One thing that I didn't quite get was how typical SME offices are set up in Malaysia. Especially in KL for IT companies. They're small, hard to get to (or find within blocks of buildings with weird entrances) and not to mention expensive parking fees. Then you have the indirect costs of your staff coming in for a long commute. Finally you have expensive fixed cost of rent. The so called incubators are not much different either, except they're even further out and have even more expensive rent vs space.

So what can an IT startup do?

• startup as SOHO
• co-locate your servers, and you don't have to pay high price of broadband to your office and setting up servers there.
• telecommute, individual connections are much faster than than shared office line.
• Use FOSS best practices of online collaboration, internally.
• for physical meetings use virtual offices, which are now available around KL. It can be as low as RM15/hr. Physical space on demand.

Keep the savings from being lean to build up capital, especially cash reserves.

Eventually you will still want the benefits of a permanent office, but the efficiencies of the above can still be applied to keep costs low. By this time you will have ample cash reserves to deal with startup costs of physical office without having to take a small loan.

Next up will be using advantages of FOSS for small IT companies.