When Melissa Thompson began developing her online counseling business, TalkSession, in February, she worked out of a Manhattan apartment. “After three days, we referred to it as purgatory,” she says. “The lines became so blurred between living and working, productivity was affected. I woke up on weekends and my walls were all covered in Post-it Notes. It’s not good because you’re already thinking about your business all the time and you need a break.”
By May 2012, Thompson, a former Goldman Sachs (GS) trader, was on a quest for a free place to work outside the apartment. Her trek took her from hotel lobbies to borrowed cubicles. TalkSessions is currently running private beta testing from glassed-in offices on Park Avenue, Thompson says, courtesy of an investor referral. “We’re really lucky right now, because we are bartering technology services for space at an investment firm where half the floor is empty. This only came about because we were able to wrangle some connections,” she says.
If your New Year’s resolution is finally to move your business out of the spare bedroom, but you’re leery about committing to a long-term commercial lease, here are some options to explore, beyond the local Starbucks (SBUX):
• Libraries and hotel lobbies. Aaron Hodari and Lincoln Cavalieri, co-founders of Glocal, a news video platform launched last month, started out of a midtown Manhattan apartment two years ago and held meetings and work sessions outside it. “One [location] in particular would be the Ace Hotel on West 29th Street,” Hodari writes in an e-mail. “The large, library-style lobby was a perfect area to work … over a great cup of coffee.”
Most public libraries offer tables, Wi-Fi, and computers—and scads of entrepreneurs around the country take advantage of them.
• Shared space. Recession-era downsizing left many companies with a great deal of empty square feet on their long-term leases. Recouping some of that wasted expense can be attractive to existing tenants, even if you pay below-market rent and can’t commit to a formal sublease. Ask friends, investors, and colleagues if they know of available space, or barter with clients for a desk in their office. Be prepared to follow house rules and be displaced when their business picks up.
Lilli Cloud ran branding consultancy Bluefeet out of her Los Angeles home office for its first eight years. In 2009, two graphic designers she worked with occasionally mentioned they might move to a home office due to the recession. Cloud was looking for a change, so she took an office in their suite, enabling them to stay put but paying less than she would for a standalone office. The financial and creative benefits exceeded her expectations: Her income doubled from 2010 to 2011 and again from 2011 to 2012.
She attributes some of the increase to an improving economy but pins part of the uptick on her new suitemates. “I went from working with them once in a while to working with them 50 percent of the time. They have introduced me to their biggest clients, and I’ve brought them a ton of work, too. We feel like a team, because we are in the same office every day, and if one of us has an idea, we can walk down the hall and say, ‘What do you think?’” Cloud says.
• Co-working facilities. Vic Ahmed, a Denver serial entrepreneur, says he’s been a founder, investor, or board member of more than a dozen companies that started at Starbucks. “I’m not even a coffee drinker,” he confesses. Today Ahmed is chief executive of Innovation Pavilion, an 80,000-square-foot shared work center outside of Denver that houses 80 companies that pay $200 per person per month. He has plans to open 10 similar locations around the country over the next two years, he says.
Some of these for-profit operations offer entrepreneurship support, such as mentoring programs or networking events. Some are open to any kind of business; others are geared toward specific industries, such as biotechnology companies. “The advantage is that everybody here wants to do a high-growth startup. You meet valuable people and hang out. Sitting at home, you’re not going to meet people at random,” Ahmed says.
The wiki page contains an international directory of co-working locations and heaps of information about the co-working movement.
• Incubators and accelerators. City and regional economic development departments and universities across the country operate low-cost workspaces geared toward startups that have worn out their welcome at Starbucks. Some offer basic office amenities, while others have full-scale accelerator programs, with training, networking events, and mentoring on site. Some accelerators are operated by investors who take an equity stake in the companies they bring in. All emphasize below-market, month-to-month membership or short-term leases and tout the benefits of creative collaboration.
Named for the Great Chicago Fire (not the tragedy, but the collaborative effort to rebuild the city in its aftermath), 1871 is a 50,000-square-foot nonprofit endeavor that has attracted more than 200 startups since it opened in May 2012, according to Melissa Lederer, the organization’s chief marketing officer. Membership ranges from $175 to $300 a month per person. “All of the different pieces of Chicago’s startup ecosystem are part of 1871, from startups to venture capital firms, to top universities and digital leaders from around the community who give of their time to mentor and teach,” Lederer writes in an e-mail. “We hope that this environment fosters opportunity for the startups that ultimately accelerates their business trajectory.”