Sharing offices with another company is a rite of passage for many in the startup world — Built In Chicago’s own first home was under PowerReviews’ roof, and ContextMedia has taken more than half a dozen companies under its wings.
If you think about it, co-location makes perfect sense. The early-stage startup saves money and avoids signing a lease for an office it will outgrow in a few months anyway, and the more established company gets to utilize its ‘growing room’ while ramping up its hiring efforts.
But in addition to logistical upsides, the startup also gets the advantage of watching a successful company from within, absorbing part of its wisdom along the way. We talked to five Chicago companies that started in someone else's space.
You’d never guess it now, but social media startup Sprout Social’s first office was a single room inside another Chicago tech company’s headquarters.
"Lightbank was one of Sprout's original investors, and they helped us secure a conference room in the Groupon building,” said VP of Operations Rachael Pfenning. “The building was great — lively and a fun place to come to work — but working in a windowless conference room had some obvious downsides. As our team grew to about 30 people we moved into our own office in the West Loop which was really liberating.”
The team put a lot of effort into creating a space that felt like home, but Sprout’s continued growth soon brought the team out of the West Loop.
“Honestly, we never thought we'd leave, but after a couple years we outgrew that space,” Pfenning said. “We moved into the Loop and we're now in the process of building out our dream office, which is being designed by and for our team."
Today, Sprout employs more than 200 people in Chicago.
Reverb.com’s founder and CEO David Kalt is also the owner of the local brick-and-mortar institution Chicago Music Exchange. Kalt started the online music gear marketplace not long after buying CME, and his three-person team set up its first headquarters in a small room above the Exchange’s drum shop.
“If you ask those first few employees about their experience in that cramped second floor room, they’ll joke fondly about surviving 3 p.m. — when school let out and kids came in to bang on the drums below us,” said Kalt. “But in all seriousness, the co-location did help shape our culture early on. When you’re nearly elbow-to-elbow with your team, collaboration is a way of life, and that’s certainly something we’ve continued, even as we’ve doubled our headcount and graduated to our own two-floor office.”
At the time. Kalt said, it was comforting for his early-stage startup to co-exist with another successful company in its industry. But spreading your wings has its benefits, too.
“The ‘unknowns’ that exist early on as a young company can be scary, especially if you’re creating a new service that essentially didn’t exist previously,” Kalt said. “The ability to have our own office was a very physical sign of our success. And of course, it brought with it conference rooms, a video production room and a ping pong table, among other things.”
Founded by Northwestern University graduates Mert Iseri and Yuri Malina, SwipeSense got its start in a university-affiliated incubator. But after scoping out its first standalone office, the fledgling healthtech startup found itself in a pinch.
“SwipeSense was ending its time in the Northwestern incubator in Evanston, and we had located our dream office in the Ravenswood neighborhood,” said Iseri. “Only trouble: our leases started two months from that date. Rishi Shah extended a generous offer to house us in ContextMedia's brand new offices in 330 N Wabash. This was the new home that would house hundreds of new employees, and we took up a few of the available desks.”
Iseri said his team found the leadership on display by co-founders Rishi Shah and Shradha Agarwal and ContextMedia’s company culture infectious.
“We were inspired by the comradery that the office buzzed with — people are in there, fully productive at 8 a.m. — and the awesome leadership those two gave to the office,” said Iseri, adding that a piece of ContextMedia’s DNA came along with his company through the move.
“It felt very similar to moving from home into your dorm room — a little uncomfortable with way less amenities — but finally a space you can call your own,” he added. “We made the new space truly ours, with our own art, norms and culture… It is always a little nostalgic every time I visit the CM office — I still know where the snacks are kept!”
Back when bswift only had four employees, the company rented a tiny office that shared a conference room and a kitchen with a number of other startups. The tight quarters forced the founding team members to squeeze their desks together to fit them all in.
Upon reaching a dozen employees, bswift decided to rent its own loft space with more space than they knew what to do with — but the new space wasn’t without its own quirks.
“Instead of sharing the kitchen with other companies, we sometimes shared it with cockroaches. They never did the dishes,” said Chief Fun Officer Patrick McGarrity. “And we had soot in our ceiling that would fall onto our desks overnight. So, every morning, we all went through a cleaning ritual.”
“We also had exposed cat5e wires running all over the place, which, in hindsight, we really should have installed with the help of licensed professionals,” McGarrity added. “Especially since our office briefly experienced an indoor waterfall one day when the tank of water on the roof — well, actually, we never really learned what happened, but we do know that the tank stopped doing its job.”
McGarrity said early employees remember most of these mishaps with fondness, but the company eventually outgrew its loft space and moved into its current offices in the Loop. After experimenting with cubicles in the loft, bswift decided to strive for a more collaborative vibe in its new offices, largely inspired by its original four-person office.
“Instead of cubicle walls, we have benches with ‘landing pads’ that let visitors take a comfortable seat on the same level of their coworkers. We’re slowly getting rid of the rest of the dividers throughout the office, and even the barriers between different departments have windows in them,” said McGarrity. “We’re proud of the collaborative culture we’ve created, and the sense of community we’ve fostered.”
While many established companies can reminisce about their early days as office squatters, Chicago sales education startup Victory Lap is still in the process of forming those memories. Founded this year by a former sales leader from Groupon and ThinkCERCA, the company is developing and running a sales education and job placement program for aspiring closers out of ReviewTrackers’ new River North offices.
Founder and CEO Brian Bar said the arrangement came about through a connection with ReviewTrackers COO Kevin Kent.
"When thinking of a space for Victory Lap to reside in the first few months, Kevin and ReviewTrackers immediately came to mind,” said Bar. “I wanted to make sure that our sales candidates would have a great experience, and that we wouldn't feel like the 'uninvited house guest.'”
The co-location has been a boon to his company’s culture as well as the experiences of his students. Moreover, it has given Bar's team an opportunity to have candid discussions about growth with a team that is further along that path.
But although that growth will eventually mean that Victory Lap will need a space of its own, Head Sales Advisor Elle Bruno said ReviewTrackers’ culture will have a lasting impact.
"It has been inspiring to learn more about their culture through osmosis, and we've definitely learned a lot about what we want to do with our space and culture once we open our doors,” she said. “The Victory Lap students feel such a great energy being in the startup culture, and it's clearly motivating them to want be a part of something similar."
Images via listed companies.