As the general manager of Generator, John Moffett presides over shared office spaces at two sites in Britomart, and two in Wynyard Quarter. They were operating at capacity before the lockdown. How is COVID-19 going to change the world of shared offices?
JEREMY HANSEN: John, like a lot of people you’ve been working from home for the past few weeks. What’s that been like for you?
JOHN MOFFETT: It’s meant I’ve got a much better understanding of what I need around me. I’ve found that what we’d normally take half a day to do is taking three days because you don’t have the people around you to talk to quickly. Technology is all good, but there’s something to be said about leaning across a desk and asking for an update, as opposed to organizing a Zoom call. I’ve got a 10-year-old and a seven-year-old at home as well – my wife works in the fashion industry, so work for her has been pretty quiet, but being around your kids 24/7 isn’t normal! I’d much rather than manage 40 staff than two kids.
You call the businesses that rent space from you at Generator sites ‘members’. Who are they, and how have they fared under lockdown?
The ‘members’ title was originally derived to help create a business club feel. It establishes a sense of belonging to something bigger. Since lockdown has begun, we have had a couple of people come to us and say we’re not going to survive this, but a very small percentage. Most of them have been in a bit of a holding pattern, much like the rest of the country. Since lockdown, we’ve had the majority of our members reach out to us for assistance, and we’re working one-on-one with them in terms of how we can assist. Some companies have done well out of the lockdown: tech companies that do cloud-based service security, for example. But members in recruitment, along with tourism businesses and marketing and comms businesses, they felt the effects quite early, but they also believe that they’ll be the ones to feel the uptick first as well. Our members are a little bit of everything, we think carefully about how the mix will work for everyone. We’re a little microcosm of the New Zealand economy. It’s not just one or two startups, it’s Salesforce and Google; ASB have space with us, Spark has their 5G lab in our space. These are businesses who are mature but are savvy enough to know they don’t want to be locked into a long-term lease. There are also small accounting firms, IT businesses and a lot more.
How is the pandemic going to change the way you do business?
I think for us it’s changed because nobody really knows what the market is going to look like in the next month, let alone six months. It’s probably forced us to look at our flexibility and make sure we’re giving it across a number of areas that we haven’t previously. Our standard membership term is 12 months, and we are looking at how we pivot to make those terms even more flexible, to give people the ability to reduce staff by half in six months if they need to. People are going to be looking for flexibility and it’s going to be a lot easier to pivot with us than a traditional landlord.
There’s been some discussion in the media about shared spaces being harder to control in terms of preventing the spread of the virus. How are you working to counter those concerns?
I think those concerns are absolutely relevant. But our spaces tend to have more space per square metre than your normal corporate office, and there are also multiple spaces you can work from, so if for any reason you felt uncomfortable or unsure about something, there are private offices and breakout areas and a multitude of different spaces. I also think that in terms of elevators and things like that, our elevators only feed our offices, so you’re not getting into an elevator with two or three other people going to different offices, and you know that the place you’re going to and the other people in that space are being managed in terms of hygiene in the same way.
Lately there have been a lot of headlines about the high-profile global shared space company WeWork, their abandonment of their planned share market listing, and the resignation of their CEO and co-founder, Adam Neumann. Some people have taken this to mean that the shared space model is broken. What’s your take on that situation?
The rise and fall of WeWork has certainly put the spotlight on shared workspace, and while there were undoubtedly missteps by co-founder Adam Neumann, what happened with WeWork doesn't reflect the industry as a whole. Now, more so than ever, the shared work space model feels relevant as businesses need to be flexible and adapt quickly.
WeWork was an industry darling for a long time and they did a lot to help the shared space industry – the rapid growth and global expansion of WeWork helped develop a wider awareness of what shared workspace is. WeWork also had a major focus on enterprise clients so they helped shift the conversation from co-working being all about hot-desks for start-ups to it being a really viable and cost-effective option for large corporates and SMEs.
Is the shared space market getting more competitive here?
There is more shared space planned to come into the market over the next year. But New Zealand is still really under-developed in terms of shared space – I think we’re only at about 2 to 3 percent in terms of the total space occupied by shared office space in the CBD, and a normal city is around 5 to 6 percent, sometimes higher, so there’s lots of space for us to grow. Next year we will be celebrating our 10th birthday, and as a local operator we really understand the local market, which is a key differentiator to the competition.
Generator was founded on a presumption that businesses wanted to work differently. How do you think the way we’ve worked during lockdown will change our working habits when it’s over?
I think that we’re in a really good place to assist businesses with the way they work. Working from home, it’s not the best for everybody. I think when people say “working from home”, they just want the option. I think everyone’s nervous about the next three to six months. We’re pretty positive because we can really step out there and say if you need flexibility and want to grow, the best place to do that is when you’re surrounded by other businesses doing the same thing with ability to foster connections and operate in a growth mindset. There’s no need to go and get a lease for six years or spend capital on an office fit out, just turn up and hit the ground running. I think knowing that you have a place to go and work, whether it’s your fulltime office or a flexible space or just meeting rooms, knowing it’s there and you can turn it on and turn it off, I think that’s what people are going to look for.