Yesterday I came across a post called, The Workplace of the Future, by venture capitalist Tomasz Tunguz. In it, he references a book called, Cubed: A Secret History of the Workplace, and talks about the changing nature of how and where we work.
What’s immediately interesting to think about is how recent the modern workplace really is:
The information worker is a relatively new concept. Peter Drucker coined the term in the 50s. By then companies had already developed new ways of housing information workers. The very first information workers were accountants hunched over “Bob Crachit” desks in the back rooms of factories. Booming railroad companies demanded more organization and created offices within the new skyscrapers along the Chicago skyline. With these new offices came stacks of paper and folios, and cabinets in which to file them. Then, the Mad Men wrought an era of typewriters and mahogany corner offices. Next, Bell Labs invented the suburban office park, moving offices from the city as part of post-war suburbanization and in the 70s, Herman Miller crafted the now-ubiquitous cubicle, which was called the “Action Office” when it launched. Oh, the irony.
It’s also interesting to think about how quickly things seem to be changing. Up until quite recently, everybody seemed to be singing the virtues of the open office plan. However, today, more and more companies are shying away from that kind of space planning:
In 2011, the organizational psychologist Matthew Davis reviewed more than a hundred studies about office environments. He found that, though open offices often fostered a symbolic sense of organizational mission, making employees feel like part of a more laid-back, innovative enterprise, they were damaging to the workers’ attention spans, productivity, creative thinking, and satisfaction. Compared with standard offices, employees experienced more uncontrolled interactions, higher levels of stress, and lower levels of concentration and motivation. When David Craig surveyed some thirty-eight thousand workers, he found that interruptions by colleagues were detrimental to productivity, and that the more senior the employee, the worse she fared.
Today, the most radical changes are appearing in startup offices around the world and are being driven by a desire to have spaces that embody their unique corporate cultures. This means everything from cool brick-and-beam architecture to bike racks in the office to flexible rooms and spaces that encourage mobility throughout the day. And to further reinforce these cultures, companies are creating positions like Chief Culture Officer and Chief Vibe Officer.
But as I’ve said before on ATC, the other big shift is simply location and the return to cities. More and more startups, for example, are choosing San Francisco over Silicon Valley and it’s because the city is where young people want to live. It’s increasingly where the talent is. This has already brought about many changes in workplace design, but it likely bring about many more.
Though it’s sometimes common to downplay “this for that” startups (that is, derivative startups that try and borrow a model and use it in another market), Storefront–which can be described as Airbnb for retail spaces–has just raised a $7.3 million Series A round.
Storefront is a marketplace for short term retail space (think pop-up shops). People with space simply create a listing and decide how much they would like to charge per day, per week or per month. In doing so, Storefront “helps all sorts of brands, sellers, and merchants to create their first brick and mortar retail experience.”
What I find interesting about Storefront, and other startups like Airbnb, is that they’re really rewriting the way real estate marketplaces work. Instead of large retail landlords (Storefront) and multinational hotel operators (Airbnb), technology is allowing individuals to now participate in these marketplaces. Supply is being decentralized and anyone with extra space can participate.
You could argue that these sorts of informal and short term rentals are nothing new, but I don’t think there’s ever been the possibility of scaling up like there is today. I mean, just look at how much attention Airbnb has been getting in New York. These startups are having an impact on the way the larger market functions.
Change is coming. And I think we’ll see a lot more of it in the real estate space.
Last Monday, the Office of the New York Attorney General subpoenaed Airbnb for information about all of its 15,000 “landlords” who rent out spaces in New York through their service. Airbnb has since refused to provide the information.
This is an interesting case. Airbnb is one of those startups that seemed initially like an idea too crazy to work, but has since grown to become a serious disruption to the hotel industry. However, the problem is that many jurisdictions have laws pertaining to illegal hotels. In the case of New York, the law prohibits short-term rentals under 30 days unless the permanent resident is present alongside the guest(s).
What this means is that renting out your apartment while you’re away for the weekend-which from my experience here in Toronto is how a lot of people use the service-is technically illegal in New York. State senator, Liz Krueger, believes that apartment building residents shouldn’t have to worry that their neighbouring apartment could turn into a de facto hotel room.
While I do sympathize with this concern, I think there’s a gradient of use here. Not every Airbnb user is operating a de facto hotel. Many, whatever that percentage might be, simply use it to earn extra income while their place sits idle. And to do this, the permanent resident is trusting their home to a stranger.
So in a way, there’s a filter in place that isn’t there when the unit is being operated strictly as a hotel suite. Therefore, maybe we just need to expand the definition of having a “permanent resident present” to include having their belongings and life in the place.
It’ll be interesting to see how this all pans out. But whatever the result, it’s clear that Airbnb is definitely shaking up the status quo. Do you think residents should be freely allowed to rent out their places on any term?