Should you share an office space or lease one of your own?
As reported by The Harvard Business Review, an increasing number of companies are utilizing coworking facilities as alternative work locations for their employees.
What was once primarily seen as a freelancer's domain, has quickly become a viable option for businesses of all sizes. Nearly 1.2 million people worldwide will have worked in a coworking space by the end of this year, according to the 2017 Coworking Forecast from the Global Coworking Survey.
It should come as no surprise that tech startups are also turning to coworking at increasing rates. But does that mean shared office space is right for every startup?
As blogger Thomas Szmidel pointed out on Apster, companies without established MVPs might be better off working from a home office. Calculating that a founder might spend $13,680 for a private desk over the course of one year, he argued the money could be better spent elsewhere.
Though Szmidel ignored the more affordable option of drop-in desks, we tend to agree—which is why we almost exclusively admit tech startups with MVPs at RocketSpace.
How should startups approach choosing between a shared workspace and a privately leased office?
What Are The Pros and Cons of Shared Office Space?
While there is no definitive answer for every startup, there are several factors to consider. For the remainder of this article, we'll outline the pros and cons of coworking. Let's start with the cons:
The Cons of Coworking
Imagine that today you must:
- Finish preparing a presentation for a potential investor.
- Make half a dozen sales calls.
- Discuss product road-map with your developers.
You have zero time to socialize and zero tolerance for distractions. Can you guarantee your fellow coworkers will be in the same frame of mind? Probably not. Everyone has lighter days and heavier days work-wise, and you can't tell the jovial group in the lounge to "keep it down," any more than you can throw the cell phone of your desk neighbor against the wall.
Of course, you could minimize noise distractions by renting a private office. But noise travels, and you may still encounter a fair number of distractions when forced to interact with others behind the door. Whether you're walking to the bathroom, preparing a snack in the kitchen, or receiving a knock from a fellow coworker you met last week, you're likely to run into people and conversations that seem more interesting than your to-do list.
The bottom line: Since coworking spaces feel less structured than traditional offices, drawing the line between work and socialization may sometimes prove challenging for yourself and team members.
2. Competitor Proximity
Once you get into the San Francisco tech startup community, you begin to realize something fairly quickly: It's not that big. If you're working on a viable MVP, chances are you have competitors at varying levels of scaling. That can be a good thing—it proves your idea is valuable.
However, that doesn't mean you want them looking over your shoulder as you make important decisions. In an open seating culture, there is always the possibility of speaking around those you'd rather not have hear you! Though we'd never suggest being paranoid, you might have to remind yourself and your team members to reserve certain conversations for closed conference rooms.
3. Closed Work Hours
Some coworking spaces are only open from 9-5. If you're a startup working 10+ hour days, that simply won't be a big enough time frame for working hours.
Not to mention, the structure of your days may vary. Maybe you spend the first half of your Monday attending a special event and don't get into the focused work until late afternoon. Or maybe you get a brilliant idea after dinner and want to work while it's still fresh. Regardless, running a startup is a round-the-clock job; make sure your workspace accommodates that.
4. Lack of Customization
One of the coolest aspects of having your own privately leased office is branding it. The walls, furniture, and even the lighting can all be customized to represent your unique preferences. When it comes to decor, shared workspaces vary significantly from chic to "Office Max."
Generally speaking, the more you're willing to pay, the more aesthetically pleasing environment you will get. With that said, just because a space is well-decorated doesn't mean it's really you. It can feel like living in a cool hotel, while you're waiting for your house to get built. You're always quietly reminded the place isn't really yours whenever you have ideas of things you'd like to change.
The PROS of Coworking
1. More Flexibility
The most obvious benefit of shared workspace is the flexibility it provides in three different areas:
Flexible Plan Options: With coworking, there are typically no year-long lease requirements. Hot seat, private desk, and private office memberships are all offered on a month-to-month basis.
Flexible Cost Options: With no upfront fees, no deposits, and a variety of option plans, coworking provides founders with a valuable opportunity for keeping costs down.
Flexible Space Options: Increase your team count by five people overnight? You can probably switch to a private office fairly quickly. Want to ditch your private desk for a hot seating pass since you're not around as often as you thought you would be? No problem.
Not sure how much cash your startup will have three months from now? The overall flexibility provided by coworking can provide extraordinary peace of mind, compared to the responsibility of a typical lease.
Building a startup can get kind of lonely sometimes. No matter the phase of growth, there are always new things to learn, do, and evaluate. Surrounding yourself with other entrepreneurs can help take the edge off when things get rough. Especially if those individuals are also working in the tech space.
The best shared office spaces host plenty of events for mingling, networking, and learning from fellow cohorts. Whether that be in the form of happy hours, educational workshops, or guest speaker events—situating yourself in a workspace where you can't help but meet other entrepreneurs could make the difference for your startup.
Not only is working by yourself often tiring, eventually you may be struck with downright loneliness. What better place to cultivate the entrepreneurial spirit than with other like-minded people?
3. Greater Access to Key Players
Another advantage to working in a tech coworking space? The enhanced access you'll have to key players who can help your business grow. Congregate in one space with a lot of other startups, and you'll tend to attract the attention of angel investors and VCs looking for new opportunities. Added bonus? You'll likely be located in a more happening area than you could afford to rent privately. That means you're more likely to hit up networking events after powering down for the day.
Furthermore, tech coworking facilities like RocketSpace also serve as incubators, and are often able to connect their members with corporate partnerships. Despite the hesitancy many startups have with taking corporate investments, the right pairing can actually be a match made in heaven. Many large corporations are looking for ways to tap into fresh markets with relevance. With your ideas, and their knowledge of scaling, the sky's the limit.
Raising a seed round, and need help preparing for your pitch? Get our guide: 12 Things You Should Know About Raising A Seed Round.
4. Amenities + Services
When you lease a private space, you don't always have the luxury of just showing up and getting to work. In most cases, furniture needs to be bought, the internet and phone connections need to be secured, and parking needs to be arranged for employees.
Not only is there a lot to set-up initially, there is also quite a bit to maintain (i.e. if wireless goes down one day, you or your limited staff are on the phone troubleshooting). The advantage to coworking? You don't have to do any of that stuff, or hire someone to do it for you.
Top coworking spaces offer things like:
- High Speed WiFi
- Free Printing and Scanning
- Complimentary Beverages
- Full Kitchenettes
- Mail Distribution
- Onsite Support
- Privacy Nooks
- Meeting Rooms
An added bonus? They'll take out the trash, keep the bathrooms tidy and pay the bills.
To Share or Not to Share?
We all remember the first time we moved out of our dorm rooms and into our own apartments. That feeling of elation that we'd finally be able to do things our way. It's no different for startups "graduating" into privately leased offices.
However, nothing is less freeing than wondering if you're going to have enough cash for payroll six months from now. Or troubleshooting building issues when you have capital to raise, deals to close, and marketing strategies to fine-tune. So, it's important to move forward with caution.
Most negative coworking experiences come from one of two things:
- Providers who don't invest in what matters most (privacy/productivity/networking).
- Poor compatibility with other members.
Find a coworking space specifically designed for tech startups, and you're less likely to encounter the kind of disruption you don't want! At RocketSpace, we believe tech startups can have the best of both worlds—a focused, high-quality workspace at an affordable price.
Which is why we exclusively admit tech startup founders with viable MVPs, and continually invest in the kind of amenities that matter most (i.e. high speed WiFi, privacy areas, and comfortable workspaces).
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