After choosing business partners, deciding on where your company opens for business could be the next biggest factor in its success. That’s because the mantra, “location, location, location,” carries just as much relevance for a tech startup as it does for a neighborhood coffee shop.
This is part one of a three-part series on startup workspaces.
After choosing business partners, deciding on where your company opens for business could be the next biggest factor in its success. That’s because the mantra, “location, location, location,” carries just as much relevance for a tech startup as it does for a neighborhood coffee shop. Fortunately, the last decade has seen an explosion of workspace environments geared specifically for startups with access to state-of-the-art technology, a network of mentors and vendors and the ability to staff up quickly. Here’s a primer on the different types of startup workspaces.
These range from shared desks to formal offices. They usually attract freelancers and sole proprietors looking to move out of their homes and into an office environment, or small companies looking to save money as they build their business to a point where leasing their own space is economically viable. At Philadelphia-based Benjamin’s Desk, CEO Michael Maher has attracted a diverse community of businesses in all stages of their growth.
Timeline: Month-to-month leases (many offer daily rates)
Networking/education events: Usually
Startup stage: One to roughly five employees
Industry focused: Not always, although coworking spaces seem to self-segregate into industry clusters (design/creative, technology, nonprofits, etc.)
These intense months-long programs are usually connected to venture capital firms with the mentors and advisory firepower to help shape a brilliant idea into a marketable one. Startups face stiff competition to get in but, once they do, they usually enjoy free office space and support. The programs end with a demo day, where the startups pitch their updated product and business model to a panel of investors to earn a shot at funding their next step. That’s what Philadelphia-based SnipSnap did in 2012, using their accelerator experience to develop and then launch their mobile coupon app.
Timeline: Anywhere from two to four months
Networking/education events: Yes
Startup stage: Six months to a year
Industry focus: Yes. Accelerators exist for consumer technology, bio-tech, healthcare, and more.
If accelerators help startups focus on developing their products, incubators are where startups go to focus on building out and marketing their products. It should be a “landing zone that already understands you,” says Donna Harris, cofounder of 1776, a Washington, DC-based incubator. Incubators offer startups cut-rate office space with the flexibility to grow their staff, access to specialized equipment (think research lab for bio-tech or 3D printer for manufacturing), and mentoring from industry pros. Incubators are often attached to universities and economic development organizations but can also be attached to for-profit entities like large company R&D firms.
Timeline: Up to three years
Networking/education events: Yes
Startup stage: First three years after launch.
Industry focus: Yes, especially for incubators attached to universities or large companies.
Part two: The Technology Advantage