🔒 Meet Stafford Masie – Google to WeWork, SA tech whiz still running at 100mph

When in the company of 100mph-thinker Stafford Masie, it’s best to listen closely. A computer scientist by training but an entrepreneur by persuasion, Masie has a string of successful startups to his credit. The man who opened Google’s first Africa office recently returned to a US-based multinational, now helping office sharing group WeWork launch in Johannesburg and Cape Town. The local reception to WeWork has been warm with Masie’s charge chalking up a list of vacancy-filling records. In this interview from the latest episode of Rational Radio, we get to know one of SA’s best tech minds, plus WeWork SA’s general manager provides a rare opportunity for us to look inside a company that has kept an excruciating low profile after being through the publicity wringer over the past year. With infectious enthusiasm. Masie explains how WeWork is now moving past a turbulent start-up phase into a more mature stage that will ensure it can – sustainably – continue revolutionising the world’s office market. – Alec Hogg

Stafford, do you invest in JSE-listed companies?
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I’m not going to disclose that.

Do you invest in Tongaat?

No, I’m not a shareholder in Tongaat.

Were you a shareholder in Steinhoff?

I’m not going to discuss this, we had quite a bit from the Ibandla’s from our Moneyweb days. I had lots of chats with Markus back then.

Yes, and he was so impressive. We’re talking I suppose, ten years ago. Maybe he wasn’t a crook then.

You know what’s very interesting? I’ve got a story about Markus. I remember I did my presentation about the future of technology at Ibandla at the bar area and he was standing, watching his horses race and we started talking. We spoke for about 45 minutes to an hour and not far from them, he called me in and said ‘you’re going to tell us how we’re going to become like Google’. He was very proactive in that way. He flew me up to some game lodge – I can’t remember where. I landed and we had a huddle around the future of tech and how they as a group could harness it and how they could think differently, etc. So he was quite forward-thinking in that regard. Joel Stransky was there and all those boys and I got to know them quite well, but it’s interesting, what happened there.

You’ve had an interesting journey.

Yes.

From South Africa to Israel to do your computer science studying. 

I came back and then Telkom, Dimension Data, and then I had my first start-up. It was a bunch of geeks in a house in Pretoria in Waterkloof. We bought a house and we just shoved everyone in there.

Like Facebook.

We worked for 72 hours at a time, hated sunlight, didn’t make eye contact.

Very much like Facebook. Seventy-two hours at a time. Wow.

Yes, and then we got our first deal with Sasol. I’ll never forget that – to do tech for them. And then, a portion of that was in Cabot and it became Novell Consulting Services and that’s when I went over to Novell and I bumped into Eric Schmidt and that’s when I went to pick Eric Schmidt up at the airport. He was nobody. He had been the Chief of Micro Technology Systems. He came to South Africa. We went around the country and six months later, he invited me to go the States. I worked for a guy called Louis Wagman who reported in to him and essentially, we were called Global Corporate Technology Strategists and I spent 7½ years doing that, and that was interfacing with CEO’s and translating what we heard there, and articulated back to us developers back home. 

So, we were the bridge between the techies who were anti-social and didn’t make eye contact with the CEO of Brazilia Telecom and what he wanted to see that platform do. That was our role and it was a privilege and then Eric went to Google and we all thought like ‘what the hell is he doing’ like why would he ever go? I actually got an invite to join Google when he left and I turned it down because I thought ‘ask.com, Jeeves’… Why would I possibly go to Google?

When was this?

About late 90’s/early 2000’s. Google was small. This was when Eric joined. This was the first mature person inside Google and I didn’t join because I was very fascinated with the open to a softer movement and I wanted to be a part of that, and Novell did a lot of that. Then, my second kid was born and I didn’t want my kid to grow up to become an American, so I came back home in 2004 and headed up Novell. After that, I was going to become a helicopter rescue pilot.

Nice.

That was actually what I wanted to become and then I sat down with a journalist. She showed me her phone and she said, “Google’s looking to hire in South Africa” and I thought ‘but they’re here’ and then I reached out to someone who knew Eric Schmidt well and I said ‘what’s this? Google’s here already?’ and then he forwarded that to Eric. Eric forwarded it to HR in London and a one-line email said ‘make it happen’. They flew me to London. Eighteen interviews later, I came back with a Google laptop and a card that didn’t work and I launched Google in Africa for the first time, and that was fascinating. The first time we did Google content that was indexed for South African content and we were teaching people how to optimise that but we also did street view. So, I went to Toyota. We bought a ton of Prius’s’.

We gutted the Prius and we put all that strange Google equipment inside of it and that’s where street view came from. Then we did stuff for the world and then in 2010, I jumped out. I went and took a sabbatical for a while but then I went and built – after that – thumbzup, and thumbzup is a Payment Pebble that plugs into a phone and converts it into a card acceptance machine. The payment device became the Payment Blade. We launched it with Absa. We took it to Australia. We took it to New Zealand. We went into Southeast Asia with it and then 3½ years ago, I jumped out of that because I was burned out. During my burnout phase, I was shopping and I decided I could do something with retail shelves that had gaps in them and I built a company called SauronAI, an artificial intelligence that runs on retail shelves. I also invested in a Fintech company. I just sold a Bitcoin start-up so yes; I’ve been very invested in technology start-ups and building things that don’t exist in the first place with very smart people.

But why here? Why not Silicon Valley?

Because South Africa and Africa puts forward terrestrial challenges that you won’t find in a first world and when you overcome those terrestrial challenges, it becomes so much easier to replicate and federate in the G8. I will never forget with the Payment Pebble; when we built it, we had to think about security. We had to think about literacy. We had to think about energy, anaemic networks and price sensitivity. It’s really hard building stuff here but when you build it here and you overcome, you get skill here; when you go to Australia, everyone speaks English. The rule of law is paramount. Everyone’s got the latest phone, etc. and it just became so easy. Then, when we went to South East Asia, because we had done it in South Africa, the terrestrial questions around ‘can it scale in this environment’ weren’t there. It went very quickly to the commercial route.

So, that’s why I feel the next Twitter is not going to come from here. The next FB is not going to come from here. The next Google – no. I think the next Twitter of water purification will. The next FB of healthcare will. We’re already seeing the next Google’s of the financial services here and I think Africa is a place where folks like myself should stay because when you build things here at scale, it generally forces you to build things that have human impact. I mean, I built the Payment Pebble because someone lost a baby, because she couldn’t make a payment. That was the origin of that company. And then, Sauron AI, which is our artificial intelligence one, was because I couldn’t find bran muffin mix on Woolworth’s shelves every time I went shopping. So yes, I tend to do that. I wasn’t going to work for anyone again and I was enjoying my family.

Then, WeWork came along.

While the founder…

Yes, this was July/August last year. I think it was more July last year. I walked into the WeWork building in Rosebank and it was still a construction site because I was looking for space for my engineers. I walked in and to cut a long story short, I couldn’t conceptualise and I couldn’t think why this was so special. I just knew we were in London and I’d seen it a couple of times. Then, when I climbed in the elevator, the recruitment lady that was looking to recruit a GM for the operation in sub-Saharan Africa – she was in the elevator and she said, “Hey, Stafford. I need your help to recruit”, so we went down and we had lunch and I put forward some names for interviews and then she turned to me a couple of weeks later and said, “Why don’t you throw your hat in the ring?” I said, “Yes. I’m not interested. I’ve done this multi-national thing. I’ve done the Google thing.”

At that stage, was all the controversy about Adam and…? 

No, not yet. No, this was the heyday. If you take middle of last year, it was the heyday. Right, this is when the valuation was going to be insane. But anyway, I got onto a video call with Adam and Miguel. Adam was fascinating but I found Miguel very fascinating and I went from a 15-minute video con – and it was 90 minutes – that we were on Zoom. We were talking and we were really engaged and I loved what they were trying to do. They gave me an understanding of how big the space was. Commercial real estate is the largest industry in the entire world. There is no other industry bigger than this and the nett impact that they were having was not even 1% yet and their vision around…I’ll never forget what they said. They said they want to build the world’s largest physical social network. That really resonated with me.

So, not let space, but build a social network in the space?

Well, a consequence of that would be this physical, social engagement – not necessarily attempting to go out and do that explicitly. But if you take a look at… They say WeWork is not a tech company because we were trying to trade on that. They say we were trying to trade on that. I get that but if you start to work for WeWork, you start realising how much technology is here. The ability to walk into a WeWork building, tap your card, and then immediately when you’re connected to the wi-fi you’re all onboard, you can go to any WeWork in the entire world. Get off the plane and just walk in. You don’t have to speak to anyone. You know how everything works. Your laptop just connects. Your phone just connects. You walk around London and you know when you’re near WeWork because your phone just lights up.

There are very few companies in the entire world today that has identity federation for connectivity working in that way. That’s a huge technological layer that makes a lot of things possible for businesses so you can walk into anywhere with a Global Access Card into WeWork and you’re operational. You can have your meeting and you can access services in that building. You can attend events in that building. It suddenly makes a city a campus. It makes the globe a campus. And also, the possibility to get skills to be a part of your business. I’ve run start-ups a lot and one of the big challenges of an African start-up is when I get to Australia, where am I going to meet the CEO of an NZ if he doesn’t want to meet with me inside of an NZ? Is it inside a coffee shop?

Already, I look like an African start-up, so the prejudice…or just out the gate, you’re looking like you’re dangerous and risky. If you’re in a WeWork and you’re in a beautiful office and you’re offering coffee and you’re walking up, it’s a different feel. Also, the ability to acquire skills on a global basis.

How’s it been going? I know you as an ambitious guy and clearly… how many WeWork’s are there now? Three?

Yes, in less than 7 months we’ve got three significant presences. One in Rosebank.

This one by the way, is absolutely spectacular. I have been a WeWork fan for a long time. We had an office in London. I haven’t seen anything as beautiful as this building.

The 155 West here in Sandton. We’ve got one in Rosebank and we’ve got one in Cape Town. The one in Rosebank… the figures there are just astonishing. I knew what we were building was special, but when we opened up the doors in August last year, we were fully subscribed and that’s a building of almost 2,500 desks – fully subscribed in 7 weeks. We filled that building in six months. That’s the fastest occupation density in terms of velocity in South Africa. I sat down with the Redefine CEO because they own that building. They didn’t believe – Andrew and Sipho (the chairman). We brought them into the building in November last year because they said ‘these numbers don’t make sense. It cannot be true’. We brought them in the building and they walked around. They actually saw that it was filled up.

Who’s coming in? Who’s subscribing so quickly?

It’s a diversity but I think just on average about almost 50% of the folks occupying our space are enterprises. It’s not start-ups. Start-ups are actually 10-12% of the base. We see emerging businesses and we see largely corporates coming, and not corporate head office. I.e. a bank will say, “We want our block chain team in here because (1) we don’t know whether that number’s going to be 20 people or 200 people. So, the ability to flex our space where we’re not taking long-term- leases, it makes commercial sense.

And pirates as well, as Steve Jobs used to say. Put the Mackintosh there with their skull and crossbones. They’re the pirates of the organisation – much better than being in big corporate building.

Well, we call them millennials now, not pirates.

Were they millennials in his time, too?

I think that’s what you see. When I speak to corporate CEO’s, they love WeWork because there’s a monetary value in terms of them not having to kit out space and the value of not having people work from home. If people work from home, it’s lonely, it’s depressing, and they keep calling the IT department because they can’t connect and the IT department is sitting and talking to 200 ISP’s per day. It’s just not sustainable. Whereas when you go into a WeWork, you’re mixing with people. There are events happening and it’s meaningful in terms of productivity but CEO’s are saying to get to millennials, to hire and to retain them… If I don’t put them in a WeWork, I can’t do it no matter how beautiful I make my blue, red, or green building. At the end of the day, I can’t retain those skills. They want to be in places like WeWork because this is where millennials live now.

But Stafford, it’s not just millennials. I’m certainly not a millennial.

You can just see when you walk in, right? It’s a place where you want to be. It’s a place where a lot of things occur.

When I talk to people who are a little older, they say ‘oh, but there is a Regus and there are lots of these shared offices here in Johannesburg.  I think there’s one here in Johannesburg called The Cube. How do you answer that question? How is WeWork different to those operations?

First of all, I’ll say this: from a competition perspective, the space is so big so we don’t focus on those folks a lot. We find we have enough people coming through our doors. We have waiting lists of people wanting to get through our doors. It’s clear that the product is very differentiated. It’s not a co-working space only. If you look at the full value working proposition, co-working is such a small aspect of it. When you walk into a WeWork, the amenities, the floor layout, the design, the way the technology works so seamlessly, that we worked out the fact that you have access when you walk into a WeWork to almost 1-million global members instantaneously. I’ll give you an example. A guy tapped me on the shoulder a couple of months ago, a pony-tailed millennial with tattoos up to his ears.

The two of them are sitting there. They’re graphic designers. He taps me on the shoulder and shows me an invoice on his laptop for R18,000, so I asked, “Is that invoice for me?”. He laughed and says no. Let me quickly show you, a GM, of how WeWork works for us and he showed me on the WeWork member app – our mobile application – and he showed me in the app ‘Naspers’. At the link, they asked if there’s a graphic designer in the building. He ran after 2 days of work for them and made R18,000, so it’s not just a place where you come and co-work. It’s a place where you live, work, and play, so it’s a place where you can build your business.

So, what about the future? What plans do you have for WeWork in South Africa?

So, we will… I mean it’s obvious that we want to fill these buildings that we have. We want a thorough, verbose, well-articulated Africa strategy within the business so we truly… You know, this is the first time we’re on the African continent. This is a learning process for them. My job and my role are that they understand Africa, they understand the nuances of doing business here in Africa and that we kind of showcase the capabilities and the innovations in Africa adequately. So, Africanising WeWork is one of my top priorities right now. North of the border – people always ask me that question. Yes, we want to go but we’re growing differently now. When I joined WeWork, it was all about desks. Now it’s about driving decision-making. 

Now, it’s looking at the performers and making sure that we can fill desks, that the demographics that we want to target, that we can actually get into the building so we are a lot more meticulous from a financial perspective than we’ve ever been before. Folks like Sandelo (our chairman), Sandeep (our new CEO), the number of executives cascading into WeWork now at the top echelons… He just did his first meeting last week with the entire company – Sandeep, the global CEO – and after that call, the feeling that you get… that value proposition that Adam saw? And no matter what you say about Adam, at the end of the day, what he built is something that’s an anomaly. There’s nothing like it in the entire world and now we’re getting folks who know how to run businesses to run P&L’s on a global scale. We’re getting that level of expertise at that level and I’m excited about that.

I want to ask you… Just think this one through. The Adam Neumann, the Travis Kalanick’s from Uber. Why is it that they are able to build something say sensational but not be able to sustain it?

Yes, I do think there’s a phase that innovators need to execute and I think there’s a phase in a business where a traditional MBA would look at the space and go ‘you are nuts. It’s never going to happen’. If you take a look at what Adam Neumann built. If you take a look at what Travis has done with Uber. Take a look at the scale of these businesses. Uber is in London, Manhattan, DC, Paris. Had an incredible investor Soft Bank, backing that vision and take a look at the nett result. From a pure number’s perspective, it will stand up inevitably. I think Uber is just the type of business where you need crazies in the beginning – people with incredible visions. Now, what I like is the immunities that kick in as they start maturing. We can say what we want. We saw Travis leaving Uber.

We saw Larry and Sergei had to step down and Eric had to jump in at Google. We see Microsoft – Sanjay taking over there. So everywhere you take a look, there’s a phase that the business goes through, whether the crazier innovators – the guys that are constantly trying to reboot the system and build new, and break down the clay and can reinvigorate it again, need to move on. Then you need more P&L-driven folks that look at the organisation because it’s a certain size, look at the P&L and I think market immunities that kick in and I think they’re good. It doesn’t mean that the original idea was not valid, that the business is going to fall over. Uber is just so big. Look at the impact that it’s had and look at what it does to me on a daily basis. I walk. I catch an Uber and while I’m catching an Uber, I’m getting Uber eats for my kids.

This is how the world should work. Now, the model around that from a monetisation perspective; that’s an interesting one. Folks like the new Uber CEO would have to figure that out. Whether that’s downsizing, outsourcing, or growing more responsibly like WeWork’s doing. Now, we’ve got scale. Now, that will be done in a different way so instead of going off and doing a lease on a building where we go to a developer and say ‘well take the lease, we’ll take the 20-yr commitment, and we’ll back it up’ they’re saying, “Wait a minute. We don’t know enough about your fundamentals’, so there’s a different way. We can do it in an asset-lite way. We can do it in a franchise model so there are different ways to grow a business without this heavy plunging in with raising enormous amounts of capital. I think where WeWork is right now, we’ve got to think more creatively. We’ve got to think more intuitively around where we are and how it’s going to grow, I think it’s going to be a partnership-led model where we scale out. WeWork’s going to be double its size that it was in September last year, in September this year. It will be double its size.

Because of existing commitments?

That and the combination of doing things in a creative way. Again, coming back to the franchise model, coming back to asset-lite where we’ve got an intermediary, so the landlord’s sitting there. We’ve got someone saying ‘I like the WeWork’ model’. I’ll take on the lease. I’ll have a management agreement with you and then we’ll have a ref share associated with it. That’s the model that we’ve already employed in South Africa. South Africa is an asset-lite model for WeWork.

Is that different to elsewhere in the world?

Yes. Elsewhere, we have WeWork that have explicit ownership of leases and that’s why the street looks at that and says wait a minute. This is a huge liability and a downturn, etc, but it’s not. If you look at a down-turning model in South Africa, where do South African business come to in a down-turning market. They come into a WeWork because it’s more cost-effective to be in a WeWork because you’re not signing yourself a longer-term commitment and you’re focusing on your business and your core fundamentals, especially if you don’t know if you’re going to lay off half your team or if you’re going to double it. Being in a WeWork gives you the ability to trombone and just flex your business in a very unique way and you can do on a global scale. I think the value proposition’s clear.

I think innovators have their time and then they need to step away. As a start-up founder, I see that more and more. As I built a business for me, there’s a time when I’m crazy. No-one will put money into it. I’m putting money alone into it. We’re prototyping something. You’re proving that it can and then you get the folks in the room that kind of look at your bill of materials, your cost of this, and your operating margin. How does it scale out, looking at your manufacturing line and single suppliers? There’s a time for that folks, but not in the beginning. If we don’t have the crazies, we wouldn’t have half the stuff that we have today.

Here’s to the crazy ones.

Exactly.

Stafford, always good seeing you, particularly in your own building in our own new studio.

You’re welcome.

And thanks for the WeWork story of South Africa – a different approach and I’m sure that under your guidance, it’s gonna be the one to shine around the world.

Thank you for that vote of confidence.