Lab Co-working spaces take various approaches to package space, equipment, and prebuilt, pre-staffed spaces. It’s kind of like:
Instead of leasing a raw building and setting up a whole restaurant,
You get to waltz in and order dinner, and it’s brought to your table,
and someone does the dishes. And when you’re done, you walk out.
Or maybe the analogy is that you get to walk into a building that already has a commercial kitchen, dining areas, a host, wait staff, and dishwashers, and you just focus on the cooking…
Either way, Lab coworking spaces are prebuilt and pre-staffed so that science innovators can focus on their high value intellectual property! And you don’t invest in the space and get handcuffed to it – leave whenever it suits you.
- Value of Coworking: Cost savings.
We calculate that coworking is cheaper than leasing and building a lab & office for yourself.
In another blog: “Explaining Full Costs to Lease Science Lab Real Estate” we did some explanations and some $ cost calculations (and alluded to the time involved) in direct leases or subleases. We showed that the construction, equipment, and staffing costs might add 153% to the quoted Base rent in a lease – that is, if you look at a space and the base rent is $100k/year, your all in costs might be more like $259k per year. That’s a drag ! (The additional costs come from the additional reimbursements that are standard in lease contracts, construction costs, equipment costs, and staffing costs.)
And here’s another way of looking at expense – a ballpark of the cost per worker who gets a bench and an office desk, plus lab equipment to use and support staff:
- Value of Coworking: Turnkey Serviced Operations instead of headaches
Bonneville was founded by a PhD startup founder who took their company through Nasdaq IPO in 2010, and along the way smacked his head repeatedly on leases, construction, equipment, HR and staffing, and facilities operations. After retiring from his startup, he founded Bonneville to take care of those headaches for other scientists.
There are a number of co-working spaces to choose from, with different operating models that might fit your goals. Some want a piece of ownership of your company or intellectual capital, some don’t. But in general, here’s a table of what lab coworking spaces include, versus a lease or sublease of another space:
Glasswash Included: Coworking really DOES your dishes…
- Value of Coworking: Time Savings
What Bonneville’s founder Kinkead realized when he built his startup to IPO was that facilities and leases didn’t just cost money, they cost time. If you are in the business of science innovation, you got in the game to do science, and that’s where your value-add skills are. Real estate issues, staffing, and vendor contracts aren’t rocket science, but they do take A LOT of paperwork, and TIME.
Bonneville or other lab coworking spaces keep your mind out of lower value-add uses, so you
- don’t have to spend time on hiring and HR of support staff,
- nor wade through city codes and to design spaces,
- nor raise capital to buy equipment that your company will use only a fraction of the time
- Value of Coworking: Shield from Big Liabilities – Stay/Go/Shrink/Grow without long term commitments.
Perhaps an even bigger offering in coworking is that you aren’t creating long-term Fixed Cost Liabilities for your company. You stay out of 5 year rent obligations, equipment leases, employment contracts and so on.
Startups and growing companies without fixed revenues are in a dynamic situation, where their size and expense tolerance might change quickly. They might need to grow one year, and then reduce expenses the next year. Leases and salaries are two of the biggest expenses for companies, and coworking offers the opportunity to stay out of support staff obligations, as well as to change size by thousands of square feet on just a few months notice. Reducing one’s rent fixed costs in lean times can help save the going concern and keep companies viable.
Moreover, long term lease obligations can sometimes be a drag on target companies’ acquisition prospects, since the acquirers often have “mother ship” space of their own and view the smaller offices of the growth company as an unnecessary burden.
Even for mature companies, coworking space can also be used for flex space – when moving from one location to another, when developing a new business line, or onboarding a new team.
Conclusion
Different coworking providers might work for different companies, and part of that might just be location proximity to the boss or the team. Or for some companies with longer time horizons and low sensitivity to capital illiquidity and long-term liabilities, leases or subleases make sense.
But per the table above, coworking includes a LOT, and keeps a lot off your plate.
If we ballpark a seat in a coworking lab at say $2000 a month, and we use a national average of say 300 square feet used per lab worker (lab workers use more than office workers who can be jammed into little desks), then a lab coworking seat is say $6.67psf. Prime market direct leases start above that in base rent alone, and don’t include the laundry list of benefits described. You can find cheaper leases in older buildings, and different submarkets, but when you add up the costs of providing all that coworking includes, we calculate that you’d need to be signing a triple net base rent of $2.57 psf/mth in order to be even up with a $2000 coworking seat.
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