Located in Downtown Palo Alto, HanaHaus is a creative space designed to give freelancers, entrepreneurs and investors a place to work and collaborate. Built on top of the historic Varsity Theatre, the co-working hub was launched by software company SAP in 2015 to promote innovative thinking among creators.

HanaHaus is part of a growing, global trend. Co-working spaces — facilities that serve as a space for group work — have sprouted in startup cities across the world, such as Crew Collective in Canada and The Factory HQ in Berlin.

Statista predicted that there will be 18,900 co-working spaces worldwide by the end of the year, forecasting that the co-working office space market will triple by 2022, and the number of members will increase to over 5 million.

Conception

Named after the business ethos that drives SAP’s database server HANA, HanaHaus is the brainchild of Dr. Hasso Plattner, chairman and co-founder of SAP.

According to Hanahaus’ website, the co-working space draws from SAP’s mission “to innovate, foster equality, spread opportunity across borders and cultures and help organizations run at their best.”

Head of Technology and Architecture at SAP, Abdul Razack, was also involved in the conception and design of HanaHaus.

“There were five major [HANA] development centers,” Razack said. “There was one in Korea, one in China, one in India, one in Germany and one in Palo Alto. We wanted to take that concept and expand that across the company and across the industry.”

Model

HanaHaus charges $3 an hour for open-seating in the lounge area, group seating from $10 to $50 an hour and private seating from $25 to $75 an hour.

A growing number of co-working spaces like HanaHaus have introduced short-term rates in addition to their monthly offers, so both tech workers and students seeking an alternative to their university library can utilize the working space.

The colorful space — complete with sprawling lounge areas, conference rooms and unlimited access to coffee from the neighboring cafe — has become a popular alternative to renting out an office in the Bay Area, where the real estate has become prohibitively expensive.

In Downtown Palo Alto and Menlo Park, rental prices can reach upwards of $120 per square foot a month.

High-end office spaces in San Francisco’s neighboring Financial District are going for more than $75 per square foot.

When asked to compare HanaHaus to other co-working spaces, such as WeWork, HanaHaus Business Development Manager Lara Redmer said that while WeWork attracts companies, HanaHaus seeks to accommodate individuals as well as teams.

“[WeWork] makes more sense if you have a fixed team that needs to get together every day from morning till afternoon,” she said.

WeWork rents out affordable workspaces in long-term contracts and then sells them out, making HanaHaus’ hybrid workspace/coffee shop more appealing for short-term stays. The company offers spaces in 20 locations in the U.S. and across 28 different countries.

Experience

Part of HanaHaus’ goal, Redmer said, is “engineered serendipity” by fostering unplanned encounters between professionals.

“If you bring the right people together, good things can happen,” she said.

HanaHaus customer and Stanford alumnus Michael Hanson ’96 M.S. ’97 said that the pricing model is reasonable for a focused work session, but not for everyday.

“It’s a good place for people to come if they [need] a change of scene or a focus space.”

He thinks the conference rooms also offer a much better alternative to coffee shops for private meetings.

In addition, he argued that HanaHaus caters directly to Palo Alto’s technology-driven culture.

“There’s not that many cities where this kind of innovation is happening,” Hanson said. “What you need is a combination of people who want to work this way and business opportunities for them to work this way.”

HanaHaus is only one of a few co-working spaces in Palo Alto, such as Enerspace and Sandbox Suits, but its model is being used as a template in other locations.

SAP is set to open up its second HanaHaus co-working space in Newport Beach, California early next year.

Envisioning HanaHaus locations dotted around the world, Razack believes such spaces will revolutionize work culture and inspire creative ecosystems across the world.

“The world is a global village, technology has made it equal, and no one region has an advantage or a disadvantage other than timezone,” Razack said.

Contact Vincent Xia at vxia ‘at’ stanford.edu.