These is a new trend in the Bay Area. Renting an office from professional setups like Regus is becoming very passe. After all, who wants to deal with all of their rules and the year long or 3-months long contract? The new wave of the future for startups is flexible work spaces like Plug and Play and SandBox Suites.

Plug and Play is pretty old by Silicon Valley standards. They were established in 2006 and is growing by leaps and bounds. I attended their open house on their new Redwood City facility. They have already filled their Sunnyvale and Palo Alto offices with startup companies. Judging by their progression north, I would guess that they will be in San Francisco proper any day now.

These are just a few places where startups can work. More are springing up almost monthly. Mitch Denny put together a chart showing the variations between the facilities at three different work areas.

One important piece that he has not included anything is about networking. Networking is the key to the success for many startups. Networking can help an entrepreneur get fresh ideas, solve problems, find partners and find funding opportunities. The networking opportunities would depend greatly on the startups in each office and if the facility scheduled any events to get the entrepreneur out of their cubicles to talk to each other and maybe a VC or angel.

Some of these workspaces seem focused mainly on the short term revenue, like collecting monthly office rent. Others like Plug and Play seems to be focusing on the incubator portion of their business. Personally, I would think that the long-term outlook of helping startups would be a better business model than just another work area rental place. Time will tell.

I attend the open house at the new Plug and Play location in Redwood City. What a great event! So much energy and a great mix of startups, VCs and angels. I am looking forward to more events from these guys.

Plug and Play seems to be a business that mixes rental of temporary office spaces to businesses, primarily startups, with angel and VC investing in some of these businesses with their own capital. It is a bit like an informal business incubator. It is a unique business model.

What surprised me is how many people attended the open house. The open house was from 5-7pm on Thurs, May 22, 2008. I had expected a few of the people who worked in the Redwood City office to hang at the party, mainly because the open house included free food. (You would be amazed at how many people will show for free food, even in this expensive area.) But the place was packed with people from all different businesses including startups, support businesses like accountants, insurance agents and hiring firms, the Plug and Play staff and VCs and angel investors.

The part that I enjoyed most was speaking to other entrepreneurs who have been successfully building their businesses for a while. It is always great to hear about someone else’s experiences in the trenches.

The best part of all is that this open house suggests that Silicon Valley is not seeing any downturn despite what may be occurring the the US economy as a whole.