ABOUT THIS EPISODE
For Hub Australia’s Brad Krauskopf, running a flexible workspace business is about much more than meters squared. It’s about people and creating solutions that give them the choice and experience they need to run successful businesses.
Jo Meunier [00:00:17] Welcome to the Future of Work podcast by Allwork.Space. I’m Jo Meunier and today I’m really excited to speak with Brad Krauskopf, who is currently nine hours and half the world away from me today in Melbourne, Australia. So Brad is the founder and CEO of Hub Australia, which has grown to become Australia’s largest privately held flex workspace operator. It’s recognized as the trusted local flex partner for landlords and businesses in Australia. It targets the premium end of the market with high levels of customer service, quality fit outs and a hospitality style offering that helps customers grow their businesses by attracting and retaining talent. Hub is recognized as an Employer of Choice in the Great Places to Work rankings and has a longstanding commitment to sustainability and impact. And with more than 20 years’ industry experience in Australia and internationally, Brad is recognized as a pioneering driver of coworking and flexible work in Australia. So welcome, Brad, and thank you so much for joining us today.
Brad Krauskopf [00:01:16] Thanks, Jo. Great to be chatting with you.
Jo Meunier [00:01:19] Fantastic. Okay, so first of all, I’d like to hear a little bit about your journey into the world of coworking and the flexible office space sector. So could you tell us how you got started and how you’ve developed Hub over the past decade or so?
Brad Krauskopf [00:01:32] Sure. So, my background I’ve always been an entrepreneur at businesses since very early on in my career. And probably about 10, 15 years ago, I said no to the family business of hotels. And then, interestingly enough, as time goes on, I find myself still in what I call hospitality, running Hub, which I started in 2011.
[00:02:03] You know, like many coworking operators who very much came into being off the back of the GFC and then a huge amount of people looking for a place to work and a place to come together. As we’ve grown Hub over the years, it’s interesting how our first space was 200 meters squared, so you know, a whole 2000 feet. But we found that by 2016, we’d really worked out the customer that we could service really well, and that was the more established growing business. And that took us more into premium locations and spaces where there was a much greater focus on the employee of those organizations and their teams, because ultimately we were creating a great place to work for people to come into every day. Right now, we’re all navigating through coronavirus, but we’re very much seeing some great opportunities coming up for flexible workspace ahead. And you know we’re across Brisbane, Sydney, Melbourne and Adelaide and more and more every day we’re seeing people coming back into the spaces, which is great to see.
Jo Meunier [00:03:27] Yeah, absolutely. Well, we’ll come onto that in just a moment. But if we can just rewind a few months to before the health crisis — end of last year, beginning of this year — and things were looking very bright for coworking and flexible office space. So could you tell us a little bit about how the sector was looking over in Australia and how was Hub doing? What were your key cities at that time?
Brad Krauskopf [00:03:51] Yeah, look we were doing great. And certainly 2020 hasn’t exactly panned out, as any of us thought. We had just announced new spaces in Melbourne and Sydney, which is certainly our focus. The spaces do tend to be around the 4000 meter squared mark. We own and operate cafes internally to all of those spaces, which has become, I guess, a key part of our brand. And then we were working a lot with teams, say 20 people, 30 people, up to 50 people. I must admit Jo, thinking back to, pre the health crisis, it just seems like a decade ago. It really does. But look, we’re running a good business, we were a profitable business. So we went into 2020 in a good condition to cope with what it has thrown at us. And also, we’ve got a high staff member to customer ratio, which has served us incredibly well in terms of being able to keep in contact with our customers, and coming up, I guess, with more custom solutions as we’ve gone through this to navigate onto the other side. And certainly we’re seeing that… we signed a deal this week for 170 desks, which, you know, that’s a large size deal for us.
Brad Krauskopf [00:05:45] But, you know, it was directly in line with what a lot of people are saying… this company normally would have taken on a traditional lease, but now what they’re looking at is not just something on flexible terms, but somebody to actually operate their space for them as they’re starting to bring people back into their workplace.
Jo Meunier [00:06:08] Gosh, that’s, 170 desks that’s quite a lot.
Brad Krauskopf It helps, definitely.
Jo Meunier Yeah. And throughout the pandemic. How did you cope with that change? Did you have to close your spaces? Were you able to remain open?
Brad Krauskopf [00:06:24] Yeah. The spaces did stay open and indeed the people that were running essential businesses… one of our larger customers is government, and there were people coming in each day, albeit not a lot. We automatically went into crisis mode. We started to spend a lot of time on the phone with members rather than getting to spend that time that we’d normally spend with them face to face. We moved all of our programming online and launched a virtual offering which up until then we didn’t have. And then we’d be, you know, working hard with our landlords, with our team. Look, it’s just been action stations for the whole time. And, you know, of course, added to that, is actually the stress that this is a health crisis, not just an economic one. So, you know, you want to make sure you keep everybody safe and healthy as well.
Brad Krauskopf [00:07:35] We started monitoring something, we called it our Hub Coffee Index. And we’ve seen it as a bit of a barometer for how workplaces are getting used. And, at its peak, we were selling around twelve hundred coffees a day from the cafes and that went all the way down to twenty six in April in a day. That was its lowest point. We’re now back up to over a couple of hundred a day. And I think it’s an interesting way of mapping out and seeing just how much people suddenly started working from somewhere else.
Jo Meunier [00:08:10] Yeah, absolutely. And the fact that your coffee sales are beginning to creep slowly back up, that must be a positive sign. So how are you working with members and businesses to get them safely back to the office? And what kind of changes have you had to make in your workspaces to enable people to come back to work?
Brad Krauskopf [00:08:28] It’s a lot more than just sanitizer. I will be very glad when we don’t have sanitizer being talked about at all levels, but I guess beyond that, a few key ones, communication. It’s got to be regular. It’s got to be everywhere. Like, it’s got to be on the phone. It’s got to be on the website. It’s got to be in the emails. We’re finding that everybody consumes their information in different ways. So we’ve had to be, let’s call it, over communicating. A lot of staff training, first and foremost, we’ve got to make sure we’ve got a safe and healthy workplace for our staff. That’s important. And then we’ve also then got to help them and make them feel confident and trained to then create workspaces that thousands of people come to every day. So that’s been a big part.
Brad Krauskopf [00:09:26] There’s increased cleaning schedules, making the experience touchless, where feasible, putting in dividers, but then also doing some things like shortly when you come to Hub, you’ll be coming in and there’ll be a screen there which says, for instance, the air quality, the temperature, how many people we’ve got on the floor and actually communicating to people, we’re transparent, we’re focused on this and giving people the information that they then feel confident that they’re coming into a healthy and safe workspace. So, you know, there’s a whole lot of things that we’ve had to do. And it’s certainly something that I think ultimately workspace operators, you will be judged on this. because otherwise it’s a basic necessity, the space has health and safety for all the people using them every day.
Jo Meunier [00:10:27] Yeah, absolutely. And bringing so many people into one building, as you say, it’s a confidence issue, isn’t it? A lot of people are scared to go back to those places and they feel safe at home where they can control their own environment. They’re going into a workplace surrounded by people, that must be quite difficult for some people to come to terms with.
Brad Krauskopf [00:10:46] Yeah. And look, you know, there’s also, in Australia, I’m sure we’re like many different countries, the states in Australia each sets their own restrictions or rules on gatherings. So we’ve had to communicate with people across state lines. And then, for instance, we have a workbook that we’ve put together for our customers where they can then use that to help them put in place their own plan to get their staff back to work. See there’s this unique thing there — we’ve got to make sure we’re providing the right work workspace. But then all of our customers also need to make sure they’re being great employers for their teams. So we’ve had to work with them in order to put in place communication to put in place, rotating schedules for working. And it’s been a, I guess, a more custom approach that we’ve had to take with each of our members.
Jo Meunier [00:11:50] Yeah. And I understand you’re involved with the WORC — the Workplace Operator Readiness Council. Could you tell us a little bit more about that?
Brad Krauskopf [00:11:59] Yeah. That this was something that was kickstarted by Industrious in the US. But, you know, there’s now 20 operators or a little over 20 operators around the globe where we’ve all come together to pull knowledge and pull experience. And we’ve published a playbook for all operators to be able to utilize to help them operate a healthy and safe workplace. It’s actually something that if you go to www.workplace-council.org, that’s the website where you can download the playbook. And I really encourage operators out there that, you know, this is something that you can use. And I guess it’s been a bit of an industry collaboration, also working with a lot of established corporate real estate partners. And it is I guess it’s a testament that, ultimately we know we’ve got to come together because we want everybody to be looking at the workspaces as a safe place to go.
Jo Meunier [00:13:07] Absolutely. And this would be so valuable for workspaces of all sizes, but also across the world. Different countries are at different stages of coping with the virus. Some places are in quite strict lockdown, whereas others are opening up. So I should imagine that would be a really, really important resource for the whole industry.
Brad Krauskopf [00:13:26] Yes. There’s so many new things that we’re all having to bring into our day to day these days. Yeah, hopefully it will be a great help to people.
Jo Meunier [00:13:36] Okay. And flexible workspaces, we know that they can help businesses get back on their feet, and for instance, at Hub, you’ve had this huge, huge influx of a company wanting a hundred and seventy desks. And by offering flexible agreements and services, operators like yourself are in a position to help businesses adopt distributed teams, work more flexibly… So can you tell us how Hub is working with businesses and landlords to help them create their own solutions and responses to the impact of the virus?
Brad Krauskopf [00:14:08] Sure thing. So I think what we’re going to see is that the numbers are going to start telling businesses and landlords that it makes sense to be offering up flexible options. But then I think there’s also a recognition that, you know, running a workspace just got really hard. We’ve been, for that for the last 15 minutes here, we’ve been talking about health and safety and a whole lot of really important things. And so for a landlord, for example, having that service layer there to provide all the different things that a tenant is going to need so that they sign up with them, whether it’s on a lease or whether it’s on flexible terms, ultimately it’s going to be driven by a large amount of the workforce wanting to come into that office. So you’re going to need a professional operation of that office. So what we’ve seen is that people are coming to Hub, this organization where they wanted to have more flexible terms, but ultimately, what they really want is for their staff to be coming back into the office, to be collaborating to be selling and to be looking after their customers. So to that end, what I’d see is the biggest opportunity that we’re working on is how can we bring that service later into partnering with businesses and landlords in order to help them deliver workspaces that people love.
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Jo Meunier [00:15:45] And that would tie into your hospitality background.
Brad Krauskopf [00:15:49] Yeah, look, I hope so. And also, you know, we have also seen that, you know, people have worked out that they can work remotely. And many people have worked out that maybe they can, but they don’t like it. But what we do know is that if you’re going to need to get into the car or you’re going to jump on to the train to come back into the office, there’s got to be a really good reason for doing it. And it’s got to be more than just work, because I do know that if I have to, I can do it at home. So how landlords or businesses alike appeal to the person that comes in and says, right, I will do my day of work or I will go in to socialize or I will go in to do meetings, it’s now going to be intentional. It’s not going to be because somebody told me that I had to. It’s because the workspace and the experience that I’ll have there that day has got to be something more than what I’d get if I was just working from home. And, you know, whether it’s hospitality, whether it’s a focus on learning or whether it’s a focus on technology, there’s going to have to be something there that is more than what I’d get if I did my day of work at home.
Jo Meunier [00:17:17] Absolutely. It does suggest that companies might only go into the office perhaps a couple of times a week. So does that mean that companies will need less office space?
Brad Krauskopf [00:17:29] There’s one school of thought here that because of all of the distancing required is that, you know, you’ll have less people coming in, but you’re still going to need the same amount of space. Look, I think what’s going to also happen here, though, is that the nature of what people are coming in for is also going to completely change. It might be because I’m coming in to do learning. It might be because I’m coming in to innovate or for a meeting, or it may actually be because I really just want to socialize and be around other people because I’m going crazy working from home all alone. So I don’t think anybody is yet in a spot to say whether more or less space is going to be required. But absolutely, what people I think are justified in saying is that you’re going to need a very diverse range of different spaces. Which, it’s going to be impossible to do that just from this single location that you’ve signed a long term traditional lease with.
Brad Krauskopf [00:18:36] So there’s been a lot of talk about suburban and regional locations. There’s been a lot of talk about how people are going to need to adapt their existing office. And then there’s also a common recognition as well that, you know, having all of your staff sitting under the one roof, all of the time, doesn’t sound like as good an idea as it did in January of this year. So, people are going to need flexibility and choice in terms of how they provide the different workspaces that their teams need to get the job done, but also to keep attracting and retaining the right staff. So I think that’s going to mean complexity, that the businesses are going to need to partner with a lot more operators or landlords or even their employees. One of the issues you’ve got there is OH&S issues of working at home. So, you know, there’s a lot of different things that need to be addressed when we move into a world of distributed working or anywhere working. And I think that is where some of the providers, like some of the flexible workspace operators and coworking operators, are in a really good position to step into that void because, you know, they’ve got the relationship with the customer. They’ve got the relationship with the landlord. And, you know, I think that also flexible workspace operators. We’ve also got a really great incentive to make sure that we become that trusted partner for business because otherwise people are just going to be working at home. So, you know, I think we’re well incentivized to really come up with solutions that are focused on the people using the workspaces and not just the number of meters squared.
Jo Meunier [00:20:47] Yeah. So workspace operators would have to become very experience centric to attract people.
Brad Krauskopf [00:20:54] Absolutely. So whether it’s health and safety or whether it’s wellness or whether it’s hospitality, you know, sustainability and impact is another one that I think is going to increasingly be important for people to be able to demonstrate how they’re delivering on that. Landlords are getting a return on their space from a lease, a traditional lease, it doesn’t justify investing in all of these different things. Now, they can either set up their own flexible, experience centric model or they can partner with operators who can do that for them. I think, we already have seen examples of both. But you can be sure that as more and more deals for 170 desks, for example, get signed up by flexible workspace operators, landlords are not going to want that space that would normally have signed up on a traditional lease to no longer be theirs.
Brad Krauskopf [00:22:02] So landlords will step into this game. And whether that be doing it by themselves or whether that be partnering, we will see landlords more and more enter into flexible workspace.
Jo Meunier [00:22:17] OK. And also what we were discussing a moment ago about distributed working and how some people will continue to work remotely while others come into the office and then perhaps change around. I should think technology would have a huge role to play in ensuring that works seamlessly and smoothly. And just thinking about meeting rooms, for example, some people who want to have remote meetings, while others will be happy to be in the meeting rooms in person with physical distancing. How is that working at Hub? What kind of technology have you got in place there?
Brad Krauskopf [00:22:52] Yeah, sure thing. So we’re actually as we speak, we are implementing a whole bunch of new enhanced Wi-Fi, but also video conferencing. It’ll be in every room. Plus, we’ve also provided packages for our members where it would be, I guess, a work from home kit. So whether that’s from an ergonomic chair through to the technology, you know, you’re absolutely right. It does need to be seamless. It does need to be easy. And it does need to be enterprise grade. So I think certainly in a few years from now, I’m sure we’ll have VR headsets with these meeting rooms. I think that’ll actually come sooner rather than later. But yes, that’s been something that we’ve had to deal with. And, you know, whether it’s through signage or whether that’s through putting in place cleaning protocols for the meeting rooms, there’s a lot of there’s a lot of extra layers that have come into just having a meeting these days. It’s quite unbelievable.
Jo Meunier [00:24:08] Yeah. It’s quite a huge change. And to think that the way this year started and the way six months in where we are at the moment is quite, quite different to what we were expecting.
Brad Krauskopf [00:24:19] It is.
Jo Meunier [00:24:22] But there is light at the end of the tunnel and perhaps a year from now, 18 months, we could be in quite a different situation, hopefully a positive one. And so what are your thoughts on the future of work once we get past this current situation?
Brad Krauskopf [00:24:37] Yeah, I think that what we’re going to see is that there is a good future for the workspace and for flexible workspace on the other side of this.
Brad Krauskopf [00:24:46] I mean, when we talk about people wanting choice; choice and very long term leases that lock in your requirements for a very long time, they’re opposed to each other. You know, for people to be able to have that choice that they need to provide to their staff to keep attracting and retaining talent. They’re going to need a wide range of different workspaces in order to deliver on that. And I think that’s where flexible workspace operators can really focus to identify, what are those workspaces that they can be amazing at delivering on, for businesses.
Brad Krauskopf [00:25:33] I think we’ll see a lot more landlord partnerships. As we were just saying, remote work will also mean working from work hubs that are closer to home. And finally, I think we’re going to see a much greater focus on the people rather than on the metres squared. And, to that end, I think that will be very welcome by everybody, because, ultimately, if we don’t create workspaces that warrant you coming in from the living room, then not only will that be a poor outcome for flexible workspace operators, but more importantly, you know, organizations need offices to help them build culture, to develop their next lot of leaders and to develop new products. So, you know, the workspace, you could say it becomes even more important, but it absolutely will go through a lot of change over the next 12 to 18 months. And, we really need to remain nimble. And just always keep focus on the people that are going to be using the workspace.
Jo Meunier [00:26:56] Absolutely. And focus on people can only be a good thing.
Brad Krauskopf [00:27:00] Absolutely.
Jo Meunier [00:27:01] OK. Brilliant. Well, before we wrap up, is there anything else you want to add about the discussion we’ve had on the future of work and flexible space in general?
Brad Krauskopf [00:27:10] No, look, it’s an exciting time. And it is a challenging time to be here. But I certainly think on the other side of this, it will turn out to be that the products we’re delivering are much better for businesses and for the people that use workspaces. And, you know, certainly I do hope that the health crisis is one that, doesn’t impact any more people than it does over the next six months or that it already has.
Jo Meunier [00:27:52] Yes. Agreed. Well, thank you Brad. Thank you for joining us today on the Allwork podcast. I hope you stay safe and well and your team, and we would love to have you back on the podcast again sometime soon, hopefully in happier circumstances.
Brad Krauskopf [00:28:05] Let’s hope so. Thanks, Jo.
Jo Meunier [00:28:10] Thank you, Brad. Take care.