Bounce Hour is a Cruzio institution. Photo by Chip Scheuer.
Cruzioworks is housed in a large light-filled atrium. There are desks, carrels, a reading nook, a couple of long tables and a white board bearing the scrawled, somewhat cryptic note “Bounce hour, Thursday, 10:30 on the blue couch.”
Bounce hour is not whatever it sounds like. It’s a chance for the workers who share this space—the contractors, freelancers, consultants and founders of start-ups—to connect and bounce ideas off one another. Today, about 20 have shown up. Among them are a couple of software developers, a microprocessing engineer, the two founders of the Makers Factory, a blogger, a home-school teacher and Cruzio founder Peggy Dolgenos.
The conversation ricochets between a discussion of potential uses for QR codes and a recent red tide causing seizures in seals before one participant mentions that she’s interested in making a game about evolution. Someone suggests a local game design meetup she could attend. Another coworker—who turns out to be one of the designers of the popular online game Second Life—helps narrow her focus with a couple of questions. It’s a simple enough conversation, but instances like this are where the sense emerges that the coworking whole is more than the sum of its parts.
“It’s easy to work in the same space with people and never talk to them because you have your blinders on, and bounce hour kind of forces people out of that,” says Manu Koenig, the founder of Greenocracy, a social media site designed to facilitate public discussion of policy issues. “Bounce hour is just one more thing that brings the coworking community together.”
Cruzioworks opened in January of this year, becoming the second facility in the city of Santa Cruz to cater to a growing army of office-less workers. (Full disclosure: Santa Cruz Weekly’s staff worked out of Cruzioworks for six weeks this fall while its office within the Cruzio building was being finished.) On the other side of Pacific Avenue is a cozy loft space where the coffee is always on. It is the original NextSpace, started in 2008 by Ryan Coonerty and Jeremy Neuner as a way to keep some of the best and brightest on this side of the hill.
Neuner and Coonerty initially viewed Santa Cruz’s brain drain from the perspective of city officials—Neuner as the economic development manager for Santa Cruz, Coonerty as vice mayor (and later mayor). From that standpoint, this area presents a set of obstacles to increasing employment: it is fairly isolated geographically (45 minutes from the closest airport), the cost of living is high and two of the largest economic drivers—agriculture and tourism—offer only seasonal work, meaning the county’s unemployment rate can jump from 10 percent in the early fall to almost 15 percent in the winter.
Instead of lobbying to attract large traditional companies to Santa Cruz, Neuner and Coonerty wanted to create a space that could attract lots of one– or two– person companies. “Two–thirds of the day the typical office is empty,” says Neuner, now CEO of NextSpace. “People are off at client sites or they are telecommuting or they are in a conference room or whatever.” NextSpace has branches in Santa Cruz, San Jose, San Francisco and Culver City, with plans to open even more spaces in the next year.
The Satellite Telework Center, which opened in Felton in April 2009 and expanded to Scotts Valley in January 2011, is also planning to expand in the upcoming year. According to co-founder Jim Graham, the company is eyeing spaces in Menlo Park, Palo Alto, Santa Barbara and Hollywood. The Satellite offers many of the same services as Cruzioworks and NextSpace, but Graham insists their facilities fill a slightly different need.
In part by virtue of their locations, smack dab between Santa Cruz and San Jose, many of The Satellite’s workers have full-time jobs in Silicon Valley but have been given the opportunity to work more autonomously. “They will work two or three days over in Silicon Valley,” Graham says. “They’ll schedule all of their face time with everyone over there, then they’ll come back over to our place for that uninterrupted time to actually sit down and get work done.”
The future of work, as Neuner sees it developing, will allow for this kind of flexibility. “The workplace will no longer be a place—it will be a portfolio of places that you will pick and choose from almost on a real time basis based on who you are and what you’re doing that day and who you need to work with,” he says, “and even what your mood is, quite frankly.”
Getting Wired
Even now, Neuner says, “If I’ve got an iPhone and a laptop and an Internet connection, generally speaking, there’s nothing I can’t do if I’m in a creative, knowledge-based economy.”
The Internet connection is crucial. If Neuner and Coonerty’s strategy was to keep Santa Cruz competitive by keeping talented individuals here, Cruzio’s strategy is to offer workers who stay in Santa Cruz a technological infrastructure on par with what they would find in Silicon Valley. And that begins with bandwidth.
Cruzio started in 1989 in the spare bedroom of computer programmers Peggy Dolgenos and Chris Neklason’s Westside home as an Internet service provider with email and web hosting services. The business grew rapidly, but eventually Dolgenos and Neklason realized the Internet infrastructure wasn’t keeping up with the demand for things like Netflix instant streaming, or the uploading and downloading of huge files.
“About five years ago we realized that the big companies were not going to be building out in Santa Cruz County—it’s not worth it for them—and our customers have been wanting a lot more speed,” Dolgenos says.
Cruzio made a deal with the University of California, which was working to improve connectivity at UCSC, to do the same for the city. Today, fiber optic lines run from campus to the Cruzio building and all the way up Highway 9—46 miles through the Santa Cruz Mountains—to Sunnyvale. The new lines offer 200 times as much bandwidth as was previously available in Santa Cruz, making it possible for local businesses to maintain an edge against rivals in Silicon Valley.
The infrastructure expansion also meant expanding to a bigger building that could house the generator and servers. That building turned out to be the former Sentinel building, whose owners had defaulted on the loan in 2009. Once Cruzio had lines and a hub in town, all that remained was connecting to individual users.
“It can get expensive going to every house separately or every business separately,” Dolgenos says. “We thought one thing we could do is invite people in.” And they did—at last count Cruzioworks, which opened in January 2011, had close to 120 members.
Teleworkforce
Initially, Cruzio was in talks with the Satellite Telework Center to open a location in the building. The Satellite, though, prides itself on a no-nonsense philosophy that puts it in a different category from Cruzioworks and NextSpace.
“Our approach at the Satellite is just a little bit different from your typical coworking space,” Jim Graham says. “Cruzio wanted to go with more of a collaboratively-focused coworking model, and we felt there was slightly more demand for the model we’ve got, which is slightly different.
“We have a lot of people who have worked out of their house for a long time but they’ve got little kids or a spouse who comes home, and those little distractions that can get very frustrating,” Graham says. “So what people will do is come here a day or two a week, set up in a cubicle and just dive right in to what they are doing. They really like how much more they can get done in a shorter period of time.”
There are no hard feelings, though. “We had worked with Cruzio on their space, and it got to a place where they wanted to go one direction with it and we wanted to go another,” Graham says. “We just kind of said, ‘OK, you want to go that way,’ and we shifted our attention to other spaces.” The Satellite opened a second location in Scotts Valley in January of 2011, the same month Cruzioworks opened.
Right Place, Right Time
At Cruzioworks and NextSpace, though, the collaborative element is paying dividends (literally) for some members. Manu Koenig, the founder of Greenocracy, started working at Cruzio in April. “We decided to move into Cruzio for one simple reason: we couldn’t have a serious business meeting in cafes anymore,” he says. “Coworking turned out to be an added bonus that I hadn’t really anticipated.” From among their coworkers, he and co-founder Robert Singleton have recruited both investors and web developers for their site.
A similar dynamic exists at NextSpace. “It might just be that I’m a freelancer, I’m a solopreneur, I’m a telecommuter and because I work at NextSpace I meet a few people, and now I know some cool people that I didn’t know before,” Neuner explains. “Those people start to trade ideas and trade expertise and little bits of knowledge, and you find that the person sitting next to you is exactly the guru that you need to help you with your project or with your work.”
It can be something as simple as the app developer sitting next to a graphic designer and enlisting them to design the icon and logo, or two single-employee companies joining forces to become one two-person company.
Sol Lipman joined NextSpace at the very beginning, “Literally, I was there the day the doors opened,” he says. It was at NextSpace that Lipman and his partner, working on video platform for Twitter, connected with a few other one– and two–person companies—a design firm, a back-end technology firm—to form Rally Up, a mobile application company.
“They all started out as independents or little groups of two who didn’t know each other,” Neuner says of the individuals who formed Rally Up. “They found each other at NextSpace, realized that they had complementary skills, came together into a company, created some cool applications that got on everybody’s radar screen and AOL acquired them not even a year ago to be sort of their lead mobile team.”
Rally Up was purchased in the fall of last year; the team is now spearheading mobile projects like Editions, AOL’s magazine for iPad, on behalf of the Internet behemoth. “At AOL, we’re like the A Team, if you will,” Lipman says, “We’re sort of brought in mercenary–style when there are opportunities in the market that AOL—because it is a big company—has a tough time unpacking.”
Lipman doesn’t see Rally Up’s success as an anomaly either. “That’s what NextSpace does—just putting people in one location allows people to get to know each other and the desire for people to collaborate, I think, is a very human thing.”
Even though he has an office at AOL in Palo Alto and a title there, Senior Director of Mobile, Lipman is still a member at NextSpace Santa Cruz, where he works every couple of weeks. “I miss my friends, so I go there and get distracted and eat some lunch with old friends.”
Buddy System
As the workspace is changing, co-working facilities like NextSpace and Cruzio are also stepping into a newly created void in workers’ social lives. Coworkers at NextSpace have gone on not just to start businesses but also to fill each other’s social circles. The San Francisco branch of NextSpace has spawned a band, the Dodgy Winos, and chapters of a running group, the NextPacers, have started at both the San Francisco and Santa Cruz offices.
At Cruzioworks the coworkers are still getting to know each other, but a similar camaraderie is emerging. The two-buck Chuck was flowing at a recent “Work Wines Down” event, which started just as the work day was ending. “I got to meet everyone in the space who I wave at but I don’t really know their names,” says Robert Singleton. That was just at the beginning of the night, though—by the end, there was giant inflatable remote-controlled sharking flying around, and karaoke broke out. “Manu and Chrissy sang ‘Sweet Child O’ Mine,’ and one of the guys sang—verbatim, like he knew every single word, grunt, everything in song—‘I Like Big Butts’ by Sir Mix-A-Lot. Perfectly nailed it.”
One NextSpace member saw one other gap in the “coworking revolution,” as NextSpace refers to it—a gap in the accessibility of coworking itself. Shelley McKittrick is now the founder of Bootstraps Enterprises, which aims to offer affordable coworking to people who have had a hard time entering the workforce.
“What we’re doing is creating a model that includes co-working, which is really not available to poor folks at this point,” says McKittrick. “Even the cheapest coworking in town is 100 bucks a month, and then where do you put your kids?”
McKittrick moved to Santa Cruz in August 2010 after working in nonprofits in Denver and Los Angeles for 17 years. She started working out of NextSpace in February 2011, and that’s where she got the idea to put a social entrepreneurial spin on the same model.
McKittrick ticks off groups that could benefit from involvement with the organization: “Low-income families with young children, the transgender community, older folks, veterans. People who especially in this economy, but even outside of this economy, have a really hard time working.”
In addition to coworking, McKittrick says Bootstraps Enterprises will offer child care, work readiness training, cottage industry incubation and counseling services onsite.
Already McKittrick has received a lot of support from the NextSpace community in her venture. “What the community at NextSpace is doing is connecting me. I’m new in town, I have a lot of nonprofit experience but I don’t know the players. The folks in the coworking community—it really is a community, it’s not really about where you are sitting—share skills and resources.”
Those skills and resources are helping put Bootstraps Enterprises on track to spread the idea of a work community around. “We have our 501c3, we have a strong board of directors and we have applied for several grants,” McKittrick says. And they have fallen in love with a space—a mustard-colored craftsman on Mission Street next door to the Youth Services Center.
Asked if she expected Bootstraps to be up and running some time in the next year, McKittrick answers, “We’re going to be open in three to four months come hell or high water.”
