Coworking startup Loosecubes is shutting down on Friday, a pretty surprising fact given that it raised $7.8 million this year from big name investors that included AOL founder Steve Case at Revolution. The looming question is why the sudden turn of events.
Loosecubes went through a big rethinking of its business model this summer and simultaneously moved toward an invite-only format as well as a free model. The idea was to leverage high value social networks like Facebook and LinkedIn to connect office hosts with the types of workers they wanted in a given space (so architecture firms might want to offer up space to graphic designers or engineers).
The long term goal was to figure out a way to sell subscriptions to corporations, so they could then pay to offer the service to their employees who would want to work remotely. Loosecubes was going to have to spend money to put desks into the network, particularly if offices weren’t up for opening up their space for free.
It was a bold idea that Loosecubes was after, abandoning a strict per transaction model in favor of trying to build a social network of office sharers and then monetizing that network. For the time being, it doesn’t appear to have worked.
For more on the share economy, see “Opportunities and risks in the share economy.“