Centaur Stage is a weekly video series where we explore bold ideas about the future of work and learning. Each Thursday afternoon, on LinkedIn Live, at 2:30 PM UAE-time, Marilyn Zakhour, CEO & Founder of Cosmic Centaurs is joined by some incredible guests to share insights, opinions, and perspectives about the future of how we work and learn.
In this episode, Marilyn and Letswork Co-Founder discuss how his at Letswork have adapted to the recent changes and how he believes it will shape the future of the work. Watch the full episode here
About Hamza Khan
Hamza Khan is a co-founder of Letswork. In 2017, Hamza was selected for the E25 entrepreneurship program at EMAAR. Three months later, he launched Letswork with his co-founder, Omar Al Mheiri. Some of you may remember Omar from our Cosmic Conference last July.
Letswork is the Middle East’s largest flexible workspace solution provider. Letswork allows users to work from 60+different co-working spaces and work-friendly cafes and hotels across the UAE with a single membership, as well as instantly rent meeting rooms and offices any time, anywhere.
The rise in remote working following the COVID-19 pandemic has made Letswork the go-to platform for over 20,000 freelancers, entrepreneurs, and corporate employees to find affordable, flexible, and inspiring spaces to work, meet and connect.
Hamza is also a qualified lawyer, having received his law degree from the London School of Economics and having previously worked for Clifford Chance LLP.
In this episode, Marilyn and Hamza discussed the future of the office. Marilyn opens the session saying, "If the last 12 months have taught us anything it is that most knowledge workers do not need to be at the office to create value. The data shows that this trend is here to stay.
The McKinsey Global Institute estimates that more than 20% of the global workforce could work the majority of its time away from the office—and be just as effective.
She continues, “While we know not everyone has the means or is in a position best suited for distributed work, we also know that employees would like the option to work remotely. A recent Owl Labs survey found that 77% of respondents agree that after COVID-19, having the option to work from home would make them happier. But it's not just about being happy, these employees are accustomed to these new work models and the majority prefer them. The same State of Remote work report shows that 80% of full-time workers expect to work from home at least three times per week.
Employers and organizations around the world have responded to this, integrating more flexible and hybrid work models within their organizational strategy. Recently, Citibank reported that moving forward their staff would not be required to work from the office for more than 3 days a week. One sector impacted by all these changes is the coworking space industry. The global market value of flexible workspaces is estimated at approximately $26 billion. It’s no small player."
Is the office dead?
Marilyn’s opening question is a thought-provoking one. She asks "Do you think the office is dead?”
"The office is not dead," responds Hamza. "The office is reborn. It's been redefined as to why, when, how it will be used."
When asked where he works from, Hamza said, "I work from our spaces. I will work from home if I need to get stuff done by myself, or I work with the team at one of our spaces. It depends on our days, what needs to get done, how we feel etc."
Marilyn continues, saying "I love to theorize what it is about the office that made it such an important part of corporate and organizational life, but also the aspects of what the office will need to become. What are some of the experiences that one gets in a corporate office that you think are here to stay and which do you think are no longer as relevant?
Hamza responds. "Humans are social creatures. There is knowledge osmosis that happens between you and your peers and you and your boss. That is the most glaringly obvious thing that has been missing in the emerging post-pandemic world. For many who have worked from home, we’ve missed out on these interactions. For some people - it's for the better. Some don’t want to know what their coworker's cat has been up to. But whether it's on a personal or professional level it's super important for people to have that day-to-day interaction with their colleagues. You can’t solely rely on an annual summit or once a month to meet up and catch up. I think It needs to be a little bit more regular than that. That's why we are seeing more companies opt for hybrid models. They want structure and also, culture plays into it. If you are fully remote with a team distributed around the world, then regular meet ups do not work but if you’re part of a traditional organization with thousands of employees in the same city it would be a shame to miss out on meeting up and lose out on that personal touch."
“That's a great point," says Marilyn. "A question we get from our clients is what is the best work model? We always say - it depends. Depending on the culture and rituals and what you want to communicate, the office can play an important role or no role at all.’
Marilyn continued, "Last we spoke with Omar at the Cosmic Conference, he told us about some of the cool things Letswork did to respond to the new needs of your customers during the pandemic. From offering spaces at Rove Hotels to adding meeting rooms to your list of spaces. I’m curious to hear more about how your business model has adapted over the last 12 months. We want to know what your customers' new needs have been and how you responded to meet them. I’d also love to know about how you and your team have adapted."
"It really comes down to the customer," said Hamza. "First, it's about who is that customer and what their needs are? Over the last 12 months, it's been pretty evident from the member database. We have realized that our customers have evolved from where they were 2.5 years ago. Initially, our target market was freelancers, entrepreneurs, small SMEs of 2-3 people. They wanted a cheap, affordable flexible solution on a day-to-day basis. The other alternatives were too expensive or not flexible enough."
He continues, "Now we are seeing that our customer demographic has changed. Our product is far more attractive to corporate employees who want that flexibility. People who are employed by local, or global organizations that have adopted ‘work from anywhere' policies. So they have the flexibility and choice to work from wherever they want."
"This new demographic of corporate employees have more money or need some professional spaces and services or quiet meeting rooms. It has forced us to evolve our spaces. Originally we were only working with F&B outlets, work-friendly cafes, and hotel lobbies but now we’ve evolved to work with other co-working spaces."
"Our competitors are now our partners. We’ve brought them into our ecosystem working with them rather than against them. It’s expanded our offering and gives our customer the chance to do more.
"They can grab a bite, meet people, be focused, and get on with their work in a professional and quiet environment. We give them choices. We know you can’t please everyone but we give them the choice to make the decision for themselves. That's how we’ve adapted."
Referring to the example of what Letswork did with the ROVE Hotels, Hamza says, "Specifically, the ROVE hotel room offering was really exciting, and we were the first in the market, but ultimately other people copied us so that was proof that it worked. It's a very important market for us and we get a variety of users booking these hotel room spaces and it’s becoming super popular. We thought it would be a two-three month thing but its been very popular"
"It’s incredible to hear," said Marilyn. "You never know if something is just a good PR stunt or if it becomes part of your product offering. I love this example and in a class I teach about digital disruption, I give an exercise to my students and ask them to consider me to be the owner of a hotel. I ask them to rethink about the hotel's assets from the viewpoint of other industries. The healthcare example comes up, so does using hotel rooms as exhibition halls."
She continues, "Speaking of which you have a very diverse catalog of spaces.We’ve seen around the world that people have moved out of cities. Just this morning I read in Bloomberg that IWG (international workplace group) shares have rebounded based on hopes it will benefit from hybrid working. This surge is attributed to its locations in more suburban areas. Whereas WeWork relies on desk rentals in metropolitan cities, we know that COVID pushed a lot of families to the suburbs or countryside where there is more space and less density. I know Dubai is a small city in itself but I am curious if Letswork has seen any additional customers visit your locations that are not in the hubs like Downtown Dubai, DIFC etc. Has the distribution of where people want to work from shifted in the last few months?"
"Without a doubt!" says Hamza. "Previously people were always focused on Downtown or Dubai Marina spaces. But we’ve seen that proliferate since and now we’re looking at spaces in different communities. A lot more customers are looking for places that are close to home. They’re looking for that third place close to home, that isn’t their office, where they can work, meet, connect, relax. Some people just want a place to read a book or to host a small networking meetup. Just as hotels need to reimagine their use cases - so have we. We asked ourselves, what else can we use these spaces for? And we work to try to translate that vision to our partners. Unleash the potential of what they can do with that square meter of space. The hospitality sector is a bit slow with digital transformation but the pandemic has caused them to rethink how they need to see the future of their properties.
"According to Global Workplace Analytics, employers can actually save over $11,000 per half-time telecommuter per year on average. What are your thoughts around hybrid work models and companies bringing it into their organizational strategy, what implications do you think this will have on your industry?
"When it comes to traditional commercial real estate, those people would be lying if they said business was great and we’re selling traditional offices. The entire sector has been completely disrupted and they’ve had to rethink their strategies. The demand (as a result of hybrid work) will be less about a slick 50K sq. ft HQs in main cities. Instead, it will be a lot smaller. We’ve seen examples of a hub and spoke strategy where companies actually have a small hub in a prime part of town that acts as a base with various spokes and a network of smaller spaces closer to where people live. I believe we will see more demand for smaller, flexible, more ad-hoc spaces. We’re trying to be well-positioned to leverage that opportunity. The hybrid model is where the industry is heading. "
"And with a new generation of millennials and GEN Z talent entering the workforce, in order for companies to attract these new talent groups, they're going to need to offer that flexibility and cater to their preferences," he continues.
So flexibility and offering choice will rise to the top of their priorities. Hybrid is definitely here to stay.
Marilyn responds, "we always speak to our clients about this. Success in the long term, will be about adapting to what the talent is going to require. If you have talent and skills and you’re choosing between 3 organizations, it’s clear where they will go - where there is flexibility. Not everyone needs to be remote or flexible, but at some point, it's about - will your talent have a choice?"
Taking an audience question, Marilyn asks Hamza what he thinks about Airbnb's 'work-cation; initiative that allows people to book remote working destinations.
"It’s super cool," said Hamza. "My gut feeling says - perhaps in the summer when people are vaccinated and if travel opens up, people will be taking long ‘work-cations’. We advertise the same for our hotel rooms. People will be doing more of this. They might rent a space on Air BNB, perhaps a house or apartment with friends, and they will work from there, or find a local coworking space membership. So long as the time difference isn’t too difficult to manage and maintain with the company’s office hours, it will become more trendy.
Remote Year organizes 2-week or 1 month-long stints. You have to apply and the company had to suspend operations in 2020 but they were acquired by Selina (a co-living concept in Latin America). They acquired that company because that will be the future, people will travel and work from wherever while also enjoying their time."
"That lifestyle used to be reserved for digital nomads. They were freelancers who moved to Bali and surfed, then moved home, then went to Europe. That type of lifestyle was reserved for a very small demographic but now it has gotten a lot bigger. Also, with schools for example, I don’t know how a lot of parents feel about homeschooling and since we don’t know how long that will go for, you may even see parents and families taking their kids with them. It won’t be the single, millennial 25-year-old who went surfing in Bali, we will definitely see more variety."
Marilyn responds, "Couldn't agree more! Recently we’ve seen some interesting real estate transactions here in Dubai from European buyers. Dubai was rated as one of the best places to live because of the perceived safety and I was telling my husband that we need to start a school that operates 6 months in Switzerland and 6 months in Dubai because there will be many families who adopt the nomad life."
"We saw that too," said Hamza. "In November - February when the whole world seemed to be in Dubai and they escaped lockdown in Europe, people were doing long stays and working from Dubai. Schools were still remote, offices were still closed and they came here so we saw a surge in customers sitting at hotels or people with long stays booked. I remember seeing a bunch of French and English country codes on our membership database. It made us realize that this might happen elsewhere when it worsens here and gets better somewhere else."
Taking another question from the audience, Marilyn asks: What are your corporate clients asking for in terms of flexible workspace solutions? Have any companies that have downsized purchased corporate memberships with Letswork and if so, what did you learn from those engagements?
"We’re still learning from these engagements. Our team membership requests have been through the roof. Rather than chasing individual customers on single customer acquisitions, we’re getting 10 to sign up at the same time. Each company varies. If you’re an SME with a team of ten that has to downsize completely in the UAE and you want a flex desk offering there is a lot of friction because of the requirements of the country. In other places, you wouldn't need a trade license linked to an office address but here, many people must sign up to some sort of lease even if it is very minimal. We’ve been working with free zones to come up with joint solutions for these needs. It’s been very interesting but from a company perspective, it depends. Some needed a space for their team, so they get a Flexi membership with access to spaces a few times a month. For those who want something more permanent, they buy memberships for their employees either individually or for teams that need more regular access.
Our model for dealing with teams will definitely change as we onboard more and more spaces which can handle teams of different sizes and preferences. Those organizations that have reached out to us, will be the most attractive employers and asking for these solutions. As a potential employee, if I see a company that downsizes and spends their money on coworking spaces, it adds to the benefits."
One really interesting aspect is to see how companies that no longer have some of the real estate costs will translate those cost savings and invest them in employee well-being and productivity? That would makes them really desirable for emerging talent.
Marilyn agrees, “We will definitely start seeing a shift of those benefits towards new ways of working. Whether it's food subsidies or other things, there will be a definite shift in benefits that move to new ways of working and lifestyles."
One last question
And finally, our last question for the session. Hamza, please complete the following sentence - “The future of work is…”
"I hate to be cliche but the future of work is flexible," said Hamza. "How you work, who you hire, how that work is being done, what tools you use.No matter how you look at it it has to be flexible. Can we migrate towards simpler, easier-to-use solutions or ways of working? When previously when these were not options. This whole future of work ecosystem will bring a lot of options it never came about but now that we have these options people are exploring them.