It’s no surprise the traditional paradigm of working from the office every day of the week is gone. Fortunately, in 2020, we have tools such as Zoom, Slack, and DocuSign, for example, that allow us to communicate with each other and maintain acceptable productivity levels. There are lots of advantages from working from home including no commutes and more time with family, but at the same time, there are lots of disadvantages including lack of time to focus (for those with young children), inconsistent WiFi, slower feedback loops, etc. Some form of work-from-home will likely endure post COVID-19 and although some job functions are better suited to it (ie customer support) than others (ie sales), there is no substitute for actually being in the same physical space as another colleague or prospect while trying to communicate with or otherwise interact with them. That is why I believe few companies will adopt 100% remote work-from-home policies in perpetuity.
Who knows when COVID-19 will pass, but when it does, one question all company leaders are asking themselves is “how will we re-enter the office without sacrificing the safety and security of our employees”? A mitigating solution may be to reduce human-to-human interactions, say by implementing alternating attendance schedules that would allow certain employees to come into the office on pre-determined weekdays in order to comply with new health regulations and keep employee density levels below maximum thresholds. This presents a major opportunity for startups, particularly those offering intelligent smart access technology to help CRE office tenants adapt to the new work-from-office paradigm in an organized fashion.
To prevent overcrowding and the spreading of germs, interconnected, multi-tenant and contactless smart access management systems have become more important than ever before. Not just touchless but an intelligent, dynamic system that can track human density in real time across every aspect of a building (ie entry foyer, elevator, hallways, tenant suites, community kitchens and bathrooms, parking etc) is critical. Luckily, some startups were already building solutions to this problem prior to COVID-19 but were focused on either smart access management, workplace optimization management, or a specific type of property (hospitals, for example). Smart access focuses on touchless check in/out software for entry points while workplace optimization tends to focus on subsequent real-time employee density tracking beyond the front door.
Startups, such as, Envoy, OpenPath, and Proxy, among others, provide CRE smart access management systems. There are two types of systems: multi-tenant and single-tenant. Multi-tenant refers to technology that all tenants in the building use, such as, turnstiles, elevators, parking garages, etc in order to get to their suite front door. Single-tenant refers to technology that is used by a single tenant within their suite space. OpenPath and Proxy are multi-tenant solutions but are not installed in nearly as many buildings as Envoy, a single tenant solution. That said, given Envoy’s existing scale driven by its lighter touch, bottoms up go-to-market strategy selling directly to tenants rather than building owners/managers, Envoy has a major distribution advantage. If Envoy can develop a multi-tenant solution while existing tenant customers simultaneously recommend it to building operators – it will be a very dangerous company – one that can take advantage of a significant “beach head” positioning it to become the de facto smart access management platform with which other additional tangentially related products, such as package delivery management, conference room and phone booth booking, and temperature and lighting control, can be built on top of. All that said, smart access management technology is helpful in notifying leadership when occupancy has reached maximum capacity, but how will leadership know if employees are maintaining a safe distance and complying with new guidelines? How will employees know which hot desks are available?
Startups such as VergeSense, among others, provide workplace optimization management systems that use hardware sensors to offer real time utilization insights across facilities including desks, phone booths and conference rooms, kitchens, bathrooms, etc. For example, sensors count the number of people in a room, inform where employees and visitors congregate most and identify which desks are available even if only a backpack is present. This real time data helps enforce new rules and keeps employees accountable to maintain a safe and secure work environment. Some secondary benefits of real time utilization data include a reduction in cleaning (why clean if the facilities weren’t used?) and energy (why turn on the AC or heat if the facilities aren’t being used) costs. Analogous to Envoy, but starting with workplace optimization, the breadth and depth of VergeSense’s current install base across the Fortune 1000 gives it a meaningful head start. If VergeSense can similarly develop a multi-tenant solution, it will be a very dangerous company too.
Over time and as those two categories converge, it will be interesting to see which initial product approach 1) smart access management or 2) workplace optimization and go-to-market strategy 1) tops down – selling to a landlord/property manager (ie VergeSense) or 2) bottoms up – selling to a tenant (ie Envoy) will lead to the winning category-defining company. The good news is, in the near term, both product categories seem to have lots of room to run. Given the natural existing holes in both categories’ product suites and the near term demands from CRE customers, cross promotional and partnership opportunities may exist to help sell to and through each others’ existing customers which may result in healthy coopetition. Needless to say, it’ll be fun to watch!