By Jack Seymour

BrightFunnel is a San Francisco-based startup, providing data analytics for B2B marketing with their unique revenue intelligence tools that link marketing campaigns with sales performance. Founded in 2012, they now boast a robust client roster, including Cloudera, Revel Systems and Upwork.

BrightFunnel is located at 222 Sutter Street in San Francisco, where it occupies 6,700 square feet for its 50 employees, with the expectation to grow to 85 in this space.

Speaking with BrightFunnel’s VP of Finance and Operations, Jason Kalira, we learned about some of the growing pains his company encountered with their first office space, and what it takes to grow in this expensive market when staying in San Francisco is a key priority.

SEYMOUR. Jason, BrightFunnel is booming! You guys somewhat recently moved into a new office at 222 Sutter St. Tell me a little about the latest move and how it came to be.

KALIRA. It was clear that we had outgrown our 2,600 square-foot space in downtown San Francisco. What initially seemed like an oasis of endless space had quickly given way to excessive overcrowding by uncomfortable and cramped employees.

If you are a growing startup in San Francisco, you know that good space in San Francisco ain’t cheap, and cheap space in San Francisco ain’t good

While the space had one thing going for it, an incredible location, nearly everything else about it had become incredibly painful as we packed over 35 employees into every available nook and cranny. The optimal spacing in a professional office setting is about 175 square feet per employee—we were below half that at 75 square feet per employee—so, not ideal.

The lack of personal space was almost the least of our pains. You knew it was going to be a good day when you had a meeting, and there was actually a conference room available. So, we converted all private offices to meeting rooms and put a door in the kitchen so our sales reps could conduct demos in peace and quiet. We eventually became so desperate for meeting space we even converted our server closet into a call booth. We had people taking calls everywhere—the stairwells, elevator lobby, and probably even the restroom if it wasn’t for our next big problem…

Hands down, the biggest (and most inconvenient) problem at this office was the restroom. We had only one, key-locked, single stall bathroom for the entire floor. Oh, and this single restroom was shared by both our office and the one down the hall. Is this scrappy start-up life or what?!

Needless to say, it was time to move on. But the process to acquire our new office space didn’t come without its share of hurdles.

SEYMOUR. That’s about as scrappy as it gets! When it came to choosing a location for your next office, how did you come to settle on Union Square?

KALIRA. Remaining in San Francisco trumped just about everything else on our wish list. If you are a growing startup in San Francisco, you know that good space in San Francisco ain’t cheap, and cheap space in San Francisco ain’t good. Figuring out what made sense, while staying within the confines of the city, was an initial hurdle for us.

While we never considered leaving the city, the neighborhood we should settle down in was a topic of debate. There were a lot of considerations—everything from current employee commute times, to the variety of lunch options nearby, to access to public transportation.

We conducted employee surveys to understand location preferences and even completed commuting impact studies for every new office address we considered. Ultimately, we decided if it ain’t broke, don’t fix it, and focused our search in our existing neighborhood, which we had grown to know and love. While this inevitably opened the door for additional hurdles, our team was incredibly happy with this decision.

SEYMOUR. Of those additional hurdles, what would you say was the hardest to overcome?

KALIRA. One of the biggest challenges you’ll likely face as an early stage startup looking for a new office is managing your new budget requirements. On the one hand, you are a rapidly growing startup that needs more space, more conference rooms and more restrooms. On the other hand, you are a rapidly growing startup…and that often means you are scrappy and don’t have an endless budget to throw at rent each month.

SEYMOUR. Any advice, or tips for other startups dealing with similar budget restraints?

KALIRA. Look for a Sublease instead of a Direct Lease! Existing tenants who want to get out of their current lease are often less interested in getting top dollar, or even current market rate for their space, than a building owner might be. The top priority for these tenants is to get out of their lease and cover their costs so they can move onto a new space for themselves. Additionally, a sublet usually offers a finished space that doesn’t require as many out-of-pocket expenses for electrical, plumbing, cabling and other infrastructure—a huge win.

Also, try crafting a Class A Space in a Class B Building. Expansive updated lobbies, in-building dry cleaning and rooftop gardens are great, but opting for a professionally managed Class B building (without all of that glitz and glamour) can free up quite a bit of budget to spend on creating a top-notch experience where your employees spend the majority of their time—in the office.

SEYMOUR. Another complex hurdle that a startup faces when choosing an office space is predicting how much space it needs and for how long. How did you address this issue?

KALIRA. Moving into a larger office means the business is doing great and growing rapidly—a good problem to have! However, if your business continues to do well (and you are betting that it will) and you didn’t plan very well for the growth, you may need to move into a bigger space again in six months. This is a bad problem to have.

At BrightFunnel, we moved into a space that has enough room for us to double our team size but doesn’t have a massive amount of unused space at our current headcount. We have multiple communal areas that we currently use for events and collaboration space, but that we can easily grow into as the team continues to expand.

SEYMOUR. Any final advice for other startup executives or founders out there getting ready to move?

KALIRA. Yeah, at the end of the day, managing your first big office move as a startup is no easy task.

However, the more you know about the process up-front, the better-positioned you’ll be for success. If you can predict the hurdles you will face and plan for how your company must solve them, you’ll give your employees an office they’ll love coming to work at every day.

Jack Seymour is a leasing associate at Transwestern’s San Francisco office, Jack’s primary role is to serve as an analyst and communicator on major projects working alongside the established office leasing team of Jeff Moeller, Peter Conte and Zac Monsees. He is also responsible for developing relationships with and serving the needs of local and/or national prospective clients as well as providing diverse marketing support for leasing services.

West Coast Commercial Real Estate News