We are excited to announce our new Boston Headquarters located at the WeWork facility, 200 Portland Street, Boston, MA. As we have been busy hiring, it became obvious we needed to get our team together in one location in the city close to public transportation. Having started down a path to sublease space, we were surprised to land here, but as our analysis showed, this type office arrangement makes sense.
How did we land here? It all started with this Brita water pitcher.
This is the water our old facility used to put out for people. Not only was it warm, but every time you used it, you asked yourself, why am I here? (This might not have been the main cause, but the place definitely didn't have the energy we needed).
So in our first tour of WeWork, we immediately noticed the fruit water, plus the cold beer, the roof deck, the energy of the place, the access to common space, and we bumped into other team members from prior startups working in the same building.
So the vibe was right, but did the economics make sense?
To answer this, we enlisted our broker, T3 Advisors ( highly recommend them and Colin Whitney ). Colin lined up some visits to various subleases downtown in addition to tours of other co-working facilities. The challenge with subleases was finding the ones that were the right size. Having to predict our space needs in Boston over the next 12 - 24 months is pretty difficult. While we expect to hire most of our team in San Francisco and Boston, you just never know. Given initial interest during our Alpha, we are probably underestimating our needs. But then again, what if we end up with much of our hiring in San Francisco? Or Boston?
The most promising sublease, for example, for around the cost of WeWork, was a dive office space near the Public Garden with a cool old fashioned elevator complete with licensed elevator operator. She only worked 9 - 5, so we had to take the stairs after that. The space met our needs from a location standpoint and had sufficient space to grow. However, adding in some minor buildout and other operating costs, the space was actually more expensive on a cost/employee standpoint, while cheaper on a cost/square ft. In addition, someone had to be office manager and deal with the issues around deliveries, IT systems, cleaning, shopping etc. We could certainly grow into the facility lowering our costs, and someone could be a part time office manager, but staying focused on the next six months, the space was more than we needed. It also lacked some of the vibe that WeWork provided.
We also looked at a more classic, Brita Filter like shared office place in the neighborhood. During the tour, they really emphasized the copy machine and printer. Then I noticed all the closed doors and realized I was in a shared office space filled with lawyers and accountants. Hmm, not the vibe for a tech startup remaking the world of Healthcare IT Management.
Ultimately WeWork met our needs and was in an ideal spot close to North Station. Rapid7 is around the corner from us as is TripAdvisor and we already have good inbound job interest from their employees who want to potentially join a smaller company.
So ultimately the “what we need now” vs. “what we need in the future” won out. At some point, as the company grows, the cost/employee for subleased or leased space has to be better than WeWork. But, I was surprised to see so many companies with 20+ employees at our facility. So either they are wasting money, or they have made the calculation that leasing space just isn’t worth it. The economics of WeWork on a cost/employee basis will ultimately drive our decision making. I expect us to evaluate options every six months as we grow and as the office space market changes in Boston.
Here are my tips if you are evaluating a WeWork space:
The WeWork inventory seems a bit fluid as to what offices are actually open. Since they are so flexible with their tenants, they don’t appear to always know the exact space that will be free and when it will be free. If you can be flexible, that helps.
Not all the spaces inside a WeWork are equal. One 16 person office can be different from another in terms of actual size, office partitions, layout, and wall space. Understanding the exact office you are getting is important. If you can't get the exact space, move in, and get on a wait list for the spot you want.
Use a broker to help you navigate all options for space. It costs you nothing.
The premium you pay for having a window office is pretty minor. Get a window office.
While an office might fit 8 people, that is actually 8, 48” desks next to each other. It is pretty tight. Some offices will have walls which are great for things like white boards. Expect a tight fit.
If you are sick, stay home. The space is too tight and you will get everyone sick.
Not all the locations are the same either. Our roof top deck is unique.
Make sure you understand all the pricing. WeWork is somewhat opaque on this. I don’t think they are trying to be shady, but this is more a symptom of rapid growth. We knew most of these charges below before we moved in. Make sure you know all of them:
Incremental IT charges to support custom SSID, VLAN, and wired space
Set up charges for anything you do
# of credits you receive each month for conference rooms and the cost for those conference rooms
Cost for incremental “seats”. WeWork allows you have more members than the seats you have purchased from them up to a limit. Make sure you understand the incremental costs, if any, for these members. For a company with employees who show up infrequently, this is a way to have space for them above your office space count. Of course if your office is full that day, they will need to sit in the common space.
Much is negotiable depending on the vacancy of the space and WeWork's needs. Another startup I know just took space in a new facility at 50% off the list price for a year because the space was new and they wanted to move a larger client into their old space
We are keeping our eye on WeWork’s IPO and financial woes like I am sure most tenants are. Our downside is pretty small if something goes south. Walk in, take out our fridge, peal off the white board from the wall, pick up monitors and leave.
Come visit us at 200 Portland Street for some beer, fruit water, cold brew and some fresh air on our roof deck. And we are hiring of course!