Langley Steinert would love to see workers in the office five days a week.
Steve Kaufer thinks two days is more realistic.
Steinert leased 11 floors in a new tower that’s rising over the Massachusetts Turnpike near the Berklee College of Music campus for his company, the car shopping site CarGurus. Kaufer stepped down last summer as CEO of Tripadvisor. Its sprawling brontosaurus of a headquarters building sits just inside Route 128 in Needham, mostly empty on most days.
Together, Steinert and Kaufer cofounded the popular travel planning site Tripadvisor in 2000. Steinert went on to create CarGurus, where Kaufer was an early investor and board member. Both Tripadvisor and CarGurus are publicly traded, and employ 3,100 and 1,400 people, respectively. (The two companies’ shares have been pummeled over the past year, losing 30 percent and 57 percent of their value.) Steinert serves as executive chairman of CarGurus, and has an office in Harvard Square for his latest venture, ApartmentAdvisor, which aims to help people hunting for an apartment make a more informed decision. Kaufer is working from home in Newton, making angel investments in other peoples’ companies, and exploring ideas for his next venture.
Though I have interviewed them both many times, I’d never spoken to the two of them together about their collaborations, their thoughts on the future of the office — and their views on challenges facing tech companies. So last month, we met in Steinert’s office near the Cambridgeside Galleria mall for a wide-ranging conversation. What follows are edited highlights.
Does the arrival of ChatGPT and other generative AI tools feel like a huge inflection point in the tech world?
Kaufer: It does to me. I kind of pat myself on the shoulder a tiny bit by resisting some of the hype recently about Web3 or crypto or NFT. I’m not knocking the technology; it’s just like, how is it really going to impact most businesses or most people? All of a sudden, the generative AI stuff rolled around, and I’m like, “Whoa, instantly a bunch of great use cases, in pretty much every business I could think of.” [With] travel, where I spend most of my time, [it’s] awesome. So many of the initial demos were, “Hey, create me a three-day itinerary in Paris.” And it did a better job than a lot of other [existing sites,] and you couldn’t have a conversation with the content: “Oh, but wait a minute, I’m taking my young kids. My young kids don’t like museums. Where do we stay?”
Steinert: I was playing with it the other night, and I compared a BMW 3 series to an Audi A4, or a Camry to an Accord. It’s reasonably good at that.
I was driving past the Tripadvisor headquarters in Needham the other day, and was struck by what a crazy record scratch that was, of going from pre-COVID, where the culture was all about being in the office together in this beautiful space, to now it was like completely dark.
Kaufer: I’m not terribly emotional about it. It’s a building. We built it for great reasons, and then it was empty all of a sudden. I drive by, too, and people are in it every day. I don’t think it’s ever getting back to full capacity, because the world has changed around us.
Steinert: One of my favorite [job] interview questions [is a] two-part question: How many days a week do you think we will end up back in the office, five years from now? And how many days a week do you personally want to be in the office? What do you think?
Steinert: Two days a week? Both where do you think we’ll end up, and where you want to be?
Steinert: Much more.
The answer you’re looking for is, like, four?
Steinert: I think five is done. Although if I had my desire, it would be five. I love being in the office. I love the energy of other people. I love the creativity, the serendipity.
Is there any kind of mandate at CarGurus?
Steinert: We’ve mandated two days a week.
And nobody is taking attendance?
Steinert: We are. And to be completely transparent, there was a lot of pushback. That surprised me. But for me personally, there’s a magic about being around other people that creates synergies and excitement and ideas. I don’t think you get that when you’re working from home.
Do you still feel like the talent market is really tight?
Steinert: It’s flipped. A year ago [it was brutal.] I wouldn’t say [it’s] easy [now], but [it’s] a lot easier.
This is the best time in the world to start a company. I wouldn’t want to be later stage. I wouldn’t want to be pre-IPO, or growth equity dependent. You’re in the worst place in the world right now. But if you’re trying to start a company, this is the best time.
Kaufer: If your fundamentals are good, there’s plenty of money out there. Now’s a great time to go start something, especially in tech. You go back to generative AI ― this is a sea change that’s going to affect a whole lot of businesses. Three or four people might want to compete with OpenAI, but thousands of new businesses and new products can be spawned leveraging [generative AI] to tackle a very particular need.
How does it feel, more in a macroeconomic sense, outside of tech?
Steinert: Economically, I think things are reasonably bleak right now. You’ve got rising interest rates. You have a conflict in the Ukraine, which doesn’t seem to be have a resolution any time in the near future. And that conflict in the Ukraine is driving massive increases in commodity prices around grain and fuel.
And we saw Silicon Valley Bank, the bank of half of the startup world, just disappear.
Steinert: Well, not to add too much fuel to the doom fire, but I was having dinner recently with someone who’s very knowledgeable about the banking industry and the commercial real estate industry. And there’s a ticking time bomb on most of the banks, especially the regional banks, because all these office buildings are not completely vacant, but they’re way down on utilization. All these office buildings have loans that need to be refinanced. And they were at very low interest rates. They’re going to step up in a massive interest rate spike on their next loan. And the covenants for those loans had certain lease up ratios that [the buildings are never] going to hit again. So you’ve got a huge reset in interest rates, the economics of the building are completely upside down. It’s going to be a bloodbath. What happened with the housing crisis, in 2008, this could make that look like a picnic.
Since we were just talking about real estate and office use, what about the new CarGurus building? You probably set that process in place when you were still CEO?
Steinert: We’re really excited about it.
Does that tie into your belief that we’re going to be in a very different place in five years in terms of office usage? Looking around the current CarGurus office, it’s a Wednesday and I see some people, but it’s not cheek-by-jowl out there.
Steinert: I mean, could we get by with less floors and save some money? Sure. Given our profitability, does it matter? No. I’m not being trivial about the costs. But I believe that having a wonderful place for people to come to work is a great way to attract people to create new ideas.
It sounds like you may have plans to do companies other than ApartmentAdvisor.
Steinert: My model is, I’d like to create a new company every two years. And I have the capital and time to help that company flourish.
Kaufer: I do want to kind of get back in the hot seat and start a new company. And I’m happy to be an adviser [or] angel investor in other companies that I’m just kind of intrigued with what they’re doing. I’ll give you an example. I’m an angel investor and I guess a formal adviser to a company called TrueBridge. They’re a platform for influencers. They approach brands and companies and say, “Look, the whole social media landscape is an amazing way to reach people.” And I’m fascinated by that. I’m learning.