We've all heard of the big company that started as two guys in their garage, but these days, with startup organizations and incubators, more and more success stories seem to feature companies that built their success from group collaboration. One excellent example of how startups can take advantage of collaboration is to work in a coworking environment with other companies and entrepreneurs.
Tuesday I had the opportunity to chat with Harry Lin, CEO of Lottay, an online gifting service that has spent a large portion of its short history coworking with outside developers and entrepreneurs. Starting in October of last year, the company spent six weeks working in the offices of San Francisco-based Ruby on Rails development house Pivotal Labs. In December they moved into a space at the Ventura Ventures Technology Center where they work alongside other consumer Internet startups, sharing ideas and resources.
"The thing about a startup is that you're always under resourced; you never have enough people," Lin told ReadWriteWeb Tuesday. "So the more you can make out of less, the better off your are, the faster you can go, and a startup is all about speed."
Lin, formerly the Vice President of ABC.com and General Manager of Evite, was brought on board at Lottay after the company received Series A funding in the summer of 2009. Below are some highlights from my discussion with Lin on the benefits of coworking environments for startups.
How did Lottay benefit from the Pivotal Labs experience?
We camped out at the Pivotal Labs office for the entire six weeks. We were in San Francisco and sitting in their office everyday with the two developers that were on our contract. The reason this worked better is that it was very intense and very concentrated; you had no other distractions. The other reason it was fantastic is that its a room full of 25 top notch Ruby on Rails developers. We were only paying for two of them in our engagement, but there were the other 23 sitting in that room working on various things.
We would come up with a problem or a hurdle we couldn't get over and we would just shout out, "Hey has anyone ever done this with a library?" and some guy would jump up and say, "Yeah, I've done that!" Voila! Problem solved. And that would happen all the time. So we were getting the benefit of this very open, huge brain trust that Pivotal had even though, technically speaking, we were just paying for the two guys. The third other thing I'd say was great about the environment is that they had other clients in there. So we got to meet, talk to, and get to know some other Internet companies, and that was really cool."
What is the experience like now in Ventura?
There are 12 of us in this incubator here in the city of Ventura; it's a very deliberate ecosystem the city is trying to push, and we're part of that ecosystem. We all speak the same language, the same jargon, the same shorthand. If one of us comes up with a brilliant idea or an interesting strategic question, we'll grab each other, white board it, sit in a room, chat in the hall way - the kind of random things that happen when you're all physically located in the same place. The other thing that we benefit from is that because this is run by the city, we get a lot of support in the form of a fantastic rate on rent, free wifi, marketing and public relations, and they've helped us find recruits when we have openings to hire people. The city is more than just a landlord, they're trying to jump-start this ecosystem.
So you would suggest that early stage startups try to find coworking space?
If possible, I would not do the "in your basement" or "in your garage by yourself". Those are the legendary stories we like to hear about, but I think the majority of successful startups has had some kind of coworking environment. I worked for nine years in the Bay area and I know that while there are official incubators, there are also these offices where nine out of the ten companies there are high-tech companies. Being with other people who are doing the same thing is hugely beneficial.
In the consumer Internet space, especially with how the Web has evolved over the last decade, everything is getting more social and more open, both in terms of the consumer behavior and in terms of the development and how things are produced. So it just stands to reason that in launching and trying to grow these types of businesses, you should be more social as well.
Is there anything startups should avoid when in a coworking environment?
It is tempting to do a lot of partnerships with other startups because you're there, you know each other, you understand each other's pains and trials and tribulations. Resist the temptation unless is makes a lot of sense. Usually what a startup needs by way of partnership is a large established company.
What is your advice to the young startups out there looking to launch or grow their business?
There will be 100 problems to solve every week. I can guarantee you that at least 75 of those problems have already been experienced and solved by someone else. That's the problem with being in a garage or a bedroom by yourself; you'll probably end up trying to solve those 75 problems yourself. When you're colocated and coworking with other entrepreneurs, you can share. "Oh, you've got that problem? I've got that problem, and here's the solution." You can benefit from their learnings and not have to reinvent the wheel, which saves you a lot of time.