It’s a truism to say property is expensive in London. And the latest victim of rising prices is – ironically enough – real estate search engine Nestoria, which is moving out of its current home “because the building is to be renovated and turned into luxury flats.” However, despite the nostalgia associated with “little quirks like the window that never closed, the stolen furniture…” I’m sure they won’t really miss the “lack of heat in mid-winter” and the “the mice, meeting rooms with doors that won’t shut, the mysterious corridors that lead nowhere, the occasional ear drum shredding alarm.” However, it’s not out to the sticks just yet as they will be staying near Covent Garden and Holborn.
As a recent visitor to Moo’s brightly-lit offices in Clerkenwell, I can confirm that not everyone has to make do with bad facilities – but then not every startup has backing from Index Ventures. Meanwhile, some startups like to stay ‘virtual’. Crowdstorm (privately backed still) completely dumped their offices in Waterloo last year and started meeting in a London club and coffee shops (actually, that doesn’t sound to bad), while plenty of others just do the coffee shop thing. Let us know what you think of the whole property game viz. your startup…
It’s simple. Work from home, have monthly or biweekly F2F meetings in somewhere like Adam Street.
Which points up a hole in the market for some budding entrepreneur. Cheap temporary office space with all the bits (flipchart, projector, fast internet) available by the hour.
Why would an internet startup actually need an office?
Wonga is bucking the trend, with a plush pad in St John’s Wood that’s reminiscent of a gentleman’s club! Our unique office features fine wood panelling, a marble-topped bar and walls swathed in golden fabric. But we’ve not lost our marbles and spashed the cash on such opulence, we’re just lucky enough to be based in the former games rooms of a building that once belonged to the Sultan of Brunei!
There are advantages of having an office, especially if you have a B2B operation. For B2C the living room could be ideal
as demonstrated by the startups like hotornot, Techcrunch (Micheal Arrington once wrote that he is still working from his living room).
Another option maybe move away from Central London. Brighton is one option – 50 mins train ride to central London. Rents are lower and geek community is very active. Check out: http://www.projectbrighton.com/
Wonga – Ok, that I’d like to see!
I second alternative areas (such as Brighton!). I declare my interest in Brighton as I live there, but still think it rocks and other larger companies are starting to move down here (Second Life, Disney Club Penguin for example.)
Other options are creative/flexible spaces used for the likes of coworking. One opened up in Brighton recently and the vibe is really great. They guys who run it are also very community driven. Meaning it’s obvious that they want to do something positive and it’s not all about the money. This really beats the traditional ’service office’ space model where the generally charge alot of money for the space plus anything extra will cost more. I wrote something on it here – http://www.projectbrighton.com/2008/01/18/discover-coworking-and-lots-more-at-the-werks/
Brighton is a great place for a tech/media start-up (I live there too, I must confess) but actually there is a limited amount of office space available for companies that need a couple of thousand feet instead of a couple of hundred.
Try Croydon. OK, so it’s got an image problem. But there is a huge amount of office space around at good rates (much, much cheaper than central London). Its almost as good as being in central London – it’s just ten minutes by train from Victoria and London Bridge.
If I was running a venture fund I would rather people spent the money on development and marketing than on trendy offices in Clerkenwell.
We started out in Kingston Innovation Centre – a government funded business incubator in Kingston upon Thames . It’s £100 per desk while you’re pre-revenue and you get business premises, good meeting rooms, parking and all the usual office facilities (high speed broadband, phone line, printers, coffee, copying).
They have good links to the investment community and the DTI (we got our technical innovation grant of £56k thanks to them) as well as local universities – so we were able to get students on free placements for several projects.
They have since got LDA money and have opened another one – the London Innovation Centre (LINNOC) in Croydon.
Come to Shoreditch … its cheap and people arent too ugly. We’re on Scrutton Street and its half the price of the west side of London (Im a fulham refugee). For example our space is over 1000 sq ft of light warehouse. We’re really happy. If anyone is a one person startup we have a spare desk.
I’m getting some excellent feedback, especially from people based outside London, on new private members club One Alfred Place(www.onealfredplace.com), and have just joined the committee. I’m also a huge fan of Adam Street (www.adamstreet.co.uk).
Personally, I have found the combination of working from these sorts of clubs, working from home for half a day a week, and some reasonable, flexible sub-letted office space to be the perfect combination. For the latter, it’s often a case of finding a like-minded entrepreneur who will sub-let a room or section of desks, with a view to growing from there.
For longer term solutions, I have used and been pleased with both Instant Offices (www.instant-offices.com) and Devono (www.devono.com) and can personally recommend both. Hope that helps.
@Keld – that’s a great offer, maybe there’s a few more start-ups with funding/offices who could do the same. I’m guessing most could squeeze an entrepreneur into a corner
@Daryl – I agree with you about Croydon good transport links, shame about it’s image
I’m like Oli – a mix of home desk borrowing and anywhere with a wifi connection.
VCs often tell me point blank that two things annoy them about London – prices of people (well, that’s just the market) and the price of offices. This is why I think startups and people with ideas should look seriously at “co-working” spaces. Yes, this is not a million miles away from a members club – but a grand a year (in one case) is a lot for a club and way too much for co-working. I think we’ll see a lot more of this idea as property prices continue to be a problem. I am also surprised not to see many startups sought of the river on our startup map. Might be opportunities for space there…
Many of us work from home and use skype. When we meet physically in London, we use a combination of our investor’s office, coffee shops, clubs, etc.
I guess eventually we will have to get some office space somewhere…
Home office for me. Though I do have hints of startup greatness via the used Herman Miller chair I picked up for a song on Ebay….
To be honest, as my team is all virtual to me, Skype, Jabber, and Google Docs is all I need to keep things plugging along. Have to admit, must check out One Alfred Place. Looks really swish.
A friend of a friend of mine runs the Hubworking centre: http://www.hubworking.net – seems good if you want to be in the City.
Great post Mike – this is all useful info… when we were getting setup here, I actually blogged some thoughts on what I thought was important for startup space. I also blogged about how we went from 0 to office in 20 hours… here are the links in case anyone finds it interesting:
http://www.seanglass.com/wordpress/?p=80
and
http://www.seanglass.com/wordpress/?p=79
@Keld – your space does rock…
And for the curious, here’s where Sean Glass ended up:
http://www.utopiavillage.co.uk/
http://www.quickoffices.com/office_details.asp?id=3530
Mike,
As you know we located SubHub in Cardiff exactly for this reason. It’s two hours from Paddington by train so it’s accessible to London whenever someone from our team needs to be there. It’s also close to Bristol where there is plenty of digital media activity. And Cardiff Bay, where we are located, is very nice especially in summer. I like to joke that I have a Bay Area internet start-up even if it is a different bay!
In Cardiff we benefit not only from reduced costs but also from subsidies provided by the Welsh Assembly. Salaries are lower than in London and loyalty is probably greater as there are fewer start-ups in our space competing for talent. We are in the @Wales Digital Media Incubator which is a subsidised facility where we pay £60/person/month, and they also provide computers. We have job creation and other grants worth around £300,000 which are free cash and non-repayable as long as we hit certain targets.
Because of all this we have been able to bootstrap our start-up much more efficiently than if we had been in London. This has been really helpful given the blind alleys one can often go down in building a company and finding the right message and model. Without a doubt we would have had to take external investment sooner to fund that whole process if we had remained in London. Now we have a launched product, an experienced team and a growing customer base, which is much more appealing to the potential investors we are currently engaged with.
Cheers,
Evan
P.S. When I am in London I usually work from the Institute of Directors — £250/year with drop-in workspaces in Pall Mall and near Liverpool Street. They also have facilities in other cities such as Edinburgh, Manchester, etc.
If you run a start-up, you are probably a director and so you qualify for IoD membership. Yes it is a bit more stuffy but hell I’m 43 years old now so I don’t need to work in a skateboard park. When I want to do social stuff or occasionally work more quietly I use Adam Street.
Evan
We’re in serviced offices on the ‘wrong side of the river’, between Waterloo and Vauxhall. There isn’t a huge amount of stuff around (distinct lack of decent pubs and sandwich places) but we have lovely views of Big Ben and are only minutes on the tube to the West End or City:
http://www.workspacegroup.co.uk/london-commercial-property/offices/south-east-london/southbank-house/
it was probably quite disappointing to leave this – originally – very nice building (:
I’ve been trying to find a small office in Kent for some time now. I don’t particularly need the space as my home office is reasonably well set up with the exception of my broadband connection, which sucks… about 40-60x slower than what I was getting in London. It’s barely more than dialup speeds… crippling.
If anyone knows of any spare desks or cheapish offices in the mid/west Kent area then I’d be grateful to hear from you.
Mike! I should have mentioned when you visited MOO’s lush Clerkenwell pad that we’re on a 1 year lease and paying less than half the market rate for the space. If you’re super-flexible and happy to shop around you can nab a short-term bargain for a serious discount.
Anybody seen The Hospital in Covent Garden? £350 a year if your under 35 (or 30) and its a really cool place to work. http://www.thehospitalclub.com
I’d recommend it : )
I’ve been on both sides of this issue, as a startup and as a landlord. I had a very cheap office in Bow, which was similarly knocked down for a residential development.
What I then decided to do – in an effort to offset some of my costs – was to go large, and take over 15,000 square feet of an old clothing factory, again in Bow, and set to work subdividing it into very cheap small units for mostly creative and startup companies.
My initial idea was to complement the offices with some sort of classic Bay Area-style co-working or deskspace setup, but demand for this was muted. What’s been far more popular have been self-contained spaces from about 100 square feet, as i guess people value privacy and security. From my own perspective, homeworking has far too many distractions and the discipline of actually coming out to work is really valuable.
I’m also about to take over another 5,000 square feet of warehouse space next door, so I’d be very interested to hear what the startup community actually needs, before I actually start building walls. If anyone needs cheap space, please mail me – storey7*at*gmail.com
@evan – very impressed with the cost savings you’ve made by being in Cardiff – clever idea.
Now even though we (crowdstorm) are virtual as Mike mentions (in fact I am writing this from the lounge at Stanford business school!), I really think we would be more productive in an office with flipchart, desks, and other similar startups. Thing is that serviced offices are expensive, other offices often want long term leases and are expensive, and subletting other startup desks would be good if you could easily find any.
So, my question is this. Is this a real problem for people and if so, what do we do about it?
The situation gets even more interesting if you’re a startup that REQUIRES space – IE content production. There was no option to bootstrap ChannelFlip with virtual working because we had to have a central space to build sets, put up lighting, store thousands of pounds of video shooting and editing equipment etc. We have survived this in the first few months by renting space outside of London, in Oxford – but like many other startups, have found that the majority of the people we want to hire are already in London, making life awkward.
There seems to be an awful lot of reasonably priced office space in London – as long as you’re willing to travel for it. Shoreditch, Hackney, Hammersmith and pretty much anywhere south of the river have plenty of space that’s affordable – particularly if you find renovated warehouse space, or creative hubs. What you won’t find, for the most part, is anything cheap and central.
Some very constructive information here! Thanks everybody this is exactly the problem I/WE have been facing.. how do we get into London on a limited budget.
Currently were based in SOUTHAMPTON of all places.. but it is where I and my partner studied so it was easy to find some office space above an Internet cafe for 2000 pounds a quarter including all bills.
However its not great facilities and not a good working enviroment for our needy developers! So were looking to move into London in the next 6 months once we find suitable space both for office and living.
If anyone has any more advice i would really appriciate it! You can contact me at sam *a*t* ugame.net, we will need around 8 desks.
P.s. I’m going to start checking out Techcrunch UK more.. to used to just reading the main TC site.. loving advice not just about Silicon Valley!
Lending Stream, being a startup, was pretty nostalgic in moving out of a pristine building to a new posh building. We tried our best to adapt to the heritage building with our new electronic gadgets and other luxuries, but we finally made the decision not to repair too much to meet our ends. So our final call was to DON’T DISTURB! MOVE OUT!!!
Starting an office at London! Oops! thats too costly, is there any other cost effective option…thats what comes to most of the entrepreneurs.
I agree..thats why i suggest running an online business is the call of the hour!!!
It can be tricky, but we find that there are many options, and your business operates as sole trade but you require office space then some options could be so lease a virtual office. Or perhaps even look at some other commercial office space in Birmingham.
As more and more traditional businesses are either forced to close their operations or size it down, the number of virtual businesses increase in numbers.