Considering an Office for Your Startup? Read This First.
CEO & Founder of Server Density.
Published on the 18th November, 2015.
The entire concept of the office is broken.
It’s not a theoretical problem. The way people approach the office has some very practical implications, like where they locate and how they work from it. Before making those decisions, it pays to ask:
What is the office? What is it used for?
The word itself used to refer to a building where all business tasks get done. Think last century tasks like order-processing, accounting, and document filing. Or more contemporary tasks like, you know, feeding the tech-disruption sausage factory with Angel and VC money.
But this doesn’t do justice to the people involved. Not anymore. We are not beasts of labour. Humans have individual needs and unique aspirations. Creativity, desire, meaning. You can’t cookie cut those. The office idea couldn’t be more personal.
So we want to propose a new meaning for the word. Something more expansive, akin to an open canvas for what humans are capable of.
The office as a financial resource pool
Dozens of employees come together and buy a $10,000 espresso machine. That espresso machine sits next to a laser printer, ergonomic chairs and other expensive tools that no employee could afford on their own.
There are undeniable efficiencies in the economics of the office. Those gains provide safety. A team can absorb more setbacks than an individual can.
So why stop there?
The obvious next step is to gather those offices around a central hub. The resulting ecosystem makes bigger industry investments possible. It’s about doing things no company could attempt on their own. We spoke to Leo Polovets of Susa Ventures who exemplified how crucial belonging to a hub is:
“Starting a company in or near a startup hub provides hard-to-surmount fundraising and hiring advantages. The stronger the hub, the stronger the advantages.”
Silicon Valley, San Francisco, New York, London, Berlin, Bangalore. Hubs are everywhere. Their economics are hard to argue against.
The quest for financial safety can become toxic
But it’s not all peaches and cream with the office and the hubs.
From fashion, to superstition and home decor, strange things tend to happen when populations grow. As teams expand, there comes a point when quiet voices are overwhelmed by loud office hooha. A point when nuance is lost. When the best idea no longer wins.
Groupthink. Conformity. Bullshit. Politics. Waste. Sound familiar?
The safety of belonging to a group can easily deter progress. Too much safety means you have things to lose. Willfully or otherwise, you avoid risky future tangents in favour of what works—and pays—today.
We’ve seen this before, haven’t we? Over the years, several large “collectives” realised that even multi-billion dollar war chests can’t protect against tiny cash-strapped entrants.
Armed with nothing more than an Internet connection and a copy of the Fountainhead, millennials went out on their own and dared the world to stop them. The dizzying speed that outfits like Uber, Slack and Snapchat went from MVP to stratospheric success caused a beeline of investment money. In their hopes (desperation) to capture the next unicorn, Angel investors became all too eager to dispense investment to more and more startups at much earlier stages of development. “Fair-weather investors and founders have flooded the “hot” tech scene,” wrote Tim Ferriss recently.
Indeed, a growing amount of founders’ attention is now spent positioning themselves within driving distance of VC money. Startups are gravitating to the hubs for all the wrong reasons it seems. What’s worse, their quest for financial safety happens at the expense of other more crucial decisions.
We asked David Heinemeier Hansson (creator of Ruby on Rails and partner at Basecamp) for his thoughts. We wanted to know why Basecamp (formerly 37signals) chose Chicago for their headquarters. Here is what he had to say:
“Where we started Basecamp didn’t matter as much as where we DIDN’T start Basecamp. Not being in Silicon Valley or San Francisco allowed us to escape the tractor beam of bullshit, it kept us free of VC entanglements, and it forced us to make ends meet with what we built.”
So what’s the alternative?
The lone genius and the hermit
Small companies are avatars of the people who found them. When we talk about startups we’re pretty much talking about individuals. Where do they function best? What lifestyle choices did they make?
Server Density started out as a remote team and stayed purely remote for a few years, before some of our folks decided to work from the same place.
“Remote working only works if you start remote. That way it becomes a core constituent of company culture,” says David, our founder. “I found you can add an office afterwards, but not the other way around. The culture and lack of ingrained usage of the tools just doesn’t work.”
We do a lot to make remote work: Hipchat, GitHub, Google Plus, weekly Hangouts, and regular company all-hands meetups. We treat our employees as adults and trust them to make their own choices about where and how they work. This should be obvious, i.e. if you don’t trust your people who are you going to trust?
“I decided to unroot myself from London due to the cost of living and the sheer lack of sun and light,” says Daniele, one of our designers who moved back to Italy. “I now visit London several times a year. It’s a lifestyle choice. I like living as a nomad and get the best of both worlds.”
There is a big difference between human resources and human potential. Releasing workers from office chains is all about the latter.
“The biggest benefit of remote working is the ability to set my own working schedule,” says Victor, one of our iOS engineers who works from a coworking space in Barcelona.
Picking an environment to work from has ramifications far beyond productivity. Working from home, for example, may be the only way to stay productive for many people, including several here at Server Density.
When you’re a depression or anxiety sufferer, offices can be overwhelming, terrifying even. Some people are able to participate and then block out what’s happening in the background. Others are less able to do so. It is this sensitivity to our surroundings that makes sustained work from busy and loud communal places unbearable. Working remotely allows us to shield from that.
Mind you, working remotely should not necessarily equate with working from home. Personally, when I take homebound work too far, it becomes a safety seeking ritual (a coping strategy, in OCD parlance). The only way to deal with that, is to get out there and face my fears. Psychologists call it habituation. It involves embracing a certain amount of discomfort so you can move forward. After working from my home in Greece, it occurred to me I needed to be around more people. So I relocated to the UK and our office in London.
Another problem with working solo—both as an individual and as a startup—is disconnection. Working next to people with a shared vision provides a sense of purpose you just don’t get on your own. To cater for that, we hold regular team meetups and company get togethers. For those who work in the office we ask everyone to have lunch at the same time, in the kitchen, away from the computer.
The potential for spontaneous encounters and what James Altucher calls “Idea Sex” are exponentially higher once you throw people together in one place. You can’t do much of that from your bedroom. There is something to be said about being open and in-tune with your surroundings. Is the real world ready for what you have in mind? Have you created demand for your product?
Our London office
Work under the neon lights of any co-working space in Old Street of East London and you could easily be forgiven for thinking you’re in San Francisco.
The Silicon Roundabout of London—known as Tech City—has been a significant focus for the Tory government since 2011. We believe Britain is one of the best places to start a company. We saw great benefits in setting up our company in the UK with an office in London. But we didn’t want to immerse ourselves in the caffeinated hoopla of East London.
Since starting in 2009, we managed to grow from organic customer revenue. People actually pay us for what we make. It was off the back of real revenue, real customers, and a real plan for the next few years, that we attracted some funding in the past, to help us go a little faster.
But funding has never been our preoccupation. As creators of things, we value the peace and quiet afforded by Chiswick, a residential area in West London. And while we’re far from the reality distortion of the Silicon Roundabout, our travel connections to the City couldn’t be better.
In closing: stay open
If anything is evident when discussing work location, it’s that there are no right or wrong answers. This applies to every aspect of running a young business: It’s not so much about what you do, as much as what you don’t do.
In other words, the best way to be smart is to not be stupid. Don’t ignore business fundamentals. Don’t get sucked in the hype. Know the signs of a fad when you see them.
There is an unprecedented level of noise to signal ratio right now, which gets worse the closer you get to the heart of Silicon Valley or the Silicon Roundabout. Don’t shun the material efficiencies and collaboration wins of working next to others. But don’t get lost in them either.
Just because someone sets up office in SF doesn’t mean they will fare better than a distributed team without an office. Equally, just because you managed to resist the siren call of the “startup hub” doesn’t make you any more enlightened or clued in than everyone else. Keep your critical thinking hat on. Avoid judgment and stay open.
Whatever place you call office, stay focused on what matters. Your magnum opus.