WeWork Isn’t For Every Startup
The case for having your own dedicated office space
When you’re selling a service provided by your employees it is often hard to differentiate your company’s services from those provided by your competitors. When we built Architel, a managed services business, we decided that our office would become a stage where we could perform for both our existing clients and our prospective clients. Our performances were designed to help them understand why our service delivery was worth more than our competitors.
SETTING THE STAGE
More and more startups are opening their offices in coworking facilities like WeWork. Pundits and investors alike are deriding dedicated offices as a result, but I think there is a time and place when a dedicated office can be very powerful. For example, if you’re in the services business, making your offering tangible can be a very powerful selling tool. Of course, if you’re just going to put your team in cubicles you might as well leverage a coworking space — but if you can design a stage and put on a show that brings your ‘service’ to life your advantage could be palpable.
With that goal in mind we set about to build a stage for Architel once Equinix took over our space in the INFOMART. Most managed service providers simply have their help desk employees sitting in cubicles — the same sort of environment most of their clients work in. My thought was that we could create a stage where our technicians could perform for our clients — something we decided to call the network operations center (aka the NOC). Set behind a glass wall, my plan was to create an environment reminiscent of the Johnson Space Center in Houston (as seen above).
To elevate the look of the NOC I worked with a designer to create custom furniture specifically designed for the room based on a black and white laminated desk I found in a design magazine. I think the result was pretty sharp. However, I wished I had increased the angle in the front of each desk once I saw them installed. Also I’ll have to admit they were a bit cramped for two NOC technicians — I should have made them a bit wider. The total cost was about $25,000 installed.
Given the fact that our NOC would be located in a multi-tenant office building with standard ceiling heights we weren’t going to be able to create a “stadium” style room. Our previous facility was raised up with each row one step down from the other. This was a good look but ADA requirements for ramps made it quite expensive so the decision was made to stair step the ceiling instead. I think it was a better solution and preserved floorspace for more desks.
Upon completion we brought each prospect into our facility for a tour. We would then encourage them to visit the offices of our competitors, most of whom had run of the mill offices and cubicles. If we could get a prospect into our facility they almost always became a client as they were impressed by the investment we had made in our facilities — most associated these investments with great value.
INVESTING IN YOUR PEOPLE
Most companies invest in their employees — especially service companies in the form of continuing education and certification. But too few companies use those investments as selling tools. At Architel we tried our best to put our investments on display and made them part of our sales pitch. When prospects came to our offices for a tour one of the best places to take them was our workout facilities.
Architel employed a trainer to come to our offices two or three days a week to conduct group and private workout lessons with our staff. We encouraged each of our employees to take advantage of our trainer and most did. We would explain to prospects that we found that our team got better customer satisfaction scores and they were more productive when they were working out. We were able to measure the effect by comparing our trainers notes and the data from our ticketing system. The impact of physical training was measurable and significant.
For years we catered lunch on Fridays for our all-hands meetings and training sessions. As we grew, these lunches became expensive and they weren’t terribly healthy. In keeping with our wellness strategy we employed a nutritionist (she happened to be married to our trainer) to prepare a healthy meal each Friday. She would also give a short presentation on why the meal was healthy and how our team could eat better throughout the week. Ironically the cost of her meals and presentation was usually less than what we were previously paying. If we could get a prospect to come to lunch on a Friday we had an almost 100% close rate. Our customers appreciated all of the effort we were going to keep our team’s bodies and minds healthy.
We also invested in fun. When you entered the front door of our facility you were greeted by a full-sized statue of the Incredible Hulk. In addition to our gym and showers, we had a full kitchen and bar for our monthly happy hours. There was an full-sized arcade game with a built-in kegerator, a foosball table, and a pool table. These ‘props’ cost us very little and had a big impact on hiring, sales, and overall employee moral. The most common comment we received from both clients and prospects was that they wanted to come work for us — this was intentional.
The coworking trend is growing quickly and is appropriate for most startups — especially those building software. But don’t underestimate the ability of an office to tell a story. If you’re simply renting space to store bodies you’re likely better off at WeWork, but if you design your space to put on a show for your clients and prospects a dedicated office can be very powerful.