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Living Together Works For Startups. Can It Work For Facebook?

Facebook has partnered on plans to build an apartment complex near its campus. Startup teams that live together aren't uncommon, but the business perks of the arrangement may not scale to a public company.

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    Menlo Park, Haven Avenue

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By the time Facebook revealed that it was partnering on a 394-unit apartment complex within walking distance of its Menlo Park headquarters, many Silicon Valley startups had already experimented with office living quarters. Most notably Facebook when it was still a college kid's pet project.

Startup teams that live and work together aren't particularly unusual in Silicon Valley. Their rationale for cohabitation usually goes something like, "we are working together around the clock anyway; we might as well save on rent."

Often it's more of an accident than a master plan. Cindy Wu, the cofounder of a site for crowdfunding scientific research called Microryza, says her company’s live-in situation initially developed when she and her cofounders invited contract workers to stay at their San Francisco apartment, which doubles as company headquarters. When those visitors got full-time jobs, it was easier for them to move in permanently than battle San Francisco real estate. Five of six full-time team members now share the one-bedroom apartment and office. Victor Ho, the cofounder of a loyalty program called FiveStars, also lives with several employees. He says living together made sense when the company moved from Cupertino to Mountain View to San Francisco. "We’re working all hours of the night together, so you get to know people really well, and they become your friends," Ho says. "And then as we’ve grown, we’ve moved into new offices. As people have had to move, it was just kind of very logical that they would move in with each other."

What starts as a practical decision, many founders find, comes with some decent business perks, too—to the point where listening to founders describe their live-in offices can start to sound a little like a techie version of kumbaya. "We share everything," says Nanxi Liu, the CEO of another startup with a live-in office called Enplug. "There is no this is mine, this is yours. It’s like family. I think the kind of dedication people have to the company and being teammates to each other [goes] to another level."

Some other business perks startups find in uniting home and work:

Friendships: Profitability and customer loyalty are both linked with employees who have best friends at work. Living with the people with whom you work facilitates close friendships. It's not a big deal to give a coworker direct feedback on a project when you store your toothbrushes in the same cup.

Working, all the time: Ho describes a period when he and his cofounder shut themselves in the same room for three months to learn to code, only pausing to sleep in six-hour periods. Liu says her engineering team once held a meeting at midnight on Christmas eve. When you’re always with your coworkers, work is always a possibility.

Easy onboarding: "[New employees] can think about how to provide value to the company rather than about where they’re going to live," Wu says.

Retention: Living where you work brings the consequences of quitting to a new level.

Facebook motivations for partnering on housing units for its employees are likely driven by practical concerns. Real estate in Menlo Park is scarce and expensive. Helping a developer build apartments is one way to ensure employees they hire can actually move there to work. There’s a tax incentive for the company to fund the 15 low-income units. But Facebook is also famous for trying to maintain what Mark Zuckerberg calls the "Hacker Way," which includes startup qualities like an open and meritocratic culture.

One thing that could hold its housing unit back from reaping the benefits of employee cohabitation often enjoyed by startups is that Facebook is not a startup. It is a public company that employees 5,299 people. This means it does not have two things that make living together a good choice for companies like Enplug, FiveStars, and Microryza:

Employees who expect work to be their lives: Many startup teams don’t have a problem with total dedication to their jobs. "People realize it’s not a job, it’s not a career, it’s part of your life," Liu says. At more established companies, however, employees often have the expectation that there will be a division between their work and personal life.

Unanimously young employees: Everyone who works at Microryza is younger than 24. None of the startup founders I spoke with for this article have employees with kids who live at work. And many acknowledged that the situation wouldn’t work as well in a family setting.

Unprompted, all three cofounders compared living together as a startup or at Facebook’s planned apartments to the convenience and community of college dorms.

For Facebook employees—many who ride a bus from San Francisco to work in Menlo Park each day—the convenience of the new apartment building, which sits 1.5 miles from campus, could offer enough appeal to make a move. But it’s also easy to see how living with corporate coworkers could offer the convenience of dorms with a horrific twist. You walk outside in your bathrobe to get the paper and see your receptionist. Your dog poops on your boss’s doorstep. And you must face, at the office, the drowsy neighbors who couldn't sleep thanks to your baby's screaming.

If employee housing works out for Facebook, the grown-up company, the way it has for startups, there’s a lot to gain by helping market St. Anton's apartments to its employees. But hopefully, for those first tenants, employee housing is not, like college, something best enjoyed while young and excited about the potential of starting a new project—something Facebook should have grown out of by now.

Slideshow Credits: 01 / [Images courtesy of KTGY Group, Inc.];