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Should I invest in office space for my early stage of startup?
Hi Makers,
I am kind of stuck on how much investment should I make on office space. And curious about is this something every startup struggle with or only a few?
Would love to hear how did you tackle this, how important was a better working space for your startups and how much investment did you make!
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@rrhoover @alphahunter If you're building software, having an office doesn't really matter. What's important is what you're working on and who you're working with. I'd save $$$ and not get an office, invest the saved money into good hires.
@alphahunter what do you mean by "better working space"? I would first decide if you're building a centralized or distributed team as that will influence the next series of decisions. The answer is always contextual so hard to provide a blanket prescription. :)
@rrhoover @alphahunter Assuming its software, it's best that you don't invest in an office right now. It sure has its benefits, but you'll end up spending a significant amount of money into office space. Earlier this year, my cofounder and I took 2 seats in a cowork. We did it because we wanted fewer distractions, but I'm regretting the decision now as its an unnecessary expense and shortens our runway every month.
@rrhoover @alphahunter @syswarren Agreed. We're early stage software and have not invested in office space. You could, instead, use the @workfrom app to find places to workout of or meet your team in your local area. - it tells you things like noise level, quality of wifi (and login information), and number of outlets of things like Coffee shops, coworking spaces, etc around town for remote workers.
Definitive no. Use your capital to scale your business. Then you can have any kind of office you want.
Only if the startup is making enough money to cover rent and expenses. I don't think it makes sense to worry about office space until the solution is proven in the marketplace.
@alphahunter I think it deff depends on the startup and its people! Sometimes it's hard to get an office setting but others it's hard to get a good flow going from home.
@alphahunter It depends on what you're working on. If its an online startup, then you should probably wait until you start getting some promising ROI. However, In some situations it may become imperative to get a good working environment if it will help boost the confidence of the people working on the startup. Sometimes the level of decency of your workspace can also directly or indirectly impact on your level of commitment into the project. But, if you choose to set up an office early in your startup, my advice would just be keep to not spend too much yet on that. There will always be an opportunity to scale up later.
No. You need to focus on giving your project the best chance to succeed. One way to obliterate this goal is to mismanage your available capital or simply run out of cash before you can get it off the ground properly. The broad and dynamic overhead on office space could gobble up your capital before you finish your next cup of coffee. Right now you need to watch your expenses like a hawk and duly weigh every pending expenditure. Better to hire top notch remote workers and provide the technology to facilitate great communication and collaboration with the team. If you need a nice business address, then you can get a virtual office in a fancy location and use that address for pennies per month, relative to the having actual office space.
Honestly! I think you have to focus only on your product trying to avoid as much as you can all the passive expenses (and office space is a passive expense). If your team becomes big enough and you have to work as a close team, then think about it. In any case try to spend the minimum on your office space
I am a huge proponent for starting in a coworking space... Get a private office if you can but chat with your peers, learn, and help where you can. We have gotten so many opportunities through connections forged around the beer (and soda) fridge.
@c_elliott_ +1. That's exactly the reason I'll soon switch to a coworking space. Friends of mine stayed as long as possible in their ex-coworking space because they loved the community and possibilities they got out of it.
What do you need office space for?
We have space in Old Street for various reasons - Been in the area for around 20 years, have no real space at home and kids running all over the place.
I can technically work anywhere but prefer the space and 'going to work' as it were plus it's great for meeting clients.
It gives me a base to go and concentrate in.
Oh, and edit to say, no need to buy into a 1 year contract with someone like wework, just a desk in shared space would be perfect for a start-up.
Hi Mahesh,
I have a slightly biased view as I am the founder of a startup which helps businesses and startups build out their office space in a cost effective way with the best products and services on the market. You can check us out here - www.uneebo.com
In my opinion it definitely depends on your need as a team, how budget restricted you are and how quickly you are growing and expect to grow in the next 6-12 months. I have interviewed several startups that bounced from space to space several times in their first couple of years because they just hadn't thought that far ahead (like you are doing).
It can end up costing a lot more money in moving costs, lost productivity through all the headaches of the space not being suitable anymore and pretty disruptive in distracting you on the decision making you need to make as a founder/team.
Would love to setup some time for a call to discuss your thought process as it would be great lessons learnt for me. Also happy to offer a special Product Hunt discount if you decide to pursue a new space.
Thanks!
Rich
We work from home and we are happy about it. Everybody is working on their stuff. However, it depends on a team.
Hi, depends on your persona. Can you work from home? do you need people around you? do you need to be around people 5 days a week? are you a solo founder? do you have a team that you can communicate on-line? what sort of $$$ is required to rent out? can this go to growth of your company? are you just wanting an office to tell your friends and family( a prestige thing?) can you buy a package of say 10 visits to a co-working space? How many hours will you loose in travel time. I have worked in an eco system of startups and home, currently working from home is my preference. If all else fails, trial a office space for 30 days and see how you go. Its what is right for you, but just because you may choose home, doesn't mean that you cannot change your mind as your company evolves.
Our team works remotely as it helps keeps cost down and the developers seem to be more productive with out the interruptions a open plan office can cause
It depends on the stage of your startup. Almost, every startup should have people who are geographically reachable and can meet at frequent intervals without excess burn
In the very-early-stages like problem discovery, customer discovery, MVP, etc. Assuming you are bootstrapping or only raised from friends and family
- If you have a team and one of you happens to have an empty space then use it. Otherwise rent a warehouse/flat
- If you are solo then use an empty space where there are least distractions. But move in to a co-working or rent a small warehouse/flat where you can assemble people to join your team.
For early-stage and later when you are discovering product-market fit and market-product fit.
- Get a working space
If you have a physical product then have a dedicated workspace from the start.
At any given time having a dedicated work area helps the team. Recently, I came across a startup which has a remote team. Majority of team members live in a city where co-working spaces are available. Instead of moving everyone to current office they have rented seats/cabins at co-working spaces in each of the cities.
@alphahunter Depends whether you're a distributed team or not. But going for a co-working space before getting your own office space is a better idea.
@alphahunter We run a remote, fully distributed team as we offer services and find this to be perfect for us although you will need to spend time finding all the right technologies to suit your team so everyone is empowered and happy with their setup.
This is difficult to respond because we do not know what kind of business it is, what your ROI is, how long you have been on the business, what stage your business at...etc
But unless your startup have started to generate very good ROI, I would not spend money on rent. Remember a lot of big Cos. started from a basement/garage/home and they were very conscious of spending their money until they generate RIO.Amazon, Zappos...etc. As a startup you want to cut/minimize initial costs as much as you can so that you will spend your money to scale up your business. Also I would rather spend the money on Marketing and Ad. I'd put the rent budget on a side for scaling my business...
I'd say it depends. First do you have funds to cover it? If not, go go garage!
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