What did you learn from the bankruptcy of Regus’s American operations?
We had opened up too many spaces at the top of the market, coming up to 2000. That was the underlying problem. But once you’ve made that mistake, you never make that mistake again.
We are super cautious. You have to plan your business from the day you make your investment and get the right mix of customers and the right mix of revenues. We are getting 28 percent of our revenue from services. WeWork only had 5 percent of revenue from services. It’d be like having a hotel where you give all the food and drink away, and room service is free. You might have a full hotel, but you just cannot make any money.
Do you think investors are beginning to see what you’re capable of?
It’s what the industry is capable of. Corporates want to outsource everything they can. Anything they don’t have to do, they don’t want to do. Real estate is one of those remaining, very difficult things companies have to do — find space, design space, build it, operate it. They just want space as a service, and if you do it in a shared way, it’s cheaper, it’s more flexible, and it’s not on your balance sheet.
What if there’s a big economic slowdown in the near future? Let’s say Britain leaves the European Union in a disorderly way, or there is a recession in the United States. What have you done to prepare for that?
From the time you make an investment, you plan for the worst thing that can happen. We are dealing with recessions today — bad ones in Argentina and Venezuela. You name it, we’ve seen it. You’ve got to work very closely with your landlord. And at the same time, you’ve got to be ready to expand.
Shared-space operators are all hoping to sign up large corporations. Is signing up big companies a crucial part of becoming successful?
Absolutely. You can only really have them if you have the network. You don’t want to be the biggest in New York; you want to be the biggest in every state in the union. We’ve done every state except Alaska, and we’re just doing that now. Look, Fargo, N.D., isn’t the world’s most exciting place, but it’s bloody stable there. We like those markets. In a decentralized, digital world you might find your next great analyst, but they don’t have to come to New York City, where it’s costly to live.