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I’ve recently become a member of a new shared working space called Hub Westminster. It has been hugely beneficial for me, both from a contracting point of view and for running my new business.
Shared working spaces are fantastic for new startups. Here’s why:
1) Financial savings. Startups are invariably cash-poor in the beginning. After the usual seed-funding round one of the first expenses that a pre-revenue startup incurs is office space. However, upon reflection I do not see an immediate rationale for this decision. An office for a typical startup requires a number of recurring payments such rent, heating, lighting, water, internet connectivity, council tax and a myriad of other one off costs such as furniture, a printer/scanner (and toner!), fridge, cutlery etc. This is a large initial set of outflows to make for a fledgling firm, especially when there is little to no cashflow. A shared working space has already spent these costs and can gain better rates at volume than you could individually. These savings are invariably passed on to you keeping your outgoings leaner in the early stages.
2) Time savings. Another commodity that should be spent wisely is time. At the outset there are likely to be no employees and a handful of founders. At this stage, everybody does everything. Renting an office requires sorting out accounts for the costs outlined above. Landlords, energy suppliers, ISPs, local councils and water firms all require time to communicate with. Not only that but furniture must be constructed, drivers installed, walls painted and computers set up. Why waste all this time when you have so little in the early stages? A shared working space provides all of this, ready to go, on day #1.
3) Meeting users/testers/customers/clients. Being a member of a collaborative hub gives you immediate access to a large group of willing users who will be happy to test your site. You are getting out of the building while being in the building. I’ve not yet met anybody working in a hub environment who isn’t willing to take a look at a web service or hobby site I’ve just built, usually offering incredibly helpful feedback. Some of these people will convert to early customers or key influencers – who will be available most of the time very nearby. This saves a huge amount of time at the customer development stage.
4) Meeting co-founders/employees/freelancers Another benefit of being part of a community is the availability of people who are skilled in specific areas. At the Hub Westminster I’ve already met (and am working with) great coders, designers, testers and communicators. These people are the sort of folks who end up becoming co-founders. Not only will you get to know them over a reasonable time period, but you don’t have to suffer through ‘founder dating’ or other contrived forms of pre-funding collaboration while you get your startup off the ground.
5) Events. One attractive feature of a strong community are the frequent events. I myself have started the Hub Hack Night with James Arthur, which aims to bring together coders, designers and entrepreneurs to build technology in the social enterprise space. It is already proving beneficial to both of us, as we are now able to speak from a position of thought leadership, in essence, providing a means of indirect marketing for our projects.
The mechanics of most shared working spaces are simple. Monthly pay-as-you-go membership, volume discounts for multiple stakeholders of the same firm, fantastic internet connectivity, clean environments, centralised and shared resources as well as great people. There are few disadvantages.
Having an office with expensive chairs, beanbags and pool tables may make you feel warm, fuzzy and ‘startup-y’ inside, but in reality you’ve just wasted a month’s payroll or marketing budget on items you really don’t need at this stage. Next time you plan to start a business, give serious consideration to a shared working space – it will save you a lot in the early stages, right when you need it the most.