Natasha Guerra is the CEO of Runway East, a Bristol and London-based collection of collaborative workspaces for companies within the SME market who are looking to scale. She spoke to Business Leader about the growth of the company, the impact of the pandemic, and its UK expansion plans.
Can you give us an overview to your background and your career?
I have been running Runway East for the past seven years – since 2014. However, I briefly started an admin services business following my gradutation from Bristol University with a physics degree.
Following university, I went to business school, and it was here that they encouraged me to become an events manager and set up my own business. I thought it was going to be really easy to run a business – and then actually, as it turns out, it’s really hard. I wasn’t charging enough money for the products, which I think is a mistake lots of people make early on in their journey.
After that, I ran a London-based network for entrepreneurs for ten years called Ice. It’s a not-for-profit network of about 350 tech entrepreneurs and founders. We used to organise trips and events to build relationships and introduce investors.
And then with Runway East, it is a similar idea but with some office space – it was about bringing entrepreneurs together.
Where did your entrepreneurial spirit came from?
When I was growing up, my dream job varied from radio DJ to travelling and living in Africa. Every week it was something different. However, both my parents work for themselves in the property sector.
Prior to that, my dad was a mechanic, and he ran his own garage.
Both of my parents have always been self-employed – so I think it was a combination of seeing that growing up and my own drive and determination.
Can you talk about Runway East and its growth?
There are five current Runways – two in Bristol and three in London. We have another two opening in the next six months in London. We are also looking to expand within our current spaces. We’ve got about 120,000 sq ft now, but we’re going to be opening another 50-70,000 sq ft this year.
How much of a challenge has the pandemic presented Runway East?
Being shut for a year was not ideal. The big challenge was never knowing when it would end and not being able to make any forecasts, and all our businesses involved in Runway East were obviously in the same position as us.
When the pandemic first started, people were hailing the death of the office – and that was a massive worry. We worked hard to think about what new types of products people would be looking at after the pandemic, and how people will be evolving their offices to be part-time or hybrid.
As a result, we have launched a variety of new products to make sure that we are adjusting to people’s new normal.
How has uptake been impacted?
We have seen primary office uptake increase. We have sold a lot of timeshares in London when people take offices two or three days of the week – that has been very popular. I do not know if that is here to stay and I do not think that there will be as big a shift going on as we necessarily expected, at the start of the pandemic, in terms of what people want from their office.
I think lots of things are becoming much more important, like wellbeing and sustainability and how working life is not just the office and a desk, but a shared space.
We saw a huge rebound in demand last quarter (Q2 2021) and was one of our most successful periods for sales in our history. Clearly there is demand for flexible products like ours, but only time will tell how that will play out.
Do you believe there will be no ‘death of the office’ then and working life will return to what it was pre-pandemic?
We are not far off a full return to what it was pre-pandemic. When the pandemic first happened, we had a lot of people say they are not going to use our office for the next three months, so there’s not much point keeping it. By and large, a lot of them have now returned and most of our offices are now back to being pretty full. For us, we’re seeing more demand than ever, and our pool of potential customers has massively increased.
A new trend I am seeing is that these new businesses are slightly more established than before the pandemic and they might not have looked at serviced office space before, but have now suddenly found themselves tied into five-year leases where they no longer want all that space. They are waking up to the benefits of not having to sort out their own internet or deal with other issues of owning your own space.
Have you got the plans for the new locations outside of Bristol or London?
Ideally, we’d love to be in the ‘big six’ cities eventually – and we are actively looking. We work slightly differently to others in our industry as we don’t lease space, we partner with landlords directly. We look to make landlords a premium return compared to what would be the traditional rental yield. They are looking to make a 30% premium on their rent. We achieve this by cutting up the space and then rent them out to multiple companies on a smaller basis.
Our model involves us partnering directly with the landlords, so it’s harder for us to find space. What we do involves building relationships with landlords and finding the right partners.
What does your day-to-day role look like?
At the moment, my main concentration is on expansion; looking for great sites, design, and of course the logistics of launching a new building, as well as how to grow awareness our business. I’m also focussed on baking in sustainability to our work as we know it’s increasingly important to our members.
And obviously, now that we’re coming out of COVID, the issues that we’re primarily thinking about are how sustainable a building is, for example. I think the whole property industry is focusing on recycling, green energy, and sustainability. As we move forward, that’s a big focus for us and how we evolve.
What would you say are your typical companies that use your space?
We primarily focus on businesses that are classed as SMEs. Our average customer has about 16 employees and they’ve typically raised around £1m in venture funding. We consider ourselves more of a growing space. A lot of our companies have been to an accelerator or incubator, and they are now looking for their first full time office space – and that is where we come in. We are also seeing an increased amount of larger companies utilising our facilities for dedicated desks or smaller offices.
Has the growth of Runway East been organic, Or have you had to raise funds?
We are an employee-owned business, and we didn’t have any external fund raises. So, the opposite of WeWork and we are not backed by billionaires. We are here to build a sustainable business for the long-term that we can be proud of. I want to help all these businesses on their growth journey.
How would you describe yourself as a leader?
It is a collaborative environment. I think both David Foreman, our COO and myself are open to receiving criticism, both positive or negative, about the way we run the space and about what our members think about our spaces. We are always looking for continual improvement. I am disciplined about improving our business environment for the people around us, but I think we have a fun place to work. Runway is a social, collaborative, enjoyable environment.
However, I have some negative qualities too. I am not very detail-oriented, and I often try to rush through things, which can be annoying for everyone involved. And I can be a bit like a magpie – I love shiny new things and must be brought back down to remember the task at hand.
As a female CEO – are you encouraged to see more females in high-ranking roles, or does more need to be done?
You know, for most of my time, as CEO, I haven’t really noticed – I’m just doing the job. Sometimes it’s great because you get invited to events because you’re a female. Often, I get invited to dinners where the other CEOs are much more senior, but they needed to get a few women in the room.
But there are also situations where it is not a positive experience.
I remember when we first went on a tour of a space to meet a landlord, and they thought I was the receptionist. So, there is definitely unconscious bias in certain scenarios. I think the world is making so much positive progress, and there are so many different opportunities available now that were not there before.
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