So you’ve got this idea for a product. You pull a few friends in and you start working at the local coffee shops. You plug in your Mac and camp out all day drinking the free refills and bumming the wifi.

You’re nimble. Not tied down to a space, free to enjoy the flexibility that comes with being an entrepreneur. Cool! You and your team check-in regularly on Skype and you use Basecamp and you get together a couple times a week on a video conference or in-person. You’re saving so much money NOT having an office.  You’re doing everything right to bootstrap…

Having been through this and now being on the other side, I have to say that this is one of the great fallacies of start-up life. Here’s why:

1)   You’re functioning at about 75% productivity in a coffee shop or at home. The distractions are everywhere. At the coffee shop it’s the annoying person on the phone; at home it’s the cat, the dog, the neighbor, the internet is down, the TV is on…The fact is you’re not at “the office” so your time is more malleable.  You can “meet for lunch.” Or you can “wait for the package” or whatever. No one is holding you accountable (sure, you say your partners are – but Starbucks office time is not the same as real office time).  

2)   If you’re serious about building a company – like a real company not an iPhone app - than you’re going to need space.  You’re going to need whiteboards and desks and printers and fast internet and phone booths and meeting space.  I’m sure there are virtual tools for all of this, but the reality is that these tools are largely poor substitutes for real-life problem solving and company building.  The virtual tools are designed as supplements, not as replacements.  One of the reasons why incubators (Techstars, YC, etc.) exist is for the energy and the space.

3)   Your boundaries between work and play dissolve to the point that you don’t know how to work and how to play.  When you live in coffee shops you tend to go at one speed, whether you’re crushed for time or not. When you have an office with a product deadline looming, you stay there until it’s done. When you miss deadlines at Starbucks you write them off because you’re working remotely and “these things take time” and “hey, look how much money you’re saving by NOT having an office.” And if you’re the kind of person who used to have the coffee shop as a place to go and clear your head while pounding out some element of the business, that is now officially gone.

4)   Lastly, office space is cheap and plentiful assuming you don’t need super nice digs. It’s also surprisingly cheaper than you think when you do a fully loaded cost analysis. When you’re not at the office the chances of you bringing your lunch are probably lower and the coffee is definitely more expensive.

20 coffee shop days = 40 coffees X 6 lunches out X 10 occasional snacks = $200 X 3 co-founders = $600.

Small office space for three in Cambridge right now is running about $800 all in.  I can’t believe it is so much more elsewhere. If you really think you have a company – a real company remember – put up the $2,500 and start building.

I am a stickler for keeping the burn rate low, but I also know that you need to know where to turn the dials. Time IS money.  Opportunity costs matter.  Lean, bootstrapped offices in my mind help you discover real quick whether you have another good idea OR the capacity to deliver something people really want (and will pay for).