CRE Success: The Podcast, S01E02
Brad krauskopf, hub australia
landlords, workspace, commercial real estate, operators, people, business, customers, podcast, space, cra, flexible, australia, success, hub, big, teams, building, work, brad, providers
Welcome to CRE Success: The Podcast, where we help people working in commercial real estate achieve their professional goals. Check us out online at cresuccess.co/podcast. And now here's your host, Darren Krakowiak.
Hello and welcome to Episode Two of CRE Success: The Podcast. It's so great to have you with us. If you work in commercial real estate and you want to achieve success more quickly, you are definitely in the right place.
On today's episode, we're going to be speaking to Brad Krauskopf. He's the Founder and CEO of Hub Australia. Now the role of flexible workspace providers in the future of work is a very timely one. So, I'm looking forward to sharing this interview with you. Brad and I will be discussing leadership how he thinks the CRE industry can better serve its clients and I asked him about the most important advice that he could give to an aspiring founder.
Before we get onto that interview. I wanted to quickly invite you to contact us with any topics you would like us to cover on the podcast. I do try to share information on LinkedIn and YouTube which is helpful to people working in our industry. So, if you have a particular question that you'd like me to tackle here on this podcast, just send me an email, or you can visit our website and fill in the Contact Us form at the bottom of the homepage. Our website is cresuccess.co Contact us and I look forward to answering your questions.
We'll be back in 30 seconds to speak to Brad Krauskopf, the Founder and CEO of Hub Australia right here on CRE Success: The Podcast
And now it's time for the interview on CRE Success: The Podcast.
Brad, welcome to CRE Success: The Podcast.
Great to be here. Thank you for the invite.
The first thing that we ask all our guests to do is to step into the elevator and to give us their elevator pitch so we can know who you are. So Brad, set into the elevator and tell us who you are.
I'm Brad Krauskopf, the CEO and founder of Hub Australia, we’re a premium workspace provider in Australia. We've got hospitality inspired workspaces for companies across the country that will ultimately help them attract and retain staff by giving them a workspace they love coming into each day.
Awesome. So, when did you start Hub Australia?
Back in 20… 2010? Actually, we opened our first location in March of 2011 but we were running around building up the community prior.
Okay, so what led you to start this business
So I was actually living and studying in Madrid, 2008, 2009, which was the GFC when the GFC happened, that was actually one of the first big kickers for co working around the world, where everybody suddenly started working from home, i.e. they'd lost their jobs and they joined the freelance economy. And very quickly, they realized a lot of the limitations of that, of which the key one was with was social isolation and loneliness, which is somewhat, you know,10 years old, we're now living in an even more extreme example of that. Yes. So co working was really kicking off there. And when I was in Madrid, I came across a group and help them get together a co working community over there.
Excellent. So co working. I think a lot of people perhaps didn't become familiar with the concept until maybe four or five years ago, but it's something that's actually been going on for…for a lot longer than that.
Yeah, it has and I guess, you know, many people do still look at co working and think of a big open plan space. But you know, in all reality, most co working organizations catered to establish businesses. There \ can be teams of anything from you know, a couple of people all the way up to 100 people in in a private office is quite common, but co working really refers to the way that the operator goes about operating that space, with a focus on connection, on learning, on helping those businesses to grow. Rather than, for instance, the serviced office model which was very focused on, for instance, the reception or administration services provided as the… as the amenity over and above the desk.
And then of course, flexible space tries to encapsulate both of those streams, if you like. So, what do you prefer to call your business in Australia?
A co working business, but I see that morphing into it'll be generally referred to as the flexible, as flexible workspaces, and then businesses will select the space that works for them and matches their culture and organization.
Okay, so what makes Hub Australia different to other co working providers or more broadly, other flexible space providers?
Yeah, sure thing. So we've, we've set about putting ourselves at at the premium end. And we quickly realized that, you know, competing in the mid-tier market with the really big international providers was always going to be a difficult proposition. Several years ago, we started focusing on established on growing businesses. And in particular, how can we create a workspace that this the beer teams really love. So, to that end, we've invested a lot in the spaces, in the health and wellness of those spaces. And then we've wrapped around a hospitality offering, and a way of looking at things, where we know that each day we need to provide an experience for the people that come into that workspace. And that's been our focus, so whether that's on the customer service side, of things on on having the café, and the different amenities such as, you know, media spaces and fitness spaces and wellness spaces. We've found that packaging all that together has meant that businesses are able to choose to be at Hub because it helps grow their business rather than it being you know, a desk or or short-term solution.
Okay, so some of those extra services that you talked about in terms of exercise or barista, how has that evolved over the last 10 years? What are people looking for now that perhaps they weren't looking for a few years ago?
People definitely got a lot more sophisticated. You know, like what was acceptable even a few years ago is simply not what's considered a good professional flexible workspace offering these days. More and more we found that people want to really good attention to the technology, the acoustics, and the service levels that they get, you know, when people sign up, they're not just looking for somwhere for their team every day. They're looking for some way that they're really happy to invite their customers, their investors. And their teams too. We've found that the service level expected and the level of amenity expected continues to go up. But people are happy to pay for that. Because they know that that ultimately this is going towards helping them attract and retain the best talent.
So you mentioned before about when some of the bigger players started to come into the market, and that perhaps led to, you didn't say commoditization, but certainly it meant that your position as a high provider was a bit of a differentiator, which which helped you to continue to grow your business. I'm just curious when some of those larger providers started to come into the market. Was that more competition for you? Or did that help increase awareness, or what was the impact for your business?
Yeah, look in in fairness to those larger operators. The main impact there that we had was it really grew the market. You know Hub Australia, you know, several years back, we were a very small business, you know, we've grown considerably since then. You know, it was always hard to cut through and and get past that blank stare of what is co working and also shake that perception that it was you know that it was just for freelancers and startups, whereas, you know, most of the business comes from established and growing organizations. And indeed, in recent years, a lot of corporate customers as well. So we found that the, it really grew the market. But then what it did was it really put a need for any operator to get a really clear understanding of who their customer was and what their offering was.
So can you tell me a little bit about your role as CEO and founder of Australia>
I’m fortunate these days that there really is a team that I'm working with each day that's leading the organization. So you know, you know, back in the early days, it was it was everything from marketing
to finance to, to operations. But now, you know, there's a team in place that, that, that I work with on those decisions. What I find these days is my focus is more on strategy, looking for opportunities, but then also making sure that, you know, I spend more time recognizing the importance of the building the culture and and the team and my role in that.
And in terms of the culture of the team, do you find that you're trying to find the right people who can help you build that culture? Or are you already set what the culture is? And then people come in that need to fit into the culture that you've already created?
Yeah, look, it's the latter by now. Look, I've stumbled along this for many, many years. Like, you know, that will be our 10th birthday next year. It took us six, seven years to figure that out, where we finally figured out the customer that we could service really well and profitably, as well as the kind of culture that we needed to make the customer happy but also have the team happy. And I when we move more to that premium-end with a focus on staff retention and attraction for our, for our customers, we realize that if we double down on our commitment to the Hub team, and creating a great place to work for them, then you know, it wasn't a big leap to see that they would then create, in turn, a great place to work for all of our all of our members and customers. So, recognizing that if we invest in the team, and we know ultimately that that that's gonna be a good investment in in building out our customers and getting their loyalty.
And I guess that also helps with the…the type of thought leadership that you do in the marketplace talking about building a culture and it's also built a culture that that you've seen in your team, which then gets emulated throughout the whole of the Hub Australia community.
It does so we will we love seeing our members you know, and their success. And you know it, the our team essentially becomes part of their team, you know, given that they share, you know, we all share the amenities and the, you know, the community that each of the Hubs are.
So if you had to pick out your favorite thing about your current role, what would it be?
Oh, wow, the being a part of the being part of a team, right? It's pretty, pretty great. You know, it's often we end up you're part of lots of teams and stuff when you're, you're back at school. But, you know, it's only every so often that you, in your corporate career, where you get to say, Well, you know, this is this is this is great being a part of a team. It's a it's a good feeling. Yeah.
Awesome. And of course, I get, I guess there must be a lot of intrinsic satisfaction, that being the team that you would have also seen grow and build together.
Yeah, it is. Kind of sometimes you never give yourself time to time to pause and think about that. And I guess in some senses in business these days, like you never can just sit back can just sit vack. The one think I have learned about teams. If you know if you let your guard down I think okay, cool culture done set, let's move on. It'll backfire on you very quickly. So, so you know, yes, it's great being a part of it, but I also do recognize that particularly on the team front, you know, we'll never be finished.
So, what would be the hardest thing then if if teams are the best thing, what's the hardest?
It's balance, particularly that bringing this to to commercial real estate is a big thing that we got here you know, like what the customer wants with, you know, flexibility experiences for their team. And then right across to, you know, traditional long term leases and existing offices that or indeed a new office, is the cost a huge amount of money to, to build and to finance. And then somewhere in the middle of all of that, we've got to try and come up with solutions that are actually about the people that use them, you know, being the businesses and the teams, not about the people that fund them. And you know, we've got to find you've got to get the business model, that it's worthwhile people funding and building and owning those assets. But, you know, more and more, we're also seeing here that if we don't keep the end user in mind, then at some point or another, some people will come up with a better solution. And, you know, in some respects, that's, you know, that that's exactly what, you know, WeWork was able to commoditize here, where they recognize that there was a really big gap between, you know, between what businesses needed and what they were getting from the real estate now. You know, the execution hasn't panned out for WeWork there. But that, you know, there's many other good operators around that, that and you know WeWork with will still see if they get a second act as well. So so you know, there is opportunity there. And you know, this was always demand driven, the flexible workspace wasn't, wasn't pushed upon to everybody. It was a gap where, you know, the new workforce was kicking and screaming for a better way to work, and flexible office was a way of bridging what landlords had, which was the workspace and what the customers needed. So it'll be interesting to see how, particularly off the back of COVID-19, more and more companies are going to be wanting flexibility. So how commercial real estate as a whole reacts to that urgent need for flexibility is going to be something where the operators are around at the moment and going the play an very important piece of that puzzle.
Let's talk a bit more about commercial real estate, because you touched on it there. You've got a national successful business that's very relevant to the commercial real estate sector, which is where this podcast is focused on. So, based on your dealings with agents and property managers and companies, what's one thing that you think that we as an industry, the commercial real estate sector, need to do to improve our service to clients, but also improve our operation as an industry?
Look, I think it's recognizing that, people are not looking for facilities management and property management. You know, they're looking for an experience so that they can give their teams or staff a really good reason to come into work. And particularly when, you know, people have just suddenly learned that some of their work can be done from home. You know, it was interesting, five weeks ago saying all of the articles saying that work from home was going to become the norm. You know, there's not as many of those articles around, you know, 5 or 6 weeks on, because people have also realized the limitations of working from home. And that sometimes you really do need the office. You know, landlords and commercial real estate, are going to realize that now that people do have all those technical all the technology to work in a distributed fashion, they going to get need to give them a reason to come into that office, that is not the desk and it's not the technology. And that goes towards, you know, offices are going to be for collaboration, they're going to be for meeting with people, they're going to be for learning, and they're also going to need to be for social connection. Now
All of those things are not the mainstay of the standard property management or facilities department. So how landlords adapt their, their offering to cater that'll be interesting in that, you know, they've got to work out do we bring this kind of expertise in house? Or Or do we outsource it? And you know, that's certainly one of the opportunities that Hub is looking at, to be a, you know, a manager of flexible workspace on behalf of landlords, because you're going to need an expertise there. And there's also going to need to be a health and safety aspect there where you to run the office that is going to be productive for the teams, but also considered healthy and safe by the people that use it. That's going to require a real specialization and commitment in order to deliver that space every day.
So just to touch on something that you said there about managing space for landlords, I understand you currently just operate on traditional leasing models with landlords when you lease the space, but you're talking about transitioning to something more of a management model?
Yeah, we are. And, you know, this is something that has already been done overseas, quite extensively. And, you know, we're starting to see in our negotiations that, more and more, you know, there'll be, I guess, let's call it a hybrid lease component, or also management discussions, management agreement discussions. I think an interesting thing that's come out of this, particularly in Australia, is that we've just seen a huge meltdown with COVID. And, and what's ended up happening, albeit extreme is, you know, landlords have been exposed to the risk of their tenants. And I'm not just talking about co working operators here. I'm talking about every tenant, and we saw this in the code, which which the real estate code, that got put out in April in Australia, you know, it requires landlords and tenants to come up with a set of deferrals and waivers on rent. And you know, this is doing all manner of different things to the you know, to landlords’ cash flows and valuations, which is going to take many years to figure out how it will all play out. But um, you know, when landlords are exposed in on the risk side of things with a with a tenant, and indeed when, they're also seeing that their demand… like you know, their customers who are ultimately signing long term leases. And they’re now coming to them and saying, I will not sign a long term lease with you. The landlord is going to have to come up with a solution to either retain that tenant or lose them to flexible workspace operators. So that's where I think, you know an management agreement or some kind of hybrid lease where there's a base and a turnover component, that's going to allow the landlord to keep those customers on short term agreements, but also to participate in the upside of the of the flexible workspace operator.
So, who drives that change? Is it the tenants who tell the landlords that they want that? Is it the landlords who anticipate it, or is it the operators like yourselves who convinced the gods to provide something before the market needs it.
Good one… look unfortunately, of course, always with property things take months and years. But I think what Coronavirus has taught it is that things that once seemed impossible or seemed like they take a long time can suddenly actually happen in a few weeks in a few days. So what I think is that off the back of this, what we're going to see is that all at the same time, you know, tenants and landlords and operators are all going to be tackling this over the coming 12 months with hopefully a much more aligned set of goals. Because ultimately, you know, we want full workspaces with, with companies, kicking goals and being profitable, with rent being paid. And with real estate prices going up again, you know, that's going to take a while because we're going to have a down market for at least some time here. But if landlords don't recognize that seismic shift to a distributed mode of working, then other some other landlords will recognize it and they will get in and we will see, I think, the customer and ultimately when I say the customer there, that's the office worker that needs a great place to work each day and a productive place to work each day, they're going to drive a lot of the decision making that ultimately takes place over the coming years.
Well, it will be an interesting one to watch over the coming weeks, months and years to see how that all evolves. I'd like to move on now to talking about success. And this is the CRE Success: The Podcast. So one thing I'd like to ask you is: what do you deliberately and consistently do that contributes to your own success?
Look, it's constantly working at making the product better, and making the company better, like it's recognizing that, you know, it's a constant effort and it's a marathon and you got to just keep chipping away at it, even when it's, you know, two steps forward, one step backward, you know, occasionally it's two steps back, one step forward, as it feels like over the last couple of months, but you got to keep you got to keep plugging away, to create a better company and a better product.
So avoiding complacency and being committed to that continuous improvement.
Yeah, you do.
In your opinion, what is one or more attributes that makes a great leader?
It's the, the taking on board, feedback, constantly, you know, constantly challenging yourself to work with others, as well. Like, particularly when you first start out as an entrepreneur. A lot of it really is up to you. But then as you go along the key thing or that will make it a success is your team. So, it's learning about how do you switch from being a one person to being a cog in a team. Is, I think, a big way of how do you become a great leader.
My final question for you, and I'm gonna ask you, even if you're required to say, to build a great team, I'll ask you, what else is it? What's one piece of advice that you could give to an aspiring founder? Because you've been a founder a few times, I believe. So. what's one bit of advice for those people out there who are interested in building their own business or building something on their own? What would what would you recommend that they need to do?
Look, you got to pick the right time to strike and then it's all about perseverance. You'd be amazed how many times you'll come home to, you know, your husband or your wife, or your partner and you go: You know, this is it, we're toast. This is never gonna work. And then somehow, a week later, you know, you are still standing and three months later, three months later, you come in with a new crisis. But if you keep that things, it's amazing how often you'll find that the solution does present itself, but it does take time. So you've always got to keep at it.
Brad, brilliant advice. It's been a really insightful and engaging discussion, I'd like to say a big thank you for being part of it. Thanks for being here.
Thanks, Darren great to be part of the podcast.
For more information about our guests visit cresuccess.co/podcast And now a final thought from Darren Krakowiak.
Hi, again, I hope you're enjoying the podcast. If you are, then why not recommend us to a colleague, client, peer or partner? One of the great things about recommending content is that when you make a recommendation, you often get credit for the benefit that the person gets from that content. So, for example, if you recommend a book or an article to somebody, that person will associate the benefit of that resource with you, because you recommended it to them, even though you didn't even create it. And I guess that's only fair that you deserve that credit because you did think of them. So, if you think others should check out our podcast, please let them know about us and you can enjoy the spoils that come from how they benefit from our content.
Speaking of books, when I launched CRE Success, which is my coaching and consulting business that exclusively services the commercial real estate sector, I thought it was important to let people know what I stand for. Therefore, I wrote a short eBook. And I say short because it's only 12 pages, including the front cover, and a lot of images, so it's easy to read in less than 20 minutes. Anyway, in this book, I talk about the attributes that I've noticed as being common in the most successful people I've dealt with in commercial real estate. Those five traits all start with the letter P: Passion, persistence, positive thinking, preparation, and professionalism. That's why the eBook is called The 5 P's of Commercial Real Estate Success. If you'd like to read the book, you can download a free copy by visiting our website and filling out the download form. It's at cresuccess.co That's all we've got time for today. Thank you to Brad for being a great guest. And thank you to you listening. I will speak to you soon.
Thanks for listening to CRE Success: The Podcast. If you enjoyed this episode, make sure you subscribe to us on your favorite podcast platform and be sure to leave us a five-star review. For more information about the show, just check the show notes on your podcast app or visit us online at cresuccess.co