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100% agreed. I've participated with a startup/think tank recently (http://webecologyproject.org) and while we could have had offices- we didn't. It worked so much better for the most part.

Our downside to this was twofold however:

1) We choose our team poorly & it was too big. That isn't to say that these aren't all simply wonderful people, but for making a highly efficient machine- it was a hodge podge of people with various levels of interest, skills, experience and commitment. We crept up to 10-12 people quickly and since it wasn't a formalized business structure at first this seemed ok. We were however all in the same geographic location (Cambridge).

2) We had too many meetings, which people stopped attending and become ineffective. These became a time sink. People would defer conversation to the meetings instead of our internal email list (which for some conversations is the right thing to do), but then these became lengthy 4-5 hour meetings that stopped getting things done. Our coding slowed. Decisions stopped being made, interest was lost slowly.

These are points very specific to our group and I totally agree on holding off on office space until you MUST have it. Keeping costs down and excellent workflow up initially are a must. Just don't try it with 10 people and don't kill people with mandatory meetings. Use IRC or some other tool religiously.

If anything, look into a coworking space like Betahouse (http://betahouse.org) or New Work City.



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