How to Build and Expand an International Headquarters

By Brian Samson

When you’re launching a services startup, finding office space can be complicated, especially in a foreign country. I'd like to share some notes on our journey and how we got from a co-working table to our own beautiful space we call home. 

My co-founder Alex and I are based in San Francisco, California. However, we decided to build our international headquarters for our company in Buenos Aires, Argentina, an attractive city for a software services company. We started out in early 2016 and didn't have a steady cash flow to invest in expensive office space. We were closely managing our burn rate. We also wanted to find a place our team could grow and build a culture.

Software services companies operate differently than software product companies. Our operating model was based on being able to sell consulting hours and recruiting amazing talent for the projects we sold. Services can be difficult to predict and forecast supply and demand (even for the established ones), so we knew it would be best to start small and scrappy.

Our First Space

In January 2016, Alex and I visited Buenos Aires to tour commercial office space with a real estate broker from CBRE. The typical space was enough for 30-50 people and would cost us about $10,000/month. This was too much to spend without knowing if our company could keep up and justify this space.

In February 2016, we hired our first two employees, who spent their first week working from a Buenos Aires Starbucks while searching for the right space. We recommended co-working, which was wildly popular in San Francisco and just catching on in Buenos Aires. We asked our team to develop criteria for finding the best co-working space. They came up with:

  • Simple pricing
  • Good location, close to transit
  • Amenities
  • Environment

We decided to go with a new co-working space in the Palermo area of Buenos Aires called La Maquinita. Palermo was a trendy neighborhood of young professionals, coffee shops, bars, restaurants and tree-lined streets. This area also targeted the growing number of tech entrepreneurs looking for community. La Maquinita had a bilingual staff, a cool hipster office and all the normal co-working amenities. A huge benefit was the turnkey solution. We didn't have to worry about buying furniture, internet, security, etc. Everything was handled with our monthly rent, based on each desk we were using. Each seat was roughly $200/month. 

By July, there were few empty seats in the office, which coincided with our growth as we had a team of 20 engineers working side by side. Space was at a premium. The co-working office was quickly running out of room and we were crammed like sardines. In some cases, our poor software engineers were working eight to a table that was meant to accommodate six. It was uncomfortable, and relocating the team was our only option. Unfortunately, we were still a young company and hadn't reached a point of predictability with our sales. We weren't ready for our own space yet and needed a transitional area. I now understand the importance of finding a co-working space with enough flexibility to grow.

Our Transitional Space

The criteria for finding our next space were:

  • Available ASAP (we were running out of space)
  • Amenities
  • Attractive office with room to spread out

We decided to stick with co-working and had an interesting option fall into our lap. La Maquinita just so happened to be opening up another co-working office in another part of the city. It was in Belgrano, an upscale neighborhood, although not as centrally located as Palermo. The office was on a busy street with loud buses and some seedy local stores, but there were certainly perks. The space was stunning with new furniture and fresh paint. I think there is something special about being the first occupant of an office. We took on the role of anchor tenant due to our size and had our own floor where we could proudly display our logo. 

The risk we took as the anchor tenant was a less-flexible pricing model. We paid for additional seats, whether we used them or not, to retain our anchor tenant status. So the pressure was on us to grow.

By the end of Q1 2017, we were facing steep price increases based on our forecasted growth. The level of service wasn't worth the high prices. We looked at the numbers and decided it was time to invest in our very own office space. Be careful not to lock in lease terms if your business isn't yet predictable.

Our First Real Office

The criteria for this next leap were:

  • Convenient location
  • Cost-effective
  • Modern and attractive
  • Flexibility to grow

By Q2 2017, our company had grown to over 40 people in Argentina, many of whom were working in Buenos Aires. We were excited to make this leap and finally have a place to call our own.

We found a beautiful building, near our original office in Palermo. We were the sole tenant on a floor and had a suite across the hall we could use if we wanted to quickly expand. Our Argentina management team did a great job on finding this office, and we actually saved about 40 percent from our prior rent. The downside was losing the co-working amenities and having to hire our own janitorial services, install internet, utilities, security, etc.

Your own space doesn't need to be expensive to be amazing, and it's best to wait to purchase until your burn rate is predictable. We are fortunate to have such a great office to call home. It's positively affected our culture and team spirit.

--

Brian Samson is currently co-founder of True North. He's an operations leader with 3X Startup exits.

This post was published on the now-closed HuffPost Contributor platform. Contributors control their own work and posted freely to our site. If you need to flag this entry as abusive, send us an email.
CONVERSATIONS