How to Start a Business

Step 5 We Need a Warehouse to Store Our Junk! - Find a Location

Having decided that the Bay Area was for us, we needed a slightly more specific location. At first, we checked Craigslist and drove around in neighborhoods with warehouses, calling the numbers on "for lease" signs. That wasn't particularly effective, but it did result in meeting commercial real estate agents who could show us buildings before they had signs on them.

We looked at dozens of buildings, and seriously looked at 10. In one building in Emeryville, a high-end home-building shop had just gone bankrupt and cleared out, leaving all of their tools (these were going to be auctioned off) and built-in furniture. There were four beautiful desks with a conference room in the front, and a warehouse with skylights in the back. It had a definite fate-like feel: 4 desks and 4 partners; an air-compressor with plumbing, regulators, and fittings already installed; lots of built-in cabinets, drawers, and work-areas; and an upstairs break-room area that could easily be converted to living quarters. We could move in and get to work immediately.

Since Squid Labs had no assets nor any history of making money, I took the lease on our building personally. I had just sold a house in Massachusetts, and my wife, Christy, would soon have a job in biotech, so I was able to convince the landlord that I could (probably) handle the financial burden if Squid Labs never took off. I figured you can only go to zero, and that my partners wouldn't let it get to that point. However, we negotiated a break-lease clause that cost 3 months of rent plus the realtor's fees. The thinking was this: Either we're going to fail and need to get out of the lease before 3 years us up, or we're going to be successful and need much more space before 3 years is up.

Renting 5000 sqft of commercial real estate may not sound like the best way to live and start your business cheaply, but I think it's important to have a space whose primary purpose is work. For the first few months before we got our warehouse, each of us was consulting from our houses or apartments. Work certainly got done, but the positive change in attitude and emotion around the business when we started working from "Squid Labs" was simply amazing. If you're just starting something and won't be able to take an entire building, I would highly recommend finding some office or lab space to share.

Comments

[nfarrow]

Nice Squid bus LOL