick and Mortar’s walls, as well as amenities such as Internet service and printers.
The business model is based in the idea that people benefit from working in a community. Co-founders Aberle and Storm are banking on the community-oriented nature of Moscow to make their venture successful.
With a population of about 24,000, Moscow is more rural than many cities that support co-working spaces. Aberle cautioned that opening a co-working business is not a matter of “if you build it, they will come.”
“It’s really not the town that determines the success of the co-working space; it’s the vitality of the community you build it in,” he said.
Opening Brick and Mortar was a bit of a “leap of faith,” Aberle said, but he and Storm also took into account some features they believe make Moscow stand out as a viable location for co-working.
Moscow has a strong central downtown area, Storm said. Because it’s a university town, people already have “an adventurous spirit.”
“It’s really been exciting how quickly people get excited about the concept and think about the ways it could be extended to meet different groups’ needs,” he said.
As a former web developer, Storm believes community engagement is important to smaller businesses. Brick and Mortar allows people who might normally work from home to work among a group.
“I like this in-between space where you’re working on your own things, but you’re around other creative people doing things,” he said.
According to a 2010 survey by co-working publication Deskmag.com, that collaborative work pays off for businesses. The survey asked 661 co-workers across the globe how co-working benefited them. Eighty-five percent they were more motivated, and 88 percent said they had better interactions with others after joining a co-working space. Forty-two percent of those surveyed said their income increased since they began co-working.
Aberle said many Brick and Mortar members used to work in coffee shops – and still do on occasion – but enjoy that Brick and Mortar offers relative peace and quiet without isolation.
“We find that people are really attracted to that idea of community,” he said.
Brick and Mortar’s Main Street location makes its members a part of life downtown, helping make them visible to potential customers and make connections with other business owners. It also gives small businesses a space to meet with clients, Storm said.
The business has about 15 members so far, most of whom use the open desk space that faces Moscow’s Main Street.
When Storm and Aberle began work on the business in January, it was located in a former storage space behind the Main Street storefront. They had to expand due to zoning regulations, and the storefront conveniently came open for rent. The full-scale Brick and Mortar opened in May.
For $10, anyone can use a desk and Brick and Mortar’s cafe-style lounge space for one workday, 9 a.m. to 5 p.m. A monthly Cafe Membership is $40 and includes 24/7 access. A full membership for $150 a month grants users a dedicated desk, and two small offices are available for $250 a month.
Aberle said their business plan estimates Brick and Mortar can accommodate 10 to 15 each of Cafe-level members and full-time members, though he expects the numbers to shift depending on demand.
Michael Fields, a software designer, worked from home before moving into Brick and Mortar in May. He enjoys the quiet of the space – he has a new baby at home – and the chance to ask other people with similar businesses for advice.
“You feel like you’re part of Moscow down here,” he said. “If I’m just working in my own room at home, there’s not as much.”
Josh Hartung, a mechanical engineer and industrial designer, has been a Brick and Mortar member for about two months. He says the space is a great way to control overhead and meet people, and he hopes it becomes a step toward keeping University of Idaho and Washington State University graduates in the area to develop technology businesses.
Hartung said he hopes for a “hacker space” — which allows for hands-on product development — to eventually become part of Brick and Mortar. He considers it a preliminary step for startups looking to join business incubators.
A hacker space offers experience, he said, “and failure is welcome at low cost, low risk, and that’s really where ideas develop.”
Co-working is uncommon in Idaho, but Boise’s WaterCooler is another facility that includes shared space for small businesses. Unlike Brick and Mortar, the WaterCooler is nonprofit and focuses on new businesses that use the space full time, but the two endeavors share a focus on collaboration and community.
Rick Ritter, president of Idaho Tech Connect and self-described “houseparent” of the WaterCooler, said that when young companies share space, they benefit from their peers. Ritter acts as a facilitator, helping businesses connect to resources they need to grow, but said the businesses help each other as much as he helps them.
“These are all companies that in very different places … but there are lots of common problems regardless of what industry you’re in,” he said.
Ritter said he often observes his tenants sharing ideas and strategies in common spaces like the kitchen. To facilitate even more of this type of collaboration, the WaterCooler plans to open its large meeting room, “The Idea Studio,” as a more flexible co-working space a few mornings a week beginning in September.
Like Aberle and Storm, he cited downtown space as being a boon to small businesses. Central locations provide a sense of vibrancy and “being in the center of things.”
“I can come to work in the morning and have meetings all over downtown, and I can walk to them, or I can ride my bicycle,” he said.
Aberle first encountered the idea of co-working on a tour of NextSpace, a well-established co-working site in San Francisco.
He and Storm had already been talking about how they could get involved in the “collaborative economy” trend that encourages the sharing of things like tools, cars and offices, and Aberle knew he’d found an exciting idea based on a proven model.
The NextSpace owner warned him that owning a co-working space doesn’t make a person rich. Overhead is high and much of the job is community management.
The numbers aren’t completely bleak, however. According to Deskmag, 72 percent of co-working spaces become profitable after two years. Ritter said the WaterCooler became profitable about six months after it opened, though its profitability fluctuates depending on how many businesses are using the space.
Aberle and Storm are financing Brick and Mortar out of pocket for now. Aberle said it’s common for co-working spaces to start with little debt.
“When we sat down and put together the business plan, we were just trying to be as low-risk as possible, so that meant not taking out a lot of loans or putting in a lot of money at first,” he said.
The co-founders have kept their investment low by doing work such as painting and demolition themselves, and they purchased furniture secondhand and from Ikea. Members have contributed to the space as well by bringing in furniture, power strips, food and other items for everyone to use.
Aberle said he expects Brick and Mortar’s growth to be slow and organic, depending largely on word of mouth, with “a long horizon” before profitability.
They plan to reinvest in the space as Brick and Mortar brings in more money.
“We’re running pretty lean” in the beginning, Aberle said. “We’d love to have a $10,000 projector back here to meet needs, but we’re holding off on acquiring stuff as the space needs it rather than buying a bunch of stuff right now and trying to attract a certain audience.”
Aberle said he was willing to invest in co-working, despite the fact that it may never turn a large profit, because it will benefit others. “You run this type of space as a labor of love and belief in the concept and the people who are going to make it happen,” Aberle said.