11 Mistakes Startups Make Building a New Office
Nowadays, I’m building IT programs from scratch, constructing new offices, and conducting compliance and security assessments as an independent contractor for early stage companies. You can visit my website, theitplan.com or hit me up at email@example.com to chat more.
Hey Team —
I’ve yet to join a startup that isn’t perpetually in the process of finding a new space. I’ve also yet to see one that doesn’t make at least a few of these costly mistakes.
So if you find your self looking for a new office, building a new office, or in any way dealing with a new location, here’s some things I would urge you to consider. This does not include the learnings from opening retail locations.
Quick side-note. I do this professionally for gobs less (we’re talking > 25%) then the quotes you’re getting because I work as an independent consultant and I actually, truly care that you’re super happy with the outcome so, hit me up.
11 Costly and Common Mistakes Building New Offices
#1 Engaging a qualified technology expert too late or not at all
The ramifications of this one are massive — every problem you can imagine stems from this mistake and it’s one every startup makes!
Why does this happen? Startups have limited resources and staff learn to wear many hats. Perhaps they’re trying to save money, but it’s more likely they just don’t know because they haven’t done it before.
Consider it from this angle — you’d save the cost of a plumber if the painter did the plumbing.
Here’s what you need: an independent IT consultant or contractor to design and install the technical systems.
Here’s when you need them: Before a lease is signed and/or during the electrical design/MEP design phase.
The amount they cost is going to vary wildly by market and scope, making it difficult to predict the cost. It should be a flat fee and it should have clear deliverables and expectations. At the time of this writing, a range would be $5,000 — $50,000 for a small (25 staff) to large (200 staff) office build in NYC.
Here’s what they’ll do:
- Alert you to the tech checks before you sign a lease,
- Work with the architect to design the low voltage for the space,
- Perform a site survey for wireless placement,
- Account for acoustics in your conference rooms,
- Place ethernet ports throughout the space based on your needs,
- Design conference room technology
- Design entryway and guest technology
- Design the WiFi and the network behind the WiFi,
- Design a security camera, badge access, and alarm system,
- Manage your internet service installation,
- Work with a low voltage subcontractor to perform the cabling,
- Where necessary, train you and staff to use administrative portals,
- Test, label, and document it all for handoff.
A great one will also configure and install the WiFi and network and be available after handoff to support it for some time.
#2 The lease gets signed without evaluating the internet service providers
Here’s why this is a problem — internet service is not a utility, it does not have to be there for you and nobody has any obligation to tell you this. If it is there, it doesn’t have to be adequate for your business needs.
While this shouldn’t be a dealbreaker, there’s no good reason to be in the dark on this when you sign for new space. Just ask the management company or realtor which ISPs are already in the building. Then, check out that ISPs reviews and call them to see if they’ll be able to set you up with the service you’ll need.
What you want to avoid is paying for internet service you need to be extended to your location. This can come with a significant cost to you, both in terms of time, money, and reliability.
While you’re at it, consider if you need backup internet service and if so, does it need to be taking a different path out of the building? Mission critical locations such as an HQ or customer support center often need redundant internet pathways and this will also affect the internet equipment you need to buy to support that.
Here’s a tip that I learned the hard way. If you can find an ISP broker in your major city, they will contract internet service on your behalf and manage the installation at no cost to you. The ISPs pay them for new business.
#3 The architect peppers the space with low voltage drops
Consider this from their perspective.
- you can never be dissatisfied with the ability to find an ethernet jack,
- their buddy the electrician, gets to charge you per drop,
- they get to charge you for time on the low voltage designs.
Even if we pretend that none of that is true and it doesn’t matter whether they put one drop or 480 drops. This is still a costly mistake.
Here’s why — consider what happens at the other end of those drops, if you want them to go anywhere, like the internet, you need to plug them into a switch. As of this writing, the cheapest 48 port PoE switch on Amazon costs $1,000 so you need 10 of them for those ports to do anything when you plug something into them.
Furthermore, each switch carries a mutually exclusive risk of dying in the middle of a work day and you need a firewall, router, or distribution switching layer to accommodate the ten switches and each of these devices should have an extended warranty…
This one small detail has a lot of hidden costs behind it. I’ve been able to offset my entire fee for the project simply by catching this and reducing the number of ports.
#4 The edge use cases of the space and details slip through the cracks
Here’s real-world examples of what I see when this happens —
- The day after move-in, you’ll start getting reports that theres a horrible echo in the conference room.
- An entire row of desks is unusable when the sun starts to set because the glare through the window is unbearable.
- The WiFi stops working during the all hands meeting because nobody accounted for the shift in density nor performed a WiFi site survey.
- Deliveries can’t be made because the delivery person has no way of notifying you they’re at the door.
- The building won’t let any guests up to your 25th floor without a chaperone and they have no way of alerting you a guest is there.
There’s so many examples that only come from experience. A competent technology designer will account for these.
I will happily eat my words if there’s a course out there that makes a point to teach students to consider sunset times and the angle of computer screen glare.
#5 Going big on a statement piece
This one is painful. Not only because of the cost but because you’ll be reminded everyday that it wasn’t a good idea. And there’s a good chance you knew that at the time, but the person driving these is almost always a Founder/CEO.
You’ll be able to spot this one when the response to “Why is that there?” is “The CEO wants it.”
Here’s some real-world examples.
- We’re a Fun Company = The marble ping pong table placed front and center in the office. You’ll spend company time navigating around it 20x a day and nobody can use it because its in the center of the office.
- We’re a Trendy Company = The $30,000 entryway logo design made out of handcrafted yarn by a custom designer that slowly becomes just as noticeable as the nicks on the wall from when the ping pong table was moved out.
- We’re a Sophisticated Company = The beautiful custom etching on every glass front that makes it impossible to see if anyone is in the room or not. You’ll see a lot of people on the floor checking for this one.
This touches on a really important theme — how to make decisions about your space. Gather your project team in a room and ask everyone to rate the importance of each of these factors when making any decision.
Cost (incl. resale value), usability (how easy is it), functionality (what can it do), function (what purpose does it serve?, scalability/extensibility (can it grow/evolve with you?), portability (can you move it if you want/need to?)
#6 Punting on planning the guest/visitor experience
From the technical iPad check-in to the college mini fridge in the entryway, walking through this is pretty important. Yet, it always gets lost in the shuffle towards the end, which is usually too late.
Why does this happen? On top of simply not knowing, it’s usually not anyone’s specific responsibility, nobody is accountable for it. It also tends to happen when the project team is understaffed and people are stretched too thin to worry about all the details.
Here’s some things to consider when planning this part of the space:
- Placement of TVs,
- outlets for charging,
- WiFi accommodations (what’s the wifi password?),
- check-in tablets,
- security concerns (what can they see from the entryway?)
- bathroom accessibility
Speaking of lists…
#7 Agreeing to substantial completion without a punch list
If you’re not making a punch list, this is probably the first or second time you’re on a construction site. All good — everyone is on a construction site for a first or second time.
But the general contractor is going to quietly test you by indicating they’re meeting substantial delivery and if you sign off on these things, then you’re waiving the work that you’re due to fix all the small little things. The unpainted millwork, the chipped bathroom counter, the glass door that’s going to shatter on the 20th opening because it’s installed at an angle.
Why does this happen? Inexperience. Unless you’ve constructed a new site, you likely have not been exposed to the lingo and warning signs the architect and GC is sending you. They can’t be responsible for your decisions, but they will try to nudge you.
Here’s how to prevent this one. Learning construction lingo is like learning a new language. What would you do if you traveled to a country that doesn’t speak your language? Do that here.
#8 Approaching security as an afterthought
Security is, at a minimum, cameras, alarms, access control (fancy word for locks, turnstiles, etc). It’s also acoustics (can people hear through the walls of the CFO’s office?), viewing angles (can visitors see what staff have on their screens?), and preventing theft or safety threats by designing areas and processes for visitors and deliveries.
Imagine an elevator that opens directly into a pod of staff working at their desks — yes, I have seen this.
Are any windows accessible from the fire escape? Do you need to consider and make provisions for an active shooter situation? Who is going to arm and disarm the alarm? Does cleaning come at night or during the day? Do they need badges?
These are the tip of the iceberg that you should be considering with a new office space. Great news — a qualified technical consultant will automatically be doing this for you. We got you!
#9 Failing to account for moving or disposal costs at the old site
Just reading all of these is probably exhausting — imagine going through the whole process! Any sort of consideration for the old site is out of the question.
But consider that your lease probably states that you need to return it in a condition similar to how you received it. This can mean all sorts of things but if you fail to account for it, you may be hiring someone to go do it for you or worse, face a significant fee from the building you’re leaving.
When it comes to moving, nobody ever thinks about picking a weekday that’s not near a holiday and not near the 1st, 15th, or last day of the month. Why would they? Well, that’s when movers are sitting around. You can move on the first, sure, but you’re competing with everyone else whose lease is ending, too.
I’ve seen companies ask staff to take their monitors home and bring them back to the new office. I’ve seen companies move with people from TaskRabbit, but when they show up there’s no way to actually move anything to the new office (ie: moving truck). The worst was easily a group of movers who didn’t have insurance and broke several expensive pieces of equipment.
Here’s how to fix this one. Much like the guest/visitor process, set aside some time to review the moving process and get quotes from multiple moving companies. Review your lease or speak with your current building management to understand expectations for return.
#10 Failing to account for union labor and insurance costs
If you’ve moved into a non-labor union building and a labor union building, you will know that the cost of moving into the latter is 2x the former. There’s no problem with this but the reaction tends to tell all when the budgeting team finds out.
11. Banking on changing anything later
Once you’ve approved something, it’s done. Changing it later is the equivalent of starting over. Change requests are priced to reflect this.
What is a change? Anything. If you need to move a security camera 10 ft from where you initial said it would go, that’s a change and it might cost you $2,500 on top of materials and labor to execute the change.
Why does this happen? Startups iterate, it’s why you hear the term agile all the time and not waterfall. Construction is a waterfall process and it doesn’t conform to a startup’s way of doing things.
Wow, right? That’s a LOT! Construction is a big deal and there’s a lot to account for. I’ve worked with too many startups to advise learning it on your own. Besides, at your growth rate, you’ll be moving again in 6 months. Take this opportunity to shadow someone with experience and use that to do the next one on your own!
One final note here. This is your new home, let’s treat it with the respect and honor it deserves. You got this!