Originally from Thailand, Max has lived and worked all over the world. He studied Hospitality in Switzerland before working with companies like Expedia in the Middle East and Africa and has most recently joined Sonder - a company founded in Montreal which now operates over 6,000 short term rental units globally.
In this conversation we talk about the importance of IRL offsites vs virtual team building, corporate culture when teams are globally dispersed, difficulty when scaling hospitality experiences, the opportunity for businesses to pursue sustainable profits over moon-shots, why AirBnB can't offer customers a standardised level of quality and much much more.
Spend time with this conversation - here's the full transcript
Career history and globalization in the tech industry
Qasim Virjee 0:13
Welcome back to gathering Episode Seven. This time around, we are in studio with Max Chen, from Sonder. Sonder is a very interesting company. And and Max is a very interesting guy. So beyond just the company that you belong to, I think from what we were just talking about off camera, there's a lot to your personal life and career history in different countries that will play into this conversation. And I'm really excited about that. Because we, we have an audience that is, you know, obviously, in this whole people and culture world dealing with all sorts of aspects of kind of rapidly globalizing companies, companies that are distributed around the world. Now, everyone seems to be hiring the best talent wherever they are, now that we don't need to go to the office. So lots to talk about. But let's kick it off Max with a little bit of an introduction.
Max Chen 1:07
Thanks. Thanks for having me on the podcast. This is great. It's actually really exciting. Nice. So be out. My name is Max. And I work for sonder. Now, I've worked for other companies before like Expedia. And before that I was in real estate feasibility. In terms of where I've worked, I started. I started studying hospitality in Switzerland. Before that, I was living in South Africa. And then I started my career in Dubai. So I've done you know, Africa, a little bit of Europe, and then went to the Middle East. From there, I went back to South Africa for a little bit with Expedia. And now I'm here in Canada, looking after North America, basically with sonder. With
Qasim Virjee 1:47
So how long has it been that you've been? Like in Toronto? Two
Max Chen 1:50
years. Two years? Okay. Two years? I barely feel like a Torontonian.
Qasim Virjee 1:54
Did you choose to live in Toronto? Or was that the condition of the job with solder at the time?
Max Chen 1:58
No, I joined Zalando when I was in Montreal, like mid pandemic, I got to know the sonder. tech guys, by playing board games with them in a we work. Yeah, you know, I was jobless. At the time, I had a job that I thought was lined up with Expedia that fell through during the pandemic, with my work permit everything. And, you know, just to kind of talk about the power of co working space my wife worked for we work at the time. So I was hanging out in the area, I was doing some certificates to upskill myself, which I think is a whole, something we could talk about, like a whole sub industry of selling new certificates, like it's gonna guarantee you a job in somewhere, whole LinkedIn learning and everything. So I was doing that. But what did come out of it wasn't necessarily the job from the certificates. It was the relationships that I've made, you know, playing board games, getting to know the guys and then when the company started hiring again. Yeah, I think it was a lot of personality. But, you know, learning Hey, you actually come from experience. It's an industry that's very much related. I started working with Sondra there. My wife got moved to Toronto for her job. And um, that we work Correct. Yeah, so Toronto wasn't something I expected. Yeah, I thought I was going to be a Montreal for a while. So groovy
Qasim Virjee 3:08
city, right. It's cool. I love Montreal. That's where I went to university. Yeah. Oh, really. I was there from like 98 2003 almost like after I graduated from McGill. I was unemployable because I was in business like I started as a bee calm. And then I quickly got out of that because it just felt too much like you know, I moved to Kenya when in 92 Right so as a Canadian I escaped going to Canadian High School, right so when I was in in business and McGill, it felt very much like I somehow was back a few steps and in high school, everyone in a be calm in the beacom program, McGill were these like, keener Canadian. Maybe also because like the aesthetics of the building, like the Bronfman building of McGill was it was like a cinderblock building with tube lights. And I don't know wasn't my vibe and so very quickly, I just stopped going in the mandatory classes. Got a few calls over the years for like, you know, the administrators saying like, you're the only student that seems to like, we don't even know how you're still in the program. And I'm like, I can't transfer out I've been tried for two years. Honestly.
Max Chen 4:12
You know, I've been in the Middle East so that's the extreme weather and then people make fun of me, you know, saying you went from the desert to one of the coldest places on earth and just the the subject of weather is always a bit of a bore, but you can die in this weather you can die serious. So as a student, I can't imagine like the lack of motivation if this is how it felt
Qasim Virjee 4:34
when it wasn't even like a lack of motivation for me because actually, I was the way I looked at it. I went to Montreal I didn't go to McGill, you know. And so even the stuff that I ended up learning and getting degrees in at McGill, it was all stuff that I couldn't learn otherwise. That's why I decided really quick I was like, a be calm is a stupid degree. You know, and I still believe this. It's a dumb degree because you can learn it in a book like It's all textbook stuff. So why would I spend four years of my life when I'm becoming an adult? You know, doing things that like I could have done when when I was a teenager? Yeah. That's my, that was my logic. And so I actually did a degree in, in religious studies, comparative religion, looking at Hinduism and Buddhism. And, and then I also did an independent study, kind of analyzing the urban context that led to the evolution of electronic music in North America. Yeah, just random
Max Chen 5:32
journey. Yeah. Because it was interesting. I was gonna ask him more about, like, what made you go to Kenya? Like, what was what was the inception of the idea? Kind of? Yeah,
Qasim Virjee 5:40
it's a great question. Like, not many people have been asked that when I tell them that we moved there when I was 11. Like, what what it was was my parents, you know, were from Kenya. Right. So we're like, 123, maybe four generation Kenyan. So their parents, parents, parents moved from India. Wow. Yeah. And so they have a claim to being Kenyan, you know. And I think what happened was with the, you know, Idi Amin, kind of wrecking Uganda in the early 70s. And expelling all Asians, East Asians, South Asians, every kind of Asian, he could lay his hands on from the region, from the country. A lot of people got spooked in the region. And so East African Indians essentially started looking elsewhere for where they can live. And my parents were part of that they lived in Kenya. So it was relatively stable economy and everything. It was being built at the time. And they just, you know, kept hearing from their relatives like, hey, this might not be that good. Where else can you go? Yeah. And then they came here,
Max Chen 6:46
Canada. Yeah. And Montreal, no less like Toronto. Then you went to Montreal?
Moving to Canada, career changes, and starting new ventures
Qasim Virjee 6:52
Well, my parents moved to where did they go? They went to Vancouver for bid. That's where they landed. Then he went to Edmonton. They went to Calgary back to Edmonton, then to Calgary. And that's where I was kind of in the mix. My brother was born in Calgary. I was born in Edmonton. And so we grew up there and Alberta for the first like, 1011 years of my life. So I moved from Calgary to Nairobi, and then from Nairobi, is when I moved to Montreal to go to university. But yeah, like after McGill man. I stayed in the city because the city made sense to me. You know, it's, it's like it's a furtive environment for cultural experiences. Right? Yeah. Which is what a cool international city should be. Yeah. Yeah. 100%. So that's where so that's where you move. That was your first Canadian city that you lived in? Yeah,
Max Chen 7:38
yeah. My wife was already there at the time. Like she got married in Montreal. She met her in Montreal, no, got married, we studied together. Yeah. So it sounds like a bit of a, you know, college romance thing. It really wasn't our relationship thought at the end. And then we went together to Dubai. And we, you know, work there. I actually had a really good life. But I ultimately for my career, I wanted to go back from real estate into E commerce. And so I joined Expedia. And they needed someone in Africa. So I went back home, one could say, to South Africa, and I looked after like Africa, Indian Ocean and Israel. Interesting. Same, like they considered one region, but they very much can handle their own stuff. And from South Africa, a lot of the you can imagine the headquarter of functions and the big jobs with you know, Expedia, Expedia are in North America. So when she when she had moved to Montreal first, I always knew I was going to join her. And I was just waiting for the right opportunity, you know, to get over. In the end, it didn't it didn't work out that way. Yeah, just like playing checkers. And yeah, I was like, you know, you have to get the job first, but then that and then I was like, when the job fell through. I was like, No, that's it. I'm moving. I'm going to try a new country. I've moved enough in my life. I think I'm pretty confident I can make it work. So yeah.
Qasim Virjee 8:58
Well, to move to like, minus 40. You know, Montreal. Also, I had a little bit of friends that I have balls, you know, yeah, but yeah, you can know French but you need balls.
Max Chen 9:10
You gotta find them in our weather as well. But ya know, it. It's been a great move. It's, it's a great place. It comes with its challenges, right? No, I think COVID Anywhere is not the normal place.
Qasim Virjee 9:24
Yeah. And for our audience outside of Canada, I mean, like the lock downs that we had in in Quebec and Ontario. We're like some of the most strict in the world very much. Yeah. So it's kind of a crazy experience to like land here and then what you guys even had a curfew in Montreal? No. Yeah. Yeah, we did. Couldn't go out at night or something. It's funny. I don't remember that. Very well. Wiped out here. Yeah,
Max Chen 9:48
we're just okay. In the beginning. It was nice. You know, I think maybe still the honeymoon phase of, you know, being married and then it was actually Toronto that really got me moving to a new city. We already had a group of friends and You know, it lines up pretty well with kind of what your podcast is about the work environment, I really had a critical look at my job, because I said, Hey, I'm used to working in new places. My previous role was very much sales orientated. So it allowed me to meet a lot of people. When I moved to a new city, a new country, I would fly and travel a lot to see new faces, learn new things. You know, I felt like a big bottle that was lacking didn't have an office to go to. So yeah, I have great colleagues. I've met some very smart people, because of what's on there is a startup environment, we hired some very, very sharp individuals, but they just want a screen. You know, it's hard to really, once you get the feeling of accomplishment of like a project is done, or you met certain milestones. Yeah, it's not the same thing when you're trying to you know, grab a beer by yourself takes a laptop to the pub happy hour, you know, I've ran on a Friday and I'm basically I'm pretty much going off. I'm done drinking with you guys. Oh, man, I'm gonna go drinking my wife. So when?
Qasim Virjee 11:01
Yeah, in 20, when was this actually wasn't even 2020 2021. I incubated a couple of ventures, new ventures at start. Well, here, I launched a couple of companies betting on two things that we're going to no matter how long this crazy pandemic was looking to last. I was like, I want to I want to kind of like I had this great hypothesis, which is, can I see the evolution of new companies that could be my tenants, you know, coming out of this, right? So then I don't need to go look for tenants that start well, in our vehicle, we could call work our own company. And it was it was great idea. But it was all Bootstrap, which meant that it was you know, ultimately short lived, but one of them was called shaker tin, and shaker tin is great brand, Shaker tin.com. I started building a catalog, a VOD catalog, like video on demand of instructional videos for mixology. And, yeah, and then we use those with a live instructor to do like mixology classes for corporations. And the ultimate goal was that we would take this catalog, and we'd shop it to hotel chains to be training resources for distributed staff, so that, you know, the bartenders could become mixologists, we would offer a certification and we evolved the whole, you know, training program. But yeah, we did tons of business. And we got great clients like airmiles, and RGA. And all of these, like big companies, we're using shaker tin for animating their, their weekly, the end of the week for everyone at home. And what we do is my instructor would teach a couple recipes for like 30, to 50 to 200. co workers, like all sorts of different sizes, live on a live stream, we'd have some like virtual event platform, and everyone for that would be shipped out a cocktail kit to their house. So they're all like mixing. And it was so sad to me to see this happen, actually. Because everyone when they were like I was, you know, when we were in studio, we're like in one of our bar spaces on campus. And it was like, we're in a bar. Yeah. I assumed everyone would take their laptop into their kitchen for this or something. But I didn't think it through man, when you see the tiles on the screen of all the different heads, and everyone's at their desk. Oh, and then it's cringy. Because like, the the team leads are like, Hey, Jim, I see you over there. I hope you're ready to put your pen down or something, you know, like, and it's like, no, it just doesn't translate this whole, like common to the common room thing. And then everyone's other desk, like in their living room. Maybe they've got like a dog on their lap or they're like little kids like Papa. And he's like, no, no, I'm working well, it's like mixing cocktails. It's depressing.
Max Chen 13:45
You definitely need that group like alcoholism to kick in. Yeah, for that environment. Oh, right. God, you know, it's funny, you said it because Expedia is a was a great place, you know, for that kind of party vibe and everything. And
Qasim Virjee 13:58
we even did a session or two for Expedia. But
Virtual team-building activities and wellness
Max Chen 14:00
they, they they started cutting back on encouraging drinking, you know, they they they made some new rules about only X amount of drinks. And I think one of the rules that really stuck out to me was in their corporate events. No manager or no employee may pour another employee a drink. I don't quote me verbatim on that. But it was a rule like that. So over an X number of people attending, they had to get a professional bartender, and only that bartender may serve drinks, but
Qasim Virjee 14:26
maybe that was like, you know, a rule hooked up to eliminate classism.
Max Chen 14:35
Yeah, that that philosophically can get very very touchy
Qasim Virjee 14:39
tonight. I'm not your boss, Jim. I'm just your friend. Lets us Fred over there. The hard Bert Barton are the poorest 50 drinks.
Max Chen 14:47
I think everyone just got too scarred by that one colleague who would just always pour way too much alcohol in and then just like a splash, you know, you've seen those jokes where they use this spray bottle to spray on the oranges and like that Maybe it's from that. I think it's a lot of people who, I think they had a lot of cases where people got way too drunk. Yeah.
Qasim Virjee 15:06
And it's an interesting point. I mean, like, I think on one hand, you've got this, like, how do you animate your virtual team, and kind of like give them experiences that are shared. And then on the other hand, it's kind of like, those experiences now. And again, this is the one of the big hot topics where everyone right is talking about wellness, wellness, wellness. So you want to animate your team's experiences as much as you can and make them fun, but they should also be kind of like fulfilling as experiences and have a lasting effect. That's positive. A lot of people were talking to you are having like a little bit of difficulty figuring out what that is, you know, yeah.
Max Chen 15:41
Because little stipend here and there. I think in the beginning, playing virtual games online, like, Minecraft know, much more simpler than, what's the beyond us the little figurines? Were you on a spaceship? I don't even know name. Yeah. So that was pretty popular in our every Friday, you know, everybody gets a stipend to buy six pack of beers or a burger. Yeah. falls off pretty quickly off the wall. You know, people the only game you can only play hang man, so many times and Scrabble, you know, all those
Qasim Virjee 16:12
Oh, it's so true. Like, yeah, one of our member companies is a company called, that we work with is called venue. And venue was started by one of the cofounders of tech to which is the largest. Let's call it subscriber base of, you know, innovators and startups in the country really. And we talked about their solution, it's kind of cool, because they're really big on like engagement tools and live streaming. So they're like, instead of group activities online, and having people go off into their own virtual rooms to like, play these hangman games. They're really focused on let's all talk to each other, you know, and what that content is sorry, what the content is, is up to whoever is using the software. But the software allows you all these positive feedback things. So you can like, vote up what people say. And you can kind of like, do all this kind of stuff to like, make it more fun, supposedly, to video conferences, actually,
Max Chen 17:06
isn't that what some people think is toxic about social media, which is like trying to say the right thing and get it? You know,
Qasim Virjee 17:14
it's a good point that can you thumbs down when people say, there you go. Just just turn off your mic. Jim,
Max Chen 17:22
you're not funny. And I'm fine. I'm glad I can finally tell you outside of a meeting. Yeah,
Qasim Virjee 17:26
I choose to ignore you, Jim. Write me up with HR.
Challenges and lessons learned in a corporate startup program
Max Chen 17:31
I'll tell you more when I go on the off site, which is what I think is the best, I think getting people in a room together for the brainstorm. It does wonders I've done to recently with two different departments in zonder. And the relationships I get built, and the kind of the leaps in comfort in confidence within the team that gets built during those short three days is you can't substitute it,
Qasim Virjee 18:01
where are you planning them? Like where have you held them? Well,
Max Chen 18:03
we did one in San Fran. Alright, we did the recent one Phoenix.
Qasim Virjee 18:08
And for so both of those are cities, but were they like, like kind of a relaxing scene? Or was it more like, what was it what was the venue?
Max Chen 18:17
First one was a we work, we went around the we works. And it's very much you know, during the day meeting room in a we work like a big boardroom and the San Francisco one was in the Salesforce tower. So it was more, I think it was impressing the team about the great view as well, you feel very nice and important. But then, you know, in the evening really where the relationships are built, or at over the dinner table, right? So a lot of those kinds of ad hoc brainstorm sessions. And then for Phoenix, it was much more casual, we have a building where we have all the units and on a floor because we're in the accommodation business for those who don't know, Saunder. And as part of that whole residential building, there is a recreational space, big, very nicely decorated with a pool table table tennis, big TV for watching games and a bar. We did our whole off site there, no meeting rooms, nothing couches, and just throwing ideas out there, you know, having people who will invigilate the conversation leader. But between the two, yeah, one was maybe a little bit more productive if you looked at like written output. But the second one was a little better, because that was a multi team off site as well. So if I think about what that website achieved in a casual environment, that was that was the best. This is
Qasim Virjee 19:38
what we're hearing right and start well. Okay, so let's, let's give you Yeah, we'll do a little show and tell here. I mean, we already are, but we could start well, it started right in 2017 As we were saying before, you know off camera struggle I founded start well as a co working space and the idea was, I had just spent some time Serving the Canadian innovation landscape. for work and for kind of pleasure, I helped a bunch of like family offices place money in early stage ventures. And that was at the same time and then after, you know, spending a year really, at SoftLayer, running their startup program for Canada. And that was a cloud infrastructure company that was bought by IBM. So through the m&a I went over to IBM, and ran essentially IBM startup program across Canada, fledgeling is it was under resourced as it was under intended as it was. And there's a lot of lessons from like, you know, seeing this whole like corporate machine trying to like trip over its feet to be relevant, that I have to share, but
Max Chen 20:46
under intended as a word. I'd love to hear more about that later.
Qasim Virjee 20:51
Yeah, like, here's the thing, right? This is 2000. And what year was that 2014 15 That I was with software, and then IBM. The thing that I found was IBM for so long, at that point had been growing through acquisition, staying relevant through acquisition, I don't mean, like, they're great research teams all over the world, right, great innovation teams that are in back offices, kind of like tinkering on technological innovation, product testing, and one wonderful stuff. Even their design group, like in Toronto, there was an office that was an interface design company, I don't know why they have won IBM, to compete with, you know, all these other agile firms for corporate clients to like design products. But they have won it. And they were great people there. And so what I was trying to do with the startup program to say, Okay, let me reach into all these amazing pockets of talent at IBM, and pull out if nothing else, hours for consulting, that we can donate to early stage ventures, and just do office hours, if nothing else, so they can kind of get a look behind the scenes at how a big corporation works, but also, as a corporate partner, explore how their solutions could benefit IBM by getting actual feedback from IBM employees. And then of course, any other insights from from the knowledge pool. So very simple, like most companies do this kind of stuff for their startup programs, not really a kind of game changer. Yeah. But the fear that I faced in the organization. Some of it was very stupid, like some of it was very Bunnell, where you had team leads being like writing me angry emails, I don't know who you report to, I can't see you in the, in the, whatever their org chart kind of software's. And I'm just wondering why you're reaching out to my guys, and who's gonna pay for their time. As I really like, are you managing micromanaging your team, so they have to clock in and clock out every like hour on each project, otherwise, you can't pay them? I, but that's the way they were set up. And so people were out for my hide from day one, when I was at IBM, because I was challenging the status quo of how they worked internally. And classically, IBM has multiple teams, you know, didn't really talk to each other. So IBM, you know, let's say some, whatever product, you know, gets evolved and brought to market. It might not be designed by IBM is like interface design team. IBM is like many, many companies in a sense. And of course, they've been surviving on on buying innovation for so long, where they're acquiring companies to buy markets a lot of the time. So in tech one, they buy companies like crazy, but most of them are either Aqua hires, or really to just kill competition. So this is what happened with SoftLayer. SoftLayer was a kick ass cloud infrastructure company, one of the few cloud infrastructure companies that was built to scale. And that was literally their tagline built to scale. Like burden in my brain. But such a cool company, because down to even the wires and the the placement of the wires in the server stacks. Everything was designed. Which sounds like it makes sense now that we know like Amazon and Google and all these crazy server, you know, technologies that they've deployed and created to keep costs down but also to, you know, scale across the world hosting capabilities. Crazy. Yeah. So software was one of the first software used to be called the planet. So some people old school, you know, tech geeks know the planet. I had come across it years and years ago because for my radio station that was streaming online for my record label called Indian electronica. I had done some procurement years and years ago, looking like we're talking 2000 2003 Looking for a streaming service or otherwise a Server virtual server. didn't have bandwidth caps. This is just like a little interesting thing. You couldn't find one anywhere, like someone that had global relevance, fast kind of connectivity to their data centers that would give you enough kind of dedicated resources on a shared server that your stream would never like, you know, under buffer or go down. And the planet had unlimited bandwidth. So it was really big with like streamers early on. And it was a big host for hackers and all sorts of people doing crazy stuff. And they were Texas based. So they had that kind of like cultural flair to say, Yeah, whatever. Like they were really Cavalier in a way. Yeah.
Speaker 3 25:39
Austin, Texas, Dallas, Dallas, based
Qasim Virjee 25:43
in Dallas. And then what happened with software was, so they're kind of like architecture was so tight that it was their API they had they were the first cloud infrastructure company, I think that I came across that had an API. This is before Rackspace announced their API. But their API had like 1400 calls on it, when they released it like it was so overdeveloped, but it was powerful, where you could do an API call to provision hard like bare metal servers. So I could deploy a brand new server in remotely using API calls, where a robot would literally put like machinery together and and kind of build out a server. So really, really deep tech in in evolving how Cloud Servers really come together and work. Interesting company because of that, but what happened was there was infighting with the owners. And essentially, what happened is, they kind of reached a market cap in North America, and from what I remember, their kind of like annual revenue was like 450 million bucks or something. And they couldn't grow because of competition, Amazon at the time was just coming up in Cloud Hosting, like it was, it was really a new competitor, you know. And SoftLayer, didn't want to buy competitors to gain market share. And so they had to look globally, they started opening a few data centers here. And there, they opened, I think, at the time, one in Toronto, and a couple others. And the problem was that the founders didn't, they're Texans, they drive around with like, handguns in their glove compartments, like no joke, I've seen this. They didn't want to go to like Dubai, and open a data center, they didn't want to get into Africa, but they the business needed to, to stay relevant. So essentially, that company went on the chopping block. Meanwhile, IBM was up for tender on a couple of Pentagon contracts, and, you know, Department of Forestry and stuff, contracts. Skills are just crazy. But what's crazy is that IBM didn't even have a cloud infrastructure to even bid on that tender. So they were looking, they were shopping all over the world for a cloud vendor, because IBM, in its infinite lack of wisdom, was selling as a cloud solution, they would sell on prem multilocation. So they were selling this thing that they would call like private cloud, where they'd go into like General Mills, and like add all of their factories or whatever, put in like some clunky, massive server rack infrastructure, and then try and get like dark fiber, or whatever connectivity point to point and network them and call that like a cloud. It's kind of like how shitty SAS companies will, you know, say that they're cloud based. And they're, they're SAS, by having virtual server instances, with a full software stack installed on top of it. And every time a new customer signs up through the front end, it provisions a version of that software. This is like old school, like fake it till you make it tech that's like bound to break the accounting
Max Chen 28:59
on that must have been hilarious. Oh, yeah, all these different locations? And
Qasim Virjee 29:03
well, they wouldn't, because they were an on prem business, like they're their server. That's the history of the company, right? It's like, all this clunky on prem stuff. And so they would sell like a server for 2 million bucks or something. And so if they could sell a cloud contract to a corporate client, that cloud contract is the opposite of what the cloud actually gives the client in the real world, which is scale at affordable costs. They would instead have like a $20 million contract to do a private cloud. So anyway, what happened was, they essentially bought software for like a 2x Arr. Like really got it cheap. And because because all the founders at this point, were tired of each other or whatever the owners and and they bought this company, and then they started skinning it, you know, and, and it's interesting because that one sale, paid for the whole company. And then the because it was built to scale. It became IBM's you know, secret weapon for for cloud now they had a cloud, they could deploy all over the world. And so they grew it. Interesting. Anyway, I don't know why I brought that up. Oh, we're talking about this whole wide.
Max Chen 30:10
Maybe it was about acquisitions and like the follow through on it. I thought it was gonna go into somewhere where it was about integrating the team and as well. Expedia is a company that by acquisition, tell me Well, yeah, I'll
Qasim Virjee 30:25
just I'll close this loop. I think what it was was I was talking about Yeah, being at IBM, as a precursor to start. Yeah. And struggle under intended, under intended. All right. I don't know there's a lot to just, you know, I don't want to just like throw shit around. But like, yeah, basically, I found a win. So I actually was working for software because of the company that it was, and then joined, you know, not begrudgingly like opportunistically joined IBM through the m&a thinking, great. Now there's a lot more, you know, leverage to create awesome. And I found at every turn that essentially IBM had no intent whatsoever to engage with what it saw was a threat to its sales. IBM, collectively, culturally, saw like the blue blazer culture saw startups as cannibalistic to sales opportunities, to the point where my program rostered startups to give them free Cloud Credits, I would have cloud salespeople, again, who are selling on prem crap, like they didn't understand the Cloud Credits that we gave them. They would start data mining for through some back in whatever contact or otherwise asked me for the contacts for my customers, and start calling the startups and saying and selling them multimillion dollar contracts. And the startups will call me and be like, we don't have this money. What's happening? They're like, No, they're, so they got very confused about like, what freemium is. And you know what the upgrade path is? Funnily enough, one of the companies that was on our roster was a Toronto company, whose brand is now so famous, they were a kind of, they were using like AI for, really for like deep science research stuff. And they had a brilliant name that Facebook wanted to acquire. And they were called meta, no. So I knew the guys at meta, and it was an actual company. And I actually, like gave them an extra million dollars of Cloud Credits or something to keep them alive. They were gonna, like, they were basically their servers were too expensive. And they hadn't raised enough money yet. And we kept them alive. And then the one of the consequences of that down the road was that they sold their brand and their company to Facebook. Oh, so that's just one example. One anecdote of the success of this program. But IBM didn't have that foresight. You know,
Max Chen 33:08
imagine, imagine guys hold on to that. Yeah, like more took it in a little bit closer to you, right into itself. And but you would need that you even need that atmosphere innovation, right? You would want to dabble in that space, if you really want it to become what it is now. Oh, yes. Metaverse idea,
Qasim Virjee 33:28
like where IBM, you know, historically has bought companies to kill them to try and be the biggest dog in the market and sell a shitty solution to, you know, an unerring unaware, you know, customer. Yeah, I think they could have flipped the script instead, again, it would be a different company, but like, you know, look for innovation everywhere that it exists and be the platform to support it. Then again, I mean, then they will be like Google, right. Very different companies very different. So anyway,
Max Chen 34:00
yeah, you have that, you know, in in outside, like the travel industry, you have I was gonna say Expedia is a company that grew through acquisition. And the follow through on integration or of integration wasn't always ideal. You know, the m&a guys kind of sign a deal. And then next thing you realize, when you really get down to the weeds into the weeds, your databases don't don't sink, right. So not exactly a perfect example. I wasn't part of it. So I can't speak too much to like the nitty gritty details, but they acquired a company called HomeAway and VRBO, which everybody knows. And VRBO. Yes, yeah. So we call it verbo. And it was their foray into vacation rentals, right? Everyone's like, Whoa, yeah, Expedia is in one acquisition. Couldn't get the inventory. Like, couldn't get it to connect. And meanwhile, if you look
Qasim Virjee 34:51
so you see me the VRBO listings, couldn't get pushed on to expedia.com or
Max Chen 34:56
a lot of duplicate listings, you know, didn't We didn't nobody was really communicating maybe that you know how the integration was going to work. And if you look at how the structure of the company works is we, at the time Expedia, you have the people who go and acquire the listing. So if you were a vacation rental or your hotel, you know, you would have to agree to come on to our website, but we're just a marketplace. Right. So when they went and got this vacation rental, you know, supply to come on, it was supposed to complement the existing hotel supply. Whereas booking.com Did all organically. They were hiring teams, going mom and pop like door to door Mom and Pop signing everybody likes owning your apartment, high
Qasim Virjee 35:38
bed, bed and breakfast. Yeah, look, we've
Max Chen 35:41
got this cool app. We've got this website, you know, booking.com. Great, yeah, come on, you know. And then on one marketplace, you had everything like the Marriott down to customs bedroom, right? In theory, right. But yeah, Expedia went and did these kinds of acquisitions where the integration didn't work out. And it was a really good example of not only the the tech not work out, but then you had this whole team that was sitting there. And they were an innovative team. Or they when they acquired hotwire, which was a last minute booking, right, I
Qasim Virjee 36:09
remember using that, yeah,
Employee churn and mobility in the tech industry
Max Chen 36:10
they were known to be the fun team. They had go kart races in the office and things like that. And when you get down to okay, maybe the business revenue starts coming in, you know, and we, you know, you can pipe, you can share inventory. But over time, if you're the people working in that company, you kind of looked at it and said, my job is about to disappear, or my fun time is gonna go, it's gonna go and then edit stifles innovation, a lot of places, or at least the people who have the choice are usually the most mobile, they drop off like flies, if they don't become like a senior leader or something like that. And I think that now you see a lot of the startups you know, starting to do that like posturing up to get acquired and things like that. You have that problem of the churn, right of talent. Yeah,
Qasim Virjee 36:58
churn is a big one. And actually, it's something that's been recurring in this series so far is talking about especially precipitated by the last couple of years, maybe it's something people have told us that it might be a generational thing, it might be a kind of a culture of work thing inherited by people coming out of at least in Canada, the work study programs where you're spending a short amount of time as you know, the end of your engineering degree or something at a company for six months, and then going to another one. And that just becomes the culture where like people are looking for new experiences, new projects to tackle, especially engineers that are, you know, very high grade or very solutions oriented. They want to tackle, you know, climb the mountain, and then go on to the next mountain. So they're looking for challenges. And that's what a job is at a company. And so they don't mind if they have 50 companies that you know, when they're 50 years old to look back on that form their career, their CV. Yeah. What, but I feel like we sorry, yeah, no, no, go for it. I feel
Max Chen 38:01
like sometimes we maybe look at it as age is one thing, but most, nobody has. You don't hear very often where they talk about you have these companies that service and want to install this mobility in the workforce, like LinkedIn and things like that. It's a lot less painful to do so. And it's romanticized to have a global globalized world. Oh, yeah. So like, if you were to say, yeah, it could be age. But isn't it a function of the fact that with the rise of startups and the internet, they wanted to make it easy to move? Because we talk about how valuable talent is, if he's been at three companies, startups want, like institutional people who've worked in large institutions?
Qasim Virjee 38:46
Yeah, that's a whole fucked up thing to me, like this idea of kind of, you know, oh, why is it a badge of honor to say you're like x Facebook? Well, maybe you sucked. Maybe Facebook itself sucks. You know, like, maybe your team never did anything at Facebook. But somehow it's like desirable,
Max Chen 39:06
you could turn it around to right. Yeah, you worked out a startup great, basically means you'd work the weirdest hours, you never had to do time management because that working nine to nine every day.
Qasim Virjee 39:17
Well, this is the thing is that like, you know, it's interesting, right? We're talking to a lot of HR people that are either internal or external recruiters or or talent, you know, acquisition folks as part of the series and, and I think what they're their strongest kind of theme and how they find good people is really network and network effects. Not so much like resumes. But that's also another whole topic that's socio analytical one is to look at kind of the increasing relevance of LinkedIn in the last few years as a social network as opposed to as a place to like create CV without typing it up. Yeah. And there's a kind of a Social Behavior emerging that's like, on that network, where people are like, yes, posting jobs, yes, answering job listings, applying for jobs, but also kind of using their profile as more than a resume. Right. And in the LinkedIn profile, I mean, this is the interesting thing. We've kind of assumed this, right. So also, I have a little tin hat thing to say about this, which is kind of cool. You know, I don't know if you remember this, right. Not many people kind of, actually, that I've talked to remember this moment, but sometime, I believe it was in 2020. Like, towards the end of the year, Facebook pushed a UI update for their web interface. Okay. The look of Facebook changed. Yeah. And overnight, within two weeks, LinkedIn, use the old Facebook layout, the river of news that you're so familiar with now, because it's been only like a couple of years. But we're all on LinkedIn all the time. LinkedIn kind of took the old Facebook interface. As soon as the old one was discarded, and it became popular for people disenfranchised from Facebook, like LinkedIn became the new Facebook for professionals,
Max Chen 41:14
I was gonna say that people, the posts aren't always professionally driven. There's a lot more emotions being put into the post. And I think that puts employers and managers in a tough spot sometimes because everyone
Qasim Virjee 41:28
is a representative of their employer on that platform or elsewhere. And yet, they're trying, it's a social network. So you want to kind of like express yourself, right? And at the same time, so it's very interesting, because employees might be speaking in a non representative way. But more importantly to me, is that companies are missing cues on those posts, for celebrating employees and encouraging them. You know, there's a lot of talent that's being restricted by not being facilitated as as kind of brand mouthpieces. Yeah. So there's a lot of opportunity as well through LinkedIn in this way. But coming back to the story of like, you know, the rapid cycling churn attrition amongst teams, and part of it is yes, like workers looking for things that they can't have at their company, whatever that is, right. So mobility is one of the top desirables during the pandemic. A lot of young folks who were not, you know, with child and mortgage said, I want to go to Tulum. Like, I want to, you know, I want to live by Cancun, I want to, like, get a beetle of Volkswagen and like, you know, live my mom's 1970s dreams. I don't need her jeans. What's up with the mom jeans people? Let's end that. Let's end. Anyone grew up in the 80s knows it was never cool.
Max Chen 43:00
Tight in some places and then loose and that's what jeans are they just change where it gets tight? Yeah, right. They just flows every season different styles on the mobility and to loom. I think it was the economist that had a they did a piece on economic refugees from the US to Mexico. Maybe you've read something along that line. So it's talking talking about during this work remote a lot of Americans particularly from those very expensive states, you know, California and places like that. They wanted to they had very good salaries but barely able to survive. Then you go to somewhere like Mexico, because you live like a king. However, what ends up happening is they now dominate, they're the big spenders right in Mexico City that are causing inflation. Yeah. And then over time, they're squeezing out local culture. establishments, so restaurants and things like they start getting kicked out and beginning replaced by coffee shops. I'll
Qasim Virjee 43:59
say the seven about specifically about Tulu man, I went to to loom for the first time in 1999. And that's when to loom was to loom like, for me it felt like it kind of felt like Lamu or it felt like Zanzibar a little bit. You know, there was a there was a local kind of culture. There was definitely like a legacy culture of hippies and some yoga places. But for the most part, it was about pristine beach. Quiet and you go there to be by herself on the beach. And just it was not like a hotel experience in that. It was not how do I express this properly? It was that kind of like desert island beach holiday as opposed to the all you can eat buffet beach holiday and in a country that you know has promoted tourism as mass mass tourism tourism, where this all inclusive hotel experience has been so predominant us Initially up the coast to Cancun to loom was the counterbalance. What's really funny is that there's this cultural inflection. Now, we're like the boho chic, you know, aesthetic is being flipped on its head as a marketing tool by local developers, you know, and hotel yeas, and it's kind of like the people are discovering to loom now feel like they've discovered something that, you know, is new. And it's, it's not at all and it's definitely not what it was, you know, 20 years ago. So, it's kind of funny. But anyway, the point is, people that belong to working teams, who want to use their job to buy some sort of lifestyle, freedom, you know, all the kudos to them for sure for trying to find a better place to live and still be able to, like, you know, commit dedication to their jobs. And all the kudos to the the employers trying to, like, manage this distribution. But it's tough like, like, Mexico is an interesting one for us, because it's within timezone approximately. But if I wanted to move to not me, I work for myself, but if someone wants to move to Prague, and their local team is here, that's a tough one. I've
Max Chen 46:17
heard many examples like this, especially if you have a role where the hours matter, you know, slightly operation on in tech, like you need to be on those calls for product calls and things like that. It's a huge problem. And those roles are sometimes the most important, because the moment you start getting churn in tech, you know, in your tech teams, who own products, yeah, one person leaves or that workload goes to the next. And then all of a sudden, four engineers turn into one, right? And then what do you do? Do you pay that one engineer the salary of four? Or do you try back hire as quickly as possible, and then culture fit, everything comes in? Right? It's a bit of a slippery slope. I think that what you're saying is getting on the ball quicker. That first person, you know, that goes out the door needs a lot of critical reflection. Yeah. And unfortunately, I think engineer jobs and things like that also happened to be some of the highest paying jobs in, in a in a organization. And so it seemed almost like a lifting of a burden. At first, like, oh, it's one less salary to be paid. But what that ends up doing in your quarterly planning or your biannual planning, it snowballs into huge problems later on. And I don't have a very good answer for it, other than for my experience, I think it actually pays to to have some rigid rules, you know, this problem of like, would do you want to let people go to Prague? And I'd say to myself, No, I wouldn't necessarily want to work with someone that's halfway across the world, a lot of people will come on, they write very good speeches about, but it's about the flexibility, you know, it's about making a work of there really been, and there is a part of that, which is, well, once they're in Prague,
Workplace culture and competitive landscape in the co-working industry
Qasim Virjee 48:10
right? Other opportunities will present themselves, their lives are going to be you know, evolving, you
Max Chen 48:16
might lose them in the end. And this is hard to say, because one day, maybe I want to do the same thing. But I should be understanding if my team or my company says, No, I think it
Qasim Virjee 48:26
comes down to culture, you know, like a lot of organizations aren't reassessing what the cultural values they hold are, in terms of either enabling distributed work by understanding what the fallbacks are for those workers, like, what are the absolute essentials in terms of like participatory culture, and adherence also to expectations that are, you know, functional and otherwise, like, communication between team members and stuff and developing relationships, if they can create software lead, you know, plan to facilitate this stuff. They don't necessarily have to, like, there are a lot of companies that require local culture, for their success. And for teams to be together physically, like, look at my business, right. So it's really interesting, because we support tech companies and a lot of innovation based companies, a lot of fortune 50 companies to like all sorts of companies come through our doors to use start well, you know, as essentially an off site or a meeting destination, aside from our media production stuff. And there's two things to that. One is we all need to be here to support these people, like my employees at start. Well, my team are tied to a physical property, we're not going we can't we can't do our job in Mexico, you know. And in yet, the teams that we support, we have suitcases all over the place. People are flying in from all over the place. And what's really interesting about that is on one hand, you could say A, you know, my team looks at those people and says, Oh, I wish I had that life. But they're not the other side. They're all coming here. Yep, yep, all of these teams are reporting back from the field to us saying, we wish this place existed wherever we live, or otherwise, if we had known about this place, you know, this should be our everyday experience.
Max Chen 50:27
We, I've seen it in my company and other companies, everybody wants to remote work. And then six months into it, I want to work membership, I want to, I want to co working space membership, yeah. And now it's just to go and socialize with people outside of your company. And
Qasim Virjee 50:42
that is like such a huge thing. So we're seeing with all the off sites that we're facilitating, whether it's for small teams or large teams that like using the coming together, when it needs to happen, for literally, the base expectation of resocialize ation people to know each other to be comfortable with each other to be familiar with each other. That's like the number one thing that organizations need to rely on evolving their culture. Because if the people don't know each other, it's very difficult to not just know what your culture is. But to rely on it. People need to be able to figure out how they relate to each other. And again, if everyone's behind a screen, it's not necessarily going to happen, you know, so. So we see that every day, and we hear it in the laughter. And like that the vibe that people have when they come to start well is so it's infectious and it's positive. And it's good vibes. Yeah. So how do you how do you look
Max Chen 51:43
at your competitive landscape? Like, how do you break out your competitors and buy brands? Oh, what are the things that you say, bucket them into other ones? Price,
Qasim Virjee 51:52
I don't like to think competitively. But what I would say is that in 2017, when start wall was founded, you know, we were specifically a co working space for early stage ventures, particularly tech companies, then things changed a couple of years in, you know, we kind of, actually since day one, I've always held something that's sent me outside of competing, which seems to be stupidity is what I was called by, you know, competitors that I know in the space. So other co working operators, really, were looking at unit economics as their business model, we need to get the tiniest glass cubicle offices to fill the most people in to make the most money with the least amount of common space per square foot to maximize, you know, that turn of profit on a real estate asset. That's basically what you know, that's the we work thing, right? Common space, if anything, is show value programming. So make the space next to the elevators where you can put an office kind of feel like it's your living room. But then, hey, wait, you're sitting there and people are walking behind you and your back is kind of your neck and neck hairs are tingling, you know, because it's not comfortable. It's a good point. So, you know, there's a lot of things that I'll throw stones that we work for, and they're their design, folks, for productizing what I call a Holiday Inn Express experience. You know, it's certainly not a senior Regis, certainly not a four seasons. And it's not even a W, you know, so it thinks it's a W, or at least that was the Adam Newman perception was that like we work is the W Hotel.
Unknown Speaker 53:42
Qasim Virjee 53:43
it's, it's a little like, low key, maybe on the staff on the floor. But like everyone gets a hamburger when they want one. But the hamburger feels like it's something new. And there's like fluorescent color everywhere, and motivational speeches everywhere. So like, people aren't alone, because they're reminded that like Gandhi, you know, lived some bullshit like that. But
Max Chen 54:07
we weren't because the Wu is probably one of the least raucous statements he made about. Yeah.
Evolution of co-working spaces from indie vibe to corporate offerings
Qasim Virjee 54:12
But like, I think the thing is that like, you know, seeing the workplace facilitated by we work is something fun and new and refreshing was kind of like the stick for we work in the early years. And anyway, the business model, despite that was very much that you put people as densely as possible in in glass cubicles, you know, charges a premium price, maybe give them a bit of lease flexibility, but the convention at the time, right, was a 10 year lease versus maybe a two year lease. So the eight year delta is a lot of value, right? However, what we always found was competitively I was like, fuck that. I don't want anyone to feel like a sardine in their office, and I want offices is to feel like bedrooms in a hotel, you come down from your office. So even our layout at stairwell, the upper floors, our offices, and then the lower floors are meeting spaces, lounges. And then even at our reception, we don't have cell service kitchens, there's a couple kitchenettes here and there for people like reheat their lunch, but you walk in a stairwell and there's a barista, who's you know, on a wicked old school restored gotcha, you know, espresso machine that you saw, and they're offering you a cappuccino. And then we also tack like, we've got like a robot that brews loose leaf teas on demand, which is kind of cool. Calling T bot. So we mix that self service and full service, low staff footprint, but it's, I hate saying it this way in, in commercial real estate, people will say, you know, it's a hospitality focused offering. But yeah, so in the early days, that hospitality set us apart, and I had probably about 50% of my square footage being common and shared space, as opposed to what is typically about 15%, maybe, you know, 15 18%, in conventional co working, and I'll say that that's not even co working companies, like we work IW, eg Regis, etc. You know, Regis is affiliated brands under ID wg, including spaces. Yeah, those are essentially shared office companies. That's where I look at it, you know, they're commingled offices, they're not co working in terms of the ethos of co working, not being there, which is more of an indie vibe in the early days. Kind of like around the time we work got started, but like co working from from when I discovered it at the Center for Social Innovation in like 2006, you know, the first spaces in Canada at the time were emerging. And the culture was very much about what is the experience of people relying on each other, working together from different organizations? Like, literally, what is that culture, when you've got 50 companies represented in the same space by kind of like a team that might be like one or two or five people from each company, but they're all sharing the same space, eating lunch together on certain days, you know, having parties together. So the ethos of co working in the early days was very much about like people together from different backgrounds, which is really cool. But then, in the commercialization, you know, of co working, what happened was, there was an over focus on the business model, which relies on term commitments, cash deposits, you know, corporate clients. So the space and the design of that space to be colorful and animated, was to kind of make the employees of these corporate companies feel like they're in a different place, and they're enjoying life more. That's the way I look at it. And you see it with brands like spaces by IW G spaces was supposed to be their fun brand to counterbalance their boring 1980s pocket square. Bullshit of Regis, right? And the design follows suit, and everyone's got the same aesthetic language, you know, from a corporate offering of co working where they're all copying each other. And it's like, designs a don't they're not context sensitive. Do
Max Chen 58:26
you think it's all designed or there are certain brands where they they to their community managers, so instilling relationships through humans,
Coworking spaces and their design
Qasim Virjee 58:36
I get it, but at the same time, I haven't seen a brand that particularly like, like, let's call it a 20 site plus brand in coworking that, in especially the western hemisphere, you know, in North America, particularly, that enables those community managers to actually understand human dynamics, and participate amongst those people in a non Bell hoppy way. For the most part, excuse me, community managers in these like corporatized co working spaces are glorified bellhops that's the way I look at it. Like, they're, they're going to help you with the printer when you have problems with the printer. And then there'll be like hanging out with you and maybe go for a drink with you once in a while. Right? There'll be your buddy, but how do they have relevance in your company's functioning? You know, are they offering opportunity for your company to grow find partnerships, find, you know, staff, if you're hiring know, are they you know, responsible for even doing the extra mile and being a concierge and getting you an Uber when you need it? Typically not no. What happens is it's very difficult to have that role not fuck shit up. So the responsibility profile goes way down. Yeah. Those people are there to kind of like, hang out. In the we work model, traditionally, it was like there are people that are just hanging out, right? Yeah. And they're animating if anything, I mean, they're animating the space, which means yay, you know, like, it's going to be donut hour in an hour. So, Bagel Thursday, I'll go tell everyone Yeah, come get your bagels, Yay, we're gonna have bagels together, guys. So there's maybe a time and a place for that in certain cultures. But what we've always found is that, like, I want my customer base to be entirely created of people who know what they do every day, I don't want one entrepreneurs, I don't want people trying to figure out their life through their work. Okay. And that's a huge cultural difference, that from day one, we've always found with these kinds of like shared office places. It's, in fact, it's a flip, you know, where people come to start well, not to try and find validation, they are pre validated, they've got their whole next five years of their work cut out for them. So in sharing space at start, well, they are really here to enjoy being able to focus, being able to collaborate, being able to do their work, that's really like the meta. It's not a sideline, um, this is not a, you know, a carnival, where people come to like, forget that their employees, which I think are baked into the aesthetics under Adam Newman, we work you know, and subsequently with the kind of, you know, I could do a kind of interior design critique episode, where I'm like, looking at different photographs of all these different operators and say, This is why that's stupid. And this is stupid. A lot of it is not, I guess a lot of it is not context sensitive. Like I've seen this, where, you know, they're trying to just like on the data center example. large footprint, multi locational brands are trying to roll out this franchise approach that doesn't enable teams in particular locations to enjoy her space that was built for them. It was designed, you know, in Tallahassee for them. And so there's a disparity between expectations of experience and the actual experience. Yeah,
Max Chen 1:02:24
and the balancing the budget anyways, at some point, like on what they can actually then slot
Qasim Virjee 1:02:29
but a lot of money gets spent for these top down, you know, design initiatives and centralized stuff like this coming full circle to hospitality, the same things in hotels, right? Like, if you look at major logo, kind of major logo efforts at creating ubiquitous brand experience, versus boutique hotels that are multi locational that are very site specific. They're like, night and day. They're different things. Yeah.
Max Chen 1:03:01
Yeah. Yeah. For a long time in the hospitality industry, people lifestyle lifestyle was that word, right. W was seen as the leader. And now, you know, now it's just more extreme versions, really,
Qasim Virjee 1:03:15
but even then was rolled back a few years. Why is W considered to be a leader? Where's the trigger these days? Like, seriously, right. Yeah. Yeah, absolutely. Like Ian schrager was the boss because he was fucking Shut up. And it was about the quality of experience in your in trigger hotel, when you walk in the door is one of you know, mirth, excitement, curiosity. And every state is an opportunity to discover.
Max Chen 1:03:45
But you have that cycle as well like that. And then everybody tries to copy it, and then someone democratizes it? Let's monetize it. You
Qasim Virjee 1:03:52
mean franchises, you
Max Chen 1:03:53
know, by making it cheaper? Yeah, okay, let's same thing. Now. We just go to a full stop version of it. Oh, this public co working space. It's got that. Okay. Now let's make a more democratized like, again, cheaper version of this was more accessible. The
Affordable luxury in the hospitality industry
Qasim Virjee 1:04:08
funny thing is, though, I mean, like, and this is the intro your examples really interesting, because, you know, he's all about affordable luxury, right. And I think his public hotels brand was the last kind of brand that was, was active or the most recent thing. But the idea of affordable luxury, is such that it should be affordable, you know, like luxury, unless you're talking about jewelry, and then you don't want it to fall apart. But the my take on things is that for quality hospitality experiences, you don't need to pay a lot. And the vendor doesn't need to spend a lot to provide exceptional service. It's actually a corrosion of the model. Such that, you know, operators feel like you know, a better and like, as a chef, I want the best quality meat. You know if I'm going to cook you a steak for sure, but I need to know how to cook that steak. Yeah, and I cook Give you a smaller portion of a fantastically like hand massage, grass fed steak that you're going to love because of the other things on the plate as well. I don't need to give you like a, you know, an 800 grams steak. For $200, I could give you the same quality of meat with sides and everything else, right? In a way that doesn't break my bank on the supply side, that gives you tons of value, in fact more value than eating more of that ingredient. So the way I look at it is like, affordable luxury is a powerful thing. So long as the operator understands what the concept is. Yeah,
Max Chen 1:05:38
but in the hospitality industry, pricing is dynamic. So when we say affordable, like, what is that point like is that revenue management department really going to set an upper bound?
Qasim Virjee 1:05:48
What it what it comes down to is that you know what we were talking about scale startups and stuff, I think, I think profit margin is an interesting thing to consider. Because most public companies are entirely focused on profit maximization. Now, if instead you had a mandate to ensure minimum profit margin, and locked in of that, so you're not an infinite scale company, you're not saying, in a great market, we can make five times what we're making now. No, you see, I don't give a fuck, if it's a great market, I only want to make one time what I'm making now. So if I want to make more money, I gotta grow, I got to have more locations, we got to offer different products to the same customer, maybe increase the value of the customer to us in different ways. But why should I try to make more and more and more and more and more and more more money? Because the product has to suffer? Eventually? It's not sustainable. Yeah.
Max Chen 1:06:49
I guess when you're modeling that out, though, the risk factor is really high and subjective to whoever's running it. Right?
Qasim Virjee 1:06:57
Yeah, except his bullshit when when any organization says that, we're going to mitigate kind of the risk of nonconstant, let's call it input costs, by charging as much as we can, when we can. They don't have any conception of what cash flow means. Because you're not holding that like extra winnings in your pocket for a bad market.
Max Chen 1:07:23
It deploying it usually, so that you can go and no, ultimately,
Qasim Virjee 1:07:27
you're just leaving it, it's always about leverage. So you make them more money, you can borrow more, or whatever it is that you need to do. So it's kind of risky. And the way I look at it is this is maybe kind of like the owner operator versus the infinite scale, you know, public company perspective. But I really do value an interplay between affordable luxury and controlled profit expectations. Part of that, of course, is knowing your costs and trying to keep them constant is tough in an inflationary kind of context. And like everyone in Europe assault, you know, dealing with this with energy as well right now. So there's things that are out of your hand. But ultimately, you'd want to provide a high level of standard at a constantly great price to somebody to make it would you call it democratization to truly democratize? You know, what you're offering?
Hotel pricing and Airbnb quality
Max Chen 1:08:23
Yeah, that mean, some some companies say that? Yeah. Yeah. Whether it's true or not, like I said, dynamic pricing tends to throw that out the window. The moment you know, people see a crunch time on Oh, no more availability in the market. You look at hotel rates and how they fluctuate. It's crazy. You know, you I look at the Toronto market on like, hotel prices, people said that, you know, we had a really tough season through COVID. And I look at some of the hotels and the prices, they're charging, and I'm really wondering to myself, who's paying that, in some cases to stay?
Qasim Virjee 1:08:54
It's crazy. I mean, definitely, we have an under supply of beds in this city. And then so that's a natural kind of inflationary pressure. But yeah, the way that people price things for hotels is really weird. It's very weird. But you
Max Chen 1:09:09
know, my point here is it's surprising to me that yeah, you know, why would you pay
Qasim Virjee 1:09:17
nobodies and it's crazy, I mean, like, but ya know, and that's a dead end kind of logic in a constrained market where demand is way outstrip supply because you see it even in the non traditional market, or you look at Airbnb in the city. They're terrible. Across the board, like the product is horrible. Most of them are in condo buildings where it's illegal to even have those Airbnbs and there's literally signs I once booked my parents before they move back to Canada recently. I booked them in an Airbnb, and it looked legitimate from the listing. The reviews were exceptionally great. Again, who's reviewing this thing? I don't know. There are people from Podunk towns that are like you know, in the big city, maybe they're not looking at the same things I'm looking at. But what I Find it. Or what I found was, my parents called me. As soon as they checked in, and they were like, What is going on, we got the key from a lockbox outside of the building that's in a place with all these other lock boxes. And there's a big sign that says, not for Airbnb usage. And then we went in the building and above the concierge, or like security guards next to the elevators, there was a sign that said, you will be prosecuted if you are staying in an Airbnb. And then we came up to the place, and the place looks fairly clean. But he doesn't look like they've cleaned the towels properly. And also, we're afraid we're gonna get arrested sitting here, like they're not going to sleep comfortably in this place, you know. And then I wrote to the chap whose place it was, supposedly, it turns out, he's not he's a broker, doing a side hustle, helping his friend make money on a property he couldn't sell. And that's what this was. And he was not receptive to feedback. And I was like, Look, dude, this is illegal. What you're doing is literally illegal. If I had known I would have paid because I paid I think it was paying like, $600 a night or something. Like, yeah, it's like, I'll put them in a really nice hotel room. Yeah. Why Am I Suffering this way? You know, like, do you understand that you're, you're over selling me something crap. And he was like, Oh, knock off 50% Off the last night. They were sitting there for like four nights. So the the experience was horrible. Yeah. And it's not just that experience that I say, the stock is poor. Like, when I look at Airbnb versus hotels in Toronto, downtown Toronto, there's no way I would choose an Airbnb because very few are exceptional properties. And, and I when I stayed anywhere, that's not my house. I mean, I'm rare, but I hold that place to the standard on my house. Yeah, I live well, you know, I always have like, even if it was a crappy little apartment, it was awesome. And and I don't know that if the mass population who checks in Airbnb does in North America, right is is not like a castle in France. I don't think people really understand that. And also, those might be people that are talking about democratization, where markets are cheaper. people staying in other people's apartments, might not otherwise spring for a hotel, maybe it's cheaper in some places. But yeah, then you have these weird things like in Toronto, where doesn't make any sense. We need more hotel rooms. Construction costs are difficult. People would rather put up condo buildings, because they'll make their winnings that as you know, the developer profile is very difficult for hotels in in Toronto. Yeah. But we are seeing a number of properties being redeveloped into mixed use because of low office utilization.
Max Chen 1:12:42
Yeah, on when I was doing feasibility in the Middle East, that's when service departments was really the boom, and what it would do to your, the cash flow or calculating. Everybody just wanted to put a couple in there. And all of a sudden, everything's black. It's like, Oh, nice, it worked out. And now all of a sudden, it's like, oh, we have all these service departments. They're all luxury. Let's, let's go put some, you know, lower brands in there. And yeah, it's service apartments, this idea of home away from home is very romantic. You know, as it sounds like, you're kind of going back to people who are working for a company of the trial for a company now with remote work, you might go to a city, and before it was all about work, potentially right. And that would be the local city teams that took you out, it'd be your business partners that take you out. But now with Airbnb experience now with service apartments with vacation rentals as an globalized world, where you can have people you studied with in any city in the world, you are maybe less attached to your company, just because why when I go see my colleague when I can see my friend. And you know, it's funny, just how all this comes together to just so many headwinds, right for companies trying to get this integration like Oh, travel with the company, we're going to pay for you, etc. But you're going there and living your own life, extending to the weekend so you can live your own life and work is just seen as a enabler to whatever lifestyle you want, or remote work is that you can be at home. It's
Startup culture and leadership in North America
Qasim Virjee 1:14:12
kind of weird. You say it that way because I've I've definitely seen it a lot recently where I'm looking at a new employee class of kind of people seeing work as a source of revenue. Yeah, they're not seeing they're not career track minded. know people today. Depending on what industry you're in, let's I'll talk about my lens on startups. Like people in startups are not necessarily engineers who are like, you know, want to be other terminals all the time and just like create solve problems, people on the front end of the side of the business and startups, a lot of them literally are just like saying this, this paycheck is like me having a gig and my customer my client is paying me. So that changes the dynamics on how they relate to their employer. You can't boss me around. You can't pushed me around, you know, that kind of mentality. This, like, I'll fire you. And that's what quitting and going to another job is, is simply that and of course, you know, it's a hot topic on this series is people talking about how do you manage that as an employer, you want to engage your peeps, but at the same time, you want them to be loyal. Because otherwise you've put so much effort into entrusting them with the work. And I think this is a real interesting thing is that a lot of people today, new, let's call it new employees aren't necessarily appreciative of the role being created for them. And it goes back to this corruption of maybe like the corporate politic in North America. But so many employees assume that the ability for the company to pay their salary is unquestionable. Yes. And anyone in startups will kind of tell you, right, no matter where you get your money, if it's VC or otherwise, that like, you've got 10 million uses for each dollar. So if someone is not thankful for the position that they hold, it's very difficult to feel beholden to them in any way. But the staff demand is like, you owe me something because you hired me, it's a really weird, corrupted thing, not for everybody. But it does seem to happen.
Max Chen 1:16:24
And imagine you've heard a lot of this firsthand from the founders of those startups. 100%.
Qasim Virjee 1:16:29
And we've seen it through our through our tendency as well, we've seen companies grow from zero to you know, hundreds of plus of people over the last five years. And and it's something that's come up over and over and over again. I'm curious,
Max Chen 1:16:42
maybe a little bit off topic, but with the cross pollenization that you have in your space between these companies. Has that ever. You ever had to exalt someone
Qasim Virjee 1:16:50
poached someone else's stuff? Yeah. Oh, yeah. Yeah, definitely. Definitely.
Max Chen 1:16:56
That was a real catch 22? Oh, well, maybe that'll put you there. It's
Qasim Virjee 1:17:00
weird, because I think the early stage founders are not looking at that as a problem as much as like conventional corporate politic does. Like, if someone, it's kind of weird. I'll say it like this. A lot of early stage founders. Maybe first time entrepreneurs, particularly, are not as cautious as they should be. They're not as cognizant of the value of human resources as an input into the business. It's really weird. And part of it is if you're in a fundraise cycle, your fundraiser is more important than anything, you know. So if leadership is constantly focused on the biggest problem, it's the biggest problem now, which is not the biggest problem over time, which fundamentally is your people, your people sustain the business's operation. But if you're even like ahead of that, you're not even really in operation. Because you've been bankrolled to set up shop, you won't appreciate what it means to be able to rely on your people. Yeah,
Max Chen 1:18:03
yeah, we made a joke about it before we started this episode of referring to North America using the phrase North America, because it sounds like I'm about to say something really judgmental. But I mean that I mean, it now in a very, I'm trying to be objective, and ask myself, if this is the case of perhaps North America, there is this point of, there's this focus on the grind? Yeah. Working hard, you know, gotta got to put in the hours. And that's, that's what determines success in some ways. And I've seen some founders kind of, you know, leaders come out and talk about that. But I think in startups is particularly like that. You have these CEOs and people like that come out and say, it's gonna be tough. And we're gonna get through it. But what it really means is we're about to go and put in some crazy hours in here. And it might be true, but yeah, ultimately, how do they get around that and realize, well, look,
Qasim Virjee 1:19:02
we've we've we've seen something weird in North America, this is the way I look at it. And the last couple of decades. There's two major trends that I see as a little fucked up. One is a new classism. And the other thing is, which might be contextual for this is secularization. So secularization in the last, let's call it since the 50s. In North America, has meant that, you know, the temples are not sacred, and that everyone has their own God. And fundamentally, you know, we've had this obscuration of signal sourcing, because of it and and you see that online, where, you know, iconography of success, and the assumed divinity of cultural icons and celebrity culture is obscuring people's subconscious value for let's call it the ever you know, looking eye You know, the watchful gaze of the Divine, this is the way I look at things. And secularization is scary as it progresses, because what it does is people in trust systems, and kind of totems with signals for their own life, you know, and perhaps this has, you know, fueled the appetite in the last couple of generations or generation for the post baby boomer generation in North America for money as a measure of success. Because you're not going to feel that, you know, conventional fulfillment that you might have had in a in a more religious society. I'm not saying that, as people turn away from the concept of God or have questions they can answer and because of that, don't go to their church of familial heritage, that they are lost in any way. I'm just saying that, you know, whether you choose to be religious or not, as the mass population is less religious, with every generation, the experience of religiosity which is if nothing else, you know, submission to a divine existence means that humans have less or fewer tools at their disposal to negotiate existential angst the human condition. So last couple of decades in North America, what I've seen is that sets the tone for this kind of like, value for Luker value for money above all else, the greed that we see the ignorance about the fluidity and virtualization of public markets, right? It's basically like using a what do you call it? I don't know everyone wants to entrust opportunity. With this divinity, like I see a lot of bets being made that are hopeful that's across all segments of the economy, right. And so this is an interesting thing for me where I see this kind of like, money above all else thing. And then a general celebrities used, you know, identity of riches. Were like, I don't know, like, let's talk about some bullshit. That's recent. Okay. Kanye West. So, Kanye West is an interesting guy. Right? For many reasons, a lot of people historically, whether you agree that he's his, his music was great or not, or whether he had one song or whether he had an album or whether he had a career in music. There is that up for debate. I feel like like, the thing is, yeah, I mean, I'm, I'm gonna hate on Kanye, you know, I always have though I always have. I've always been like, Yeah, cool. That guy can he has some songs, right, like, cool, he makes music, that's great, whatever. But I remember when that song came out, and I was living in New York, you know, and it was kind of like part of the palette if you're in the scene. In New York, you know, if you're a part of any music scene, that was a song, you know, Jesus walks type, all that shit. It was a song and it was a cool song, but it was it was like anthemic song. And it was part of the palette. It wasn't everything. And I think what's happened with these celebrity icons as music, musicians or otherwise, is they become everything to the people who are their fans, right? And that hope, and, you know, want to understand the celebrity in a way that's packaged so that they can relate to that person is has become endemic in the society where someone like Kanye West, like there's literally this kind of weird, like guilt, and what do you call it? It's people feel very much led down by the man ranting and raving about stupid, you know, anti semitic bullshit. And it becomes this hot topic in society, right? And in all the reported media, there's some sort of like, all these catches of money, like everything is told about money. So, okay, so this guy goes local, right and starts like spitting stupidity, and it's cost him $400 million. Adidas is burning money every day that they're talking to Kanye West. You know, because no one wants to call out the real issue. And fans are feeling like they're, you know, Icahn has let them down. And a lot of the defense you see in public public media for him as well. He knows what he's doing. Is this whole Donald Trump defense? Oh, he's so rich. He must know what he's doing. He's Got he did something right. Jesus loves him. You know, like people will say shit like that. Yeah. And you hear it all the time. And so I see it from the lens of technology, because that's very much my world. And I see, you know, all of these iconic folks, people that have become celebrities to nouveau Jesus status. Like Steve Jobs, you know, again, a hot topic person is Elon Musk, you know? So, Elon Musk. There's, there's just so much public opinion about that guy. Who tweets similarly to Donald Trump is just like, what is Twitter anymore? I don't know, man, I was one of the first people on Twitter, I don't use it anymore. Because it's like, a have never felt that you can engage anyone in conversation on Twitter. Yeah, you know. But that's part of that whole, like, you know, psychological kind of, let me put something there and see how it reacts, as opposed to engage people.
The evolution of motivational content and side hustles
Max Chen 1:25:57
I know, a startup that started out in one of the works, I was working out of who they were just a content website. And they did a lot of, they did a variety in the beginning when I first noticed them, and it was motivational speeches, but then self help, and then some spirituality content, etc. And as time went on, and they got funding, more funding, and things like that, first of all, looked at that, and when are you getting funding? Like, what is the problem you're solving other than entertainment? Kind of, you know, I thought a content, you know, provider, or a production company would acquire you like, No, it was what, as a business owner, okay. As time progressed, all of it became motivational. All of it was motivational videos, speeches, get it make it through it. Was culture shift. All celebrities? Yeah. And that was my first year in Canada. And I looked at it was, No, yeah, it was kind of foreign to me, I know that it obviously exists in Europe and Middle East and Africa, where I've lived before, but I just felt like it wasn't the same. I didn't get the same, you know, like, electrifying feeling, and I mean, not in a bad way of like, Oh, my God, the guy's an actor. But, you know, this person is a singer. They're very skilled, very talented, but you're making this video like they're gonna solve your family problems, or your career aspirations and go get what you want always be grinding you working at night, you know, etc. And I can't get it when they use maybe Manny, not Manny Pacquiao, like Floyd Mayweather running at 3am, after you went to the club, I kind of get that a little bit more, you know, maybe that's just a bias because I think, you know, sports, like, he's a sportsman and stuff. But, yeah, this, what you're talking about secularisation of, of it, it, it definitely, in my opinion, bleeds over, I really agree with you, because you talk to your colleagues. And there it is, you know, I'm going to finish my nine to five, and then I'm going to go and do this.
Qasim Virjee 1:27:57
Now. What's crazy is the evolution of this as marketing, and as a recruitment tool. Like, again, I'm just saying some things I've seen, I'm not gonna question whether it's good or bad. But you see a lot of companies, celebrating tech companies, particularly, but celebrating the ability to have a side hustle for employees as a recruitment tool. But at the same time, why is that a side hustle as opposed to part of your hustle?
Max Chen 1:28:26
I wasn't gonna say that, because I don't think it's bad to have a side hustle. But to call it that, do I encouraging like, I'm
Work-life balance and employee innovation
Qasim Virjee 1:28:33
gonna say, look, I work hard for my company. I'm the I'm an employee, just like everyone else here, CEO, owner, or otherwise, when I go home, I want to spend time with my daughter. And after I eat, I have one hour before I go to sleep, before I wake up again at 630 in the morning, I don't have time for a side hustle. I'm dedicated to this job. Which means during the day, it's not even I work long hours, it's like nine till six, maybe seven. I don't have time during my day to do the side hustle because I'm doing my thing. So if you really break it down, no one has bloody time for a side hustle. They don't, unless they're wearing their sleep down. They're wearing their weekends down which might be respite. If you know from your job, if it's whatever takes from you during the week to if you need the weekend to rest after a week of work because you're dedicated. You don't want to spend it trying to hustle some money. If you have a passion for something, maybe you don't want to be full time you want to be part time with your job. But I think that's it right. A lot of people are part time with
Max Chen 1:29:46
blocked out they suspect that could be passionate and yeah, no, I mean,
Qasim Virjee 1:29:50
like, look, we're going through a cultural evolution North America right now where I think distributed work is kind of which is cool, enabling people to start questioning. because there are days are less busy, or they're busy in different ways, they're not commuting as much. They're not waste seeing their days is a lot of wasted time. So it's good for people to question these things. But I think ultimately you see, or I'm seeing a lot of people going the route of saying I will earn my job because it kind of subsidizes my lifestyle. And my side hustle is going to push me into the thing that really ultimately I want to be doing. And you're using your job to finance escaping from your job. As someone who has been an entrepreneur since I was like, Okay, the first business I've never said on camera, but yeah, like 14, let's call it right, when I was like an internet reseller in the first ever in East Africa, and I was carrying around a bag of modems after school, to install and teach people with the internet was 9495. Like, since then, I'll say that, like, Yeah, I've been an entrepreneur forever. And if you want to be an entrepreneur, truly, and you have a passion to do something as a business, you can't have a side hustle. The side hustle should be the hustle. So I find it very weird that like companies would embrace subsidizing someone's, you know, departure from their employment by promoting this as a benefit. I would instead as that companies say, it's not a side hustle, I'm going to be an incubator. Right. So we'll give you one or two days a week, off your salary, like on salary, I mean, paid for, to create something amazing. We're going to invest in you as a person. But we'll calculate it out. You're part of our incubator program. And we take 5% equity. And we'll connect you with financing if you need it, or whatever resources that the company can assist with, turn it around. I don't understand why I'm not seeing more companies create these mechanisms for incubating innovation, by leveraging their talent pool, to create the value. Instead, they're at odds with it, and caught in this, like, we don't want them to quit, but they're doing some other shit. And like, they're just like, forever. And you know, like, it's, it's, there's ways around it, I think, yeah.
Max Chen 1:32:29
To deal with the necessity of Yeah, recognizing that that's that's reality, right? Yeah. I think that you're right. I think maybe once we get into the weeds of it, you would need a very avant garde approach. Have you want to do this now? Who's responsible? bility? Is it is it the director that's already your director now that now has to do he now has an additional job in addition to his job description to be the side house, hot side hustler incubator of the company? Uh, well, yeah, I
Qasim Virjee 1:33:01
mean, fundamentally, this is this is something that unfortunately, the day's been keeps getting pushed back because of personal things and falling sick and stuff. But I have a guest for this series that should be coming on in the next couple of weeks. I don't know if you know, Marcus Daniels from Highline beta. I think you'll have some interesting stuff to share with our audience on this topic, because Highline beta has been working with corporate clients for a few years now, probably about six years, five years at least, to build out programming for this. Wow. So they actually now it's not what I'm talking about. It's not what we're talking about, per se. But things like I think one of their clients was Anheuser Busch that was like, you know, saying we're a beer company, right? Supply chain concerns us, we need to de risk it. We also need to de risk kind of like our bets on particular grains and stuff like that, as being the only ones that our product can rely on, let's create new products. How do we do that in a way that's not just within our classic wheelhouse with product development. And so they create these programs for companies like that. And the company that the program that they created, as far as I recall, for Anheuser Busch was a climate change incubator. They went real meadow with it, they were like, you know, what, our people, our general team is so adept at what they do, that we're going to entrust them to continue doing a great job. But we're gonna give them access to working on Mega problems like water scarcity, because it affects our business. Their business is so large that that makes sense. But anyway, Highline beta sets up these programs for companies. So I think there might be some lessons in that experience to say, you know, when you really drill it down to this employee, you know, attribution or I guess, attrition, managing attrition by encouraging employee participation through innovation. I was also really,
Max Chen 1:34:57
you know, two birds one stone because do deals with these like, these are really big overarching problems, right? That faces humanity. And some people feel really fulfilled working on those problems, even if it's not their hustle. Yeah.
Qasim Virjee 1:35:11
Because like, because otherwise they're disenfranchised from those problems. Their side hustle might be like a scapegoat.
Max Chen 1:35:17
Yeah, it's like you have a lot of employees, questioning their company on what they're doing for diversity and inclusion, sometimes not even within the company. But speaking out against examples in the public, right, and puts certain companies in really tough spot of eyeball to we raise our voice every single time this happens. But CEOs and very tough spots, because you're kind of saying, Hey, you didn't say something. And our company is all behind you. But then, yeah, which problems do they speak out for and against? There's like, I think there are teams that just focus on this, like your PR team could spend all day just trying to find, you know, figure out which which problem to tackle. So that's a really interesting concept. I'll be, I'll keep an eye out for that one.
Qasim Virjee 1:35:58
Oh, for sure. And there's so much more to discuss. I think we put a pin in it now. So that our audience can do other things with their day. But it was it was certainly awesome to have this chat. And and I think we didn't at all scratched the surface on what sonder is, what your company is doing, but, but the perspective that you shared was it was great on all these topics.
Max Chen 1:36:21
Yeah. Well, thank you very much for having me on. It was great to hear, you know, all the learnings that you've shared. This is really, this is really, really cool. I mean, what you got going on here and the topics that you discuss it It floats around, just like it says conversational. Yeah, and I'm definitely gonna tune in for other episodes. Excellent.