Ask HN: When should a startup lease office space? | Hacker News Reader

Ask HN: When should a startup lease office space?

6 pointsbyoung210 comments

The recommended setup for YC startups is a couple of founders in a cheap apartment, but at what point do you go out and find an office? At a certain funding milestone? After hiring X employees? I can see wanting to keep costs low as long as possible, but sometimes having an office can make you look more legit.

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As late as possible. When you can no longer hold out. Try to be as scrappy as possible as competitive as possible and as economical as your situation allows.

When leasing office space improves the company's chance of success. That means it has to be a net win in terms of distractions. Finding and renting space costs time and money. So the act of doing so has to mitigate other distractions which are consuming a more important chunk of resources.

Playing business leader is definitely not a good reason.

Don't do anything just because it makes you look more legit.

But after 4-5 employees it becomes cheaper to rent an office than use coworking space.

I also think that once you start hiring non founders it's tough to ask them to work out of an apartment, especially if they have an in demand skillset like software engineering.

If you need an office because you can't live together or if there are few team members and it would be more productive to work in the same room you can get an inexpensive office for less than 4 people for a few hundred dollars a month.

But when do you do that? Say you're in the apartment during YC. Do you get office space with the $80,000 afterwards? Or when you get $1 million in a series A?

If you are already in an apt then the need for an office space is minimal. But if getting an office space will improve productivity then when you get the $80k. In NC we have an 1100 sq ft office space to work closer together and pay $750 a month. It has increased our productivity by 5x. If the business is going to fail based on a $750 monthly expense then it's time to rethink the model IMHO. For us it went from building a SaaS in 6 months down to 2 months. Your mileage may vary.

> but sometimes having an office can make you look more legit.

That's just your ego. Validation, growth and profit are what makes a business really seem legit.

I meant in the context of interviewing prospective employees or meeting clients. It wouldn't inspire confidence if you are in an apartment vs an office.

Depends on the circumstances.

Many people, like me, are well aware of the cost of leasing space. I'm far more positively impressed by a company that compensates its staff well than one that rents top-end space; shows its owners are savvy or too busy to worry about trifles.

If it's a business that caters to dullards (we all have a pretty good idea of what industries employ dullard decision-makers), then that may have less benefit.

By the time you start hiring full-time non-founders, it would be a red flag to not have an office. A lot of potential employees would be put off by it.

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