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 Clas

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

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 individuals usemore than 2,000 co-working spaces worldwide (Johns and Gratton, 2013) Besides therequirement of human resources, entrepreneurs also need a physical environment wherecreativity, innovation can flourish (Anita Fuzi, 2015) Successful entrepreneurialbehavior is also supported by a strong and diverse knowledge base, well-developedbusiness and social networks, and an ability to identify opportunities (Lee, Florida, &Acs, 2004) The shared-workspace model are designed to encourage collaboration,creativity, idea sharing, networking, socializing, and generating new businessopportunities for small firms, start-ups and freelancers (Anita Fuzi, 2015) Compared toproject teams or virtual teams in the often rigid hierarchies of established firms(Chesbrough and Teece 1996; Pawar and Sharifi 1997) co-working users can moreflexibly 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 donot meet needs and requirements to support entrepreneurial activities or entrepreneurs

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 In addition,many research contributions do not explicitly differentiate between various forms ofservices and industries in the sharing economy as well as their scope in Eastern nationssuch as Vietnam Recent empirical research also do not consider the role of workinginspiration and networking as determinants of motivation that make entrepreneurschoose co-working spaces To response to these research gaps, this paper aims toanswer the following research questions:

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

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

The findings from this research will support co-working space providers engaged in themanagement 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 better working environments that meet the needs of co-workers, especially entrepreneurs.

2.1 CONCEPTS Sharing economy

Driven by technological (Belk, 2014; Oskam and Boswijk, 2016), economical (Hartletal.2016; Moehlmann 2015), and environmental (Cohen and Kietzmann, 2014; Hamari

et al.2015) considerations, people increasingly participate in collaborative consumptionsystem to exchange goods and services in the internet (Belk, 2014) This systemenhances the capacity of utilization and increases the environmental sustainability.Cohen and Kietzmann (2014) describe the sharing economy as a system where peopleshare underutilized resources in peer-to-peer networks The sharing economy includes

“peer-to-peer-based activities of obtaining, giving, or sharing the access to goods andservices, coordinated through community-based online services” (Hamari et al.2015, p.1) The sharing economy relates to the perceived value of ownership Consumers enjoygoods and services only when they are required or desired without obtaining ownershipand the involved obligations (Belk, 2014)

The sharing economy estimated to be worth 100 billion USD in 2010 (Lamberton andRose, 2012) and serves a range of business areas such as food, accommodation, traffic,entertainment media (Hartl et al.2016) The business areas traffic and accommodationoffer sharing economy show cases For example, shared mobility offers economic andenvironmental advantages, as the total number of cars and the produced emissions arereduced (Cohen and Kietzmann, 2014) Another prominent example is Airbnb, a web-based network that enables peer-to-peer accommodation sharing Airbnb can directlycompete with traditional hotels, leading to decreasing occupancy and turnover whileusers can profit from declining prices (Oskam and Boswijk, 2016)

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 of tasks.Public libraries as well as co-working spaces can host such groups It is unclear howsuch spaces should be set up, how the inherent communities work, and which businessmodels suit the users and providers of coworking-spaces (Franke and Shah, 2003;Frankenberger et al 2013; Gandini, 2015).

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 Entrepreneursprove to be successful in taking on the risks of a startup are rewarded with 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 the sole proprietary, apartner or the owner of the majority of shares in an incorporated venture As the maindecision maker the entrepreneur monitors and controls the business 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 that entrepreneurs– not just companies – were responsible for the creation of new things in the search ofprofit Knight focused on entrepreneurs as the bearers of uncertainty and believed theywere responsible for risk premiums in financial markets Kirzner thought ofentrepreneurship 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 empirical workhas arisen concerning co-working practices In a study of collaborative production inBerlin, Lange (2011) outlines a definition of co-working spaces as bottom-up spacesparticipated by workers who strive for independence, collaborative networks andpolitics, and that share a set of values in a ‘collective-driven, networked approach ofthe open source idea translated into physical space’ (Lange, 2011: 292) The ideaunderlying this assumption is that social relations are the main factors of productivityacross co-working spaces, conceived as collaborative environments wheremicrobusinesses 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 with functional skills and irregular career paths, operating as self-entrepreneurs withinscarcely-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

multi-of work perpetrated into a production context made multi-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-enterprise with

no employees, looking to increase profit and business turnover through a managerialcultivation 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 potential clients

by chances and engage in informal market research, which are highly beneficial byparticipating shared workplaces Sam Saxton of Salter Spiral Stair and Mylen Stairsstated, “Co-working spaces are alive with entrepreneurial spirit, making them idealsources of inspiration both in terms of motivation and creativity.”

2.2 RESEARCH MODELAND 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 working space These nine determinants are sense of community, economic benefits, sustainability, enjoyment, service quality, trend affinity, networking, working

co-inspiration and trust.

of a group of likeminded people.

The use of CWS allows me to belong

to a group of people with similar interests

Contributing to my CWS community improves my imagewithin the

community

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

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

Sự đóng góp của tôivào cộng đồng CWScải thiện hình ảnh củatôi trong cộng đồng

from

Thurau etal.(2007);Lambertonand Rose(2012)Henning-Thurau etal.(2007);Lambertonand Rose(2012)Kankanhal

Henning-li et al.(2005);Wasko &Faraj(2005)Kankanhal

people in my CWScommunity

People in thecommunity whoSOC6 contribute have more

prestige than those who do not

Economic

benefits

For the given price, I

EB1 rate the CWS offer as

good

EB2 For the given quality

Tôi được công nhận từnhững đóng góp của tôivào cộng đồng CWS

Tôi có thể nhận được

sự tôn trọng thông quaviệc chia sẻ với mọi người trong cộng đồngCWS

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

Với mức giá hiện tại, tôi đánh giá những dịch

vụ mà CWS cung cấp

là tốt

Với chất lượng hiện tại

(2005);Wasko &Faraj(2005)Kankanhal

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

li et al.(2005);Wasko &Faraj(2005)Fornell etal., 1996;Lambertonand

Rose( 2012); Bock et

al (2005).Fornell et

I can save money if Iparticipate in CWS

My participation inCWS benefits me financially

My participation inCWS can improve

my economic situation

My participation in CWS saves me time

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

Tôi có thể tiết kiệm tiền nếu tham gia vàoCWS

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

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

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

al., 1996;Lambertonand

Rose( 2012); Bock et

al (2005).Bock et al.(2005)

Bock et al.(2005)

Bock et al.(2005)

Bock et al.(2005)Juho Hamari,Choosing CWS helps

SUS1 save natural

energy

SUS5 CWS is

environmentally

Lựa chọn CWS giúptiết kiệm các tài nguyên tự nhiên

CWS là một mô hìnhkhông gian làm việcbền vững

CWS là một hệ sinhthái

CWS sử dụng năng lượng một cách có hiệuquả

CWS thân thiện vớimôi trường

Sjoklint,and AnttiUkkonen(2016)Juho Hamari, Sjoklint, and AnttiUkkonen(2016) Juho Hamari, Sjoklint, and AnttiUkkonen(2016) Juho Hamari, Sjoklint, and AnttiUkkonen(2016) Juho Hamari,

I think CWS isexciting

I think CWS is fun

I think CWS isinteresting

I think CWS ispleasant

The design of the CWS offer/ website isappealing to me

I have quick and easy access to CWSoffers

The customer service

of CWS] is responsive to its customer’s needs

I believe that CWS knows about he needs

of their customers

The collaborative consumption of the CWS offer allows me

Tôi nghĩ CWS thú vị

Tôi nghĩ CWS hàohứng

Tôi nghĩ CWS vui

Tôi nghĩ CWS thú vị

Tôi nghĩ CWS thoảimái

Thiết kế của các dịch

vụ CWS/ website củaCWS hấp dẫn tôi

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

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

Tôi tin rằng CWS nhậnbiết được các nhu cầu

từ khách hàng của họ

Việc cùng nhau sử dụng CWS cho phéptôi bắt kịp những xu

Sjoklint,and AnttiUkkonen(2016)van derHeijden(2004)van derHeijden(2004)van derHeijden(2004)van derHeijden(2004)van derHeijden(2004)Parasuram

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

al (2007).Parasuram

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

al (2007).Parasuram

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

al (2007).Parasuram

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

al (2007).MoellerandWittkowsk

me to use the newestconsumer goods.

I like to interact or socilizing with othercoworkers

I can gather specific feedback and learningtechniques from others coworkers in

my field

CWS give me chances to meet myclients

CWS give me chances to form my business parnerships

I like to work when Itake part in CWS

The space and designgive me inspiration

The space and design

hướng mới nhất

Sử dụng CWS cho thấyrằng, điều quan trọng làtôi được sử dụng nhữnghàng hóa tiêu dùng mớinhất

Tôi thích tương tác vàgiao lưu cùng với cácđồng nghiệp khác tạiCWS

Tôi có thể thu thập thông tin phản hồi cụ thể và học tập các kỹ thuật từ những người đồng nghiệp trong cùng lĩnh vực tại CWS

CWS tạo cơ hội cho tôigặp gỡ được các kháchhàng

CWS tạo cơ hội cho tôithiết lập các quan hệ đối tác trong kinh doanh

Tôi thích làm việc khitôi tham gia vào CWS

Không gian và thiết kếcủa CWS tạo cho tôi cảm hứng

Không gian và thiết kế

i (2010)

MoellerandWittkowsk

i (2010)

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