“There’s probably too much supply today but we’re going to see this flight to quality and, you know, I think for Convene we feel like we are really, really positioned like if you are flying to quality and you care about premium, we should be pretty well positioned. You know, I’ve seen a lot of spaces and been to a lot of places, I still haven’t seen anyone that does what we do as well as we do it.”
Susan Freeman
Hi, I’m Susan Freeman, welcome back to our PropertyShe podcast series brought to you by Mishcon de Reya in association with the London Real Estate Forum where I get to interview some of the key influencers in the world of real estate and the built environment. We are still recording the podcast digitally so the sound quality may not be up to our usual studio standard.
Today I am really delighted to welcome Ryan Simonetti. Ryan is the CEO and Co-Founder of Convene, the company that designs and services premium places to work, meet and host inspiring events. Ryan co-founded Convene in 2009 with the intention of disrupting the commercial real estate industry and transforming the workplace experience by capitalising on converging trends in real estate, technology and hospitality. His vision to infuse hotel style services into meetings, events and flexible office spaces has been Convene’s guiding force for the last eleven years during which they have expanded to 32 locations across the US and the UK. With Ryan at the helm, Convene has raised $410 million in funding to date and has been named one of America’s 100 Most Promising Companies by Forbes and a Best Workplace by both Inc. and Fortune magazine. Ryan has been recognised for his transformative achievements on real estate forums 50 under 40 list, Inc. magazine’s 30 under 30, a list of America’s Most Promising Young Entrepreneurs and was named Top Entrepreneur by Crain’s New York and a finalist in Ernst & Young’s Entrepreneur of the Year New York Awards.
Ryan graduated Villanova University where he ran several start-up companies designed for students. His professional career began as a real estate banking analyst in the global real estate group at Lehman Brothers where he focussed on structuring and securitisation of commercial mortgage backed securities. Following Lehman Brothers, Ryan joined Gramercy Capital Corporation as a Vice President where he was responsible for the restructuring of a billion dollar loan portfolio including $600 million of hospitality related real estate investments. Ryan is an active venture investor and advisor to several start-up technology companies and their founders. So Ryan, welcome. I understand you are talking to us from Long Island, New York this afternoon?
Ryan Simonetti
Correct.
Susan Freeman
And amazing, the connection is actually a lot better than the connections we have speaking to people across London so that’s really good news. Now, my first question to you is what the W stands for in Ryan W Simonetti?
Ryan Simonetti
Ah, that’s my middle name William which was after my grandfather.
Susan Freeman
Okay. So, just going straight in, you began your career in real estate banking at Lehman Brothers and then went to Gramercy Capital Corporation, what prompted you to start Convene in 2009 and what was your vision at that time?
Ryan Simonetti
Yeah, so as you mentioned, you know, I spent the early part of my career in both real estate banking and then at Gramercy we were actually an investment company that invested in real estate both debt and equity and I was fortunate enough at a young age, timing is everything and we were really, you know, a high growth business at that time. I think from the time I started, you know we started with I think 3 or 400 million in assets and grew that to I think almost 7 or 8 billion before I left to start Convene and it was able to take on a lot of responsibility at a young age including running one of our investment teams. It just so happened that I spent a lot of my time personally focussed on office assets as well as hospitality and it was kind of during that time period in 2008 during the financial crisis that the idea came to me, well what if you ran an office like a hotel? What if you thought about the impact of design and technology and amenities and services? And if you really thought about the customer not as a tenant but really truly as a consumer and would you fundamentally change the value proposition both for the end user and their employees? And at the same time could you actually create move value in the asset itself? So that tenants that wanted to move into a building that had a Convene in it or had our services, would actually be willing to pay the landlord more and, you know, it looks like you fast forward your ten plus years that, you know, at least we were right around hospitality and amenitisation and what that meant to the future of office and, you know, it’s been an incredible journey and now with an exciting new twist and turn post-Covid.
Susan Freeman
Definitely an exciting new twist. So, just to explain to our listeners how the Convene model works because it’s part hospitality, part services, part flexible offices. How does the model work?
Ryan Simonetti
Yeah, so we’re really, we think about ourselves as a hospitality brand and what we call kind of a workplace experience platform and we partner with both landlords but the most importantly progressive companies to design and operate, you know, inspiring places to meet, to work, to gather, to host inspiring events. We, I think, have two unique ways in which we partner with landlords. One is more traditional, you could think about kind of a rent arrangement between us and building owner where there is some sort of a lease but typically plus some percentage of our revenue or profit and then a third of our business is actually where we get hired more like a hotel flag would get hired where it’s a management agreement and we get paid really as a brand and a manager of that experience and in partnership with the landlord are delivering not just all of the spaces, you know, on demand meeting spaces and flexible workspaces but really delivering that high touch hospitality experience and not just for our customers but for the rest of the tenants in the building.
Susan Freeman
And I think since launching you’ve raised more than $260 million from some top investors including household names like Blackrock and Brookfield. How many Convene sites were there as we went into Covid?
Ryan Simonetti
Well, you know, we had one that we’ve been very fortunate I think to attract not just, you know, great brands as investors but really truly, you know, great partners which, you know, I think is really, really important especially as an entrepreneur building your businesses making sure that, you know, you surround yourself with the right partners, in particular capital providers so first, you know, very appreciative to those investors and the support that they’ve given us over the years including, you know, supporting us through a really tough time with Covid. Pre-Covid, to answer your question, we had 32 locations across 6 US cities, making up about 1.5 million square feet. Of that 1.5 million square feet, just over a half a million was our flexible workplace product and then the other give or take a million square feet was a mix of your premium meeting, eventing, conferencing space as well as all of the kind of hospitality amenities and services that, you know, we integrate into our product offering.
Susan Freeman
And, as you said, you know, it’s been an interesting and difficult period and I think Convene took the decision to close your sites in as early as March. What drove the decision to close when some of your competitors tried to remain open?
Ryan Simonetti
Look, you know, I’ve said since the beginning of this crisis, the decisions you make as a company, as a leadership team will impact your brand for, you know, I really believe years, if not decades, to come and when it comes to health and safety, at least from our perspective being a premium brand we immediately knew we had to do what was right to protect our team and our clients and as hard a decision it may seem from the outside, it was actually a pretty easy decision for us as a leadership team because we just knew that it was the right thing to do and look, we’ve had to make a lot of other, you know, challenging decisions since then as we’ve had to navigate our way through this crisis and I think the one thing that, you know, I’ve learned as a leader especially you are having to lead an organisation through something as challenging as this is that sometimes the hardest thing and the right thing are the same thing and I am really proud of our leadership team as well as our board to be fearless and make some really, really hard decisions that ultimately were in the long-term best interests of the company, our clients and all of our stakeholders.
Susan Freeman
Yeah, I think it’s been a pretty difficult period for everybody and, I mean, it’s interesting because the move towards flexible working was something that obviously started before Covid and Covid has accelerated that. Since you started Convene, what sort of changes have you seen in demand for workspace and how do you see this continuing to change as we get through Covid and onto the next phase?
Ryan Simonetti
Well, I think you said a word that I’ve been using often which is ‘accelerate’ and when I think about Covid, I really think about this as the great accelerator and not just for the future of work and the impact that it’s going to have on the real estate industry, not just within our sector but more broadly but if you just look across our society hub and all industry, a lot of the underlying trends that were actually happening pre-Covid that, you know, we had been identifying and I think had been getting the benefit of as a company, you mentioned one, the desire for flexibility and agility, and what we’ve seen kind of happen post-Covid is that things that probably would have taken five or ten years are going to happen in the next twelve to thirty six months and I think there’s some really interesting trends worth noting that were kind of pre-Covid trends that are rapidly accelerating. One is not just the desire for flexibility but to me is allowing the individual employee to choose where they work, when they work and how they work, and what we’re seeing now even within our own customers is that the decision making model is moving away from the company, like even when we first started we were very much selling B to B. And now it’s the actual individual within the organisation whether it’s a business unit lead or the actual individual themselves that is really making the decision on where I work, when I work, how I work and that was something that had been starting to happen but we think will become kind of the standard on a go forward basis and that has real implications for how space ultimately gets designed, where a company like Convene needs to put our locations, the types of technology we need and how we reach our customer and really create a great user experience and so I think this idea of the consumerisation of real estate is really, really shifting quickly and the industry is going from serving B to B, to now serving B to BC, if not eventually B to C and then the second big thing is, and we’ve talked about this as an organisation for a long time, it was always driving our strategy but, I mean, I am convinced more than ever that the future of work is hybrid which is, there is going to be HQ experience, redefine whatever your dedicated space is, there is going to be a growing need and demand for third spaces like Convene and co-working spaces and, you know, a lot of the growth in third spaces even pre-Covid I see actually accelerating longer term and then now there’s this whole new thing which is remote and at home and how do organisations create a great experience for a larger and larger percentage of the workforce that on any given day is going to be working virtually and that’s not just for our workplace business, that also has really big implications for our meeting, event and conferencing business, you know, pre-Covid, you know, this year we would be doing over $200 million in revenue in meeting, event and conferencing and, you know, on a go forward basis I think every future physical meeting that we host post-Covid will have some virtual audience participation where what used to be a 500 person meeting live in person might now be a 200 person meeting but actually you are going to live stream to 800 people participating virtually so, this idea of hybrid is I think something that’s going to have meaningful impact, you know, not just on our own business and strategy but the industry more broadly speaking.
Susan Freeman
Well I am desperate to hear about the new product, the new virtual meetings product because I have read a little bit about it and I have heard about it and I think you are absolutely right that, you know, looking forward we are going to be organising events where some people will want to be there, they will want to be presenting live, some people will want to, you know, dial in remotely. At the moment, you know, we have Zoom and that, you know, gets us to a certain stage but there is a real need for something that actually emulates the sort of experience that we would get if we went to MIPIM or, you know, it would be…
Ryan Simonetti
Exactly.
Susan Freeman
… conference, so I have heard a little bit about the product so it would be wonderful to hear, you know, what you have in mind, how it’s going to work.
Ryan Simonetti
Yeah, definitely, and look, you know, we as an organisation, you know, I think we are shifting quickly from a technology enabled business to a technology led business and that has, I think, broad implications for our organisation including new capabilities that we’ve had to build up, you know, we started I would say our digital transformation process, you know, about three years ago and I’ll tell you in the last six months we’ve probably gotten three years of work done in our plan, you know, to some extent by necessity. So, you know, kind of leveraging your digital is obviously something that we think is going to be really critical across the entire business, knowing that we are going to have to connect more and more with a customer, a member or meeting participant that’s actually not physically in one of our spaces. So, when Covid happened, you know, clearly we knew that our physical meetings, event and conferencing business was going to be impaired and impaired for relatively speaking an indefinite period of time. We also knew though that from talking to our customers, the need for them to connect internally, to connect with their customers was not going to go away and anything that was happening physically was going to immediately have to convert to some sort of virtual experience and, you know, we as an organisation said look, while maybe we haven’t hosted a pure virtual event, we’ve done many many hybrid events over the years where we’ve had a physical meeting and have had to live stream to a virtual audience, we understand what it means to produce and service a great event, we have the talent to do that physically, can we convert that to a virtual offering and so what we quickly mapped out, and our product and design team did an amazing job, was technically a digital twin to the Convene physical experience so, if we had to replicate what it’s like to experience a meeting or conference or an event at Convene, could we actually replicate that, you know, digitally through software and what we spun up, and I’d say we’re in NVP right now still, we got some exciting releases coming up over the next few weeks, is we’ve spun up a virtual venue and, you know, we’re very focussed on not solving the things that Zoom and WebEx and other platforms are solving which to me is very much around individual kind of one-on-one or small team collaboration, you know, we’re trying to solve a larger need like if fifty people need to get together for a full day executive offsite with multiple breakouts or if a massive sales conference with customers happening with many sponsors, how do we recreate that experience that would happen physically, virtually? And that’s what we’ve done so everything from registration to an event page, to multiple live stream kind of keynotes throughout the day, to a dynamic breakout experience with different sorts of engagement and communication tools that allow people to collaborate and socialise around an event and try and do our best to replicate, you know, what we would typically be doing to deliver a great experience for our customers on site.
Susan Freeman
It sounds very interesting. And how do you go about replicating the sort of networking element because we keep talking about, you know, the serendipity, you know being able to sort of just chat to people which you can do at the big trade shows, is it possible to do that virtually?
Ryan Simonetti
It is and so what we’re doing is we’ve built out some really, I think, kind of cool chat features that allow participants to, you know, not just engage with the content but also engage with each other in a social way. We have a release coming out that will allow for kind one way and two way video chat with, you know, kind of a chat and engagement function wrapped around it so, we’re really starting to build out I think that next layer of engagement to replicate exactly what you said which would ease casual collisions, these kind of serendipitous encounters and relationships that get built at these conferences. The beauty of though doing it virtually is that you can leverage gain in a way that you typically can’t physically and so we are starting to think through predictive analytics based on a user’s profile. Can we actually like recommend them, you know, similar to the way that LinkedIn might work with a connection? Can we actually recommend to them who they should connect with at a conference? Or can we recommend to a sponsor, based on user profile, who they probably should reach out to or have a conversation with? So, we’re not there yet but I think as we get to more scale and get more data points and data collected in the platform, I think we’re going to be able to do some really interesting stuff through predictive analytics that will help foster, you know, the right conversations and the right connections happening within our platform.
Susan Freeman
That’s interesting actually because it’s more targeted networking than the perhaps more sort of random approaches that you generally get, you end up talking to the person that is sitting next to you at a dinner or breakfast but this way one could be more targeted about it and will you be using avatars?
Ryan Simonetti
It’s funny, we actually have a call with a gaming company this Friday around the potential partnership and part of that is definitely a sort of augmented or VR reality component that they’ve built out but also how do you kind of integrate gamification into the experience? So, that’s not something that we’ll build on ourselves so if we do decide to go down that road, we’ll definitely do it with a partner that has that capability but, yeah, we were… once you kind of think about the future of virtual, you know, a lot of possibilities open up and so I think we are very excited as an organisation that we have this opportunity to really invest and focus on it and, you know, most importantly for us like we think the future is hybrid so ultimately how do we use virtual to connect back to physical? And then in the future, how do we seamlessly integrate a physical experience and a virtual experience so that it doesn’t feel like there’s two separate things happening at the same time and we can really be that kind of one stop, seamless, integrated solution for our clients that, you know, are looking to have a great meeting experience.
Susan Freeman
Yeah, it sounds absolutely fascinating. When you were talking about gaming, I just had this picture of a roulette wheel and it selects the person that you are going to have your conversation with.
Ryan Simonetti
That would be a pretty cool breakout, I’m going to have to get that to our team.
Susan Freeman
Now that would be, that would be pretty good. Well that sounds really exciting and I can’t wait to have a go at that and I know that you have also mentioned in another podcast a working from home product. I mean, is that something you’re able to talk about yet?
Ryan Simonetti
Yeah, we’re really, we’re trying to think about different ways that we can take the member experience, the user experience of being in a Convene and knowing some of the challenges that we all have with working from home, you know, some of which are technology driven, others are environment driven, right, meaning do we have the right desk, do we have the right workstation, do we have the right tools? And then other things that we can do from a surprise and delight sample, like one of the infamous and famous things at Convene that we’ve become very known for, I think, as a brand is our food and beverage and we have… our snack station is something called Nourish and is there a way for us actually to bring Nourish to our clients at their homes and so there’s a lot of different things that we’re thinking about to really extend our membership offering just from physical space to better support our members at home.
Susan Freeman
No well that sounds like, it sounds like a pretty good idea, it would certainly liven up the working from home experience and I had hoped to see a Convene building and one of the last things that we had planned just before lockdown was to have a look at your premises at 22 Bishopsgate along…
Ryan Simonetti
Yeah, the marketing suite.
Susan Freeman
Yeah, exactly and we had this whole evening planned and we tried you know, we just hoped we could through it, we had to, you know, we just had to abandon it but, you know, we are very excited about Convene coming to London and I just wondered where the plans are now, you know, what the timing is and I also wanted to know a little bit about what differences you saw between, you know, London, attitude to flexible working in London and what you are used to in the States?
Ryan Simonetti
Yes, I mean, to answer the first part of the question on timing obviously, you know, Covid has I think delayed things for all of us so yeah we had originally were hopeful that we’d be opening, you know, kind of late this year at 22 Bishopsgate and then, you know, planned for our second location at 80 Fenchurch was to hopefully be open early next year. Reality is all of that stuff has been kicked out, you know, anywhere from nine to twelve months so at this point in time we are looking at an opening, you know, second half of next year, we think is a realistic, you know, timeframe at this point in time. It also I think gives, you know, time for all those talented scientists and our health professionals that are working on, you know, both treatment but also vaccination. We struggle to see a future where physical meetings come back without that and, you know, we want to make sure that when we do open, you know, we are opening and people can actually get the benefit of utilising Convene and our space and services so right now we are looking at, you know, as I said kind of second half of next year.
Differences between markets, you know, we, you know, I had been going to London and our team to learn the market for years before we ever really committed and, you know, every market and every culture, you know, has it’s nuances and I think it’s really important for us as a brand, you know, one of our design principles is ‘Think global, act local’ and that’s everything from the aesthetic to our food and beverage offering to the way that we deliver hospitality and service, you know, if you look at I think historically the way that service has been delivered not just in the UK and London but also in different European countries, it tends to be more formal than a US service delivery model and so all of these things kind of factor into our thinking as a brand and making sure that, you know, we bring Convene to London but we bring Convene London to London which I think is unique and different and we are really excited about the things that we’re doing from a design perspective to really feel authentic and genuine and local as well as from a hospitality and services perspective. Specific to the market, like at a macro level, the UK and London I think has been and continues to be the largest adopter of flexible space and really outsourcing space and services and that’s not just co-working and work space, it’s also meeting space, you know, if you look at the amount of providers of what I would think as kind of outsourced meeting, conferencing and events spaces relative to even what we have in New York or the US more broadly speaking, is very different, it’s a more competitive market and I think entering a market where there’s a lot of adoption is great, it means people are going to want what you are selling but we are entering a more competitive market and it means that, you know, we’re really, really going to have to focus on, you know, differentiating the brand and the experience and making sure that we continue to do what we’ve done successfully in the States which is really kind of own that premium part of the market and that premium experience and, you know, as always we’ve got our work cut out for us.
Susan Freeman
And do you have plans to go global or take further steps into Europe or will you see how London goes?
Ryan Simonetti
Yeah, look our expansion strategy actually post-Covid has changed a little bit, you know, pre-Covid we were very focussed on getting a lot of scale in a given market before we would move to a different geography. You know, if you look at like a market like New York City I think we have something like 18 or 19 locations just in New York alone. I think our strategy is shifting a little bit, you know, we think that less might be more and this idea of really creating these flagship Convene locations and as opposed to, you know, opening 10 locations in London before we are willing to move to another city in Europe, I think our plan now is that we actually want to do flagships but do them in more geographies and so that will be a slight shift so I think that means we will end up in, at least our hope is, in some other European cities, you know, in the next let’s call three to four years.
Susan Freeman
So, what attitude are seeing from the property companies because we’re seeing, you know, different reactions, some are partnering with flexible, you know, working operators, some agents are partnering with, you know, flexible working operators, certainly some of our institutional landlords are developing their own flexible working brands. Do you think we are going to see any particular pattern emerging?
Ryan Simonetti
Look, I think that the larger asset owners, my sense will move a little bit from friend to foe, you know, I think that the larger asset owners that have the scale, my experience, you know, is that in an ideal world they’d like to own the capability themselves and even if they partner in the short-term, my sense is that they are partnering in the short-term to build the capability in the medium to long-term. I think it’s different when you start to get to the smaller owners and operators and developers who don’t have the scale or the capability or the bandwidth to try and do this on their own. I think in those instances you’ll see a pretty wide spread proliferation of partnership in some form or another and, look, to me there is no question that, you know, if the future is flexible and the future is hybrid that, you know, more and more of office real estate will be designed and built out, you know, as flexible which means more competition and so again I think as a brand like Convene, we don’t want to become commoditised and, you know, we are going to double down on our differentiators and when I said less is more, you know, I think really making sure whenever we open a Convene location there’s nothing like it in market is going to become really, really, I think, important at least for our company’s success moving forward.
Susan Freeman
Yes, it’s going to be interesting and there have been people who over the last period have said “Oh well, you know, the office is dead, everybody’s going to be working from home” and clearly a few people like working from home but not everybody has the setup where it’s viable, comfortable and, you know, there’s been a lot of talk about the hub and bespoke model that you have your HQ which is there for, you know, collaboration and team meetings and everything but, you know, screen-time could be, you know, as you said in a third space so I just wondered what you thought about, you know, is there going to be less demand for traditional sort of HQ offices in cities and we are going to see more demand, you know, outside the main cities?
Ryan Simonetti
Well look, it’s interesting, I mean I get asked this question often and I have been very reluctant to really give an answer because the data doesn’t support it yet, right? If you look at lease in the US and look at leasing transactions, the data isn’t there yet that proves this idea of a hub and spoke where corporate HQs are now being relocated to suburbs or large enterprise are now thinking about having, you know, a hub in the city but then six spokes outside of the city, we haven’t seen that yet, at least in the data here in the States. I think what I can say is, you know, I believe and I think Sam Zell just said in an interview recently where he said, you know, office similar to retail in the United States is over supplied and, you know, so I think you could make an argument that just like today, there’s more office space than there is demand today, period. With that said, what we are seeing, and we saw this pre-Covid and I think that this is going to be even more critical post-Covid is, there’s a massive flight to quality and, you know, we keep saying safe and premium are now synonymous but I do believe that the assets that deliver the best experience, that provide the best infrastructure, create the safest environments both from an access perspective, an air quality perspective, you know, those assets I believe are going to perform very, very, very well and we saw that pre-Covid, you know, if you look at even soft markets like in the US like a Houston, all of the new developments, all the new stuff all performed extremely well and I think that we’ll see that same thing happen post-Covid. I also believe the same is going to be true for, you know, the co-working and space as a service sector where there’s probably too much demand… too much supply today but we’re going to see this flight to quality and, you know, I think for Convene we feel like we’re really, really positioned like if you are flying to quality and you care about premium, I mean, you know, I’ve seen a lot of spaces and been to a lot of places, I still haven’t seen anyone that does what we do as well as do it and we do think as that flight to quality happens that we should be pretty well positioned.
Susan Freeman
And so you mentioned air quality and this is something that clearly there is a greater focus on, on now, you know, probably should have been a greater focus on it before but, you know, obviously from a Covid point of view, people are concerned about what’s in the air that’s circulating. Are you find that, you know, tenants coming into your buildings are actually asking about air filtration systems now whereas they wouldn’t have done before?
Ryan Simonetti
Yeah look I think that there’s a lot more focus on the infrastructure and there’s a reason most building owners didn’t put the infrastructure in as it’s not cheap and, you know, typically a landlord’s not going to do anything until you ask them to do anything, you know, even when we think about amenitisation, I mean I have been preaching around amenitising office buildings and bringing hospitality and the need to integrate flex space for eleven years almost now at this point in time and it wasn’t until the last four or five years when pretty much every tenant said I’m not going to move into your building unless you have X, Y, Z. That same thing I believe is going to happen coming out of Covid where there is going to be a tremendous amount of focus and attention on quality of the core infrastructure and that might be everything from, you know, kind of contact lists, access to, you know obviously air quality, cleaning standards, all that sort of stuff.
Susan Freeman
Are we going to see more repurposing of retail space?
Ryan Simonetti
Well look, I mean getting back to I think the point I made earlier, at least in the US, you know I think it is pretty well known that, you know, retail, especially with all the changes that have happened as part of the acceleration of e-commerce, is massively overbuilt and so we do see a really interesting opportunity, you know, vis a vis the adaptive reuse of retail. We’ve been successful doing that in the past, we, you know, converted the Saks women’s store in New York to a flagship Convene which pre-Covid was performing wildly beyond our own expectations. We did a similar retail conversion in Chicago and so, you know, a big part of our strategy, you know, moving forward is going to be the adaptive use of retail and also I think putting Convene as kind of an anchor flagship tenant or a partner to a mixed use development and we actually, we are working with the new real estate strategy firm right now that has represented some of the big well-known retail brands and we are excited, you know, to see, kind of how does our road map and gross strategy look as, you know, we start to think more and more like a retailer and I wouldn’t be surprised, you know, over the next four to five years that you end up seeing Convene not just as part of office developments but more and more, you know, kind of anchoring the adaptive reuse of retail.
Susan Freeman
And in terms of, you know, the future of the office, we seem to be getting very mixed messages from corporates and CEOs, we had Jack Dorsey saying a while back that Twitter staff can work from home permanently and then Alphabet’s CFO was on Bloomberg recently saying when people are together it’s a critical element for innovation which I think most people would agree with so, do you think it’s going to end up, you know, somewhere in the middle, you know, people are going to realise that they need to be together in order to collaborate, come up with ideas and that you can, of course you can work from home, but you can lose a lot in the process.
Ryan Simonetti
Yeah, look I said it earlier, I mean we really believe that the future is hybrid and, you know, I think our strategy at Convene is, you know, how can we integrate physical space, technology and hospitality to really create this incredible hybrid experience? So, look the pendulum always swings too far in either direction after a crisis like this. My sense is when we get to some place of equilibrium which, you know, I still think is a time off, you know, most of our big customers are in strategic planning mode but even committing to something like a hub and spoke strategy, if you’ve got millions of square feet all over the world with different lease expirations, that’s not a strategy you commit to in 90 days, I mean it’s a five to seven year plan that you have to implement and execute again so, look I think it’s still a little bit too early to tell but we do have deep conviction over hybrid which is there’s times where I’ll be at my HQ, there’s times where I’ll choose to work from a third space maybe close to home and then there’s times where I’m going to choose to be virtual or remote and a lot of it honestly is going to depend on the commute time so, you know everyone keeps talking about Covid, what I’ve found in my conversations it’s no longer about Covid, it’s about the commute and when I talk to especially some of my, let’s call it more senior executives that may be at a different point in their life that live outside of the city that have children, it’s the commute that’s the killer and, you know, if I don’t have to commute I get three hours back in a day so instead of being on the train at 5.30 or 6.00 in the morning, I’m actually in the gym at 6.00 in the morning and I’m at my computer having a coffee at 7.00 and I think that that has a lot more to do with quality of life than it does with Covid and I think that there will be many, many employees that depending on their life situation are going to say look, I’m happy to come in the office but two/three days a week I’m going to work from home because I literally just don’t want to commute and oh by the way, if there was a Convene conveniently located near where I live, I probably don’t want to work at home either and I’ll drive ten minutes down the road and go work from a Convene so, to us that has implications on how we are thinking about our real estate strategy moving forward and making sure that we’re bringing Convene spaces close to, or closer to residential suburbs.
Susan Freeman
Yeah, and it is I suppose early days, we are what five, six months in and this has got, you know, a long way to run but I think you’re right, you know, it’s amazing actually people have done these awful commutes and haven’t really thought about it, we just do things because that’s the way it is so, if there is another way, it’s…
Ryan Simonetti
So, a lot of people just got rebooted and the feedback we’ve done is, you know, I’ve done this commute for twenty years, I literally, I didn’t know anything else and for the first time I have been able to actually like reprogramme myself and reorient myself and my day and by the way like, I don’t need to do it every day but I really like it and so I do think that we will see, you know, especially the longer that this goes on, you know, that coming out of this, like yeah more and more people on certain days of the week will not be commuting into their HQ and will be working from another place either at home or some sort of third place.
Susan Freeman
Yeah, it will be interesting to see how it develops. Now, one thing I was thinking about and I saw that you Tweeted last week on the passing of the amazing Ruth Bader Ginsburg and you mentioned a quote of hers, “Real change, enduring change happens one step at a time” and I was thinking ooh what is the effect of the hyper-accelerated change that we are getting, you know, through Covid? That’s definitely not one step at a time, I mean what is the effect of the, you know, the huge change that’s just happened to us all in a relatively short period of time that normally would have taken a lot longer? Is it going to take that much longer for it sort of set or is it going to take that much longer for people to adapt to it?
Ryan Simonetti
Look it’s a great question and I think, you know, what we’ve heard from our team, what I’ve heard from, you know, my own friends and family and, you know, people within my network is Covid has thrown all of our lives to some extent upside down and the amount of change that all of us have been forced to go through and I think the anxiety often times associated with that change, whether it’s dealing with, you know, directly with Covid from a health perspective or having somebody in your family pass away from it, losing your job, moving to a new city, I can’t tell you how many of our Convene team members through this process like have had to move their lives to a different geography, working from home, having kids go to virtual school while you are trying to work from home, I mean, there’s so much I think that Covid has thrown in flux and that’s really emotionally hard I think for all of us and to me that’s been like the blunt force impact of Covid. Now to me the beauty in that is also that I think a lot of people have had a chance to take a step back and ask what’s really important to them. Right, what does success mean to me? And like I can even say speaking for myself as somebody that’s been very driven even since a very young age, finding balance and prioritising my kids, my wife, personal time were things that I had to always work really, really hard at and, you know, even for me this has been a very big reset on, you know, my own quality of life and the importance of time with family and my children and I think that there’s a positive that comes out of this as well. Now, I think that when I look at her quote, I think how we get out of this is one step at a time and, you know, hopefully, you know, that process I think has begun, you know, at least I know that that’s begun within my organisation and it is, it’s going to be a journey and there’s going to be twists and turns, you know, I think a lot of things aren’t clear yet around some of the things we talk about around future trends and what’s the real impact that this has on office and how we work and how we live but it will be a journey and there will be things that just don’t go back to ever being the same again.
Susan Freeman
I think we’ll probably have to talk again in a year’s time and see how things are going and I also noticed on your Twitter account, you say that your philosophy is, “1% better each day” and is that philosophy holding at the moment?
Ryan Simonetti
Yeah, I mean, honestly it’s carried us through, you know, I think through this crisis, you know, our plan when this first started was survive and thrive and the first I’d say kind of 90 to 120 days was a lot about survival, right? We had to close locations, we had to renegotiate deals with our customers, with our landlords, we had to raise capital and secure our balance sheet, we had to, you know, we had to do a lot of what I think of it really, really hard but critical things and, you know, the human side of that is terrible, you know, for me as a Founder and CEO whose always prided ourselves on really having an incredible culture, you know, having to lay off and furlough hundreds and hundreds of people is like, it’s not easy and it wasn’t easy on me or leadership team in the company but I’d say like starting kind of late June/early July, I think we were starting to be able to turn a corner and it was less about surviving and really rethinking Convene and our business model which we keep saying is kind of Convene 2.0 for a post-Covid world and I think since we’ve made that turn, it has been like one step at a time, 1% better kind of each week and, you know, it’s, we’re seeing the momentum like I would say, you know, every week since then we’re seeing more customers use our spaces, we’re making progress in our virtual technology, we’re seeing some physical meetings start to happen again so, I think we can just kind of keep putting one foot in front of the other and stay really focussed and disciplined and not get distracted, you know, I think we’ll be in a really, really good spot, you know, come this time next year.
Susan Freeman
Well that’s, that’s really positive and I’m… I will be following the new products with great interest and I particularly look forward to trying the new virtual meeting platform so, Ryan thank you so much for joining us from New York and I will follow Convene’s progress with huge interest and particularly look forward to seeing 22 Bishopsgate.
Ryan Simonetti
I know, I can’t wait till it opens, it’s going to be a beautiful space and, you know, we couldn’t think of a better location to plant our first kind of flag so, hopefully we’ll get to that in person and not have to do it virtually but, you know, thank you so much for having me on today, I really appreciate and enjoyed the conversation.
Susan Freeman
It’s a pleasure and I look forward to seeing you in real life.
Ryan Simonetti
Yes. Hopefully soon.
Susan Freeman
A huge thank you to Ryan Simonetti for joining us from New York today to share his views on the future of the rapidly changing office sector and to tell us a little bit about Convene’s plans for the future.
So, that’s it for now. I hope you enjoyed today’s conversation. Please join us for the next PropertyShe podcast interview coming very soon.
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