How Web 1.0 And The Pandemic Changed Entrepreneurship And Startups
This episode will cover what happened when these technologies were introduced and how they changed during the pandemic.
When the internet was born, it was supposed to be a way of connecting people. But it turned out to be so much more than that: It was a way for them to work together, learn things, and create new businesses.
The pandemic brought about many changes in how people thought about online businesses, including the fact that some of them went out of business completely while others decided to change their focus entirely.
The Occupier Team combines their deep experience in the commercial real estate (JLL) and proptech industries (VTS, ProCore, WeWork) and applies it to the world of the occupier.
Tenants face unique real estate challenges, and Occupier set out to build digital solutions that automate and streamline the management of their lease portfolio and transactions.
Occupier was started to connect brokers, real estate teams, and lease accounting professionals to make smarter, more informed leasing decisions for the business.
How Web 1.0 And The Pandemic Changed Entrepreneurship And Startups
It’s very interesting the counter-points there that I accept and you have a lot of legacy players who are building software in the traditional, we can call it Web 1.0 state. That's frustrating and annoying but I don't think that it in itself is enough to be unseated for me or at least for you shortly. You mentioned lease accounting rules and regulations changing. I'm assuming the pandemic is one hell of a trend and created a new set of problems to solve. How those two things are not in place? Surely, it would have been a lot harder to get the attention of the customer. Do you feel like, “No, even without that UX is important, that UX itself is enough to disrupt and to see?”
No, you have to have a real problem to solve especially when you have two huge ones at the same time. When there's churn in the market, that's where the opportunity comes out. Regulations are a great thing to build products around. The government says, “There's a new law that says you have to do this.” Look at the transportation industry.
If you're a transportation company, I'm sure there are numerous laws that you have to comply with. If you don't know them, it's not your job as knowing the law, then someone's going to step in and create a product that allows you to be in compliance with those laws. You can't just say, “I'm going to pick an industry, go build a more beautiful looking product and say that, ‘I'm going to go beat everybody by selling this.’”
In one thought, a lot of founders have as well, “Let me price this at a discount to what the current market offers.” It still isn't enough. There's a perception like, “We've got a budget for this. We're happy to keep spending it. There must be something wrong with your product.” It takes a while for some people to understand that free isn't good. You should try because you're expected to charge.
As an entrepreneur, wouldn't you want to charge more money for your product? The only way you're going to charge you more money is that there's more value there.
You have to have a real problem to solve. You can't just pick an industry, build a beautiful-looking product, and say that you’re going to go beat everybody by selling it.
There are two different camps. There's the camp where I want to build Facebook and make it free. I'll make revenue leads from the backend through dates off. I don't think that pitch works very well in PropTech. It works pretty well in other industries but in PropTech, in most cases, I don't think so. The other approach is we have a clear value proposition. We solve a problem the way others don't.
This is what I've heard you say, “When not changing the business model in our company.” You don't have to come in necessarily an avid disruptive business model. You need to solve a clear problem. If you can point that problem to a regulatory change or a nature and the dynamics of the marketplace, COVID changed the way offices are run and managed.
If you can ride those trends, you still need to do everything else perfectly, have the right pricing and amazing UX. It's still not enough but you need those as a precursor. I'm sure readers can think of 1, 2 or 3 examples that contradict that. We're talking about patterns and PropTech generally. There's always an exception to the rule.
You've been in this industry for a while. I believe as a foundation, you always think of competitors as cutthroat and ten steps ahead of you. The fact and the reality are they're not. They're very slow and archaic. The fact that they're entrenched in their position makes them lazy if they'd been acquired. I don't know if you can speak to this but you've seen acquisitions happen load for right. The founding spirit is lost and things become part of the corporate machine that also leaves them vulnerable to annoy their customers. Your opportunity is to start up.
There's this almost off-gassing of those web 1.0 customers back into the market who are like, “The company that I signed up for seven years ago wasn't that cool anymore. They're not that responsive and haven't innovated that much. My contract is coming up. I'm going to explore the market. There's this new company out there that's way better and does all this other stuff. They want their product managers to get on the phone with me and get my feedback.” You have to keep that startup fear alive or you're going to get on seated yourself.
Let's talk a bit about what's happening in the world of work. At the time of doing this show, it feels like we're out in the pandemic. This is the first attempt for people to go back to I don't want to say an office environment. I want to ask you, what is the status quo? What's happening? What does the future of work look like? Which direction is it heading in and other persona types that are companies doing things differently? How do you categorize the way people are real?
It's random. Let's say that we're out of the pandemic, which we're probably technically not but it feels like we are in many places. You have businesses that are faced with the question, “How are we going to go back to work?” There are a lot of businesses that never left work. We just moved it around. It's going to require even more empathy for the employee because we have all been working from home. I was interviewing somebody for a key role. He works from home but he likes to go into the office. He realized that by working from home, he could be closer to his kids from time to time and get things done that he normally wouldn't be able to do during a workweek.
That's not to say that I assumed he was slacking off but that's true. There's more to life than your job. Especially with the idea of commuting, it makes people less likely to want to sit in their car for one hour on their way to the city. Those are those factors that need to be looked at seriously because the workplace is wherever somebody can do their best work. I saw a headline that Jamie Diamond has lost to the work from the home crowd. He was the first guy that was like, “We want you back in the office. We need people here.”
Whether you agree with that or not, someone has to take a stance and draw a line. The reality is after two years of giving people a little bit more flexibility and freedom, you can't act like that because everyone is going to be dusting off their resume. You have to have empathy for the employee. From our perspective, we've grown head count-wise throughout the last years of the pandemic. It's been very helpful for us because it's broken down the borders of where you can hire awesome talent. We have 2 hubs, 1 in Boston and 1 in New York. We’ve opened our offices back up but we haven't forced people to say, “We need you in here 2 or 3 days a week.”
It's like, “We have an office. We love to collaborate. You come on in but if you can't, we understand. If your best work is at your home set up, by all means, get it done then.” Companies will start to shift the way they use their space. They won't lease as many big headquarters locations. They might do the hub and spoke model a little bit more or they might not lease as much space at all and they'll get their teams together remotely, more frequently in shared or communal office settings or offsite.
The workplace is really wherever somebody can do their best work.
What we're going to plan to do is have offices where it makes sense from a center of gravity perspective and then get our teams together as frequently as we can for comradery’s sake but for also synchronous working and stuff like that. I wish I had an answer that tells you, “By this date, the world is going to go back to the way it was,” but I don't think it is.
I'm seeing these 4 or 2 categories with companies. Is it truly random? You're not seeing patterns.
We have a pattern. In 2021, we pulled some data in our system and learned that of declines that we have our office occupier clients, on a cohort basis, they expanded their footprints in 2021 by 30%. When I say footprint, I mean the number of leases, not square footage. What that tells us is that businesses that have people's space are opening more offices, which is probably a reaction to having an office in closer proximity to more people, rather than having one central headquarters and a CBD that people want to go to into.
People are going to start spreading out their office portfolios, which will mean more leases in more locations rather than having that big headquarters least on the West Coast and East Coast. There are two benefits to that. One is you provide more flexibility to your employees but it also allows you to recruit more areas than you normally wouldn't have thought of.
What was your philosophy prior to the pandemic? I want to hear a philosophy. It looks like everyone is more progressive. When you describe it before all of this, is it an office type of person?
I've always been an office separate type of person in my philosophy. I'm fortunate enough to be one of the owners of my company and dictate where my office is. I have an eight-minute walk home. That allows me to jump home and pick up the kids from the bus when I have to. There is some flexibility based on proximity for me. I work better when I have a separation of environments. I liked the idea of getting up in the morning, going to the gym, heading into the office and having certain times to focus on certain things.
If I'm at home, I'm less productive. I'm going to go down to the kitchen and grab a snack. That makes me make a cup of coffee. I look at my phone 20 minutes later and I've burned 30 minutes. I like being in the office. That doesn't mean I'm ever going to force up other people to do stuff like that but pre-pandemic, I was in the office every day.
It sounds like you still are in the office every day. You need that separation. You're not a hybrid type of person in the sense like, “I'll work from home Monday. Tuesday is going to the office, Wednesday, Thursday, Fridays.” It sounds to me like you work well in an office environment. That's a prototype for many people. It comes down to personality or does it come down to the home setup? Not everyone has the luxury of having a home.
That's why I go back to the fact that you got to be more empathetic to the employee because everybody has got a different situation. When we were peak pandemic and my wife and I were both working from home, we had to buy two desks. We put 1 in our bedroom and 1 down in the living area. She's downstairs on calls. I'm upstairs on calls. I'm spending sixteen hours a day in my bedroom. I sleep and work there.
I didn't like that but other people might love it. When I work from home, it's more out of necessity like, “My kids aren't in school today so I'm going to work from home and try to be a dad at the same time. I have to be at an appointment in the afternoon so there's no sense in going to the office for the day if I have to go somewhere.” I'll start in the morning in the office, at the home or something like that.
Subscribe to Zain Jaffer: https://bit.ly/2SWhYW5
Follow the PropTech VC Podcast:
Listen on Apple - https://apple.co/2Izoznu
Listen on Spotify - https://spoti.fi/2STWDwq
Listen on Google Play - https://bit.ly/2H7s6c0
Follow Zain Jaffer at:
Current Ventures: https://zain-ventures.com/
About Zain Jaffer:
Zain Jaffer is an accomplished executive, investor, and entrepreneur. He started his first company at the age of 14 and later moved to the US as an immigrant to found Vungle after securing $25M from tech giants including Google & AOL in 2011. Vungle recently sold for $780m.
His achievements have garnered international recognition and acclaim; he is the recipient of prestigious awards such as “Forbes 30 Under 30”, “Inc. Magazine’s 35 Under 35,” and the “SF Business Times Tech & Innovation Award.” He is regularly featured in major business & tech publications such as The Wall Street Journal, VentureBeat, and TechCrunch.
- https://Bit.ly/2SWhYW5 - Zain Jaffer YouTube
- https://Apple.co/2Izoznu - The PropTech VC Podcast
- https://Spoti.fi/2STWDwq - The PropTech VC Podcast
- https://Bit.ly/2H7s6c0 - The PropTech VC Podcast