NextSpace Shows a New Way to Work
In 2009, in the depth of the recession, Rebecca Brian and Jamie Capozzi both found themselves working at home, trying to keep their marketing and branding agencies afloat. They felt isolated and distracted, and as they looked around, they saw that they weren’t the only ones.
“It was the year of the contractor,” says Capozzi, who calls working in 2009 the hardest experience of his life. “The workplace was changing.”
So they decided to open a workspace that they and other design professionals they knew could share, and as they researched the idea—looking at similar spaces throughout the Bay Area—they decided they had a business.
In the end, they persuaded Jeremy Neuner, the former economic development manager for the city of Santa Cruz, to let them open a San Francisco branch of NextSpace, a “co-working” space that Neuner had co-founded in downtown Santa Cruz in June 2008.
“We realized we had a lot talent here in Santa Cruz, but it was either exported over the hill every day (to Silicon Valley) or not visible,” Neuner says. “I knew a lot of small 1- and 2-person companies, and I thought we could push that talent together in one spot and see what would happen.”
NextSpace is not an incubator, its founders say—it’s a landing spot for people who are working as contractors or starting or researching their own businesses and need office space, a mailbox, business advice, or simply companionship, especially if they have trouble getting motivated enough to get out of their pajamas during the day.
“Somebody might be working in their living room, with all the distractions of home, and never turn that switch to go somewhere and get in work mode,” Capozzi says.
Adds Brian, “If you’re willing to spend any money at all on your business, you’re really passionate and want to make it work.”
NextSpace makes money through various levels of memberships—which range from virtual access to its newsletter to a day pass to monthly use of the shared space in the middle of the room to more private office space—and events, like the magazine hack-a-thon that San Francisco State journalism students are planning in San Francisco this weekend.
So far, the NextSpace community has about 260 members, with 80 percent of its businesses focusing on technology. But there are other types of companies too.
There’s corporate treasure hunter Bill Neville, who looks for double invoices, missing credits and other errors in the books of big companies who may spend millions of dollars per year on procurement; ACR (acapellarecords.com), which helps a capella groups distribute their music; and a sex coach named Katherine Forsyth.
Members help each other. The best example of this so far is Rally Up, a mobile social network founded by nine people who met at NextSpace in Santa Cruz while they were working on other businesses. In August, AOL acquired Rally Up and the team for an undisclosed amount of money.
The San Francisco location is at 28 2nd Street, in the startup-heavy South of Market district. Neuner wants to open more NextSpace locations in the Bay Area, and, if those go well, expand across the U.S. Brian and Capozzi are helping him figure out what it is about NextSpace that can be exported.
Orange, for instance, is NextSpace’s signature color, both for the furniture and the wall that members can write on when they’re brainstorming. Both NextSpace offices are in light, bright, central downtown locations, and neither is above the third floor of their buildings. “We want people to be able to see the street and feel that energy,” Brian says.
Last month, NextSpace announced a relationship with WavePoint Ventures, in which NextSpace will run a mentoring program for small businesses whose founders want to learn to raise venture capital. Financial details haven’t been disclosed, but the idea is that WavePoint will have a chance to find new, interesting, out-of-the-way investments.
“We think there’s a lot of distributed innovation going on—bright teams can start companies almost anywhere by plugging into the cloud and outsourcing—[and] while there’s a lot of support for business infrastructure in Silicon Valley, it’s less available in smaller markets like Santa Cruz,” says Peter Gardner, managing director of WavePoint. “This is a natural way to find new businesses, through local partners who are part of the fabric. We’re enthusiastic—we’re seeing some interesting young companies.”