Our CEO, Laurent Dhollande, was recently a guest at the annual conference of the BuroClub network in Paris, via video interview. BuroClub is a growing franchise with over 200 flexible office locations throughout Europe. If you would like to view the discussion conducted in French, enjoy the video! We’ve also included the transcript of the interview below.
Laurent, please tell us about your background.
First, I want to tell you how happy I am to be with you again. We did this live a few years ago, pre-COVID, and I am excited to be back in your discussion.
My professional background? After spending 15 years in large high-tech companies in Silicon Valley, like Hewlett-Packard and Sun Microsystems, and in management consulting, I co-founded Pacific Workplaces in 2003. Prior to that, I had responsibilities as Senior Director of Corporate Real Estate and the Workplace at Sun, at a time we experimented with different approaches to workplace solutions.
That experience led me to start Pacific Workplaces with the idea that the workplace would be available “as-a-service.” Hence the term “Workplace-as-a-Service” which I coined back then. At the time, only a few people understood how we could liquefy the most illiquid asset of all: commercial real estate! That sounded a bit mysterious. Now, everything is “as-a-service” and everyone understands what we mean by Workplace-as-a-Service.
Can you tell us more about Pacific Workplaces?
Pacific Workplaces has 18 locations, most of them in Northern California, in the San Francisco Bay Area and the Sacramento region, but also in Reno and Las Vegas, NV. We will soon open a new location in Phoenix, AZ, venturing out of our original backyard but staying focused on the Western part of the US.
What differentiates Pacific Workplaces from competitors?
Our core value: We Care. These are not just words, but a way of thinking and behaving which all Pacific Workplaces employees (PAC in short) live by every day and feel to their bones. It speaks to customer service, but also to the communities in which we evolve, including our employees, members, and the cities and neighborhoods where we are located.
Among the metrics that we use to measure the impact of our company culture on the business, I can mention customer reviews on Google, Yelp, and TrustPilot that are superior at Pacific Workplaces to the closest Regus or WeWork locations to each of our individual centers. We are very transparent about it and are not afraid to publish these ratings on our website. We have accumulated hundreds of reviews, which guarantees some objectivity with the data. Asking my neighbor or my brother-in-law to post a friendly review is not going to sway the results. This is especially true with TrustPilot which systematically sends an email to all new clients. We can’t pick and choose. On TrustPilot, our average rating is 4.8 on a scale of 5 when Regus is at 3.2 and WeWork at 1.7. The difference is quite telling.
What evolutions have you noticed these last few months with respect to client behavior and needs?
A desire by professional workers to have more flexibility and to choose their place of work, which may differ on a daily or even hourly basis. Employees are a lot more involved in these choices than they were before. Corporate is not solely making that decision anymore. A friend of mine calls this the “consumerization of the workplace”, which says it all. And whether or not this is an entirely new concept, COVID has been a major changing force in that respect.
It is interesting to see that large Silicon Valley companies, like Apple, SalesForce, Google, or Tesla which have asked their workforce to come back to the office, are having a really hard time getting their employees back. And in that fight, it is clear to me that the employees will win!
If the employers are trying to force the issue, they risk losing their best engineers, all of whom can find an alternative job within minutes. Many, during the pandemic, have chosen to move to places like Lake Tahoe in the Sierra Nevada because of the appeal of the outdoors. Others have moved their family two hours away to the Sacramento area, where housing is more affordable than in Silicon Valley. They have enjoyed this new lifestyle and don’t want to come back. Employers are forced to let them work remotely, partially or entirely.
Even Elon Musk, CEO of Tesla, who publicly required his employees to go back to work in the corporate offices 40 hours a week, was unsuccessful. Many critical employees quit and Tesla quickly struck some “quiet” deals with key remote employees asking them to come back to the corporate offices 2 or 3 times a week.
What trends do you see in the flex office market in the next few months or years?
All of this points to more flexibility and hybrid work. The huge opportunity for our industry is to establish coworking locations close to where people live. It’s one thing to want to work at home, but it does not always work well when you need to concentrate on your work and you are subject to the disruption that can be provided by the spouse, roommates, the kids, or the dog. It’s also easy to feel lonely at home and disconnected from the intellectual or emotional stimuli provided by the interactions with other professionals. That’s why products like All Access Passes are very popular: with our version of it, people can drop into a private office or a meeting room that happens to be available at that moment, for an hour or for a day, anytime they want to get out of the home, and in the process, they bump into other professionals to satisfy their social needs. Simple conversations by the water cooler or at a happy hour event can go a long way to satisfy that social need, along with participation in a football pool, and so many other ways local managers can be creative with.
So if I had to summarize what we, as operators, need to do to take advantage of these opportunities I would say: 1) offer maximum flexibility in the access to your space, 2) this should include access to private rooms, not just open coworking, for health & safety concerns people have, and 3) open new locations in suburban areas, smaller cities, and not as much in large downtown areas.
CEO of Pacific Workplaces and CloudVO