Starting up a new company is always a risky proposition since, statistically speaking, the majority fail. Initial outlay of thousands of dollars is often necessary just to get office space, furniture and phones, not to mention the trepidation associated with signing a five or ten year office lease knowing full well you might not be there in five or ten months.
Traditionally-available options are not too varied, conventional business office suites being the norm, and certainly not suited to the world of jeans, cappuccino and high technology.
Late last year, New York City-based Tech Space Inc. opened up a Toronto branch to address the lack of options available to young (as well as more established) new-economy companies.
Not only are the offices replete with the conventional offerings of chairs, desks, phones and copiers found in most office suites, but also something which is of extreme importance for members of the high tech sector: a T1 Internet connection running to each and every desk.
“The infrastructure was already in place and we could simply walk in, plug everything in and get down to doing business, as opposed to running around trying to handle the infrastructure,” said Dave Taylor president of Toronto-based Digital Reactor Corp.
“There are a couple of other options, but your technology infrastructure isn’t really there behind you in terms of private networks, high speed Internet access, that sort of thing,” he added.
Even large high-tech powerhouses see this plug-and-play aspect as a key motivator to setting up camp at Tech Space.
“The alternative with Tech Space is that you can sign it one day and you are [up and running] the next,” said Michel Lozeau, group vice-president for consulting in Canada with Oracle Corporation Canada Inc.
The fact that Oracle could sign a three month contract, to first see how things would go with its downtown e-business studio, instead of committing to a five or ten year lease was appealing, Lozeau added.
Since the Oracle e-business studios are designed to foster e-business projects there is a need for the office space to fit a certain profile with a “hip” flavour and a downtown locale. Other executive suites didn’t offer this, Lozeau said.
For companies looking to open up a branch in another city, the hassle of set-up often deters even the most motivated.
“Were starting to grow in here in Canada and we’re looking for a facility that would allow us a pretty much plug-and-play approach where we could move in with a minimum of hassle in dealing with things like phones and security and furniture and all that sort of stuff,” said Stuart MacDonald, managing director of Expedia Canada Corp. Its headquarters are in Bellevue, Wash.
tech space’s beginning
“The genesis of Tech Space really was something born out of frustration in that I had a lot of friends starting technology start-ups and…they were always looking for the impossible space,” said Debra Larsen, CEO of Tech Space Inc., in New York.
The impossible included 1,500 to 3,000 square feet of office space, landlords who didn’t want huge security deposits for start-ups, a properly wired building, short-term leases and the ability to easily expand.
The first Tech Space opened in New York City in July 1998. The Toronto branch opened in November last year. Its King and Spadina location has 54 suites and a capacity of 265 people. The smallest offices are two-seaters and the largest can accommodate a staff of 60, according to Claudia Sciarretta on-site manager of Tech Space Toronto. The most common configurations are three to four and 12 to 15 seat offices.
For new companies, the ability to expand at will is of great importance.
“We are extremely flexible in the sort of configuration that a company is looking for,” Sciarretta said.
But it is not just the office space that sells potential tenants.
“I think that is one of the benefits here, you never know who you are going to meet…there are some very valuable contacts that you [make],” Taylor said.
“It is much more informal, you meet people having coffee and just start the business discussion on the couch there,” Lozeau agreed.
Besides courier, fax and photocopier services, there is also a pool table, caf