Meet Techspace, the startup in the business of helping startups grow
Britain may be brilliant for startups, but they’re all suffering the same problems: finding affordable workspaces. The cost of renting an office in many British cities has rocketed up over the past few years – you don’t even want to know how much a centrally located office in London could cost a company in rental fees.
Many startups have found ways around such problems by working remotely and collaborating online with tools such as Slack. Others make use of the working spaces that Google Campus offers or the mentoring abilities of MassChallenge. However, some startups are happy to be left to their own devices and want affordable, flexible working spaces.
That’s where Techspace comes in, offering up desk-by-desk workspace rental across London, and soon across the rest of Europe. I caught up with company CEO and co-founder David Galsworthy to find out how Techspace found itself working in the business of office-space rental.
1. Where did your big idea come from?
David Galsworthy, co-founder & CEO
Back in 2010, Alex [Rabarts], my co-founder, and I were operating an agency from the corner of an office space in Clerkenwell. To subsidise our rent, we started renting out desks to other businesses looking for a desk or two.
Luckily enough, this was such a hit that the desk sales eventually gave us enough of a revenue stream to rival what our agency was bringing in.
Eventually, Alex and I managed to put enough money together to take on another lease in Old Street. Thankfully, the demand for such flexible co-working spaces was quite high even a number of years ago. We housed roughly four companies to begin with, and this was really the birthplace of Techspace.
2. What is the problem that Techspace aims to solve?
As Sherry Coutu (CBE) identified in a prominent report, Britain is facing a “scale-up gap”, whereby startups are struggling to make the jump to becoming bigger companies. One of the main reasons for this is due to a lack of affordable commercial property. Despite London, the UK’s tech capital, boasting over 800 shared working spaces, many existing offerings aren’t flexible enough to enable startups to grow rapidly.
That’s where Techspace comes in. We’re trying to support fast-growing technology businesses, and help startups to bridge this gap by offering affordable, flexible workspace.
3. What’s the biggest challenge you’ve managed to overcome so far?
The decision to expand came at a time when we hadn’t evolved enough as a business to secure venture backing. Expansion, at this time, therefore put a significant financial strain on us as co-founders – having to commit personal capital and give personal guarantees on bank loans to the business to secure new spaces on Old Street. At the same time, as our operation was growing, there was more capital, management and process planning required as we expanded our headcount. Finally, as we wanted to continue to grow even bigger and had firmly reached the limit in terms of personal exposure, we needed to secure investment capital.
To do this, we committed yet more time and capital in harnessing the right talent to work with us and help us craft a vision for growth, backing it up with a financial strategy to take us there. All this put an additional squeeze on the business and left us with a lot of balls to juggle!
Although risky, the benefits of doing all of this at once was that it created an urgency that pushed us to create an investable business. It also gave us a track record in working together with our senior team when the stakes were high, and has now given us the confidence to make more big decisions more comfortably working under pressure as we continue to grow.
4. Where do you see yourselves being in five years’ time?
As a company, we want to keep expanding and that means moving into new cities. For example, we have plans to launch in Berlin later this year, off the back of a funding round worth £5 million. By our own estimations, Techspace will hit 600,000 square foot in Europe in the next three years. We want to be at the forefront of the worldwide cultural shift into flexible workspaces.
5. What’s the one thing you wish you had known before starting Techspace?
Back in 2011, we were using Techspace as a means to try our luck at other things. I had a number of side projects that gained momentum, and Alex developed two or three other online products that had potential. After 12 months we realised that most investors we spoke to were more interested in Techspace than they were in our side projects. If we’d known that Techspace was the winning ticket sooner, we would have been at least six months ahead of where we are now.