Tim Rowe – Founder and CEO of CIC | Flexible Workspaces: Competing Globally

Frank Cottle [00:00:39 ]:
Hey Tim, welcome to the Future of Work podcast. Really excited to have you on today. And gosh, I’ve known CIC since I think day one, so this is a particularly exciting Time for me. Can you tell the rest of the audience a little bit about CIC, your own background, how things have evolved to where you are today?

Tim Rowe [00:01:03]:
Sure, I guess we’re one of the earlier players in this space, so certainly not the earliest space.

Frank Cottle [00:01:11]:
You mean the flexible workspace?

Tim Rowe [00:01:13]:
Yeah, the flexible work in general category that we fall in. I founded the company in 1999, actually without an intention to be in this business. It was just a bunch of friends from MIT that were looking to get a cheap place to work and start companies. And we were having trouble getting leases because the landlords wanted personal guarantees and long leases. And startups generally don’t have a long planning horizon. They don’t know if they’ll be around in a few weeks or months or years. And so it’s difficult to go the lease route. And so we just rented some space. We were fortunate to get the local university, MIT, to rent us some of their space when we first started out and discovered, like many others, that working.

Frank Cottle [00:02:03]:
Around other people is, you know, I think that’s it. You’ve taken it to an entirely new high, working around other people, incubation theories, mentoring theories, accelerator theories, fundings, exits, team rooms, the very start up to the very exit point overall. Have you seen a paradigm shift or what? Paradigm shifts have you seen? And as it goes towards the origination of when you started through the changes in company cultures, funding, what have you seen and where do you think it’s taking us?

Tim Rowe [00:02:48 ]:
There actually have been a number of interesting paradigm shifts. So when we started in 1999, if you look at Google, the word coworking didn’t exist. It actually started showing up around, I think, 2006, 2007, somewhere like that. And there really wasn’t a history of doing this sort of thing very much. You had executive suites where you had folks like Regis out there that had kind of beautiful wood paneled workspaces with private offices for each company. But you really didn’t have a kind of sharing environment where people were kind of in each other’s soup, talking with each other all day and kind of sharing ideas and helping each other out. That really was probably first born in my experience on the west coast. There was a group called Ten, the enterprise network in San Jose. That was one of the great early ones.

Frank Cottle [00:03:48]:
That was the beginning of incubators.

Tim Rowe [00:03:50]:
Exactly.

Frank Cottle [00:03:51]:
The first incubators, I think started in mid, late eighty s, and they were college based. They were basically focused around universities.

Tim Rowe [00:04:02]:
Exactly. And then they became kind of focused around business clusters, like the Silicon Valley cluster. I think there was something also in San Jose called like the software business cluster early on that was well run. And so I actually went out and visited these places before founding CIC in 1999, just to get a sense for what I was going to experience. I visited St. John’s Innovation center at Cambridge, England, next to Cambridge University in the Cambridge science Park, which was also one of the early great ones. And St. John’s was doing science stuff where other places were really just offices. That was another inspiration for us. There was really nothing around mit quite like this at the Time. And there was a lot of need, a lot of desire by early stage entrepreneurs with a science background to kind of share space but also get the help that they wanted from each other.

Frank Cottle [00:05:06]:
Well, I know that as incubation became co working in many respects, that things changed quite a bit. But what have you seen in the way that space is used, the impact of that on a company’s growth, the impact of space design decisions on a company’s culture? And how does a company perpetuate that? It’s one thing to say, hey, we’re in startup mode, here’s what we’re going to do. Cool. But how do you perpetuate that through the entire growth cycle of a company?

Tim Rowe [00:05:45]:
Well, okay, so you asked about design. I’ll start with that. My early work after college actually was in Japan at Mitsubishi Research Institute. And the work style there in a japanese company, if you’re familiar with it, was long tables with chairs at the tables, much like today’s co working. But it would be one company.

Frank Cottle [00:06:04]:
Yeah, work of.

Tim Rowe [00:06:07]:
Yeah, exactly. That layout. And when I got to the US and started CIC, I created spaces like that for the companies at CIC. And you would believe this, but many people wouldn’t. That was anathema. At the Time, Americans had offices, private offices, and the notion that you would sort of work at a desk without a cubicle wall or something right next to someone else was strange to people, and it really pushed them. In the mid 2000s, when the concept of coworking was born, there was a group called Beta House in the Cambridge area that did it before we did. They just took a private home. They took bedrooms and just threw in desks and chairs and said, okay, everybody from different companies is now going to work in the same room without cubicle walls, et cetera. That was really revolutionary. There are just a few places around the country that were doing it, and people were like, is this okay? It was sort of like when you first took an Uber and you’re like, getting into someone’s private car and you’re asking yourself, is it okay to get into someone’s private car? Was that kind of feeling? And of course, now we’ve really all adopted this notion that it’s okay to be kind of physically around others that are not part of your organization. So the design shifted, I think, from kind of a classic American, almost law office kind of layout that was, Frankly, very expensive, space wise and construction cost wise, furniture wise, to this very fluid, very flexible, very cozy kind of model that is popular today in the open areas within coworking. Of course, not every kind of shared workspace works that way, but go ahead.

Frank Cottle [00:07:57]:
One thing I want to interject there is that I agree with you that there was this blossoming of new types of space and the new types of space use. But that didn’t diminish the earlier business models. They were growing simultaneously as classic you use, Regis, IWG, the old alliance centers, all of those were flourishing also.

Tim Rowe [00:08:21]:
And indeed, we were doing that, too. In other words, what we were seeing was not a replacement, but a growth of types of space.

Frank Cottle [00:08:30]:
Well, I think, though, that one thing you mentioned earlier, earliest about your own requirement, the key requirement that was consistent across all of these variety of business models, is flexibility.

Tim Rowe [00:08:44]:
That’s absolutely right. What I was going to say, and I think you probably have seen this as well, what we saw was first kind of a growth in the number of different kinds of physical places that people would work. And then what we saw was this sort of emergence of the notion this was, I think, quite radical and probably not until the 2010s that each employee wouldn’t just have one of those types of workspaces, but in fact, over the course of a day that one employee might move between a variety of different kinds of workplaces. And so it used to be you had your office and your desk and your picture of your family, and this was your kingdom. And you’d be there every day, nine to five, or whatever your work hours were. And it started to evolve that people, you know, you have a know down the hall that looks a lot like a Starbucks, and actually the coffee is pretty good. And there’s some comfortable seating and cafe tables. I’m going to work there for a couple of hours just because I feel different. And then maybe I’d like to go into sort of a private, soundproof booth to take a phone call, and then I’ll go move back to my open area desk. And we saw a transition of work from being a kind of a defined destination for someone to much more of a menu, if you will, of lots of different types of places, physically, that someone might spend their day. I thought that was a really wonderful transition.

Frank Cottle [00:10:15]:
Well, I agree with you. There was a physical transition. And I think the difference was when you had cubes, you sat at a clunky monitor that looked kind of like an old portable television, and you had a tower desktop, et cetera. The moment that we all started moving to laptops is when people said, yeah, exactly. I do the same thing. My office is my laptop. It has nothing to do where I’m sitting.

Tim Rowe [00:10:56]:
I think you’re right that the laptop freed the office to become flexible.

Frank Cottle [00:11:00]:
Yeah, we became mobile internally within a space, and as well as externally, it wasn’t just external mobility, it was also internal mobility. I mean, think of a conference room. 20 years ago, everybody walked into the conference room with a notepad. Today, no one shows up without a tablet or a laptop. Okay? And so it was that technology changed that drove it. The other thing that I comment on a little bit is the importance of community. Everybody used to say, oh, we’re choosing that location. But the reason they chose it stopped being the physical location. But instead, the people that they were going to work around at that location.

Tim Rowe [00:11:51]:
I think that that has become very central to some workplaces. I know we at CSC recently sponsored some research at Harvard Business School on employee attitudes toward workplace. And one of the things that was most interesting, given all the talk of remote and so forth, is that more than 90% of employees said that they absolutely wanted a physical place where they could have community. That was the number one thing that they were looking for. So, yeah, maybe I want the coffee. But what they wanted, the people, not just random people, but people they had built relationships with that they could see on a regular basis. It goes back to the old notion of first place second place, third places, and that second place, that consistent group of people that are your buds that kind of hold you up when things maybe are a little tougher at home or when work isn’t going so well. We haven’t replaced that 90 plus percent of employees want that. And so that is really what is anchoring us now to workplace more than anything else. We started talking about workplace design, and that’s changing, and that’s exciting and it’s got more flexible. But in that process, with the big hammer of COVID sort of forcing us all briefly out of the workplace to sort of ask ourselves the question, did we even care? Do we even really want a workplace? We’re coming back in 2023, 2024, saying, yeah, 90% plus. They may not care about some of the things about workplace, but they really care about that community. And that, I think, is what a lot of organizations now are using to drive their workplace strategy.

Frank Cottle [00:13:31]:
Yeah, no, I think so. That’s organizations as well as facility and flex, workspace design and builders, the importance of creating community. And I think we can look at an interesting study. I’ll pick on Wework for just a minute. Hugely successful in the design and building of facilities. Great at marketing and self promotion, but horrid at the concept of actually building a community inside of the facilities. I’ll give you a good example in London. You’re familiar with London, you have facilities over there. On Thursday afternoon, what happens? Everybody goes to the pub. 04:00. The people are spilling out onto the.

Tim Rowe [00:14:25]:
English invented the whole notion.

Frank Cottle [00:14:26]:
Yeah. I mean, the people are spilling out of the bars and the pubs onto the streets. There’s these massive crowds, et cetera. And it’s great. Wework had this wonderful idea that, you know, that they played with. They said, well, we’ll put a pub upstairs. They built a very large facility in London. And I said, we’ll put a pub up on the floor there. We’ll give away free beer. Everybody will stay here and this will be. They couldn’t even give away free beer and have people go there.

Tim Rowe [00:14:56 ]:
Yeah. Probably mixing up second place and third place, perhaps.

Frank Cottle [00:14:59]:
Exactly. There was a failure there to establish a sense of community, even though it carried all the labels. So it’s not as easy as a marketing plan. It has to be genuine or it doesn’t work.

Tim Rowe [00:15:18]:
So we’ve learned a little bit about this, and I’m sure you have over the 25 years we’ve been doing this. There are a couple of things that seem to have worked in terms of building community in our experience one of them is that it’s actually real work to build community. Anyone who has been part of a church group knows that it doesn’t just magically happen, that there’s a group of dedicated people who put a lot of Time into organizing and building that church community. There may be a pastor or priest or whoever it is in your religion, but then there’s a lot of other people that put a lot of Time into building it. And I think that most american companies and many shared workspaces haven’t really figured out how to resource that element to the point that it has authenticity and substance to it. So that’s a piece to it. Another thing that we found is that as we’ve built more and more specialized communities, we’ve spun out a couple of nonprofit shared workspaces with specific industry focuses. We helped create something called Mass Robotics, which is a 501 shared space for robotics companies in Massachusetts. We think it’s the largest in the world. It’s about 80 robotics companies all in one building with all of the equipment that you would need to build robotics companies or robots. But because of the kind of thematic connection that those companies have, the community side is also very strong. So instead of saying, hey, we’re just going to have, if you want a third space, you’re better off with a pup where you’re going to run into somebody you have kind of no connection with and you might not see ever again. And that’s what third spaces are for, to kind of explore right? And second places, the consistent community that we come back to and build deeper relationships with and support us, they work better when we have some kind of connection we found. So I would say that the workplaces, someTimes they’re successful with some third place communities, and I can talk about that in a minute. But where they can be particularly successful is strong second place communities. And that would be somewhere where you say, I’m having trouble getting my robotics company funded, or I’m really having trouble finding engineers with the right kinds of skills. To a dozen other CEOs who you actually know, who you’ve come to know over a period of years, and they help. I would say there’s two flavors of community. Both are important, and I think both apply to workplace in general. Beyond shared spaces within a company where you have that network of relationships, you’ve got the same sorts of challenges. I’m trying to figure out how to deal with my boss, the regional vice president, is not listening to me, is not supporting my initiatives. How do I get that to happen? That’s community that supports you there. And then there’s this thing that wework tried to do, this third place community, and there’s a whole different set of dynamics there. But it also can be done in a workplace context. It just requires a lot more focus.

Frank Cottle [00:18:29]:
Well, no, I agree with the audience. It’s funny to throw some definition on things. When we talk about business centers, executive suites, co working centers, et cetera, we’re really talking about a business model that combines people, place, and technology into a single bundled product and delivers it with a highly flexible service agreement. That’s what we’re talking about.

Tim Rowe [00:18:59]:
That is a great definition.

Frank Cottle [00:19:01]:
I’ve been using it for years, so I practice. We’re doing that. And then when you talk about adding flexibility as one of the core components to that, that’s one of the drivers to that. But when you talk about adding community, you have to make sure it’s genuine and not just a product. Hey, we have community. I remember when coworking first started up, I was at a co working meeting, and there was a mix of new co working, excited people and a few business center people there. And somebody said, oh, we’ve invented community. And I was sitting next to this lady that I knew. She’s from Texas, kind of think of a big haired Texas blonde, and she said, you know, honey, we just used to call that, you know, it was just people getting together to figure stuff out overall. So the concepts been around forever. It’s the practice of them that’s changed and the prioritization of them that’s changed. So a business center becomes an incubator, and then an incubator becomes an accelerator. And that’s really the transition that you all have gone through, is you’ve gone through this magic that takes people from the initial stage to the growth stages and help there.

Tim Rowe [00:20:31 ]:
Let me touch on a couple of things there. In terms of this building community, we tried early on and failed, having a few of our employees asking them to go get people to gather together once a week and have beer. The same thing that you talked about with WeWork. It didn’t really work that well. And then it used a very important word, authenticity. And I struggled with this a little bit. It’s like, what is it that isn’t working? And we ended up creating a nonprofit, a separate nonprofit called Venture Cafe. And it was inspired by a book written about networking at MIT called Venture Cafe. And the author let me use the name, which was lovely of her, and it talked about the pub at MIT. It’s called the Muddy Charles and how people with entrepreneurial interests would get together there once a week, venture capitalists would show up because they knew that the kids at MIT with new ideas would be there on this particular day, and there were maybe six or seven tables and just regular old little pub, and you’d get a beer, and you kind of sit around, and Bob Metcalf, the inventor of Ethernet, who at that Time was a venture capitalist, would show up, and it really worked. And out of that came multiple IPOs and so forth, companies that went on to greatness. And it turned out that there needed to be this kind of neutral ground, if you will, that was declared as, hey, this is a place where, if you’re an entrepreneur and you want to share your ideas and maybe find investors or partners and whatnot, that needed a certain level of authenticity. So we mimicked that, and we created a nonprofit to do it. And we felt that as a nonprofit, it would have a greater reality, sort of authenticity to it. Hey, this is a job and a marketing job or something at a company. And we’re now in 14 locations around the world. We’ve had 600,000 people come to these events. It really worked, but it has enormous staff, by the way. We get donations from big companies and stuff to help pay for running it. So it’s not a part of a business enterprise anymore. It’s become, if you will, its own separate animal. Just to sort of close on that topic a little bit, finding the authenticity to build community is really important. There are probably lots of ways to do it. We did it by creating a nonprofit, but I think there are other ways to do it. But it has to be real. And when you do that right, it works. So venture cafe here in Cambridge, we get about 400 people every week. It’s a madhouse. We have open bar. We have talks. The beer companies often donate the beer or the kombucha or cider or whatever, so that’s not even an expense. We often have volunteers working the bar, so that’s not really an expense. It’s a scene, and it’s phenomenal, and I’d love to have you come by.

Frank Cottle [00:23:31]:
I want to go. I’m in.

Tim Rowe [00:23:33]:
We do the same thing in Tokyo, and it’s even bigger. So it works, and we do it all over the world. So the second thing you touched on was this sort of. Maybe this is a bit of a pivot here, but a transition into the topic of incubation acceleration versus shared space. And how do you help people achieve business success as opposed to just providing a space within your framework of you’re providing space and resources, and people bring them together. We’ve gone through an arc. I don’t think this is the industry’s arc. It’s our own learning arc over the 25 years, trying different ways to do that. I’d love to share a little bit of what we’ve learned.

Frank Cottle [00:24:15]:
Well, I think from a trending point of view, I think that’s really important, because what you’re talking about is the evolution of this type of workplace that you’re involved in and really how that spreads out to a broader and broader platform overall. I mean, we go back to that coworking, and we talk about definitions, and I would say that from relative to community, and where it starts is coworking’s brand promise originally was business growth through a collaborative community.

Tim Rowe [00:24:52]:
Yes.

Frank Cottle [00:24:53]:
And it was that collaboration amongst the diversity of the companies was the strength of the collaboration overall. And so as you see trends establishing and moving forward three, five, seven years from now, how do you see this all going?

Tim Rowe [00:25:11]:
So I have a very clear perspective on this, but I could be wrong about it, but this is just how we’ve come to look at it. We started thinking, okay, let’s help these companies succeed. Our friends that were sharing space with us and our own companies, and we set out, we called it an incubator, which was the word of the day back in 1999. So our legal name is actually still Cambridge incubator, believe it or not. And we got financing from venture capitalists, and it was sort of a Y combinator kind of vibe. Let’s create companies from scratch and help promising early companies. What we found was that there was a difficult tension between a company that was coming in, getting space from you. Oh, by the way, the space was free, and we gave you investment like a classic incubator. Right in the very beginning, companies might make it, might not make it, but if they were struggling, they kind of wanted to stay in the space. And it was awkward to try to tell them when it was Time to leave if things weren’t happening, especially when 2001, the.com bust hit, companies were kind of dying left and right. And we said, you know what? Maybe what we should do here instead is to charge, like, a true fair market price for everything people use. And then if there’s sort of investment and equity support and so forth, let’s separate that off into a separate entity. That’s all it does. And lo and behold, we created a venture capital fund, and we just on the side, and it was a true regular venture capital fund. And we split an incubator into a funding source and a space provider. That was the best thing we ever did, by the way, because it made everything rational. You came in and you said, gee, I’d like some space. And we said, well, the space costs this much. And then you’d go to the venture capitalist. If they would give you the money you needed, you’d then pay for the space. And if you didn’t need the space anymore, you were definitely not going to pay for it. You’d leave it of your own accord and let somebody move in.

Frank Cottle [00:27:15]:
Well, that was, I think, evolutionary, because the first incubators that were non university based, and even them, they required funding, the first incubators would do somewhat the same thing. Hey, we’ll help you grow. We’ll give you this, we’ll give you that.

Tim Rowe [00:27:31]:
Take some equity, take a little piece of the company.

Frank Cottle [00:27:33]:
Those incubators themselves were seeking funding.

Tim Rowe [00:27:37]:
Exactly.

Frank Cottle [00:27:38]:
So they were saying, hey, my business model is an incubator, and I’m a new.

Tim Rowe [00:27:43]:
And we raised funding that way. I raised $17 million companies. I raised capital from vcs to do that business model. I came away from that, and this is colored for sure by the.com bust in 2001. That made everything more difficult. I came away from that thinking, not the right way to do it. I concluded it was better to have a collection of great companies in one space where they had the community and they could support each other and actually not one, but multiple investing sources that the companies could go to. Sure, the notion of going to one investing source is interesting, but most investors don’t like most companies they see. And so most companies have to go to like, 20 investors to find. And so we actually opened our doors and we invited venture funds to come and set up offices inside our space. And we now have, I think I last counted, 67 venture funds that have offices physically inside our spaces. And so we kind of changed the model and said, instead of us being an investor, that you have to get your money from us, essentially in order to use our space. We said the space is an open platform and investment is an open platform. The two are physically together, but it’s a free for all in terms of who invested what. And that model was what launched us. We really grew enormously under that model, still a company dedicated to supporting innovation. So we hadn’t become truly just a business to share space and get paid for it. We were still and have always been a company whose mission is to fix the world through innovation by supporting these innovation companies. But we thought we’d found a better way. I’ll call that business model two. The business model one was incubator. Business model two was sort of shared space, plus venture capital. Business model three, which really we got into in the 2010s, was, okay, this is great, but let’s go deep into individual verticals, industry verticals. So we collaborated with some folks to build a. And some of these we did as nonprofits. And that shows you. My ulTimate goal, actually, is making businesses work better and not making money, or I wouldn’t have done these as nonprofits. But with some folks, I collaborated and built the first one, which is called Lab Central. It’s now the world’s largest shared wet lab for life sciences research. It’s 200,000 plus square feet here in Cambridge. The MIT owns the property that it sits on, but it’s an independent organization. We’ve now seen $22 billion invested by VCs in the life sciences startups that have gotten started at Lab Central. And I think in 2022, we were just over a fifth of all Series A and seed life sciences funding in the United States went into companies inside Lab central. So we were about a fifth of all national early stage life sciences investment into this one entity. And so what we found was this sort of notion of kind of shared space plus venture capital. Our business model two could be made better or stronger if we started doing industry focused chunks, if you will. And the second one was mass robotics, which I’d mentioned.

Frank Cottle [00:31:07]:
Right.

Tim Rowe [00:31:08]:
The third one that we didn’t directly set up, but we were helpful to the people who did, was in clean tech. It’s called Greentown Labs. It’s also a 501. We helped out in a few ways around the edges, but it showed that the model worked. And so I’m seeing there’s sort of a progression. On the one hand, there’s kind of changes in work, how work is happening, generally speaking, in big companies and small companies. And then there’s this track of shared spaces, which know WeWork and industrious, and people like know IWG. And then there’s this third track that is really the one that we’re on, which is looking more at what type of organization can be most effective at helping a company succeed. And we call this industry innovation hubs. You notice that I’m not using the word accelerator, so I want to come back to that for a second. That’s actually a fourth track that isn’t us, but that’s someone like a Y combinator or a plug and play. I think they’re great techstars. It’s kind of yet another track. What we found in the sort of shared workspace track, the general kind of IWG industrious WeWork kind of track is it’s done right, it’s a good business. Right. I mean, I think industrious is doing really well. We respect them, and IWG has survived all the twists and turns and seems to be doing great. And we think of that as kind of meeting the needs of a general populace, if you will. And then over here on the side, we have this thing that’s been around for a while, which used to be incubators, now accelerators. I’ll give you money and I’ll get equity and I’ll try to help you. Right? And it’s still there. It’s a perfectly good business model, but we found something in between that we’re really excited about, which is we’ve been calling industry innovation hubs. And what distinguishes them is that they’re neutral. So, like our earlier business model, where we have lots of VCs in the space, the industry innovation hub does not invest and doesn’t play favorites between investors. So it ends up as a result that you get dozens of investors that hang around as opposed to know being one. Right. And then because you’re not limited to the portfolio investments or prospective portfolio investments of one investor, these industry innovation hubs also get much bigger physically. So the accelerators tend to be small, techstars tends to be nomadic. It runs for like a few months or however long their cohort is and kind of disappears and finds another space later. These are consistent and just keep growing. So 50,000, 100,000, 200,000 sqft just for one vertical, and they end up being, in each case, when we’ve looked at it, we think it’s the largest cluster of companies in that industry anywhere on the planet are in these industry innovation hubs. Now, that’s clean tech, robotics, life sciences. It’s true for all of them.

Frank Cottle [00:34:17]:
The question I have to really bring all this around it full circle is that you’re one company doing this or one structure doing this. It’s a group of companies.

Tim Rowe [00:34:31]:
We’ve done some spin out nonprofits, but.

Frank Cottle [00:34:33]:
Yeah, right now we’re going through an office occupancy crisis, a cultural change crisis, loneliness epidemic, 15 other changes that are going on in business, in space, overall, in investment, trying to sort out a lot of things going forward. How do you wrap this into one trend? Create a trend. It might be multicolored, it might be multidimensional, but put it into one trend. And then forecast where that’s going five years, ten years from now. Because this is a trending process and it’s not just for startups. When you talk about innovation centers, you and I can both probably, we won’t give them free advertising, roll off the top of our heads, large corporates that have their own innovation centers.

Tim Rowe [00:35:40]:
Yet another animal doesn’t work.

Frank Cottle [00:35:42]:
Totally different animal, but massive amounts of square footage, massive amounts of funding, billions and billions of dollars going into these efforts. And to your point, most of them are industry vertical.

Tim Rowe [00:35:56]:
Yeah, but their issue is that they’re typically not neutral.

Frank Cottle [00:36:01]:
Absolutely. They’re the most non neutral group.

Tim Rowe [00:36:05]:
It’s almost like a corporate research center, which is also a perfectly fine animal, but has kind of a different trajectory.

Frank Cottle [00:36:11]:
It is, but it’s all part of the same trending structure of growth through any variety of innovation models. Will that dominate the way all space.

Tim Rowe [00:36:25]:
Is used in the future? Okay, so you asked for sort of a unifying theory, and I’m not sure there is one, because I think these are actually distinct and separately moving dynamic trends. But I’ll say a couple of things. One, let’s not get too caught up in what’s going on in the United States, because the United States is, right now in the world, somewhat unique at a number of dimensions. Yes, we seem to be, amongst the countries the top, or almost the top of interest in remote work and hybrid. If I go to Tokyo in our center, you know, large, beautiful space, packed, and I look at Monday, Tuesday, Wednesday, Thursday, Friday attendance, it’s about the same. All the say, well, okay, so this hybrid thing that we all think is the future forever apparently isn’t in big parts of Asia. It’s also true. What I just said is also true in Singapore and China and other places. And it’ll be interesting to see whether long term we can compete or whether competition will cause american companies that reject that trend to be more successful than those that don’t. To not be, I don’t know. We’ll find not. So there’s an american experiment going on. The crisis of loneliness, by the way, is also a little bit american. Unfortunately. If you go to Spain, I would agree. The British may have invented pubs, but the spanish invented tapas bars. And everyone, just as much as the British, are there with their grandparents and their kids until 11:00 at night just chatting, and the level of community is off the charts. I don’t think they have a crisis of loneliness. I agree.

Frank Cottle [00:37:58]:
Having enjoyed a lot of Time in.

Tim Rowe [00:38:00]:
Spain, my point is that there’s some sort of country specific or region specific trends that are kind of shaping things a little bit. But what are the macro trends that may be global, that are shaping things? We talked earlier about the laptop, and I think the smartphone arriving 2007 also had enormous impact in terms of, okay, we’re all a little bit more mobile. There’s clearly a macro trend that corporates that once used to sort, you think of like Google as a mountain view company or what have you, are now everywhere, right? And they’ve got small offices in many, many cities. They are essentially globally distributed. And so I would say that’s a big macro trend. It’s become more possible to do that. Many companies are saying, look, work wherever you want to work within our system. CSC certainly does that.

Frank Cottle [00:38:47 ]:
All companies are now international. Exactly.

Tim Rowe [00:38:51]:
Customers are international.

Frank Cottle [00:38:53]:
International, because every company crosses the border these days.

Tim Rowe [00:38:58 ]:
The software that we run on is developed by a team of our employees, but they sit in Poland, right? And so companies that thought they were kind of domestic or one country or whatever, they’re not anymore. So I would say that’s a trend towards kind of global distribution of operations. I would say there’s a trend towards this. Increasingly, kind of companies are open to different creative ways to. They’re open to working like Japanese in Japan and working like Americans in America. And so, in effect, we have simultaneous experiments going on around the world. A company may say, hey, I’ve got a new product. I’m going to home this product with my chinese team or with my Singapore team. And so there’s an opportunity for a single company to determine which workplace, culture, education system, everything sort of functions better, which creates incredible global competition. Not competition between companies, but actually, interestingly, competition between countries. Right? Are the Google teams in India more or less productive than the Google teams in Mountain view or in Boston? And they know because they see the outcomes of this and they can shift their employment as a result. I would say that’s a macro trend. Another thing that’s really interesting and I’ve been watching and trying to figure out, is the growth of kind of global neutral megacities. So if anyone’s been to Dubai recently, you’re familiar with, this is a country which is roughly 90% non Emirati people. Only 10% are from Dubai.

Frank Cottle [00:40:41]:
Oh, is DOA, for that matter.

Tim Rowe [00:40:43]:
DOA, exactly. These are basically global cities. I mean, to some extent, London is becoming that as well, but they’re essentially global cities where there is no domestic, really anymore. There’s such a small percentage that everyone is from everywhere. The average stay in Dubai the average Time that people live there apparently is six years. So they’re also highly dynamic. And you’ve got Saudi Arabia building Neom, which people think maybe it will happen, maybe it won’t. But I’ve been to their model demonstrations and so forth. They’re very serious and they’re building a city that will be technically, physically, aesthetically, let me just say, very competitive with everything that we’ve got.

Frank Cottle [00:41:33]:
Right. I agree with that. It’s funny. Dubai. Somebody asked me what I thought of Dubai. And you’re referencing culturally in the mix. And I said, well, you take New York, mix it with Las Vegas and have Disneyland run it. That’s Dubai.

Tim Rowe [00:41:49]:
That’s exactly right. And then take out the sin part of Las Vegas because they don’t have much of, you know, it’s family friendly.

Frank Cottle [00:41:56 ]:
Very family friendly.

Tim Rowe [00:41:58 ]:
It’s got the craziness of Vegas without the Sin city piece. So the world is birthing these. Take this. So take a list of the world cities. Order them by population. Okay? Take a major city like Seattle that we love, headquarters for Microsoft, Nintendo. What would you say Seattle’s rank order is in the world’s list of cities.

Frank Cottle [00:42:24 ]:
By just population by population?

Tim Rowe [00:42:28]:
Yeah.

Frank Cottle [00:42:28 ]:
Oh, it doesn’t count.

Tim Rowe [00:42:30 ]:
Right. It’s like number 750 on the list count.

Frank Cottle [00:42:34 ]:
Yeah.

Tim Rowe [00:42:34 ]:
So this is my point. We have 750 cities bigger, 749, whatever. Bigger than Seattle, around the world. And many of these historically had poor education, poor communications, poor network transportation, poor medical systems, all that. That’s radically changing. And you go to a city that you might have thought of as eastern european and slow and backward, like Warsaw, Poland. And it’s more modern than anything you see in the United States.

Frank Cottle [00:43:02 ]:
Yeah. Go to Sofia. It’s the same way.

Tim Rowe [00:43:04]:
Oh, my. Right. So Americans don’t necessarily know this unless they’ve been to these places recently. And so these places are coming up. They’re organized, they have competitive systems, as I mentioned earlier. I’m not saying that every one of them is better than Americans. It’s not that at all. I’m saying it’s a competition. And the global companies are saying, I can be in any of these places. I’m not stuck to any of them. And the countries like Saudi Arabia are saying I’ll make my cities competitive, the city itself competitive, better transportation, safer, all those sorts of things. This is the world, I think, that we’re headed towards within that know what’s happening with workplace. I think the macro trends that sort of apply in my experience everywhere are the shift towards sort of flexibility in the sense of not just how long my lease contract is, but the type of physical space I’m working in, even within a day, shifting around there, I’m placing a bet, and I think it’s a good bet that the other macro trend we’ll see globally will be this clustering of companies within particular industries. It’s not a new trend historically. If you think of Hollywood and movies or Wall street and finance, if you.

Frank Cottle [00:44:24 ]:
Go back to the 15th, 16th century and think of Italy, Venice, trade, absolutely.

Tim Rowe [00:44:30 ]:
The skill sets merged.

Frank Cottle [00:44:32 ]:
Cities had reputations for their trades at that point. The concept of city states as economies were massive in the world at that Time. So maybe we’re going retrograde.

Tim Rowe [00:44:50 ]:
So I have this grand theory, Frank, that I’d maybe like to write a book about, which I’ll share with you here first, which is that every single place on the planet can be globally competitive. It simply needs to figure out for one thing that it does, to do it better than anybody else. So there was a town somewhere in New York state that they renamed at one point, Glover Town, because it was the main place in the world that people made gloves. And there were many, many glove manufacturers there, and people who sold the special thread and knew how to stitching and all that. All of the expertise around glove making concentrated in this little town. And I think you can do that anywhere in the world. You have to have the foresight of thought to pick a place that you can win in, right? And then you can really stand out. We were invited by the governor of Rhode island to build an innovation center in Providence, which is population around 200,000, making it tiny. And it’s close to New York and Boston, which is a tough thing, because your talent gets pulled to these flashy nearby cities. And yet we set out to build an offshore wind hub there, a hub of companies that specialize in offshore wind related technologies. We now have 36 offshore wind companies in the Providence facility. It’s the largest number of offshore wind companies in one place that we know of anywhere in the world.

Frank Cottle [00:46:25]:
Providence isn’t windy.

Tim Rowe [00:46:27 ]:
It’s got the coastline. It’s windy. It also is just that they picked it. The city and the state said, we’re going to lean in on this. And they did it early, before anyone else was thinking offshore wind was going to be big. Obviously, it’s getting very big now, right? And if they play their cards right, Providence will become the offshore wind capital. Right? Not just with the largest innovation center, but just the place where everyone goes for that industry. So I believe any place can be successful, but I think the macro trend is to really pick a particular area that you can win at and pull out all the stops and just be the best, at least in your part of the world. Maybe there’s another in Asia like you. That’s okay, but pick your part of the world and just say, I’m going to be the best in this. And I think that that can take any place from, I don’t know what my role is in the world economy to I’m a winner. I think there are enough fields, there are enough verticals, and we’ve kind of lost. You know, if you take some of the cities in the middle of the United States and say, what are they for? They don’t really have a clear answer today. And I think this is the answer that they need.

Frank Cottle [00:47:40 ]:
Yeah, no, I think, again, history does repeat itself, and I think using the steel belt as an example. Why was it called the steel belt? Okay, well, that could be replaced with something else.

Tim Rowe [00:47:55]:
Well, Pittsburgh steel capital now is leaning heavily into robotics, and many would say that it’s one of the two, probably the top two robotics hubs in the United States. Yeah, that’s fantastic.

Frank Cottle [00:48:10 ]:
Metal working is a key element historically, to developing anything of a mechanic.

Tim Rowe [00:48:15]:
You can kind of say that, or you can just say, shoot, we’re going to figure out how to be the best place for robotics and just do it. And they’ve done it. The RK Mellon foundation gave, I think, $150,000,000 to build a robotics hub there. Mellon, was he one of the steel guys? Yeah, banking, maybe banking. So one of the barons of the early 19th, 20th century, then pouring those resources now into the next. The future. I think that that’s the answer. And what I’m surprised about is that places have generally not really grabbed the bull by the horns and said, okay, this is the thing we’re going to do. They do a little bit of everything. We have schools, we have universities, they’re okay, we have roads, we have whatever. We have hotels, but they don’t have anything which is different from anywhere else. Right, my call. And this really goes very central to the future of work, because I think the future of work is going to be working with people who are exceptional at what you do. And the way that that’s going to happen is either naturally or with kind of intentional industrial policy, places are going to lean in and win, just as LA clearly did in the movies. Right. And San Francisco arguably did in the software fields. Or the valley, perhaps today better said the valley, as San Diego and Boston have in life sciences, I think places can get more intentional about it, right? So take San Diego. IQhQ bought 2 million sqft or whatever it was of ground near the port in downtown city. Until then, nobody would. Even though San Diego region was a life sciences headquarters, there was no life sciences in the city of San Diego.

Frank Cottle [00:50:16 ]:
No, it was all up in La Jolla.

Tim Rowe [00:50:18 ]:
And I think that was a mistake. There was no center to San Diego. And now finally there is. So this is my big thing on the future of work is that it’s going to be about specialization leading in building community, going to the beginning of our call, our conversation, but in particular around those industries that you in your city have chosen, this is going to be our future, building that community deeply. I think that with that recipe, you can take some of these struggling cities around the world and give them purpose and direction.

Frank Cottle [00:50:54 ]:
No, I think you’re absolutely right. And history points out the success of that model. We’re adding our current assets that we have today in technology, communications, flexibility, et cetera, that weren’t available back then to that model. And there’s no reason why that shouldn’t be a massive future of work trend that we all look towards. And the key will be not just the cities determining that, but us determining which cities we want it to be. Overall, Tim, if somebody wanted to reach you, we’re running long here, but if someone wanted to reach you to discuss this in more detail, email me.

Tim Rowe [00:51:37 ]:
If you look at the screen, it says Tim Rowe, founder of CEO at CIC. My email is [email protected] perfect.

Frank Cottle [00:51:45 ]:
Easy to remember our audience. Be very grateful for that. And gosh, I’m grateful for our conversation today and look forward to the next Time.

Tim Rowe [00:51:54 ]:
Thank you.