Continuity Through Crisis: Knotel’s New 2020 Playbook
This was going to be our year. We were coming off a phenomenal 2019 that saw record growth in revenue, customers, and locations. We continued to expand globally, raised a huge round of capital and hired a slew of brilliant team members.
The role of flexible workspace within the commercial real estate industry was starting to explode, as some of the biggest brands in the world began incorporating flex into their real estate portfolio as a means to improve financial flexibility and empower their teams.
Projections from industry leaders (JLL, CBRE and others) showed that flex workspace was poised to take off in the coming years, up to potentially 30% of the overall commercial real estate market by the end of the decade. In short, flex was finally going mainstream.
We had grand ambitions for 2020. In early January, we even published a “2019 Year In Review” manifesto sharing some previously undisclosed financials and business metrics. 5 million square feet. $350M in contracted annual revenue. 180 new customers. 17 cities. Anticipated profitability. Things were looking up. This was going to be our year.
Fast forward 60 days.
The world as we know it has fundamentally changed, in ways previously unthinkable. We now live in a new reality, one defined by flattening the curve, social distancing, and working from home.
The social and economic fallout of the global pandemic has been mind-boggling. Global markets have had one of the worst months on record. Nearly 3.3 million filed for unemployment last week, an astronomical leap from just weeks before. The private sector has mobilized into a wartime economy. The labor market is seeing the most radical disruption since World War II.
By early March, it was clear that business as usual was over. Like many companies, we started taking the necessary steps to safely ensure business continuity by prioritizing the things that really matter. Our people. Our customers. Our partners. Our communities.
- It’s the reason we implemented remote-work arrangements nearly 3 weeks ago and suspended on-site work for our teams in the field.
- It’s the reason we’ve been working with key owners to launch “Spaces for Cities,” to help provide emergency space for local government and health authorities.
- It’s the reason we’ve been in constant communication with our customers about continuity plans, local “shelter in place” mandates and workplace closures.
- It’s the reason we published a new operating plan, one where our top management voluntarily takes pay cuts, we aggressively cut costs and redirect resources where they’re most needed.
- It’s the reason we had to make incredibly tough decisions last week and say goodbye to so many talented friends and colleagues. We remain eternally grateful for the countless contributions they made to the business over the years.
And it’s the reason we’ll continue to do the right thing, in the face of unimaginably difficult circumstances. While we don’t know what this global pandemic has in store, we do know one thing: we’ll be there alongside you, every step of the way.
To our employees, thank you for your tireless efforts and commitment to the cause as we navigate a remarkably uncertain and raw emotional period.
To our partners, thank you for your willingness to collaborate on managing the crisis and getting to the other side, where flex will play an even bigger role in commercial real estate. And also for prioritizing the well-being of our communities through our supply of emergency space as part of "Spaces for Cities."
To our customers, thank you for your trust and your patience. We are proactively offering deferral options to our workplace customers severely impacted by this crisis. We are mindful of the financial situation many are going through and our customer teams will be reaching out. Our goal has always been to build long term partnerships with our customers, and that hasn't changed a bit.
The next few months and quarters will be very challenging for everyone in the world. We are here to serve and will be here when business returns to normal (or as normal as it can get).
While 2020 will end up playing out radically different than we imagined just a mere 90 days ago, we’re still optimistic. We’ll make it through together, stronger than ever.
This can still be our year.
All the best, Amol Sarva, CEO