Work from home. If you work with a team use Talker and Teambox.
Don't pay yourself as much as you normally would until you reach profitability. If you work from home this shouldn't be a problem. You may end up saving lots of money this way.
In my experience, teams who work from home for an extended period of time can start to lose focus and productivity. This means it takes longer to build your product, and you end up paying a lot more in salary.
By having an office (usually only a few hundred, to a few thousand dollars a month in expense), you are able to save a lot in salary (tens or hundreds of thousands of dollars a month), because your team will be more focused and productive.