How Hybrid is Working in Practice: What the Data Shows | Raise Comm. Real Estate CEO + President

[FOREIGN] My name is Justin Betakurey. I'm CEO and co-founder of Raise.

Hi, I'm Felipe, president of Raise.

So we've built a technology-powered brokerage to help companies find, build, and manage workplaces they love. And we're here today to talk about how to actually build the hybrid workplace. But before we go into that, I'm going to ask you all to close your eyes. Take yourself back to 2019. It's the end of the quarter. Your whole team's there in person. The music's playing. You're closing deals. You hit your stretch goal and everyone's hugging and giving high fives and drinking cocktails. Take yourself back to those late night product sessions where you're jamming on the whiteboard with your team. Solving complex problems, debating issues, all in person. We're not too far off from having those same experiences again. The task at hand is how can we take those great experiences and pair them with what we've learned about working remotely for the last 18 months?

You know, as, as Justin said, we're on a mission to help companies, the best companies in the world, find, build, and manage workplaces that they love as a commitment to their people, as a commitment to their customers, as an expression of their company culture. As you can imagine, a company like ours was impacted by COVID. But I can say that in our 6 years, we've never had a busier 9 months than we just came out of. We've helped more companies and generated more revenue as a result of this emergence. We're emerging from a decades-long top-down mandate of how, when, and where work happened. I would venture a guess that just about everybody in this audience has over the last 18 months been asked to be a part of a survey or has been forced to create an opinion about how, when, and where you'll do your best work. Times are changing.

We just did an analysis of the top YC companies that they publish every year, the, the largest market cap coming out of YC in the history, 95% of those companies are going to have offices post-pandemic, and most of them will be hybrid. So the future is hybrid. Most of the iconic brands in technology that we all know are building hybrid workplaces. And remember, even whether you're office-centric or remote-first, The similarity is that office— all of these companies have office space.

So what is workplace? I mean, it's this very sort of amorphous word that is assigned to the built environment, that expression of a company's culture and commitment to their people, and the programming that makes these places come to life for their employees, that brings people back. Once you've distilled out the why, that's where the word workplace comes to play. We're working with a large cross-section of companies from early-stage startups to Fortune 100 companies, and in helping them with their RTO, return to office planning, we've come to find that it's essentially these 4 strategies that are being employed in some form or another across size ranges.

So let's walk you through some definitions. So hybrid office-centric, also known as synchronized hybrid. This is what companies like Asana, and Front are doing, where most of the hiring is done around hubs in certain locations, and they synchronize when you come into the office 2 to 3 days a week, and then you can work from anywhere 2 to 3 days a week. So remote first is what Coinbase and Shopify and Brex are doing, where they run the entire company remotely, from asynchronization to all hands done remotely, but they have hubs where you can almost like a café where you can go in and visit colleagues or even do heads-down work.

It's not one size fits all, as evidenced by hybrid flex, which is essentially a mix of the first two where a percentage of the company is office-centric based on team, on work type. There is an ability for by team work type or individual to be remote, and the workplace is there to complement both of those. Some of the largest companies in the world like Facebook and Microsoft and Twitter are employing, uh, this strategy. And then of course, office-centric. There are meaningful employers out there who are looking for as similar a return to the way that things were in 2019 as you could imagine. For better or for worse, all of these that are employing any of these 4 strategies or a mix of them are committed to the test and retest.

All right, so we got the definitions down, but we always have to return to the question of why. Why return to the office when for most of us, we've been able to remain productive. Microsoft just did a study of 60,000 of their employees, and what they found was while some productivity maintained, silos were created around teams in which they didn't collaborate. And so, you know, people were on islands during these last 18 months. And fundamentally, a lot of what we're missing is the joy from work, the joy from having relationships with our colleagues that aren't just in front of a computer screen.

Microsoft gets to do it with a very large sample set, but at any size range, if we're doing our jobs and building great companies, then the teams will grow, the geographies will grow, and the mission of each of those will grow. And if we can't get them to work together actively, then so much of the joy goes away. In addition to our ability as employers to deliver on our commitments. Besides, Who the hell wants to work with a bunch of strangers?

So we've talked a lot about theory, but let's ground it in a workshop around how to actually build the hybrid workplace. And we thought no better way than to eat our own dog food and talk about how we at Raise returned to the workplace. But first, we wanted to kind of give a sense of State of the Union for us. Like many of you, we hired over 50% of our team in the last 18 months. Fully remotely. Prior to the pandemic, we had 2 offices. We let both of those leases expire in San Francisco and LA. At the start of the pandemic, 20% of our team was remote, fully distributed. 20% of our team worked in LA in our hub, and 60% of our team worked at HQ. So after the pandemic hit, we launched our 3rd market, Palo Alto. More of our team from San Francisco, as many of you have probably experienced, moved to the suburbs, like, you know, the South Bay or the North Bay, and then some moved out of state. And we hired a more distributed team. We have folks in London and Chicago and the East Coast and the West Coast. So we were already a hybrid company. Like I said, you know, 40% of our team was outside of HQ. But we knew that once the pandemic hit, we would never go back to the way things were. We didn't want to. And so we've all gone through this journey in our individual ways. And I thought it would be helpful to talk about, like, my own journey as CEO. I was in the office 5 to 6 days a week pre-pandemic, and to go fully remotely was a huge shock to the way I worked, to the way I developed relationships. There would be people I saw every day in the office that I wouldn't talk to for months in a fully remote world. And so I had to develop a lot of empathy. We all went through this journey, not only figuring out how best we work, but also just going through the struggles of the pandemic in our own personal ways. And then the last thing I wanted to talk about was balancing my wants with how everyone else wanted to work. There, there wasn't one prescription that I could give to say how everyone else on the team should work. And so we had to adapt to everyone's individual needs by individual, by team, and by location.

Well, empathy is really that word that we keep coming back to. We ask ourselves all the time at Raise, why? Why would you have a workplace? Why would you commit to the human experience? And what role does the workplace play in that? And, you know, this shared trauma that we all went through, it drove empathy and it forced us as leaders for our own company and the clients that we serve to meet their employees where they are, to have an empathetic view of how everybody was processing what was happening, and to be able to reduce friction, increase trust, and overcommunicate through that process. So part of Justin's journey, which I was, believe me, alongside for every step of it, we were always empathetic leaders, but the empathy of understanding that it didn't have to happen in a workplace on every single day for us to meet our employees and our team members where they were was a a really key role. Yeah.

So let's talk about the key factors in actually returning to the workplace now that we're on the cusp, but many of us are on the cusp of doing some form or fashion of that.

Yeah. Well, again, you begin with the why. What does a return to workplace mean in terms of our business? Achieving our goals with our business through our people means that we have to start there. We serve our employees, and they in turn are the life's blood of our business. Lisa Pickard from EQ Office said it best: "Culture is the software of the organization, and the workplace is the hardware." The war for talent is raging. People in this room are competing with each other for market share and for talent, right? Ultimately, if you begin with the people, the people today have a voice like never before. And that's where we started in terms of the key factors for our return to office. From there, you got to get the data. Come back when you've got the data, right? Starting with surveys early and often. I'm guessing that just about everybody here has, has participated in a survey. But the most important part of the survey process was to embrace the fact that they would change over time. Facebook surveyed their employees every 6 months, and the swing went from 80% in June wanting to work remotely at the start of the pandemic to only 6 months later, 80% of people wanting to come in 2 to 3 days a week. So early and often. But what do you do when you've got the information? I talked about the decades-long top-down mandate, which was really quite tone deaf to the needs of people. People didn't have a choice. They didn't have a voice. They didn't have a vote. Right. If you're going to survey your people, you've got to show them you're listening and then go do something about it. For us, that meant the concerns that our, our team had were based in health and safety, risk, the ability to get to and from the workplace when they wanted to and could, when there was a specific reason for it. And how could we do our best to increase communications? So we adopted a tier minus one policy, right? Which is in any of the locations that we operate an office, we'll take the local regulation and be one step more conservative. By a show of hands, how many were a part of a whipsaw that was something's open, something's closed, masks are on, masks are off? I see some nods and some smiles, right? There you go. That whipsaw, it's added to the collective burden when all we're trying to do is do our best work and then be the best person we can when we show up. So Tier -1 was very important. That led us to We've got to open places and meet our employees where they are. Everybody from an empathetic viewpoint has different constraints in the home or their other place of work. And so our ability to understand where our employees wanted to be and meet them there became a key factor for us. You know, one of the key tenets in this is that we don't really know. If we're in the fourth inning, fifth inning, other sports ball analogies insert here. But an office access plan is a step towards letting your team members know. And for us was incredibly important that there was a place when they needed and that they could find it, understand how to utilize it and interact with it. And it was there for them as a, as part of our commitment to their experience.

Yeah. The key here is that it was totally voluntary. And so we have yet to, and perhaps never will, force people to come back. We always want to incentivize them through the carrot, not the stick. So let's look at the results. So in LA, we're going to talk through our LA office, our Palo Alto office, and our San Francisco office. So for LA, we had a fast-growing team, but we knew we needed to get them back really quickly. And so we went with a WeWork. The key thing with WeWork is one, that it's a month-to-month you know, contract. So we have the flexibility to get out and grow into our new space. During the pandemic, we moved in there. It was almost fully empty. It's now at 73% occupancy and growing.

And as Justin mentioned earlier, we allowed that lease to lapse originally in LA during the pandemic. One of the things that we're helping so many of our clients understand is that making long-term choices with short-term data is not what we should be doing. The ability to stay flexible and nimble, to gather that data and act and react to it, was most important. And so WeWork played a big part in that for us. The same is true in Silicon Valley. Um, we started with a flex provider, Regus, um, which was part of our office access plan as we had team members there that really just didn't have the right situation at home. And we were able to use that until we had visibility into finding a space that was going to work for us from a culture and brand standpoint. But again, it was a short-term commitment. We were able to use all used furniture, which saved us over $100,000. And then in the layout of the space, it's over 75% communal as opposed, as opposed to one-to-one desking. Remember, we're in the very lucky position that we get to serve all of the greatest employers out there, and the best practices of some of these best companies that we are able to advise, we we get to eat our own dog food and do it for ourselves.

So, um, the biggest concentration of our team is in San Francisco, and, you know, we had a much bigger office pre-pandemic, and we let that lease expire and we moved in with a friend of ours so that we could analyze for 9 months how we actually use the space, how often people came in. And the things that we learned were, one, that people were really craving that social environment. And so, you know, we put together some events once a week for the team that came in. You know, pretty obvious, phone booths were heavily utilized. A dynamic space where there was just different environments where it wasn't just a sea of desks and a sea of conference rooms around it. And then we also wanted an indoor-outdoor feel. And so what we were able to do, we used to be in a one-to-one, every single person had a desk. Pre-pandemic. Now we're 3 to 1 hot desking. And so there's a lot less desk and a lot more room to have couches and high tables and, you know, ways for our team to come together. That's not just sitting heads with their headphones on at their desk.

It's— oh, sorry.

Yeah. All of their— all of the conference rooms have Zoom rooms and the, you know, noise canceling types of rooms where you could have Conversations where you can either jump on a Zoom or have a private conversation with a colleague were super important.

And how did we get here? I mean, we build a suite of technologies that, that help our clients find, build, and manage workplaces that they love. But the number of tools that are out there to gather, synthesize, and act on what our, our employees are telling us in this test-retest model, like Envoy, Eden, VergeSense, Saltmine. I mean, there are some incredible tools out there that really allow us to read the tea leaves in being non-prescriptive on how we're bringing people back to the office with programming. Right. What about the workplace is supposed to be fun and engaging? How are we getting people back? And then how are we watching them utilize these spaces? You'll notice that for all of these, we had a step 1 and step 2.

Yep.

And it was through tools like that that we were able to create spaces that we're now seeing that are our employees and team members are really engaged with.

Right. The important thing here is to learn that there's no end with this, right? This is going to be evolving over the next 10 years to figure out like what the right equilibrium is between remote and hybrid workplace and office-centric. And the key thing is to find that harmony between the two, to give your team flexibility, but also not miss that like in-person energy that we all love. And so, you know, right now, more than ever, folks are ready to return. It's obviously going to look different on individual levels, but the survey data is really compelling for people that want to get back to that in-person interaction with their team.

I think you bring up a great point in the fact that there's no end to this. In the 40 years preceding today, the workplace was already evolving. Technology being put into the workplace allowed for, you know, additional communication and the sense of remote teams being able to work together. The way that an office at arm's length looked in 2019 was so drastically different from the way that it looked in 2000 and 1990 and before. That has to continue to be the case. The very important part that we're in right now in this hybrid model is, are we as employers ready to bring people back. As sentiment changes, what are we doing to gather information from our team members? What are the strategies that we're putting in place? What are the technology tools that we're embracing in order to gather that information and create a strategy? I took a guess that just about everybody here has been a part of a survey in terms of the return to office. By a show of hands, who's been a part of a survey for a hybrid office return? Yeah, fair number. Remember, those change over time. It is so important to cast your vote and cast with your employee base a periodic resurvey because times are changing.

So a few months ago, one of our investors initialized— the partner Kim Mai and I wrote an article that was titled "Office is Dead, Long Live the Office." And You know, it really captures the sentiment. Like, we all have really strong opinions about where this is going, you know, remote forever or office forever. We really do believe that they can live in harmony. The things that we have to remember when we're bringing people back, it will have been 2 years of this pandemic and we've built so many habits from that that we have to, you know, either take with us or unlearn. And so just have some empathy for your team that there's going to be social anxiety around being in person. There's going to be the change of like waking up in your sweats, getting coffee, going to your computer, talking to your computer for 10 hours. It's kind of insane. But, you know, it has worked for a lot of us. And, you know, note that, you know, companies like Loom and Chime, Coinbase, Benchlynn, Gem, Fair, Afterpay, all of these companies, many of which are our clients, have leased office spaces in the last 6 months. And so, you know, companies are getting ready to get back. But don't force your employees back yet. You know, get through the winter, do the open office access plan that we've talked about, but use the carrot, not the stick. Create amazing incentives, reduce friction for how to get back, whether it's commuting, you know, stipends or just making sure that your office location is really accessible. And then for your remote employees, now about 30% of our company is remote, and they're amazing people that we want to keep and keep engaged. We bring them to the office once a quarter, and we basically— those are— onsites are the new offsites for those remote employees. And then the last thing we'll leave you with is just help people remember what is special about being together. And that's what the workplace is all about.