The Office Is Dead, Long Live the Office
Even before the pandemic, there was a growing shift towards remote work in offices across America and the need for social distancing has catalyzed this trend at a rapid pace. Many even declared the office to be dead, but now people are beginning to realize that while the old concept of an office space may no longer be in the cards for many industries, that doesn’t mean it’s entirely gone, merely changed. This rebirth of the modern office is creating a path for tech startups to grow rapidly and opportunities for forward-thinking investors to capitalize on this trend.
While some businesses have flourished during remote work, others have struggled or have even had to shut down completely. With COVID cases across the country continuing to rise, remote work will be the singular future of the office for many, but that doesn’t mean investors should stop their planning there. As the workforce continues to adjust to working from home and using the technologies that enable them to do so, employers may face a steep challenge in luring them back into the physical workspace. On the other hand, due to the seemingly unending confinement and isolation caused by the pandemic, many employees are missing the human element and camaraderie that comes along with an in-person workplace. For the forward-thinking investor, both of these competing forces create an attractive opportunity for investing.
Business owners who broke their leases or declined to renew them in order to save money may decide to continue with full-time remote work to further their savings on leases. While this isn’t great news for those investing in real estate, it is for those investing in remote office technologies. Twitter, Facebook and Square are among the companies which have announced their plans for indefinite remote work and it’s likely we’ll see many younger startups following their leads. Those businesses choosing to stay full-time remote will need to continually strengthen their networks, security software and general virtual communications tools, which is only further evidence that these investments are likely to continue their growth beyond the pandemic.
But that doesn’t mean a total shift to remote work is on the horizon across the board. For all its benefits, remote isn’t the right fit for all industries and for all employees, which is why companies like Google have announced a hybrid model going forward. Google plans to offer its workers a flexible work week, which consists of three days in the office for “collaboration days” and the option of in person or remote work for the remaining days of the week. By giving the option to employees to choose a model of work that works best for them and their life, as well as keeping the human contact element of a few in-person days per week, a hybrid model like Google’s balances the needs of the workplace with the needs of the workers. And there are many variations on this hybrid model; some businesses may only decide to meet monthly or annually, making it customizable for differing business needs.
Remote work was becoming a popular perk among office workers for years, with most offices offering at least some kind of small work-from-home policy. One way the pandemic has benefited businesses has been delivering greater flexibility for workers, many of whom were able to move out of high rent areas, and in some industries, even experienced improved productivity. A return to the office, at least in part, is likely for most industries, but workers may be reluctant to give up their newfound freedom to work where they choose. This increased demand may mean companies that were considering a full return to the office may need to roll out a more generous work from home policy, meaning an additional increase to the demand for the technologies that will facilitate work between remote and in-person employees.
Over the course of the next few years, it will be key for investors to look to technologies that support and facilitate a hybrid work model, combining remote work and in-person office work. Technologies that simulate in-person interactions, strengthen communication and collaboration across teams and manage employee productivity and engagement will likely all be areas for high growth even in a post-COVID world. In terms of specifics we’re seeing as likely for continued growth around the office, it’s really centered around breaking down the barriers for collaboration for remote employees, whether those be between all remote employees or a mix between remote and in-person employees. Companies exploring interactive whiteboards, asynchronous collaboration and working models are able to scale rapidly. Video conferencing, which has exploded during the pandemic, still has vast room for improvement, building on existing capabilities but making conversations less of a one-way street and closer to the flow of in-person conversations. More immediately, technologies that help ensure safety of workers in the office are likely to be in demand, especially as offices reopen in the coming months.
As with all things, moderation will be key. It’s easy for investors to get caught up and end up betting it big on all remote or all in-person work, but for long-term sustained success it will likely pay off to keep a cool head. Investors looking to the future will need to be able to wade through the current hype around full-time remote work and keep it balanced with the social habits and needs that an in-person office caters to. A transition—whether in part or in total—is inevitable, and investors will do well to target those startups that are innovating the ways that digital technologies can better mirror the in-person workplace and dissolving barriers between in-person and remote work.
Eric White is the president of Seismic Capital Company.