Co-Working Space vs. Incubator: Which Is Right for Your Startup?
The majority of startups — 69%, in fact — get their start at home. But where do you go from there? As your business grows and scales up, it may be time to invest in a public workspace. There are a couple of early options for small businesses: You can take your business in the direction of a co-working space, or choose an incubator.
But how do you know which one is right for you?
“Before making any decisions, an entrepreneur needs to assess what their needs are and what they’re looking for in a space,” says Myra Corrello, a business growth strategist and founder of Find Your Spice. “Co-working spaces and incubators both have great strengths for startups, so your selection really depends on what you need.”
Here are three things to consider before choosing a space for your business.
Think About the Stage You’re In
By definition, incubators are aimed at small businesses with the intention of scaling up. “They’re stage-specific,” Corrello says. “Incubators are intended to provide formative experiences and resources to businesses in their early stages.” Consequently, incubators tend to offer more support and resources than co-working spaces do.
Ultimately, the intention of an incubator is to produce graduates, so you shouldn’t plan to stay there long term. Some incubators also offer incentives to encourage businesses to invest in their progress. So if you need that fire and resources to help spur your growth, an incubator space may be best for your startup.
Consider Your Needs — and Your Future
Co-working spaces, on the other hand, might be better for businesses with remote employees, or “digital nomads.” Not every business intends to scale, and if that’s the case for your startup then co-working may be the best option. “Co-working spaces aren’t necessarily fixed,” Corrello says. “Even if you travel a lot, you can typically find one to tap into.”
Co-working spaces offer fluidity in working location, but also provide a sense of community and collaboration for workers who would typically be isolated. “Being in an environment that is energetic and very creativity-enhanced can be a great influence,” Corrello says.
Try Finding the Best of Both Worlds
Incubators tend to be more business-specific and tend to attract startups in specialized fields, such as tech. Co-working spaces, on the other hand, are often diverse from a business standpoint. Instead, they sometimes focus on demographic needs. Co-working chain Hera Hub, for example, provides spaces intended to empower women in business, and Propeller, an incubator in New Orleans, focuses on supporting minority entrepreneurs.
There is tremendous variety among both incubators and co-working spaces, so it’s important to find the right “fit” for you and your business. The best approach is to start by identifying your needs. “It's really a process of shopping and finding the right culture that works for you,” Corrello says. Some spaces, you may find, have the qualities of both incubators and co-working spaces, so a decision depends on both your needs and your resources.