tech-company, startup-costsWith all of the incubators/coworking spaces opening up across the US, there are 3 basic types of office space for tech companies to move into and I would like to know if anyone can recommend the best for a new startup that will be looking to hire the first 3-4 employees in the next year.
Open coworking space - Cheapest option where all you get is a desk for yourself. I worry about distractions and am not likely to choose this, but are these environments good for networking and collaboration? I’ve never been in one before and could potentially consider it as a first step before I hire anyone as an intermediary space when it’s just myself as the sole employee.
Small private office in an coworking office like WeWork - They offer services to help with HR, tax, payroll, printing, web connections, etc and sounds like a great resource. Any drawbacks? Not too expensive either given the services they help with but not cheap.
Separate office in a commercial building - what used to be the only option. Can get good deals and choose any location, but sectioned off and may be awkward when trying to setup meetings or the first hire since there will only be 1 person in the office to start. While monthly costs can be lower than option 2, There will be a lot of startup costs for office furniture and time spent sorting out all of the vendors (internet, payroll, water cooler).
FYI - I’m located in NY and there is a great community here. I’ve done nearly all of my work remotely and do not meet people face to face much, but that will need to change soon and opening an office is a big step. Not sure if I will even get to that but it helps to plan.
I think there are pros and cons to each, and it really just depends on what you need.
From the sound of things, I’d probably go with the last one myself. I’m a tad old-fashioned when it comes to things like that, but here’s my take on each.
Open coworking space
As soon as you said “tech startup,” I knew I would say no to this. Your concerns about distractions are valid. I know this is the new hip way to work, and I respect that, but studies have shown in the past that a highly skilled worker (like a developer) needs something like an hour–someone can correct me if I got that figure wrong, but it’s around that, if not more–to regain productivity after the slightest distraction. “Everyone will be working!” you might say, but here are two a little secrets of the trade:
So I would personally avoid anything like that. Again, I’m sure there are people who will disagree, and I definitely respect the collaborative environment that some startups have by doing that. I just can’t personally imagine working in a space like that.
Co-working Office
You get what you pay for is great, when you need what you pay for. Do you need an HR team? Do you need that environment? You might, and if you do then that’s great. But it doesn’t sound to me like you do. And I’d also worry about any aforementioned distractions.
Separate Office
As I said, this is what I’d do. And in fact this is what I do do. I have a private office. I don’t think it’s awkward at all. It’s not like you’re otherwise lying about the size of your company to anyone you meet with, so you might as well own it, as they say. If you can have a separate office and your business’s name on the building (even if that just means a little directory sign), then you can exude the confidence that any entrepreneur needs, then I don’t think anyone will think less of you for not sharing an office with other people. In fact, they might even think more of you.
As you say, sure, there are upfront costs, like office furniture, but in my experience, you can generally get very high quality used office furniture for pretty cheap, because other business fail or expand. I got most of my furniture from a business in my business park that was moving to a bigger building and buying new stuff, and it’s all super nice. Sure, it takes some luck. But there are also used stores that undoubtedly have good deals. Remember, you can worry about getting the best later.
And as for time working out vendors, I’d call that just the cost of getting up and running in many cases. Take a couple days, take your favourite search engine and type in “New York water cooler” or something of the like, and I’m sure that’ll handle that. Or even just use what other people use. I know it takes time to meet with these people, but it’s probably not going to be such a big chunk of your life that it’s worth paying more every month for the previous option.
Ask yourself what problem you are looking to solve by having an office.
For each of the types of office you have available, you can then look at how well each solves that problem, what problems each creates for you, and what the impact of getting it wrong would be. Be detailed.
The only problem right now is that you have no experience of open co-working. So invest 30 minutes finding somewhere convenient with minimal cost and commitment, sign up and start working from it. I mean that very literally: take the work patterns you have and apply them in a co-working space. By the time you have to make your decision, you will at least discover if your fear of distraction is well-founded.
It doesn’t sound like you have definite need for office space. But it would be nice to be able put up a professional image for meetings and such.
If that’s the case, I’d go with someplace that would give you an address with on-demand office and meeting room space.
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