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Should It Be Called “Startbucks?”

Opinion

Xconomy National — 

Today Starbucks begins providing free Internet in their stores. To me, this means that Howard Schultz has just provided 11,000 free offices for startups. To an entrepreneur, having tables, chairs, free Internet, and access to food and coffee is a golden opportunity. To a professional who provides support services to startups (e.g. marketing, design, business planning, business development), the local Starbucks just became a sales office. To a recent graduate or a talented programmer looking for her next big opportunity, Starbucks just became a productive hang out.

In the Entrepreneur’s Census, we observed that 42 percent of startups with commercial office space in New York were not paying any rent. These entrepreneurs have found free office space with potential clients, later-stage startup companies, and incubators. In each environment, startups benefit from both cost savings and strategic benefits.

Those startups that find space with a potential client enjoy a great opportunity in the product development phase to get immediate feedback. My company, for example, is testing its educational course management system this summer at a school that may eventually buy our software. In addition to free work space, we receive invaluable feedback from teachers and students as we move through our testing phase. As if having a free testing environment were not enough, we also get access to the decision makers that may eventually sign our purchase orders.

Space with a potential client is great; but, there is value to being housed with virtually any business. Some startups receive free office space from larger businesses or later-stage startups. These businesses can provide an entrepreneur with advice on funding, lawyers, staffing, growth strategies, etc. Many decisions are industry agnostic. Further, lean startups can avoid one of the biggest challenges faced by any entrepreneur: loneliness.

Incubators are a slightly different case, as they can be free (e.g. DogPatch Labs), subsidized (e.g. NYUPolyTech), or equity-based (e.g. Betaworks, TechStars, Y Combinator). Regardless of format, incubators provide a community for entrepreneurs in which to share ideas, form partnerships, meet investors, and connect with needed talent. In some cases, they provide the platform on which good ideas become great businesses. At the least, they provide space and community for entrepreneurs. Xconomy and an entrepreneur in Philadelphia, Robert Shedd, provide lists of incubators around the country.

In addition to these programs, several universities are now launching “proof of concept centers.” A recent New York Times article details how these centers match ideas with “investors and business people interested in developing them further and exploring their commercial viability.” At Yale University (my alma mater), the Yale Entrepreneurial Institute provided an early home for YouRenew and PaperG, two startups that have received venture funding and made significant progress in the last few years. Private investors, university endowments, and the U.S. government are all pushing these centers as a means to get ideas to market. Students should research opportunities at their universities and startups that are not directly affiliated with universities should look for ways to get involved.

“You get what you pay for.” This old saying applies to many things in life. For startups, though, free or subsidized office space often provides some type of community which in turn, occasionally, brings invaluable additional resources. And at the minimum, it’s, well, cheaper.

Matt Shapiro is the Author and Founder of the Entrepreneur’s Census (www.bit.ly/entrecensus) and the Chief Executive Officer of Tooble, a new educational software venture. Contact: matt.shapiro@yale.edu. Follow: @entrecensus Follow @

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  • Haim

    Well, it’s not like Starbucks made an altruistic move – he was losing the wifi battle to others that were providing free access for years while Starbucks were charging for it, requiring you’d have a card with $5 in it and assorted similar BS. I have been working in coffee shops for a long time and never in any of Schulz’s stores, and will continue to frequent those who always supported me with free Wifi instead of the late to wake-up behemoth who finally smelled the coffee.

  • Michael

    Starbucks is just now trying to catch up to its competitors, who have had free wi-fi for ages. He’s probably also noticing a loss of customers, including me, who have boycotted Starbucks due to their “gun-friendly” policy.

  • DJ

    Sitting here at the Moraga Starbucks reading your post for the first time and BAM! I am enriched by your news. I am turning down my aircard and opening up g-maps to find cooler locations to create from. While I am an ignorant coffee slob, Starbucks provides an energy infused location to create & meet like minded folks. Currently listening to two guys struggling with their Angel investor. Time to introduce myself. Add another loyal follower to your list.

  • I certainly depended on Starbucks as my fallback mobile office and Internet-access point on my cross-country drive to San Francisco. It was all the more important to have this infrastructure available because we were uploading lots of huge video files along the way, and with hotel/motel Internet you don’t always get what’s promised. The fact that Internet access is now free and frictionless at Starbucks made things all the easier. I’m especially grateful to the staff at the Starbucks on Frontage Road in Savage, MN, for their extended hospitality and tolerance.