Our real estate company offered a niche service intended for start-ups. Instead of shutting us down, the pandemic pushed us into a new market: Fortune 500 enterprise clients. Here’s why I think we need more players in the space.
Eight months ago, it was hard to imagine what the office of the future might look like: Some predicted cubicles of ceiling-high plexiglass accessed by touchless doors and elevators. Others debated the role of augmented reality. Yet others said the office was dead. Now, coming up on, likely, a full year of the “new abnormal,” and after a widespread embrace of the flexible workday, we have a little more data to make this prediction. What I’ve seen personally is something our tech-based CRE company never bargained for: Since summer, and increasingly, I’m watching Fortune 500 companies ditch big office leases and come to us for information about a completely different arrangement: They’re suddenly after the very thing we’ve been offering for almost four years — a flexible, pay-as-you-go version of hub-and-spoke.
Upflex is my fourth start-up. My business partner Ginger Dhaliwal wasn’t new to this world either; she has been building complex tech products on web and mobile for 15 years. When we launched our tech-enabled network of flexible, dedicated micro-offices on demand in 2017, we were operating under the impression that our product was for start-ups — a cool benefit that would be easy for small, nimble early adopters to pick up and implement as a way to attract the right talent. It was on this premise that we recruited our first customers.
The idea was, companies would tap into our network of on-demand office spaces, so their employees could work from any number of offices depending on where they were and what their needs were on any given day. This flexibility without added complication or cost was a great amenity. But we knew at the time, it wasn’t an essential service. There was some demand, but not tons. In fact, we knew, so many companies — the Googles and Apples of the world, and everyone who wanted to be them — wanted the opposite of what we were enabling: Instead of a hub buttressed by a vast network of micro-offices all managed through the same app, they were invested in creating one big, super comfortable space with tons of amenities, to make employees feel happy and at home. That office ‘wow’ factor was a way to get talent in the door while also coaxing employees into spending as much time as possible at work.
But when 2020’s pandemic set in, things changed. The nimble start-ups were positioned to cut their budgets to the minimum. Many of their teams were already comfortable working from home, and they weren’t in a position to provide flex space as a cool employee perk. There were moments early on when I thought it might be the beginning of the end for Upflex. What I didn’t expect was that, within weeks, we would start receiving inquiry after inquiry from very large companies. Enterprise companies that had gone all-in on the mega-office were realizing that above all, they needed flexibility.
Now, we’re partnering with the flex/agile teams at some of the world’s leading brokerages and I’m hearing from my colleagues at those firms that their large occupiers find the on-demand hub-and-spoke solution addresses some of occupiers’ biggest 2020 concerns: namely, employee happiness and financial efficiency.
While I have good reason to believe this model will only grow more popular, I also see wide adoption taking time. For one thing, a lot of companies that come to us still have long-term leases on their shoulders. Some are on the brink of those leases expiring and they are ready to pivot. Others are finding it’s worth it to buy their leases out. Yet others will wait until their current lease expires to take the leap. In such an unpredictable world, it’s hard to know what lies ahead — for the future office, and the future of everything else — but speaking with these companies, I’m seeing that this trend isn’t a snap reaction to the circumstances at hand; it’s a gradual evolution in the face of new possibilities.
There is one more obstacle to adoption, though, and an important one: There has never been demand for this model until now, so there simply aren’t that many ways to enable it — yet.
Through trial by fire — working with the first few Fortune 500 companies taking this leap — we have designed sophisticated, enterprise-focused tools that enable companies to roll out and effectively manage distributed and on-demand workspace models. While it’s a nice feeling to be one of the very few tech companies primed to give the world’s corporate giants the solution they will need tomorrow, it will also a race between a handful of innovative companies who are after the same goals: creating efficiencies for their clients and a better experience for people around the world.
As more players arrive to this niche space, the more approaches there will be, and the more inspiration to go around. In 2021 and beyond, I’m excited to see the flex office industry become even more dynamic, to see what other companies bring to the challenge. As always, competition drives innovation.
Christophe Garnier, Upflex CEO