Startup Office Space in the UK (or should we just work from home?!)

I work from home, but some of my friends and/or clients (the two overlap) have been doing this. There are some excellent dedicated startup spaces (as you note) but often a let (or more often a sublet) of existing office space can be good value in the existing economic climate because a lot of organisations with leases on space are finding that they have space they aren't using but time left to run. Its certainly worth talking to commercial letting agents/looking around to see what's on offer.

If money is tight you want to look very carefully at the economics of any offices being offered and whether - if services are included - they end up being very expensive. One startup I worked for was heavily VC funded and we used Regus a lot who (it seemed to me) had a licence to print money from their activities. That does not sound like what you want.

Some people have a lot of success with group working spaces. For example one of my clients - Trampoline Systems - uses their excess space as a hotdesking environment that is very pleasant:

http://thetrampery.com/

Often used by contractors and partners, but there's no restriction. You may find that having a relationship with such a space is a neat compromise. You can use it occasionally when you want to all work in the same place (excellent for hack sessions maybe) and for use of meeting rooms, but most of the time you can work from home. Terms seem to vary a lot: some places being very pricey for what you get, and others locking you in to paying rather a lot. Shopping around is again essential.

Going and having a look and seeing what you think of the place is of course also important.

Some of my clients do everything virtually. Personally, I prefer some human contact so pure virtual working would not be ideal. But a great deal can be achieved by passive use of skype and other networking tools to make it feel like you are all in the same working environment - something I am sure will improve.

Depending on what type of start-up you are, you might want to look into co-working space. Co-working space is a great alternative to working at home, or local coffee shops. The ability to interact with others vs. the loneliness of working at home helps many to be more productive and can have a positive impact on your business. The networking with other start-ups is great as well. Just search co-working space in your area and see if there is anything available. Most spaces have multiple membership levels to fit your time and budget.

First tip, if you're near Cambridge you might want to look at what the fine folks from Redgate offer.

built these facilities without providing the ideal environment

I think it will very much depend on personal taste and things like noise level in the rooms, so the only reliable way to judge this is to visit the facility in person.

work from our homes

37Signals famously prefer to reduce in-person discussions and go for collaborative tools instead. For me it's vital to have a place to 'go to work', a place that can help enforce a physical separation between what is 'work' and 'free time'. Additionally I think that while interruptions are annoying, having the team all together in one space generates better ideas, and this outweighs all negatives. You could look at past discussions on this site for more opinions.

It depends on your needs and budget/funding.

If you're self-funded and don't have particularly deep pockets, then office space & lease is an overhead and commitment that could be keeping you from spending on more core aspects of your business. Not having one certainly cuts the burn rate and keeps you in the game longer. Home offices cut out commuting, that's time and stress saved. It can also let you draw from a much wider talent pool. That brilliant ex-colleague who lives three hours away is far less likely to join your startup if he has to sell his house and move his family to a new city.

You'll have to balance this against your team's personal needs. Some people can't work from home because they need the social interaction, or it's just not a very conducive environment for doing work. Some need the work-home separation, although if one needs that, the all-consuming nature of a startup is maybe not for them.

Equally important is team dynamics. If your team is a group of people that have never worked together, then the isolated nature of working from home could be counter productive to get the team to gel and stick with it for the long haul.

In our software startup, we work from home. Any face to face meetings we do, we do at home, but they're quite rare. We do all our communications over Skype, padded out with a Wiki and some other software. I blogged about that here, showing how you can roll out decent infrastructure for almost no money, that is well suited for working from home.

Jeff Atwood blogged about his experiences developing software from home here.