The time comes in the life of a start-up when it must leave the modest digs where it spent its early, cash-starved years.
In the case of Apple-founder Steve Jobs, that was the garage of his childhood home in Los Altos, Calif., though some associates contend that not as much went on there as Hollywood has portrayed. For Philadelphia tech newbie RoundTrip, home for the last year was one of the region’s many coworking spaces, WeWork in Northern Liberties.
Its decision to flee the nest for a place of its own, however, could rank among the most anxiety-provoking of recent start-up relocations. RoundTrip, whose app enables medical providers to digitally coordinate patient rides, moved into a fire zone. On purpose.
“It was very disruptive for us,” Mark Switaj, CEO of the tech company, said of the fire’s impact on RoundTrip’s move to the 200 block of Chestnut Street last month.
In February, a four-alarm fire destroyed an apartment building at 239 Chestnut and heavily damaged adjoining businesses that remain shuttered, including the Little Lion, Revolution Diner, and Best Western Plus Independence Park Hotel. All are directly across the street from a new neighborhood draw from which each expected to benefit: the Museum of the American Revolution.
Three months after the blaze, RoundTrip moved into 2,000 square feet on the fourth floor of 221 Chestnut, seven properties east of the fire scene. No move is ever easy. Its was a test in ultra-flexibility, patience, and a tolerance for bad smells.
At the time, Chestnut was closed to vehicular traffic, making the delivery of furniture and other office supplies a mostly nights-and-weekends affair requiring roundabout routes and driving the wrong direction on the one-way street. The “very strong odor” of burned wood made keeping the windows open impossible.
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It sure wasn’t the relative Shangri-La existence of WeWork. There, inside the brick walls of the former Schmidt’s brewery, RoundTrip enjoyed the perks of affordable rent and no office-management duties, along with cozy communal touches such as a fireplace, coffee bar, and foosball table.
And the magnificent water.
“Everyday was new fresh-fruit water,” gushed Switaj, having a nostalgic moment in RoundTrip’s still-coming-together headquarters on a recent afternoon.
I had written about the start-up in March, intrigued by Switaj having identified an underserved niche — patient transportation for the underprivileged and the elderly — in prior roles as an emergency medical technician and director of sales with a national ambulance-services company.
Switaj had mentioned then that the company’s ride volume was growing by 30 percent to 40 percent month-over-month, with RoundTrip on track to reach $1 million in revenue this year. With 24 full-time equivalents here and throughout the country and plans to add more, Switaj said RoundTrip would soon need to move out of WeWork to bigger accommodations. The company’s lease there, for a space that could comfortably fit eight, was up in April.
I had asked Switaj to keep me in the loop, as I thought other start-ups could benefit from insight into others’ processes for when, where, and why to move out of a coworking space and into something more individual. I became even more intrigued when Switaj chose a heavily disrupted locale for his company’s new address.
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Before the fire struck the 200 block of Chestnut Street on Presidents’ Day weekend, Switaj was in the hunt for suitable properties, mostly in Northern Liberties, Fishtown, and Old City, he said. With a workforce primarily of millennials — a demographic not into owning cars or living in the suburbs — Switaj said he knew he wanted to get into Center City or close, largely for its accessibility by public transportation.
An ad on Craigslist led him to the property on Chestnut Street, which was seeking a tenant to take over the last two years of a five-year lease. Switaj wasn’t turned off by a site visit, even with the street closed, demolition apparatus in abundance, and that unmistakable fire smell.
“The location is really, really nice,” Switaj said, adding that the “plethora of places to get lunch, drinks, celebrate our successes” would help with employee retention and recruitment.
But there were some reservations, he acknowledged.
“I’m thinking, ‘How old are these buildings? Could lightning strike twice?'” Switaj said. According to public documents, the five-story building was built in 1899.
He also thought about what life is likely to be like there when something ultimately is built on the fire site, now a post-demolition charred gap in what Inga Saffron, architecture critic for the Inquirer and Daily News, described in a February column as “part of a stunning ensemble” designed to mimic Italy’s Renaissance palaces, “that stretches virtually uninterrupted along Chestnut Street from Second to Fifth Streets.”
“Something’s going to happen there, right? There’s a big hole,” Switaj said.
Ultimately, the positives outweighed the what-ifs and he “made the leap,” signing a lease in April and moving in by May 1.
“One of the first things I did was triple check insurance to make sure they knew we moved,” Switaj said. And he directed all data be backed up to the cloud.
Moving out of coworking space, he said, feels like growing up.
“I’m no longer in my parents’ place,” Switaj joked. “It almost legitimizes the business.”
Rick Nucci, cofounder and CEO of Guru, a Philadelphia tech start-up specializing in knowledge-sharing systems, cautioned young companies not to be in a rush to leave coworking spaces.
“It’s a turnoff for investors, honestly,” he said in an email. “They want to see that a start-up is thrifty/resourceful when it needs to be and will expect them to be working in a coworking space these days.”
The time to move out, Nucci said, is when a company is growing and “you really want to create a sense of company identity and values, and that’s when getting your own space can really help.”
That move and all the “complexity” of independent living that comes with it should be something a start-up is ready for, he said, warning that “there is typically a lot of unexpected expenses as you realize all the great perks that came with your co-working provider are now on you.”
Which brings us back to the fruit-infused water that Switaj and his crew at RoundTrip couldn’t get enough of at WeWork. His attempts at replicating it by adding water to dried fruit has so far underwhelmed his employees.
“They didn’t like that,” Switaj said. “We’re going to figure it out.”