REPORT MARKETING RESEARCH DETERMINANTS OF MOTIVATION THAT MAKE ENTREPRENEURS CHOOSE CO WORKING SPACES THE CASE IN DANANG, VIETNAM

THE UNIVERSITY OF DANANGUNIVERSITY OF ECONOMICS  REPORT MARKETING RESEARCH DETERMINANTS OF MOTIVATION THAT MAKE ENTREPRENEURS CHOOSE CO-WORKING SPACES: THE CASE IN DANANG, VIETNAM

THE UNIVERSITY OF DANANG

UNIVERSITY OF ECONOMICS



REPORT MARKETING RESEARCH

DETERMINANTS OF MOTIVATION

THAT MAKE ENTREPRENEURS

CHOOSE CO-WORKING SPACES:

THE CASE IN DANANG, VIETNAM

Class: 41K12.3-CLC Lecturer: Bao Quoc Truong-Dinh, MBA

Danang, December 2017

DETERMINANTS OF MOTIVATION THAT MAKE ENTREPRENEURS CHOOSE CO-WORKING SPACES: THE CASE IN DANANG, VIETNAM

MEMBERS Hang Thi Nguyen (Leader) Anh Ngoc Quynh Nguyen

My Thi My Nguyen

Mi Thi Diem Le

TABLE OF CONTENTS

1 INTRODUCTION 3

2 LITERATURE REVIEW 4

2.1 CONCEPTS 4

2.2 RESEARCH MODEL AND HYPOTHESES 7

3 METHODOLOGY 14

3.1 SAMPLE CONSIDERATION 14

3.2 DATA COLLECTION 14

3.3 ANALYTICAL CONSIDERATION 14

REFERENCES 14

1 INTRODUCTION

With the popularity of sharing economy phenomenon, the number of co-workingspaces has been rapidly growing over the past years More than 500,000 individualsuse more than 2,000 co-working spaces worldwide (Johns and Gratton, 2013) Besidesthe requirement of human resources, entrepreneurs also need a physical environmentwhere creativity, innovation can flourish (Anita Fuzi, 2015) Successfulentrepreneurial behavior is also supported by a strong and diverse knowledge base,well-developed business and social networks, and an ability to identify opportunities(Lee, Florida, & Acs, 2004) The shared-workspace model are designed to encouragecollaboration, creativity, idea sharing, networking, socializing, and generating newbusiness opportunities for small firms, start-ups and freelancers (Anita Fuzi, 2015).Compared to project teams or virtual teams in the often rigid hierarchies of establishedfirms (Chesbrough and Teece 1996; Pawar and Sharifi 1997) co-working users canmore flexibly choose teams and work processes

It is estimated that the number of entrepreneurs and start-up companies in Vietnam areincreasing substantially More than 1,500 startups have come in to play Many co-working spaces appear in Hanoi and Ho Chi Minh city These workspaces offerstartups and entrepreneurs office communities, tele-centers, telework, virtual work,virtual teams, incubators, and communities of practices but specifically offers a cross-sectoral working community with more flexibility, autonomy, and opportunities forsocial interaction (Anita Fuzi, 2015) Nevertheless, co-working spaces are stillrelatively new and not well-established in Danang, which is one of potential city thatentrepreneurs choose to start their businesses We concern whether these workplaces

do not meet needs and requirements to support entrepreneurial activities orentrepreneurs do not know how these spaces actually work

There is neither not much knowledge about why entrepreneurs engage in co-workingspaces nor why some of them are still hesitant to participate in this type of workspace

In fact, previous research only focuses on isolated determinants, instead of assessingthem and their relative strengths holistically by using quantitative methods Inaddition, many research contributions do not explicitly differentiate between variousforms of services and industries in the sharing economy as well as their scope inEastern nations such as Vietnam Recent empirical research also do not consider therole of working inspiration and networking as determinants of motivation that makeentrepreneurs choose co-working spaces To response to these research gaps, thispaper aims to answer the following research questions:

RQ1: What are determinants of motivation that make entrepreneurs choose inco-working spaces in Danang city?

RQ2: What are the most important determinants that make entrepreneurschoose co-working spaces in Danang city?

The findings from this research will support co-working space providers engaged inthe management of co-working spaces services in different industries and locations to

understand the reasons of usage With this knowledge, they will be able to offer betterworking environments that meet the needs of co-workers, especially entrepreneurs

The trend of sharing also facilitates collaborative creation (co-creation) of goods andservices Customers become part of the value creation (Oskam and Boswijk 2016).Prahalad and Ramaswamy (2004) noted co-creation as new source of competitiveadvantage as the direct interactions between firms and their customers have thepotential to create unique experiences Crowdsourcing refers to the participativecompletion of a task against some kind of economic or psychological compensation(Estelles-Arolas and Gonzalez-Ladron-de-Guevara, 2012) Self-organizing crowds donot even need focal firms for value creation Instead, communities with motivated andcreative members offer support for ideas and innovations (Franke and Shah, 2003).However, using the wisdom of the crowd for co-creation is not limited to a virtualenvironment Co-creation activities can be transferred to real settings (Schopfel et al.2015) For example, the website Meetup (http://meetup.com) enables internet groups,the crowd, to organize meetings in the real world Bilandzic and Foth (2013) highlight

that Meetup enables motivated, often highly creative and skilled individuals, groupsand crowds to meet and collaborate on specific tasks These groups need a suitableplace with appropriate infrastructure and equipment to support the completion oftasks Public libraries as well as co-working spaces can host such groups It is unclearhow such spaces should be set up, how the inherent communities work, and whichbusiness models suit the users and providers of coworking-spaces (Franke and Shah,2003; Frankenberger et al 2013; Gandini, 2015).

Entrepreneur

Entrepreneurs is someone who exercises initiative by organizing a venture to takebenefit of an opportunity and, as the decision maker, decides what, how, and howmuch of a good or service will be produced He or she could be sole proprietor, apartner, or the one who owns the majority of shares in an incorporated venture Anentrepreneur supplies risk capital as a risk taker, and monitors and controls thebusiness activities (Business Dictionary)

Entrepreneurs play a key role in any economy These people have the necessary skills

to anticipate current and future needs that can bring new ideas to market.Entrepreneurs prove to be successful in taking on the risks of a startup are rewardedwith profits, fame and continued growth opportunities (Black, Ervin L et al 2010.).The entrepreneur assumes all the risks and rewards of the venture and is usually thesole proprietary, a partner or the owner of the majority of shares in an incorporatedventure As the main decision maker the entrepreneur monitors and controls thebusiness activities

According to economist Joseph Alois Schumpeter (1883-1950), entrepreneurs are notnecessarily motivated by profit but regard it as a standard for measuring achievement

or success Three thinkers were central to the inclusion of entrepreneurs: JosephSchumpeter, Frank Knight and Israel Kirzner Schumpeter suggested thatentrepreneurs – not just companies – were responsible for the creation of new things

in the search of profit Knight focused on entrepreneurs as the bearers of uncertaintyand believed they were responsible for risk premiums in financial markets Kirznerthought of entrepreneurship as a process that led to discovery

What is co-working space?

Co-working spaces are shared workplaces for freelancers and workers working invarious industries These spaces can be seen as office-renting facilities where peoplesuch things like a desk and a wifi connection More importantly, these places alsoencourage independent professionals live their daily routines side-by-side withprofessional peers from the same sector to share knowledge, ideas and allow them toenhance collaborations and synergies (Gandini, 2015)

The first co-working space originates in 2005 in San Francisco It brought thepossibility of envisaging a ‘third way’ of working, halfway between a new work style

within a traditional, well-delimited workplace in a community-like environment.(Gandini, 2015) Entrepreneurs and freelancers mainly choose these spaces becausethey are cheap and flexible Besides, it can be lonely and challenging when working athome as they find it difficult to manage work and private life (Meel, Juriaan van;Berg, Rikke Brinkø, 2014)

Since the idea of co-working has quickly spread, ultimately, a ‘trendy topic’ bearinghuge expectations concerning the future of knowledge work Johns and Gratton forinstance, define co-working as the ‘third wave of virtual work’ (2013: 1), that seeks torestore ‘co-location’ in the digitalizing mode of production where tasks can beperformed anywhere, anytime A proliferation of co-working initiatives and venturescan be currently witnessed in different cities worldwide, for a somewhat self-proclaimed ‘co-working movement’ that now aligns with other similar ‘trendy’concepts which flourished in the post-crisis economy, such as ‘startups’, ‘socialinnovation’ or ‘sharing economy’ (Botsman and Rogers, 2011)

According to an article on Network World, co-working is perceived as a ‘movement’

or a ‘philosophy’ characterized by four common values: collaboration, openness,community and sustainability (Reed, 2007)

Alongside practitioner-oriented research, a growing stream of academic empiricalwork has arisen concerning co-working practices In a study of collaborativeproduction in Berlin, Lange (2011) outlines a definition of co-working spaces asbottom-up spaces participated by workers who strive for independence, collaborativenetworks and politics, and that share a set of values in a ‘collective-driven, networkedapproach of the open source idea translated into physical space’ (Lange, 2011: 292).The idea underlying this assumption is that social relations are the main factors ofproductivity across co-working spaces, conceived as collaborative environmentswhere microbusinesses and freelancers deploy new production opportunities in non-hierarchical situations Those accessing co-working spaces are mostly

‘culturepreneurs’, a term Lange coined to identify knowledge professionals withmulti-functional skills and irregular career paths, operating as self-entrepreneurswithin scarcely-institutionalized economies (Lange, 2006) This term stresses both thecultural’ dimension that connotes coworkers, and the eminently entrepreneurial trait oftheir activity, that is framed into a non-competitive and largely ‘socialized’ philosophy

of work perpetrated into a production context made of small-size actors, which doesnot imply hierarchical relations and where organizational arrangements are constantlyrenegotiated (Lange, 2006, 2011)

In a study of co-working spaces in Austin (Texas), Spinuzzi (2012) provides a morebusiness-oriented and entrepreneurial perception of co-working practices Thecoworkers in Spinuzzi’s account are not just ‘workers’ or ‘professionals’ – rather,mostly ‘non-employee enterprises’, meaning individuals who run a self-enterprisewith no employees, looking to increase profit and business turnover through amanagerial cultivation of social relations Spinuzzi calls this a logic of ‘good

neighbors’ or a ‘good partners’ approach, a partially communitarian organizationalrationale by which business outcomes are pursued through temporary partnerships andcollaborations among peers working in the space, resulting from a combination ofcomplementary skills and social relations (Spinuzzi, 2012) Tracy Foster of ONA said,

“In a co-working space, there’s an opportunity to develop relationships with othersmall business owners and learn from their experiences We’re constantly meeting andlearning from other entrepreneurs in the fashion and tech space.”

Co-working spaces offer entrepreneurs opportunities to interact with others anddevelop professional relationships They can interact, collaborate, meet potentialclients by chances and engage in informal market research, which are highlybeneficial by participating shared workplaces Sam Saxton of Salter Spiral Stair andMylen Stairs stated, “Co-working spaces are alive with entrepreneurial spirit, makingthem ideal sources of inspiration both in terms of motivation and creativity.”

2.2 RESEARCH MODEL AND HYPOTHESES

Figure 1 displays the model on the determinants of choosing co-working spaces,

indicated through nine factors with direct effects on the likelihood of choosing a

co-working space These nine determinants are sense of community economic benefits, ,

sustainability, enjoyment, service quality, trend affinity, networking, working inspiration and trust.

of a group of likeminded people.

Việc sử dụng CWS chophép tôi trở thành một phần của nhóm những người có chung chí hướng

Thurau et al.(2007); Lambertonand Rose (2012)

Henning-SOC2

The use of CWS allows me to belong

to a group of people with similar interests

Việc sử dụng CWS chophép tôi thuộc về một nhóm những người có chung sở thích

Thurau et al.(2007); Lambertonand Rose (2012)

Henning-SOC3

Contributing to my CWS community improves my image within the

community

Sự đóng góp của tôi vào cộng đồng CWS cải thiện hình ảnh của tôi trong cộng đồng

Kankanhal

li et al (2005);Wasko & Faraj (2005)

SOC4

I gain recognition from contributing to

my CWS community

Tôi được công nhận từ những đóng góp của tôivào cộng đồng CWS

Kankanhal

li et al (2005);Wasko & Faraj (2005)

SOC5

I would earn respect from others by sharing with other people in my CWScommunity

Tôi có thể nhận được

sự tôn trọng thông qua việc chia sẻ với mọi người trong cộng đồng CWS

Kankanhal

li et al (2005);Wasko & Faraj (2005)

SOC6

People in the community who contribute have more prestige than those who do not

Những người đóng góptrong cộng đồng CWS thường có nhiều uy tín hơn so với người không đóng góp

Kankanhal

li et al (2005);Wasko & Faraj (2005)

Với mức giá hiện tại, tôi đánh giá những dịch

vụ mà CWS cung cấp

là tốt

Fornell et al., 1996; Lambertonand Rose( 2012); Bock et

al (2005)

of the CWS offer, I rate the price as good.

mà CWS cung cấp, tôi đánh giá mức giá là tốt

al., 1996; Lambertonand Rose( 2012); Bock et

Bock et al (2005)

EB4

My participation in CWS benefits me financially

Sự tham gia của tôi vàoCWS đem đến cho tôi nhiều lợi ích về mặt tài chính

Bock et al (2005)

EB5

My participation in CWS can improve

my economic situation

Sự tham gia của tôi vàoCWS có thể cải thiện tình hình tài chính của tôi

Bock et al (2005)

CWS saves me time

Sự tham gia của tôi vàoCWS giúp tôi tiết kiệmđược thời gian

Bock et al (2005)

Sustainability

SUS1

Choosing CWS helpssave natural

resources

Lựa chọn CWS giúp tiết kiệm các tài nguyên tự nhiên

Juho Hamari, Sjoklint, and Antti Ukkonen (2016)

mode of workplaces

CWS là một mô hình không gian làm việc bền vững

Juho Hamari, Sjoklint, and Antti Ukkonen (2016)

Juho Hamari, Sjoklint, and Antti Ukkonen (2016)

SUS4

CWS is efficient in terms of using energy

CWS sử dụng năng lượng một cách có hiệuquả

Juho Hamari, Sjoklint, and Antti Ukkonen (2016)

Sjoklint, and Antti Ukkonen (2016)

Enjoyment

van der Heijden (2004)

exciting

Tôi nghĩ CWS hào hứng

van der Heijden (2004)

van der Heijden (2004)

van der Heijden (2004)

pleasant

Tôi nghĩ CWS thoải mái

van der Heijden (2004)

Thiết kế của các dịch

vụ CWS/ website của CWS hấp dẫn tôi

Parasuram

an et al., (1985, 1988); Seiders et

al (2007)

SQ2

I have quick and easy access to CWS offers

Tôi nhanh chóng và dễ dàng truy cập vào các dịch vụ CWS cung cấp

Parasuram

an et al., (1985, 1988); Seiders et

al (2007)

SQ3

The customer service

of CWS] is responsive to its customer’s needs

Dịch vụ chăm sóc khách hàng của CWS đáp ứng được các nhu cầu của khách hàng

Parasuram

an et al., (1985, 1988); Seiders et

al (2007)

SQ4

I believe that CWS knows about he needs

of their customers

Tôi tin rằng CWS nhậnbiết được các nhu cầu

từ khách hàng của họ

Parasuram

an et al., (1985, 1988); Seiders et

al (2007)

Trend affinity TA1 The collaborative

consumption of the CWS offer allows me

Việc cùng nhau sử dụng CWS cho phép tôi bắt kịp những xu

Moeller and Wittkowsk