September 23, 2017

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In A Down Economy, Startups Rise From Coworking

In A Down Economy, Startups Rise From Coworking

If you’ve been following the tech news lately, you’d probably agree that the startup landscape is exceedingly bleak. It seems like startups are either laying off workers (or folding completely) with each passing day. In a time where VC cash is scant at best, how do tech entrepreneurs go from idea to product to business? How do they make the necessary personal connections to move forward? For some, coworking is the answer.

Right now I’m writing this article at Betahouse, a two-floor apartment turned coworking space in Cambridge, MA.  Founded in April 2007 by Jon Pierce, Greg Gibson, and other founding residents, Betahouse is billed as an “informal, collaborative environment for early stage entrepreneurs, technologists and designers working on web and mobile applications.”

Though rent includes wifi internet, printers, conference rooms and plenty of caffeinated beverages (including a really nice espresso machine), being in the presence of like-minded entrepreneurs is the biggest draw. “BetaHouse is as much about making connections, sharing ideas and building community as it is about providing cheap, flexible work space, so we prefer people who share these values,” says Pierce.

There are currently 18 residents at betahouse, working on projects like iPhone applications, new search engine technologies, bio-hacking, and independent video games. Nate Aune, a web developer turned business owner founded Jazkarta as a one-man web shop in 2004. The company now has 3 employees and 10 contractors in Canada, Mexico, Paris and California. In 2007, Aune started at betahouse when “my one employee and I needed office space, and coworking seemed like a cool way to get out of the apartment and the coffeehouses, and meet other like-minded folks.” When asked about the challenges and benefits of coworking, Aune said “It’s challenging to make a phone call sometimes because of the background noise. The benefits are meeting lots of cool people and working somewhere that doesn’t feel like an office.”

The coworking environment was just the right formula for Boston-area virtual goods startup Viximo. The company that started as a small team of 5 at betahouse has grown into a 20+ employee business funded by Sigma Partners and North Bridge Venture Partners. Brian Balfour, Founder at Viximo recalls the early days at Betahouse “Absolutely a positive experience.  You are in a very colloborative, tech enthusiast, creative, and motivating environment.  That support and environment is key in the early stages of the company to plow through the challenges in getting started.”

The benefits of coworking go beyond the connections between residents. In an effort to reach out to the greater Boston-area tech community, Betahouse hosts events including an open house each Tuesday night. Recently, BetaHouse hosted a Pink Slip Party, which encouraged recently unemployed tech workers to meet to work on resumes, exchange job leads, and hear from recruiting and placement experts.

With a shortage of early stage capital mixed with the desire of entrepreneurs to retain maximum control over their companies, many founders are foregoing funding and taking a DIY approach. It is this type of entrepreneur that can benefit the most from the collaborative nature and networking opportunities in a coworking environment.

Nathan Burke is a blogger and startup marketing consultant. He can be found at blogtring.com, a blog dedicated to social media, web 2.0 tools, and anything beta. He also publishes marketingstartups.com, a site focused on helping startups promote their offerings online.

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