What’s it like to compete against a company that just raised $4.4 billion dollars to do what you do?
That was the main question we had for Jamie Hodari, the cofounder and CEO of Brooklyn’s own coworking company, Industrious. Well for one, it helps to not think of it in those terms, as it happens.
“WeWork is not only a well-funded company but I think for their core customers they have a really good product,” Hodari explained. “But this is a nuanced, difficult industry to get right and what you’re saying to a company is ‘hand off something near and dear to your company’s heart,’ which is what it’s like to walk into work everyday.”
That’s an area where Industrious’s relatively nuanced branding and culture depart from WeWork’s in-your-face messaging and ethos.
“This is an industry where it’s difficult to be all things to all people,” Hodari said. “I think you’ll see companies looking for a younger team and to draft off WeWork’s brand and culture will choose WeWork and people who are maybe a little older might want a more nuanced experience and would go with us. I think that’s where a lot of the distinction lies.”
Last month the Prospect Heights-based Industrious raised a substantial $80 million funding round, bringing it total funding so far to more than $140 million. It has 35 locations across the country, about one fifth the number WeWork has, but enough locations to make it by our count the third largest company in the coworking world (behind WeWork and the renamed IAC, formerly Regus).
Hodari said Industrious plans to expand to 50–60 locations by the end of 2018. It’s doing many of its new locations differently, however. Instead of leasing out space from landlords and retrofitting it to be a coworking space, Industrious is increasingly entering into property management agreements with landlords, who will retain the lease to the space but allow Industrious to use its expertise in design and management (it’s a trend we’ve noted in Philadelphia with coworking network 1776 (formerly Benjamin’s Desk)). That, Hodari says, is a way less capital-intensive way to go about business.
What it’s going to put the money it saves on leases into is what Hodari called “product development.” In the coworking world, that means principally refining the use of the interiors to best fit what users want in an office.
“Our thesis is that a great day at work cannot involve sitting for 10–11 hours at a desk,” Hodari explained. “You have to move to a diversity of places during a day. If you’re at Excel you’re at a desk but if you want to think over problems you might want to be in a cafe or a sort of sensory deprivation place.”
The data to figure out what people actually want will come from a bunch of sources, but include methods such as temperature sensors in rooms, to see where people (as measured by their body heat) congregate during which parts of the day, or pressure sensors in chairs to see when and how much people are sitting during the day. The information will also come from surveys conducted by Industrious and by internal surveys from the companies it houses.
Another interesting thing Industrious is doing is building in cities that are not thought of as tech hubs. While WeWork has offices spread around the country, its spaces are congregated most densely in cities like New York (where it has 50 locations), San Francisco (15 locations) and Seattle (eight locations). Industrious is way more diffuse, with 35 locations spread over 25 cities which include Phoenix, Dallas and Atlanta. (It should be noted that WeWork also has locations in Dallas and Atlanta, but not Phoenix.)
“Atlanta is probably our best market,” according to Hodari. He said probably fewer than one-third of Industrious’s companies are in the technology space, but even that is becoming less meaningful as he says modern culture allows work to be more distributed geographically. “We have to be able to serve our customers where their teams are. This is a better way to work for an enormous number of people. … I think the distinction between tech hub and non tech hub is starting to evaporate.”-30-