Start-Ups

Where to work as an early stage startup: Balancing the options

There are many places where startups can use to get work done in the early days. Here's how you can decide where to organize when you first launch.

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Fueled employees working in their New York office.
Image: Chellise Michael Photography

The first time I worked for a startup, we met at a local coffee shop during the week. The second time I worked for a startup, we worked out of a closet.

When it comes to finding a work space, startups have to get pretty creative. Resources tend to be scare in the early days and, often, where you work isn't very high on the priority list (as long as you're actually getting work done).

Whether you become a regular at the neighborhood café, you engage the community of a co-working space, or you get a deal on your own office lease, there's a lot to think about when you are looking to set up camp.

Here are some of the common workspace options for early-stage startups and what they provide for your company.

Working at home

There is a certain romantic quality to the idea of building your company from the comfort of your own home. After all, fulfilling the archetype of a technology company built in a garage often makes for a great origin story down the road.

Cobi Druxerman, co-founder and CMO at Taplytics, said his company started out in his co-founder's basement and living room.

"Working out of one of our co-founder's houses was great while it lasted," Druxerman said. "At the time we just needed a place we could call our own to hash out ideas and come together as a group. It definitely filled the bill as we had a completely private space and were able to grow as a group."

Working out of someone's home is usually your cheapest option. It gives you privacy and an environment that you're probably already comfortable in. However, Druxerman noted, it's not the most convenient option for all founders, you typically cannot work all hours of the day, and it is far from the most professional place to hold a meeting.

A garage, or living room, or basement will inevitably play into your startup's life at some point, even if it is just a place for your founders to discuss the first iteration of your product. The question is simply how long will you stay?

Co-working space

For the uninitiated, co-working refers to a shared working environment where small teams or individuals can pay to work alongside one another. Co-working spaces come in all shapes and sizes, but you can expect a large, open concept space that puts you side-by-side with other startups, or independent professionals.

The standard arrangement is for workers to pay a fixed monthly fee that gives them access to necessary utilities, bookable meeting rooms, and sometimes other perks like an espresso bar or game room.

The main allure of co-working is the community that is built up within a particular co-working space. Having a many different professionals, from a variety of backgrounds, working alongside one another often leads to some interesting cross-pollination.

ThinkCERCA, an education startup, got its start at Chicago's 1871 co-working space in the Merchandise Mart building. After moving into its own private office, co-founder and COO Abby Ross said she decided to move back to 1871, partly due to the scalable, "all-in" pricing model.

"It's good to know that our internet, cleaning, printing, and security is taken care of, so it's fairly turn-key," Ross said. "The headaches of finding a place, furnishing it, and worrying about several little bills coming in, is not how I want to be spending my time, so the more turnkey the better."

Co-working is an inexpensive option for startups who need a place to work, and it is a step up in terms of professionalism versus a garage or basement. Druxerman, however, said his team spent time in a co-working space and it often felt too distracting to be productive.

Shared space

Another option, usually taking place on a smaller scale than co-working, is sharing space with another company. This can materialize as a shared office space or a shared private residence, like a rented house.

John Milinovich, CEO of URX, said his company decided to work from a shared space from day one, as it provided them a cost-effective way to get enough room for their team and be close to their customers.

"We knew we wanted to be in the heart of SOMA, which is the center of the [San Francisco] startup scene, and also where all of our customers are," Milinovich said. "Any startup that wants to succeed has to be close to their customers - not necessarily physically, but it doesn't hurt especially for a B2B company."

Shared space will cost you more than a co-working space, but it does have its unique benefits. With a shared space, you are in control of who shares the space with you, so you can choose who to work alongside. Also, there is typically more room to grow.

In addition to sharing a private space with another company or team, you can pursue shared space through your investors. Sometimes, angel investors or venture capitalists have unused space that they will loan to you for a time. Or, you can pursue an accelerator or incubator program, some of which offer shared space.

"These programs offer a workspace, seed money and invaluable mentorship opportunities," said Bob Ogdon, founder and chairman of Swiftpage. "However, they generally require you to give up a percentage of the company in exchange. Furthermore, these programs can be difficult to get into so they may not even be a viable option."

Depending on how its acquired, a shared space can be very expensive and still bring some distractions.

Private office

Finally, we have the holy grail of startup workspaces — the private office. Almost every founder dreams of one day creating an environment that is built around the culture of his or her company.

While a private office is a great aspiration, it is not something that most companies need to consider at the outset of their journey. There are exceptions, though, such as legal and financial startups that need a dedicated, professional space to meet with clients.

For most new companies, a private office should be an end goal, not a starting point. If you are considering striking out on your own, there are some things you should keep in mind.

An independent office gives you more space and resources, but there are some drawbacks. Ogdon said that commercial office spaces usually look for at least three-year leases, meaning you would lose flexibility as company.

"To minimize the risk, look for an office space that will allow you to sign for a one-year lease or negotiate with the building manager to ensure that you can continue to expand in the building as your company grows," Ogdon said.

Wherever you end up, make sure you get there quickly. After all, you've got a world-changing business to build.

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About Conner Forrest

Conner Forrest is a Senior Editor for TechRepublic. He covers enterprise technology and is interested in the convergence of tech and culture.

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