In Japan, COVID-19 has become downgraded to Category 5 so that it will be treated as a normal infectious disease by medical institutions and public organizations from today. Forbes Japan says more than half of Japanese companies said they would not return to their pre-COVID work style while FNN Primeline reports 40% will return to the previous state, which makes me feel interesting since media outlets expressed different perspectives based on the same survey to 11,428 companies conducted by Japanese research company Teikoku Databank.
In the startup community, perhaps many of us would view this not going back to the previous state as a positive. Although I love the concept that developing new ideas based on study of the past, however, the changing times are irreversible. For startups being likely to change and evolve due to their “simple” organizational management, adapting quickly to change will give them an advantage. Startups must excel not only in changing themselves, but also in proposing new services to a changing society.
It was around the end of 2019 when the damage from COVID-19 began to be reported suddenly. About six months after we first heard it, some of our readers may recall that San Francisco-based Japanese entrepreneur Shunsuke Yamada announced a service called Remotehour. People loves the tool’s experience which allows users to talk to others anytime through an always-on connection, as opposed to, say, Zoom and other work-from-home platforms where you need o set a pre-defined time to connect. Tokyo-based VC Miraise, one of Remotehour’s investors, arranged office hours for entrepreneurs to consult with using the platform. However, we can no longer reach the Remotehour website. Yes, it pivoted.
What kind of world is out there as the dawn from the pandemic breaks out? In industries where digitization is possible, people has adopted a hybrid form of work-from-home and work in office. Major companies and startups have shut down the space of their headquarters one after another, which in principle were designed to bring all employees to work together, and have shifted to purpose-specific spaces or decentralized offices utilizing co-working spaces. Meanwhile, offsite meetings are coming into the limelight. In Japan, Island and office, a startup founded in 2021, is a remarkable answer.
As you may have guessed by this point, Remotehour has pivoted to a service for offsite meetings. In January 2022, Yamada decided to shut down the previous service and turn the helm completely to Retreat (formerly Telesite). It has been already used by around 20 startups in their series B round stage, mainly in the U.S.
Getting People Ops onboard
When a startup with a few dozen employees decides to go offsite, it is up to the People Ops team to arrange it. It would be impractical for startups to hire additional personnel or assign someone exclusively for offsite arrangements. In addition, while individual business travelers can book accommodations and transportation quickly using online travel agencies (OTAs), this is not the case for offsite arrangements involving dozens of people.
Retreat has succeeded in digitalizing this part of the process, including some automation. Since meeting rooms and other facilities are required according to the number of people, the platform curates and proposes hotels with facilities suitable for such purposes. The company also provides detailed service by having staff members accompany the guests offsite, which has been well-received by People Ops representatives.
In a recent interview with Bridge, Yamada says,
Because of the large number of people, mistakes are sometimes made by the hotels. We experienced that one request came from an employee who had declared himself a vegetarian during the sign-up process, but who, during the offsite, had gave it up and asked to be reverted to a regular diet.
The representative was in a state of flux as requests from employees kept coming up. Sometimes they get angry when we are accompanying them, but when we accept their requests and solve their problems, they later thank us very much. This will lead to them asking for us again the next time.
The more global a startup is, the more distributed its work locations tend to be. It is not uncommon for them to only communicate with each other online and only meet in person during quarterly offsite meetings. Thus, the offsite experience is directly linked to the evaluation of their employee experience, which in turn is directly related to whether or not the startup is able to retain talented people, bring in new employees, and even whether or not it is able to grow.
Despite Retreat’s emphasis on digitalization, it may seem inefficient for the company’s members to accompany clients on offsite visits, but it is not all bad. First of all, the CEOs of these clients are usually present at their offsite meetings, which provides an opportunity for the company to meet and exchange words with the founders and executives of promising startups in the mid stage and beyond. And off course, this is a great opportunity to hear directly from participating employees, which may lead to service improvements or the creation of new businesses.
Retreat’s key to market its service is how they can get People Ops representatives involved. THe company has built the community of these representatives and organized offsite tours for them to participate. The company paid for most of the travel costs to bring in the representatives, but it seems to be paid off because they target a narrow demographic which are location-distributed startups in the mid or later stage.
a16z Scout Fund, Japanese angels participate in this round
Retreat has secured pre-seed round funding from renowned US angel investor Jason Calacanis and Miraise in June of 2020 (undisclosed sum in seed round). The company announced today that it has raised additional funding from Andreeseen Horowitz’s (a16z) Scout Fund as well as Japanese angel investors including Hiro Mizushima and Yuki Ota, which brought the company’s funding sum up to date to US$1.55 million.
Other investors in the latest round include Mitsui Sumitomo Insurance Capital, Egg Forward, CyberAgent Capital, 90s, and UB Ventures in addition to Miraise as a follow-on investor. Retreat is competing in this space with Cvent (NASDAQ: CVT, acquired by Blackstone for US$4.6 billion and expected to go private) and Navan (formerly TripActions, valued at US$9 billion in market cap and has acquired a number of peers in recent years). The company wants to differentiate itself by leveraging its engineering capabilities and further increasing automation.