Rags Gupta: The office is a product and nothing is a given, right? Think first principles, and how do you improve your product? How do you measure how it's doing? What's the purpose of it, the value proposition? I think teams that think like that, the results will show.
Zach Dunn: I would love to learn a little bit more about what got you into the space that you are now at Butler and what things have led up to your career today?
Rags Gupta: In a nutshell, I've been in tech for a little over 20 years, cut my teeth during the dot com boom and then subsequent bust in the valley, a lot of scar tissue and war stories from those days but really an amazing experience. Then I found my way to the east coast and was in the early days of SaaS and cloud. Then more recently I was getting into hardware software and really getting interested in those types of companies where they're combining knowledge of the physical world with the digital world. Cut a long story short, I got introduced to Butler through one of our VCs and was immediately taken by the approach.
The reason is it's 2021 and we still don't really know how humans use and interact in space indoors. We know through GPS how we interact much better in the outdoors, outside the four walls. We know the trips people take and where they are and can pinpoint that but it continues to be really challenging to do that indoors. There's a variety of reasons for it, infrastructure and cost and privacy and all these things. I've been thinking about that problem. That's what really attracted me to Butler was some of their insight and their approach in solving that problem.
Zach Dunn: When you first joined Butler, what was the equivalent of the cutting edge way of people understanding what was happening indoors? Was there one or?
Rags Gupta: Historically, there have been your old school motion sensors. These are the ones that might be in an office conference room or in a security system at home where if something triggers it, then it gets triggered and then it can trigger an alarm or it can trigger the lights to turn on. It's a great technology. It's 40 or 50 years old. It's not been updated. If you look at the motion sensor, which I actually have here in my house and you compare it to the technology that came out 40, 50 years ago, the cosmetics are slightly different or better. Otherwise, it's the same. I think that's part of our aspiration at Butler is to really be what's next in terms of understanding activity and human presence indoors.
Now, there's different ways of sensing the world. Could be through your eyes. That's cameras today. It could be through your ears, which are audio sensors to understand movement or people. It can be through radar and other signals like that, LIDAR. There's a lot of different ways of doing it. I always say, there's never one way that's better than the others. They all have their place. But taking a step back, what really attracts me to space is the opportunity to have something that is really easy and affordable and scalable because a lot of technologies struggle in that regard. I know this just coming from my previous life where you had to put up a lot of infrastructure, calibrate it and test it. It's doable. It just means the ROI bar is that much higher.
Zach Dunn: I guess, for the folks that are taking advantage of this sort of technology today, what are some of the problems they're trying to solve?
Rags Gupta: The problems they're trying to solve or the questions they're asking are, they have to do with, in three buckets, think of it that way. There's the planning bucket. That has to do with, I need to rationalize my footprint, which is often a euphemism for reducing it.
Zach Dunn: Unfortunately, yeah.
Rags Gupta: I need to figure out where I should reduce and maybe there are areas where I should increase, maybe going more to flexible workspaces for people that they can just come in and out of. The WeWorks and [inaudible 00:05:33] in those parts of the world, they don't actually give that data back to their tenants right now. We spoke to someone recently, they've got about a dozen flexible coworking arrangements and she doesn't know how they're being used.
That's one bucket. Let me zoom back out. It's planning. Another bucket, very similar, is repositioning the space. We're seeing a lot of, "Well, do we need rows and rows of desks if people are going to come in and collaborate more? Well, probably not." There's some kind of benchmark around that that we're seeing and hearing about. The second bucket is more on the facility side. Can you use data to be smarter about how you operate your facilities? The days of just having a schedule for set points, for your HVAC or for cleaning, you don't need to do that anymore actually and have a dumb schedule instead of have it be more dynamic based on-
Zach Dunn: When you say schedules, just to clarify, these would be folks facilitating, let's say, a cleaning service to come in every Tuesday at 7:00 PM, that sort of scheduling?
Rags Gupta: Correct. Or they come in everyday and every day they're cleaning every bathroom and they're cleaning every conference room or all of that whereas that's probably really wasteful. We spoke to someone and they're like, "Yeah, it's the same schedule right now, the cleaning," whereas before, pre-pandemic, they weren't necessarily wiping down desks all the time. Now, that is more of a thing and that's more of a requirement. At the same time, you don't want to have the staff clean every desk. It's wasteful both cost-wise and environmentally and time-wise to do that if it's not been used. Can you get smarter about cleaning and cleaning protocols based on actual usage? Then ditto on energy, building efficiency in energy where a lot of people today are just like a standard, "Okay. It's 8:00 AM. We're going to fire on the air conditioner for every floor in our building regardless of how many people are on that floor."
Now, you're having companies and technologies that are being able to do that in a smarter way. Again, I think that's the second bucket of just running things more efficiently. Then the third bucket is around the employee or tenant experience, providing both just confidence and comfort to the people that are actually using the space. That can range from providing the visibility of how densely occupied the office is to when were things last cleaned to just being able to book rooms and just have that flexibility of understanding what's available rather than the static outlook rooms that are always booked and then actually they are ghost meetings and no one shows up.
Zach Dunn: In many ways, it's super important at this point to have that quick feedback loop so that when you make those changes, you're actually able to say, "Hey, I know exactly how that went. Here's what's happening in the office and then rinse and repeat as opposed to waiting for your next office lease to begin for you to actually be able to act on those.
Rags Gupta: You can't improve what you can't measure or what you don't measure. That applies here. Maybe before it was a combination of understanding how many people were in the building through badges, fair. There's just different data points for people out there but a lot of it has been anecdotal from the old school just having people go through the office and saying, "Yep, 10 of the 30 rooms booked are being used right now," as a very old school way of collecting data to surveys. We all know surveys have their place but what people say is very different from what they do. Our point of view is you want to be more data-driven in decision making and being able to back those up to whatever other functions that are stakeholders in these decisions. There are now ways to collect data and we think that flexibility you're going to need, you're going to need to be able to move things around and flex and try things out. A big part of that is you're going to want data to be able to then figure out what's working, what isn't.
Zach Dunn: One thing that I know comes up from time to time is people would start talking about sensors is a level of detail that's useful. Then there's a level of detail that can be spooky to employees. How do you think the average workplace team should toe that line? What would be a sign that they've crossed maybe into the spooky and big brotherly line?
Rags Gupta: Look, from our perspective, we're very ardent believers in that we don't collect PII ourselves. We ourselves are just sensing heat pixels and based on that inferring that that's a person and that's a person in this room or in this space or what have you. We don't know who that is. That's something we feel really strongly about. That's really at the core and essence of Butler and its founding. In terms of how data like that is used and surfaced, it really comes down to a lot of the culture and expectations of the company. Let me give you an example. We have a real time visualization of space. Imagine your office space in a map view. You can visualize in real time dots on the map just like waze or Google Maps. Dots that are moving and in space.
Zach Dunn: Like a Doppler radar almost.
Rags Gupta: Yeah, kind of, but in real time like, "Okay, right now there's 15 people in the office and here's where they are in the different rooms and all that." For one customer, they want to show a version of that in their lobby so people can understand how populated certain areas are or not and make their own decisions whereas with someone else, they would not want to show that because as an example, they may have they there's some rooms that are always being used by the same team and they don't want to necessarily have that displayed or areas that are like, oh, that's where the product people sit. We're not going to want to show that and censor that because we know we don't want to have people make that connection.
Zach Dunn: The CEOs of personal [inaudible 00:12:23].
Rags Gupta: Yeah, exactly.
Zach Dunn: That sort of thing. Got it.
Rags Gupta: It really depends on the culture and expectations of that company. Look, anytime you get to individuals or teams, I think that's where it gets maybe too much in general in terms of having any sense of... Where it gets spooky to use your term, but in aggregate or understanding how space is being used, there's plenty of ways of doing that without being spooky, without actually infringing on any privacy.
Zach Dunn: I think that a lot of this sensor data, the real killer use case immediately, at least from some of the folks that we work with, seems to be expectation management and discovery of office ebb and flow for employees. Where I think I've seen it get off the rails at least initially and where maybe it has a PR problem is where it's pretty clear that, "Hey, we want to monitor this utilization so that we can figure out where to cut square footage and all of that." I think that that feedback loop can be counterproductive at a time where people are just redoing how their office flows to begin with.
Rags Gupta: There's obviously a broader trend going on here, which is the war for talent.
Zach Dunn: Yes.
Rags Gupta: Even pre-pandemic, it was hard to hire especially in tech and in certain industries. That problem was not getting any better. Then the pandemic certainly made that a lot worse. As a result, people have to compete on a bunch of different levels with physical space being one of them and not just having a physical space, but obviously what is it like? What is it meant to do? Can it fit with the working needs of that team and that individual? Companies will need to respond to that or they're just not going to be able to hire the right people or people will self-select out. They're going to tap out here and say, "You know what? This setup is better for me. It supports my ways of working and preferences and that's where I'm going to opt into." There's just a lot more leverage that employees have now.
Zach Dunn: For folks who have listened to some of the other episodes so far, they'll know that we are big fans of activity-based work. That strongly lines up to the, how does the office support different types of work? How do you design your office to actually be the best place to do maybe small team group work, calls, customer on sites, things like that, as opposed to just having to hire one desk for every person you hire, which is a old school, as it turns out, way of thinking nowadays, because gosh, you could use that space for a lot more interesting things, but you need the feedback loop to understand what exactly those things are.
Rags Gupta: We recently did a piece on how the office campus of the future is going to look a lot like the university of today where you have different spaces for different needs. Again, back to this university, professors didn't care where you did your work. They just care that there's a deadline that you have to go and do it. Oftentimes, it might have been group work. You had to figure out where to get together with your group.
It might be in the lab if that's what it called for. It might be in the library. It might be in the cafe, but you opted in, you had agency and you figured out what spaces to opt into or not based on what needed to be done on. By the way, there were also rituals where people came together as a group, as a community. Could be sporting events, could be lectures, could be other types of, like commencements and things. You had spaces to foster that. I think that's a lot of what some of the most forward-thinking companies are thinking about is a variety of spaces to foster different types of work and collaboration.
Zach Dunn: In the typical office environment that you would see with the folks that you work with, have they started to explore what an office that is more than just conference rooms and desk space looks like or are we really just seeing the beginning of this shift from that sort of two ways of working to many?
Rags Gupta: It's that classic line of the future's here, it's just unevenly distributed. You have some companies that are, and it tends to be the tech companies, both have the budget and the freedom to really explore all these different ways of doing it. We have customers on that end of the spectrum that are really trying to push the bounds of what the office can mean. It's almost like first principles in the office. Then there's others that are a lot... They're just in a different part of the journey and just trying to make some changes on having some flexibility beyond the one desk per person factory mode of doing things before.
Zach Dunn: Most of the time, I think when people hear sensors and all of that in the office, it tends to align with a facilities department, but is that really what you've seen or are you seeing more engagement from a wider type of persona?
Rags Gupta: Certainly, historically, there's just been a lot more experience with facilities and that function. We're seeing a lot also on the workplace teams and people that are really responsible for thinking about the experience and the productivity and how they can foster that. A lot of that then, to your earlier point, impacts the people ops and HR functions, where that becomes a lot part of their realm. We've seen less of that, I would say, in terms of engagement from those functions but it is something where changes in the office impact culture, it's all holistic. If you're repositioning the office in a certain way, then people ops should be involved. At the end of the day, it's no exaggeration to say, if it's about employee productivity and retention and hiring, that is a CEO type of consideration today.
It's not capital. It's talent that's in scarce supply right now. Your culture and any actions you take to improve that culture, to improve your recruiting and improve your retention rates should have CEO or C level visibility. There's now this moment where before the office and everything around it might have been seen as more in finance and admin or a cost center. I think there's a real opportunity to actually say, "No, this is actually how the office and by the way, the hybrid environments we're creating are actually fostering creativity and culture and collaboration, which is really what's going to move the needle on growth for this company."
Zach Dunn: A lot of the folks that we're working with, they get most excited when they realize it's less about shrinking the footprint of the office that they have today and more about increasing the longevity and the reach of the one that they have today.
Rags Gupta: Absolutely. Yeah.
Zach Dunn: They're probably going to be able to hire people who live slightly further away and they'll be able to coordinate all of that a lot better if they have a good way of communicating what's happening in the office on a day to day basis. That's one part, sensor data. But another part, as you touched on, it's a culture and people thing that they have to establish early. Like, "Hey, we view the office as a tool and a service really instead of a place to just track attendance."
Rags Gupta: One person put it to me and it stuck with me, which is like, he's a head of real estate at a large public company. They've got 600 addresses. Their perspective is, "We're in the hospitality business." That is stuck with me and that just really resonates, which is, "We have to figure out ways for people to want to come in, to want to spend time." That's what hospitality does, the hotel lobby, the different spaces in those areas and how they make you feel down to the sounds, the sense that you have there. A lot of these offices I think people with that mindset will really thrive.
Zach Dunn: I think some of the most successful people navigating this change identify that they have to do a little bit of the work to make sure that the office has, well, to put a startup hat on, product market fit again. Certainly, you can get engagement with your office by mandating that people come in but that's really not solving the core issues. How do we make sure the office continues being valuable to the audience and people it serves, our employees?
Rags Gupta: Again, to your point earlier, I couldn't agree more. The office is a product. Nothing is a given. Think, okay, how do you improve your product? How do you measure how it's doing? What's the purpose of it, the value proposition? Teams that think like that, the results will show.
Zach Dunn: What have you been excited about for the next couple of years?
Rags Gupta: There's going to be more change in the next five years than there was in the last 30. There are not many moments in one's career where you're going to go through that transition shift. Buckle up. It's exciting. It means a different mindset of experimentation and being open to change and adapting. Those that adopt that will succeed, they'll thrive, they'll do well. I think that especially given some of the secular trends in terms of labor and supply constraints and everything else, it'll be more challenging if there's a mindset of, "We can't wait to get back to 2019 and how it was back then."