David Cummings on Startups

Next Generation Flex Office Space for Startups

Written by

David Cummings

in

,

Continuing with yesterday’s post on how much money to spend per employe per month on office space, there’s a gap in the market for flexible office space that’s desirable for startups and creative companies. Firms like Regus provide a massive network of 1,200+ locations with executive offices and conference rooms for rent, but they aren’t desirable for startups due to ambiance (very traditional, plain offices), seating density (typically one desk rooms are $1,000/month), and the types of businesses already in there (mostly remote sales offices and traditional businesses).

The best example of this type of next generation flex office space for startups and creative firms is the Cambridge Innovation Center on the edge of the MIT campus (see the TechCrunch write up). Here are some quick facts about the Cambridge Innovation Center:

  • Costs roughly $530 – $1,000/employee/month for the full service option which includes office space (shared space at the lower price and private space at the higher price), conference rooms, furniture, internet access, organic snacks, drinks, showers, etc
  • Co-working space with furniture and internet access but no postal address and fewer amenities is $250/month
  • Parking is $225/month
  • No contracts — everything is month-to-month
  • Over 450 companies and 160,000 square feet of space
  • 13 years in business and over $1.7 billion raised by companies in the facility

Atlanta, and other up-and-coming tech hubs, would do well to emulate this type of facility. Of course, Boston is significantly more expensive compared to other regions in the country but there’s no reason it couldn’t be done in the $350 – $550/employee/month range for shared offices through to private offices with everyone having communal kitchens, conference rooms, and game rooms. For companies with 1 – 25 employees, the traditional approach to office space rarely makes senes unless the space is a great deal, and even then there isn’t the same community feel as being in a tech/creative centric facility.

What else? What are your thoughts on next generation flex office space for startups?

Comments

4 responses to “Next Generation Flex Office Space for Startups”

  1. Dave Avatar
    Dave

    This facility is sold out and tough to get what oh want. We have found Techspace Union Square to be a much better model and so has Pandora, Mashable, LinkedIn, Marin, Yammer, and others! MIT space leaves a lot up be desired.

    Reply
    1. Vinny Fiano Avatar
      Vinny Fiano

      Your company has offices in Atlanta, Boston, and NYC, so is “this facility” ATDC, CIC or something in NYC? How does Techspace differ from CIC? And, none of Mashable/LinkedIn/Yammer are 1 ~ 15 person startups.

      Reply
      1. Dave Avatar
        Dave

        You can check techspace.com. We have been in more than 10 spaces and the companies I mentioned have all been resident tenants at one point. It is key that there is ample room to grow as you go from 2 people to a 20+ person operation. This is something the atdc doesn’t do a great job accommodating. They could really use 2-3 newly renovated floors.

  2. Eric Langley Avatar
    Eric Langley

    Dave (W) may have been referring to the Cambridge Innovation Center as “This facility…”

    Having just started to co-work out of the Hypepotamus space the community feel is something that is important, both on an emotional and a practical level. My co-workers are far flung but I still want the feel of working in close proximity with other entrepreneurs. Hypepotamus provides that.

    The challenge with expanding the size of a team within a facility is available space. There has to be some space that is not being used in order to offer the ability to expand. What real estate owner wants empty space sitting around? This would have to be priced in.

    If the companies in the space grew at predictable rates the developer could be constantly expanding the footprint of the space and keep ahead of the growth. This might not be that easy.
    Eventually the building will run out of space. Does opening another facility make sense?

    Real estate is like a factory with fixed capacity so it needs to be optimized. How many square feet per person is usually the metric that is being optimized. For startup space with variable usage peak demand day might be another metric.

    Peak demand day is similar to an air conditioning system that is designed to cool a building on the hottest day of the year full of BTU producing people. What days of the week, month, year are the busiest? We need enough space to accommodate x% of the users on that day.

    Reply

Leave a reply to Dave Cancel reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

More posts