The One Reason Your Startup Will Fail

7th October 2014

By: Jeff Jacobson

Predicting the Future

No one can predict future sales or customer acceptance of their business. Surely without either, your new venture is destined to fail. There are just too many variables that affect your company’s growth to accurately predict where you will be next month, next year or even in five years from today.

But what is the one decision you can make that will nearly assure failure for you new business? It should be an easy answer, but it is often an afterthought for many young businesses. OK, here goes. The answer…inflexible real estate commitments.

Proof of Concept, Now What?

Imagine you are the founder of a new company. Maybe a tech start-up or a consumer product launch. For the first six months of your venture, you were working out of your basement. Early testing and market acceptance has gone gone well so you now need to establish a more permanent place of doing business. In addition, you’ve been a one person show until now. Surely you can’t have professional meetings or conduct employment interviews in your basement.

How Much Space Do I Need?

This is the million dollar question. And unfortunately, the answer is always hard to predict. Most landlords and brokers are incentivized to push prospective tenants to sign the longest term lease at the highest rent. It makes sense - their goal is to limit their risk and insure a steady revenue stream.

But what about the tenant’s dilemma? Should I lease more space than I currently need in preparation for growth? What if I choose a location and find that future employees live on the other side of town? If I take exactly what I need today, is there room for expansion? Should I consider subleasing office space? If so, how do I find available space?

A New Solution

The best way to prepare for future growth (and unfortunately sometimes contraction) is to build in flexibility to your real estate commitments. There are various solutions in the marketplace including co-working facilities and incubators, but often these solutions come at a high-ticket charge and there are limited location options for the user. Kinglet is a new approach that provides a diverse selection of pricing and a wide range of location options, all with month-to-month commitments. Best of all, you can be in your new space in as little as 24 hours.