Creating a Startup in Your Garage is Dead

Creating a Startup in Your Garage is Dead

Why co-working spaces and incubators are the future of the American tech start-up scene

By Kevin Lehtiniitty, Launch Fishers Member & Guest Blogger

In 2008, I founded my first startup out of my home. Six years later, I refuse to make that mistake again. Co-working spaces are taking the Midwest startup scene by storm in a good way. Get out of your garage/broom closet of an office for a day and spend that time at the nearest co-working space instead; you’ll be begging for a membership within the first hour.

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(Launch Fishers co-working space in Indianapolis, IN. Photo courtesy of Launch Fishers.)

Creating a startup in your home sounds like an attractive option and for very good reasons. After all, that’s the way it’s been done for generations. Cheap rent, plenty of workspace, all the booze in the fridge to “help” creativity along, those are just a few of the reasons why the American garage has spawned tech companies the likes of Amazon, Apple, Disney, etc. Despite the great success we’ve seen from the model, there are some serious problems: it’s easy to become distracted at home, the lack of outside perspective creates a break in in key feedback, and company image suffers when meeting with a customer in the kitchen.

 The latest trend of co-working spaces and incubators are fighting hard to keep the same benefits while providing a tremendous amount of extra value. What are they doing right?

A Supportive Community – Imagine being stuck with a problem building your startup; this shouldn’t be too hard. Now imagine being surrounded by developers, designers, investors, and experienced entrepreneurs that have been through the situation you’re in before. Grab a few people and jump into a brainstorm. Instead of spending the day banging your head against a wall you’ll quickly find a direction to keep the company going. The value add from the community is tremendous. Not only are co-working spaces filled with other entrepreneurs qualified to help unblock you, they’re also filled with potential early adopters you can push your product out to for feedback. The community in co-working spaces and incubators dramatically increase the speed you can iterate around the build-measure-test feedback loop resulting in faster shipping and more on target products. Get advice, get test users, get a co-working space.

Hard Working Atmosphere – I can’t work from home; I’m too easily distracted. Drop me in an environment where I’m surrounded by others working as hard as they can to make their dreams from true and my work ethic changes on a dime. Co-working spaces and incubators have a unique energy. A space that gathers the most innovative, passionate, and hard working people and brings them together creates a unique atmosphere that has you reaching for that next gear you didn’t think you had in you. Startups are a lot of hard work and it’s easy to let your motivation drop. The co-working space atmosphere keeps you going through the hard times and stay focused through the good. There’s nothing more inspirational than seeing the success of others and realizing it could be you if you just keep yourself going.

Low Rent – The biggest draw to your garage is the free rent. Keeping with this theme, co-working spaces and incubators have extremely low costs and some are even free. The pricing model usually involves a yearly membership fee to the shared space with the option to add on a dedicated space for a monthly fee. Check with your local space for the exact numbers but if you’re serious about your startup, the cost is negligible compared to the benefits.

Speakers and Events – In addition to the community of people who are at the space, there’s also a tremendous extended community of speakers and events that come in to share their experience and perspective. Co-working spaces and incubators draw support from the community as a whole in addition to drawing support from partners. For example, 1871 in Chicago is also the home of Techstars Chicago and has hosted speakers including Steve Ballmer, Scott McNealy, and Steve Chen. Organizations that support entrepreneurs also need a place to call home; typically they host their events at co-working spaces and incubators. Working out of such a space puts you in the middle of this wealth of resources, ready to capitalize on the available opportunities.

Technology and Meeting Rooms – Meeting with customers in your kitchen or living room doesn’t set a very professional tone. Switch out the kitchen for a conference room table, a wall mounted flat screen TV, and a bunch of electronics to make your presentation go smoothly. Co-working spaces are filled with office equipment that can be out of budget for most startups. Not only does your company image increase but so does your confidence and the confidence of your employees to land the next big deal that will take you to new heights.

The list is by no means exhaustive and there are plenty of other benefits to co-working spaces. The hard truth is the majority of startups fail. While co-working spaces aren’t going to reverse that, they certainly add a lot of value for founders and for early stage companies that help drive more startups to success. Garages have been home to the American startups scene for years but it’s time for them to bow out and make way for the next generation: co-working spaces. One of the first pieces of advice I give entrepreneurs and our portfolio companies is to get out of your home and set up shop either in a co-working space or in an incubator. Follow it; it may be the best thing you do all year.

About the author: 
Kevin Lehtiniitty is a serial entrepreneur, startup advisor, and occasional investor. Currently he serves as the CEO of the multimedia design and development firm TINITT, the Managing Director of TINITT’s new products and angel investment arm TINITT Ventures, and as a board member for several startups helping them grow and create revolutionary new solutions to pain-points. You can read more on his blog at https://kevinlehtiniitty.com or on twitter at @KevLeht.