In the early 20th Century a psychologist named Abraham Maslow proposed that human needs fit into a five-level hierarchy: The lowest need is that of physiological well-being — including the need to eat and drink — followed by the need for safety, then for belonging and love, then for esteem and finally for self-actualization. The emergence of each need characteristically depends on the prior satisfaction of a more basic need.
Over time I’ve noticed that there is a hierarchy of needs that applies fairly universally to businesses and space as well. A business’s start up phase corresponds to the first phase: the need for physiological well-being where only basic needs must be met. Typically, money is short and is flowing out for research, development, inventory, or just living expenses, and most people don’t want to incur an expense for rent. So a business's first space might be a founder’s living room or a borrowed desk in a friend’s office. In this phase it’s usually only the founders working to build the product or make the first sales contacts and a New York City equivalent of a hovel would be fine, if a hovel could be found.
In the next phase, usually the work load is getting to be too much for the original founders and some help needs to be added. Around 2 to 10 employees will be added and space must be found for them. But still, it usually means working in whatever make-shift space is available: a sublet in a lawyer’s office, maybe, or an unused fashion showroom working on folding tables and chairs. Maybe, if the company is really lucky, it can score some space in an incubator that has a ping-pong table and a stocked kitchen rather than just a Mr.Coffee that has to be cleaned out in the bathroom in the hall. The only measures that really matter are that the space is warm(ish), dry, electrified, with internet and 24/7 access.
In the next step, the company has started to gather enough resources so that the founders don’t lose sleep before every pay day. A solid round of investment or a solid base of customers seem to provide some measure of security and so the company feels comfortable upgrading its surroundings, but just a bit. Some common actions are to look for space in the neighborhood the founders have always wanted, to find a space that offers more sunlight and feels slightly more open and less cramped. They start to see the space they want, and by extension themselves, as worth more and they will invest a little more time and money into searching and finding the right place. Still, the maximum term the company will probably commit to is about 3 years since they still don’t trust they can see clearly enough into the future to commit to anything longer.
After that, depending on how the company is scaling, they may plateau at 15 or 20 employees, or they may grow to 50 or the sky’s the limit.
One thing I like about what I do is that I get to meet a lot of dreamers. Moving from one hierarchy to the next is a leap of faith and that faith inspires me every day.