There is a war going on right now. It is a no-rules grudge match for the world’s most precious commodity. It isn’t for minerals, land or data. It is a war for talent.
The battleground for the war for talent is increasingly becoming the workspace. Forward thinking tech companies worldwide have shown how innovative and fun workspaces are a cost effective tool for recruiting, motivating and retaining high-level talent. A headquarters can be the physical representation of a corporation’s culture, or at least the one that they are trying to cultivate.
Big players often hire professionals with titles like Head of Corporate Facilities or Chief Workplace Officers and use multi-million dollar budgets to design and build their offices into flashy cathedrals of human capital. Smaller companies that don’t have the resources to hire workplace architects, sign long term leases or do extensive tenant improvements don’t have the same option. They often find themselves in coworking areas that are more suited for unaffiliated freelancers that lack infrastructure for large collaborations and are devoid of any individual brand identity.
This is where companies like Knotel come in. By offering the customization of a in-house designed office combined with the flexibility of a shared office they have made a name for themselves in New York City, one of the hottest office markets in the world.
I recently interviewed Knotel’s CEO and co-founder, Amol Sarva where I got a chance to ask him about what he sees as Knotel’s unique offering and what it means to sell “headquarters as a service.”
Q. What is your background both educationally and professionally? What did you do before Knotel and what got you into this vertical?
Before Knotel, I studied cognitive science for my Ph.D. at Stanford, and then founded several successful businesses, including Virgin Mobile. I’m a backer, advisor, and mentor at 50+ companies that produce products and offerings ranging from electric bikes to kids’ clothing to key robots and food delivery.
After being surrounded throughout my career by growing companies that didn’t have the space to properly expand and nurture teams, I knew there was tremendous opportunity to create office environments with the proper resources and accommodations that would help companies succeed, and ultimately help the tech and business ecosystems flourish.
I knew there was tremendous opportunity to create office environments with the proper resources and accommodations that would help companies succeed.
Q. Obviously, you saw potential in flexible office space. What metrics have you seen that point to sustained growth in co-working and flex space?
According to Small Business Labs, the number of global coworking spaces will grow from just over 11,000 this year to more than 26,000 in 2020. Many businesses are looking for spaces with flexible leases that offer easy move-in and tech support — beyond what WeWork can provide — and are turning to Knotel for these needs. As those companies grow and scale, they will want dedicated headquarters reflecting their brand identity, beyond glass cubes. And they shouldn’t have to sacrifice that lease flexibility in the process.
In under two years, Knotel has expanded to San Francisco, our presence in New York has tripled to more than half a million square feet, and we expect to double our spaces to include one million square feet under lease at the end of 2017. This growth will make us the third-largest provider of temporary offices in New York City.
Q. Your motto is “headquarters as a service,” can you explain what that means? How do you create a headquarters rather than just a space for work to be done?
Each Knotel location is designed to reflect the company’s unique ethos. We create headquarters for businesses that reflect their unique needs and goals for growth, and where they can tailor their spaces to be exclusively theirs, rather than just a space to get work done.
We don’t believe in sterile environments, where people are crammed into small offices with strangers. For serious businesses that are looking to grow, Knotel eliminates the risks of being locked into long-term leases. We are transforming traditional spaces by offering catered service terms, culture-coded environments, quick setup and move-in support.
Q. You seem to have growth with some of your more successful clients. Can you tell us about some of your ongoing partnerships with startups that will support your near-term growth?
We offer space to lots of rapidly growing and successful companies in New York City, and many of the area’s smartest businesses have begun in Knotel. Executives from Cheddar, Techstars, Well+Good, Change.org and many other growing businesses have called Knotel their home. We’ve helped some of these companies become the rockstar brands they are today, and are excited to continue investing our spaces in the startup community to build and generate amazing brands.
Q. You just announced a joint venture with fellow coworking provider Grind in which Knotel will take over their 419 S Park Ave campus. Tell us about why you pursued this collaboration and how you see Knotel’s unique value as a partner.
The coworking space is vast and there’s an incredible opportunity for Knotel to partner with the best providers to ensure that businesses of all sizes have great places to call work and call home. As part of this new partnership, Grind will refer larger companies to Knotel, in addition to companies that grow out of Grind’s coworking community and are looking for headquarters space. In turn, Knotel will refer freelancers and smaller companies to Grind’s coworking community, which better caters to their needs. We’re excited about this partnership, which will allow us to open up access and networking with some of the best companies in New York City.
Q. WeWork is the obvious giant in the coworking world with their new huge $4.4 billion dollar fundraise from SoftBank. Would you consider them a direct competitor or do you see Knotel’s offering from differing in a substantial way?
Unlike WeWork, which serves mostly freelancers and small startups, Knotel caters to businesses with 20-500 employees. We constantly hear from WeWork members who are tired of having their productivity hampered by distracting extracurricular events and loud video games in the lobby, and from being subject to ceaseless foot traffic and cramped offices. The 2015-era hype of free beer is dying down; companies are looking to graduate from WeWork’s spaces to a mature work environment.
Company culture should never be overlooked in a business plan; it’s vital to fostering an environment that supports tangible goals. The companies leaving WeWork are growing businesses looking for spaces that promote growth via a customized, tailored environment. Whether it’s soundproof call booths, thoughtful spaces for creatives or large, branded conference rooms, Knotel creates offices that cater to businesses’ specific needs.
Q. What other services would you like to eventually see Knotel offer? How do you plan to innovate as the market for flexible workspace changes?
The tech ecosystem has exploded in the past ten years, and we’re really excited to be working with some of the best and brightest in the business. As these companies grow, they’re looking to ease logistics concerns, and Knotel helps alleviate and shoulder these operational responsibilities so that executives can focus on their jobs.
Knotel is growing rapidly — we recently expanded to San Francisco, and we’re planning to double down on this growth and launch in other countries soon, including England, to support smart companies around the world.