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To Expand Your Business, Go Home

By JOHN TOZZI, BUSINESSWEEK.COM
Posted: 2008-09-04 14:03:48
Filed Under: Home Business, Small Business, Online Business
Moving out of your brick-and-mortar offices and running your company solely online can cut expenses and boost productivity.

Plenty of Web entrepreneurs start their ventures at home and move into commercial spaces only when they expand. Unity Stoakes and Steven H. Krein did it backwards. They ditched their office space in midtown Manhattan a year after founding OrganizedWisdom, a health search engine vetted by physicians, and sent their staff of nine to work from home. And after more than a year of running OrganizedWisdom remotely, Stoakes and Krein wouldn't do it any other way.

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    The pair of serial entrepreneurs were willing to experiment based on their experience at their previous venture, Promotions.com, which they took public in 1999 and was acquired by iVillage in 2002. Stoakes recalls being frustrated by how much time they spent finding room and sorting out other operational details for a staff that grew to more than 200 people.

    Founded in January 2006, OrganizedWisdom aims to provide health information curated by online guides and vetted by doctors, making money by selling advertising and licensing information to health media companies. To collaborate online, the company depends on group software like chat, wikis, Basecamp for project management, and PlanHQ for business planning tools that were clunky, expensive, or nonexistent just a few years ago. Even when the company had an office, several staffers worked off-site -- one in Boston, another on the West Coast -- and others worked from home part of the time. "More and more we started coming into the office less and less," Stoakes says.

    Operating Expenses Slashed
    With the infrastructure already in place, Stoakes and Krein gradually switched to remote work early in 2007, abandoning their office entirely that September. Now, Stoakes works from his apartment in Manhattan's West Village or sometimes from a nearby park, his building's roof, or a neighborhood café. Armed with his MacBook, iPhone, and paper notebook, he says he can work wherever he has a Wi-Fi signal. At first, he and Krein debated whether the change would make them more efficient. Almost a year into operating without an office, Stoakes is unequivocal about the benefits, which he recently enumerated on his blog.

    In financial terms, eliminating the cost of Manhattan office space cut OrganizedWisdom's operating expenses by about 30%, Stoakes says. The company now recruits new hires from anywhere, rather than focusing on people in New York. OrganizedWisdom has hired five people abroad through an outsourcing company that manages the tax and employment law issues (BusinessWeek.com, 7/3/08). And Stoakes has positioned the shift as his company's commitment to environmental sustainability, pointing out how it eliminated the energy, paper, and travel costs associated with an office.

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