How to Choose a Coworking Space for a Startup

A startup coworking space is a service you buy by the month or by the term, so it is easy to change and easy to choose carelessly. A short list of what your team does in a normal week makes comparison much easier than amenity lists do.

• How many people will be there on the busiest day, and on which days?
• How many hours a day do people spend on calls?
• How often do you need a room for the whole team, or for visitors?
• Do people work early, late or on weekends?
• Will you handle customer data, unreleased work or anything else that should not be overheard or seen?
• Do you need to bring anything besides laptops?

Also decide what you are buying: open desks, dedicated desks or a private office. Those are different products, and the answers above usually settle the choice. A team on calls all day will struggle at open desks however attractive the room is.

Tours tend to happen when the space is at its most presentable. If you can, visit at a busy time of day, or ask for a trial day, and bring someone who will actually work there.

• ✓Can you hear calls from neighboring desks or through the walls of the private offices?
• ✓How far in advance are meeting rooms booked up on a typical weekday, and what do extra hours cost?
• ✓Is the number of phone booths reasonable for the number of members on the floor?
• ✓What are the internet speeds in practice, and what happens when the connection fails? Is there a backup?
• ✓Can you get a private network or your own connection, and at what cost?
• ✓Are the doors, lights, heating and cooling available during the hours you actually work?
• ✓What is the commute like for the people who will come most often?
• ✓Who handles packages and visitors, and is someone on site during business hours?
• ✓Does the mailing address and the signage work for how you present the company?
• ✓Is the location near the talent or customers you are trying to reach?

Talk to a member or two, if the operator allows it. Ask what surprised them, what the last price change looked like, and how problems get resolved. Those answers tend to be more useful than a tour script.

A shared workspace means sharing a building with people you did not hire. For many startups this is an acceptable risk, but it should be a conscious decision. If you handle personal data, the Federal Trade Commission's security guide for businesses is a useful reference. It recommends storing paper files and backups containing personal information in a locked room or locked cabinet, controlling who has keys, and telling employees what to do if they see an unfamiliar person on the premises.

• ✓Who has access to our private office: cleaners, operator staff, other members?
• ✓Are entries logged, and can we see the logs if something goes missing?
• ✓Are guests escorted, and how are they registered?
• ✓Is there a separate network for members, and how is traffic isolated between members?
• ✓Do we have somewhere locked for laptops, drives and documents?
• ✓What does the operator's policy say about cameras in common areas and how long footage is kept?
• ✓If a customer or investor asks about our physical controls, what can the operator put in writing?

If you have customer security questionnaires, compliance commitments or contracts that describe your physical controls, read them before signing a membership. A company can end up promising more than a shared space can deliver. Your security lead or outside counsel is the right person to decide what is acceptable.

Membership agreements are usually standard forms, and terms differ a great deal from one operator to the next. Our guide to coworking agreements goes through the wording. For choosing between spaces, put these items in the same table for each operator.

• Length of commitment and the notice needed to leave.
• Whether the agreement renews automatically, and the date by which you have to act.
• How and when the operator can raise the price during the term and at renewal.
• What is included and what costs extra: meeting rooms, printing, guest passes, parking, phone lines.
• Deposit amount and how it comes back.
• What happens if the operator moves you, or closes the location.
• Whether you can pass the membership on if your company is sold or reorganized.

Compare the total cost per person who actually uses the space, including meeting room overages and extras, rather than the price of a single desk.

Ask how a space will handle your growth before you join. A startup that adds several people in a quarter may find there is no larger private office available in the building.

• ✓If we double, is a larger office available here, or would we have to move locations?
• ✓Can we move to a larger office in the same agreement, without a new deposit or a new term?
• ✓If we shrink, can we move to a smaller office, and how much notice is needed?
• ✓If we open in another city, does the membership carry over, or is it a new contract?
• ✓How long is the waitlist for larger offices today?

Also think about the exit. Coworking is often a stage, not a destination, and the next step, whether a sublease, a spec suite or a direct lease, can take months to arrange. Keep your commitment short enough, and your notice dates visible enough, that you can move on when the numbers say to. Our guide on when to leave coworking covers the signals to watch.

TAG does not sell or manage workspace. When a founder asks us to compare a coworking option with a sublease or a lease, we can set them side by side on total cost and flexibility, so the choice rests on the same numbers.

1. Write a short list of what your team needs in a normal week.
2. Choose the product first: open desks, dedicated desks or a private office.
3. Shortlist two or three locations that work for the people who will come most.
4. Visit each at a busy time and run the same checklist.
5. Put the security answers and the contract terms into one comparison table.
6. Read the full agreement, not the sales summary, and have counsel review anything unusual or any long commitment.
7. Put the renewal and notice dates into your calendar on the day you sign.