The now-shuttered HQ. (Photo: Loosecubes)

Yesterday's news about Loosecubes closing caught the New York tech scene by surprise. The company, one of the early movers in shared office space, just raised $7.8 million in venture funding back in June. They'd been a little quiet in recent months, and the coworking business is a competitive one, but no one figured Loosecubes was on the fast track to the deadpool. It was the kind of company that even non-techies easily understood and appreciated.

So the sudden shutdown, besides bumming out fans, left two nagging questions: What went wrong? And where did all that venture capital go? When we called, Loosecubes' office number had already been disconnected. An email to their press team returned only a canned response from cofounder Anna Thomas:

Thanks very much for your note. The information regarding the shutdown on our website and blog is what's currently available. We aren't speaking with the press at this time, but will certainly follow-up with you directly if we share additional information.

The blog post offers up some specifics about cancelled reservations and the like, but there is no mention of how the company spent its capital--hard to believe on 16 employees--or whether capital will be returned to investors.

There are, however, a couple of theories floating around.

Let's start with Loosecubes' emphasis on free spaces. The company started out as an Airbnb for office space--a peer-to-peer marketplace matching unused desks with free-floating workers. Companies charged, and Loosecubes got a cut. But sometime this summer, the model shifted a bit: Loosecubes became a big network. Offices offering space got access to unused desks for their own rootless employees. The plan was reportedly to eventually introduce subscriptions, but they don't seem to have materialized.

That could certainly speed up your burn rate. Loosecubes’ FAQ provides just a TBD on making money: “We’re trying to change the way people think about work and office space, and will eventually implement a monetization strategy that achieves those goals.” (But it hasn't been updated since June.) Many of the people seeking office space are probably either freelancers or startups--not exactly the kind of folks who can reciprocate by offering desks in another city.

However, we received a tip yesterday related to the Loosecubes funding. An anonymous tipster reported, "Loosecubes didn\'t go out of business because the company wasn\'t doing well. From whispers around the streets, they apparently never actually raised the funding they originally announced. It was pulled for some reason."

We weren't able to find a Form D for the round but given that companies have an entire year to file, it's possible they just never got around to the paperwork (companies have to file for an extension if they're going that route). Loosecubes is listed as a portfolio company on the New Enterprise Associates website, but it's not listed on the sites of Revolution or Hamilton Investment Partners, the other firms listed as new participants in the June round. Messages left for NEA yesterday were not returned, but we'll update if we receive any additional comment.

Cofounders Anna Thomas and Campbell McKellar polite rebuffed questions related to the unconfirmed rumor.

There's also the matter of Loosecubes' going invite-only, starting in July. The move was explained in terms of their shift to the network model. The company claimed at the time: "Now it’s time for our network to grow, and we believe the best way to do this is for our current members to bring in new respectful and productive coworkers and hosts." (The announcement also mentions soon-to-come pricing tiers that would never arrive.) Fair enough, but it's unusual for a company to try stuffing that particular genie back in the box.

It's also worth noting that, as even as Loosecubes was shifting its business model--when a clear and forceful argument for social exchange was most important--the company's promotions took a turn for the impractical. Coverage focused on one-offs like this workspace under the Manhattan Bridge and these shipping containers at the Dekalb Market.

But as New Work City's Tony Bacigalupo notes, one founding team's disappointment is another's opportunity: "LooseCubes’ departure leaves a vacuum at the top of the world of workspace sharing." Step right up, folks.

Tony Bacigalupo

At Wednesday night’s New York Tech Meetup, Jessica Lawrence took the stage for the first time as the organization’s first employee.

This is a big deal. There will be much talk of the significance of her hire, in particular the fact that, yes, she’s a woman running an organization dominated by men. But it goes deeper than that.

I run a company that has zero employees. Like the NYTM, New Work City was born out of a community effort, and neither were really designed to be real businesses.

As I’ve witnessed firsthand, when a small volunteer-run organization finds rampant success, a lot of things fall through the cracks. Obvious and fixable flaws might sit, visibly un-repaired, for a long time before they get addressed.

The NYTM is no exception. With over 17,000 members and a monthly event that instantly sells out 850 spots, there has been much debate about the struggle to score tickets, the process by which presenters are selected, how people get elected to the board and more.

Beyond the basic operational questions, however, is the debate about how the NYTM should use its formidable platform to enact change on a larger scale. In a decimated economy, the new businesses that arise from new technologies are going to drive a recovery that will rescue countless people from not just unemployment, but underemployment and suckemployment.

(Suckemployment is when you’ve got a job, but you hate it and are probably being mistreated and underpaid. In case it wasn’t obvious.)

NYC needs amazing new technology. The world needs it too. The NYTM happened to find itself as NYC’s hub for this, and now it’s taking the necessary steps to rise to the occasion.

When Meetup founder Scott Heiferman stepped down as organizer in 2008, he set in motion a series of events that put the NYTM on a path to becoming the organization it had to be. The subsequent formation of the nonprofit entity around the NYTM was a necessary and critical step. Now, as a real organization, the NYTM has scraped together a salary and hired its first full-time employee.

In her work as CEO of the Girl Scouts of San Gorgonio Council, Jessica Lawrence has dealt with a lot of the challenges a growing community organization faces. She also produced the country’s first Coworking Unconference at SXSW this year. She also happens to be friendly, upbeat, intelligent, and professional.

And the fact that she doesn’t have a background in technology? She’s already working on that. In her opening speech, she pledged to learn how to code.

After the NYTM was over, she opted to spend her time not avoiding the masses of people, but spending time among them at the public afterparty.

The fact that she’s new to NYC is also a huge advantage. She comes to the city without any biases and can approach everything she does with a completely fresh and objective perspective. The obvious flaws are going to get addressed, and the fine folks behind the NYTM will be able to rest easy knowing someone’s on top of things. More important, however, are the things the NYTM will be capable of doing that nobody’s thought of yet.

Why? Because if you look at the NYTM’s mission, anyone who is working full-time on the NYTM is working full-time on making the city and the world a better place. There’s been a lot of talk about the lack of interconnectivity between many of the organizations in the city in various industries, and a lot of that can be attributed to the fact that it’s never been anyone’s job to address it. We all want to play our own roles in making NYC tech better, but it couldn’t be anyone’s top priority in quite the way it will be here.

Now, Jessica can focus on these kinds of things without the distraction of having to do something else to make a living. She will be free to answer the question of why people that should know each other don’t, and why organizations that should be working together aren’t. The potential impact of that is hard to calculate, but it will be significant.

I just hope she knows how to handle a very full inbox.

New Work City

New Work City's Tony Bacigalupo and Sara Chipps won the internet yesterday with their fake slide decks for the $41 million mobile social photo sharing app Color. The decks were circulated around the New York City tech Twitters and then made their way to Hacker News and then to TechCrunch; the team at Color even gamely retweeted it.

But NWC's not done yet. The joke continues with a real party for the fake Color.xxx, Color's brutally honest alter-ego, which already dropped an Android app, Color.xxx (which is easier to find in the app store than the real thing and has 5/5 stars compared to the real app's 1.5/5 stars).

Color.xxx Launch Party at New Work City

Colors. People love that shit.

Join us as we celebrate the launch of everyone's favorite mobile social local app that lets you share your favorite color with your friends and locquaintances!

Come dressed in your favorite color!

"The best part is that we'll be doing a big experiment in seeing what happens when a bunch of people use Color (the real app) at the same time," Mr. Bacigalupo said in an email. They're also promising karaoke.

The Color decks have gotten NWC a ton of free publicity. "I sadly couldn't get Google Analytics working on my Google Docs, because it's painful," Mr. Bacigalupo said. But he did offer a few stats: the original shortened bit.ly link has gotten 2,978 clicks so far and nwc.co got 2,406 unique visitors and 4,269 pageviews, double the previous record which was on the day both NPR and The Wall Street Journal ran stories.

"It was a big day," he wrote, with a :). The NWC team has some more analytics from Twitter that they may release today.

UPDATE: There have been 880 tweets with the string "color.xxx," and that's just a fraction of the total tweets about the decks. Those 880 tweets amount to 3,467,818 total "follower impressions," NWC said.

New Work City

One night in the summer of 2007, a group of freelancers and entrepreneurs met in a brick-walled coffee shop on St. Marks to toast their untethering. It was the grand opening of CooperBricolage, one of the first coworking collectives in New York City, and everyone in the room was flush-faced and smiling like idiots. Tony Bacigalupo, then 25, stood and addressed the group like a new kid at school who had finally found a lunch table to sit at in the cafeteria. “At the beginning of this year, I knew nobody in New York City,” he said. “I project-managed for a tiny little design company out in Long Island and I was sitting at home one day on a cold winter day, working, thinking, ‘there's got to be other people who are sitting at home like me.’”

It wasn't the Gettysburg Address, but it captured the essence of coworking: There's got to be other people like me. A growing percentage of the workforce no longer needs a traditional office for equipment or credibility, but damnit, we’re lonely. Luckily New York now offers a range of options for every personality of independent tech worker. Are you chatty and beautiful? General Assembly. Subversive? NYC Resistor. Sweet? New Work City. Just want to listen to techno on your headphones and get some fucking work done? Projective Space. Poor? Wix Lounge.

It wasn’t always that easy. When CooperBricolage first launched, the concept of coworking was nascent. The term was used for a while in 1999 to describe web workers and start-up work life in Silicon Valley. But after the dot-com crash, start-ups and virtual workers were considered radioactive and their style of freewheeling, open-air workspaces now symbolized recklessness. The permanent, cubicle-based office was re-established as the respectable way to work.

But the growth of the internet and the spread of laptops have been chipping away at the assumptions that used to justify paying rent for a permanent address. In 2005 a San Francisco-based software consultant, Brad Neuberg, dusted off the word “coworking” and launched The Hat Factory, an open loft where  freelancers and remote workers could enjoy the company of other humans while getting work done without having to give up their freedom. And with the recent wave of incredibly sophisticated mobile devices, the internet-as-office trend has reached a tipping point. “We’re just facilitating something that’s inevitable, that’s happening on its own,” Mr. Bacigalupo told the assembly at CooperBricolage. That was four years ago.

It turned out that, as natural as it might seem, a café was not a practical place for a dedicated coworking space, and CooperBricolage's founders, Mr. Bacigalupo and Sanford Dickert, had to walk the concept through many iterations. But the movement had momentum! What had been a few germs of an idea scattered throughout the city—Nate Westheimer's "Cafe Bricolage" manifesto; the Jelly NYC work parties; and Williamsburg Coworking, a small group working out of an art gallery—was becoming an articulated movement, a sort of city-wide start-up collectively iterating to solve a problem.

Now, coworking is exploding. New spaces pop up in lower Manhattan and Brooklyn every month, according to the press releases in my inbox. Mr. Bacigalupo and some of the other CooperBricolage members opened New Work City, which was funded through Kickstarter and built by volunteers who ripped the guts out of the walls on a neglected floor in SoHo and wired the place to the nines. NWC opened in September 2010, almost exactly three years after the launch of CooperBricolage; Brooklyn's The Makery opened around the same time. In December, General Assembly opened its glass doors on a flashier kind of coworking, stocked with New York’s most darling start-ups and several of its best-known founders. Designer Sara Bacon opened a modest but beautiful space, Greenpoint Coworking, in January. The year-old SoHo Haven just relaunched as Projective Spaces under new manager James Wahba.

You can certainly make money renting desk space in New York if you own a building, jam a whole lot of people into it and keep it reasonably full. Neuberg-style coworking spaces are more precarious. It's tough to make coworking pay simply because even the loneliest freelancers and entrepreneurs won't pay much more than $400 a month. Renting a desk in a coworking space is a luxury if you can do the same work at home or in a coffee shop. NWC, Greenpoint Coworking, The Makery and probably others also keep some non-dedicated desk space for drop-ins, which some consider an essential feature of Neubergian coworking. The drop-in policy adds variety to the space but forfeits some cash.

So if the margins are thin, why are so many new spaces opening up? One reason is that the coworking movement is full of hippies. Mr. Bacigalupo and Ms. Bacon believe coworking is a cultural revolution and money is just a necessary complication. Makery founder Matt Langer is only slightly less gooey about it—he’s losing a few hundred dollars a month on the space, but daydreams about becoming independently wealthy so he can let the start-ups work there for free.

But the opportunists are not far behind. Office rental spaces that serve the same clientele have started to riff on elements of the coworking movement, or have outright co-opted the term. (The Neubergian coworkers are still struggling with what to call this, but liken it to greenwashing.)

Sunshine Suites, which has two locations in downtown Manhattan and is opening a third in the Bronx, is a colorfully-decorated filing cabinet of a space, each floor maximally-packed with cubicles that have lockable doors and roofs. The company offers a “coworking solution,” in which entrepreneurs work at one of the bare tables tucked off to the side for $275 a month plus a $99 set-up fee.

What Sunshine Suites offers sounds less like an evolution of the way we work and more like a more affordable approximation of what it's like to work in the beehive of an eight-story corporation, and their coworking solution is a cheap knockoff compared to the lovingly stitched together communities at the Neubergian coworking spaces. Still, "co-working"--people working together--describes the product pretty well. The word's surge in popularity is in part due to the coworking movement, sure, but it was also heavily encouraged by the recession. Proponents of coworking, the movement, may not like it--but both styles have equal claim to the word. SoHo-based WeWork, a start-up friendly office rental company that secured a small mountain of financing in order to set up a stack of chic offices at 34th and 5th Ave., in the Meatpacking District and San Francisco, has elements of Neubergian coworking and its corporate cousin. WeWork is big, for one thing--the SoHo location has 250 offices--and offices have walls and doors. But the company just launched WeWork Labs, a floor dedicated to single workers that aims to achieve the camaraderie of a coworking space.

In the beginning, the biggest problem with finding people like me was scarcity; now it's the opposite. A young start-up Googling around for office space has to sift through a long list of very different work situations that all call themselves "coworking."

One solution is for coworking spaces to trade on their own brands instead of the word "coworking." Another would be for the coworking purists to come up with a new way to describe what it is they do so they don't get lumped in with the rent-a-cubes. Another solution, of course, would be to wait for the tech and coworking bubbles to pop, and we can all go back to the original coworking solution in New York: Starbucks.