Attention office workers: Your building may soon be turning into a Web portal.
A handful of Internet start-ups are being very literal about using bricks and mortar to lure customers in cyberspace. They are creating Web portals customized for employees in the same office building, a single place where workers can go to call a messenger, order a pizza, stock up on business cards, or even turn up the heat in their cubicles.More than merely high-tech amenities, these targeted Web sites offer dot-coms and their commercial-landlord customers entree into the billions of dollars of purchasing that takes place within office walls every year. Under the business model in use by one Web site for three buildings in Toronto, the dot-com and the landlord share a cut of as much as 5 percent of the revenue from purchases made on the sites.
Modern offices, as everybody who works in one knows, are teeming with Web surfers, making them rich e-commerce hunting grounds. "You're not going to capture all the spending that goes on in the building," says Maurice Gatien, president of e-Space Connexions Inc. "But you have a pretty good shot at capturing some of their spending, particularly as it relates to business-to-business buying."
In December, e-Space Connexions launched tectowers.com, a Web site to service three Toronto office towers owned by Canadian real-estate company Cadillac Fairview. E-Space says it has contracts to establish Web portals for another 98 buildings throughout Canada and the U.S. by the middle of May.
VIPdesk.com Inc., a Washington online firm, plans to begin launching Web portals later this month for 78 office buildings in and around the District of Columbia. EggSystems.com Inc., of Minneapolis, has a site up and running for two buildings in Singapore and says it has an agreement with one real-estate customer in the U.S. and expects to announce two more shortly.
Most Internet users already know how to find CDs, books or flowers online, says Daniel A. Levy, the 28-year-old founder and president of Real Estate On-Line LLC, a New York firm that is planning to announce deals with several big landlords soon. But people are often at a loss when it comes to gym memberships, parking spaces, child care and dry cleaning, Mr. Levy adds. People "don't instinctively know where to get these types of services."
Tony Leadman works in one of the Cadillac Fairview buildings as vice president of television sales for MGM Studios of Canada, a unit of Metro-Goldwyn-Mayer Inc., of Santa Monica, Calif. He recently visited the e-Space's tectowers site, where he found information about his hobbies -- skiing and motor racing -- and checked the value of his stock portfolio. While he was there, he ordered an umbrella from the building's concierge desk, which he picked up at a desk in the lobby in time for lunch.
He says he would use the site more if it had even more buying options. "If I could go on my computer and order cleaning supplies for the house, or things like washing soap, toothpaste and dental floss, I would absolutely do that rather than run down into the mall to get it," Mr. Leadman says.
Most of the new building portals are employing a business model in which shoppers get discounts on office supplies and from local merchants. The sites also offer local event listings and building services.
They're also pitching the sense of kindred spirit shared by people trapped in the same building staring at computers all day. "Through the Internet we're allowing occupants within a building to look at themselves as a community," says Michael L. Roppolo, EggSystems.com's vice president of business development. "It's like having a customized browser" for the building.
But it's the discounts that will have to set the building sites apart from the vast selection of other portals already out there, e-Space and its competitors say. So far, e-Space Connexions has agreements with 31 vendors, ranging from such national marketers as Liberty Mutual Insurance Co. to local players like Your Butler Drycleaning. Tenants using the Web site get a 15 percent discount at Your Butler Drycleaning; they can rent a car from Ferraro's Exotic Car Rental for $65 an hour (regular rate: $86).
E-Space started out in the early 1990s as an online commercial real-estate listings service. But it found brokers and landlords didn't want to pay to post their listings. So in 1998, the company re-evaluated.
"We realized we were focused on the 4-to-5 percent of the box that was empty," says the 53-year-old Mr. Gatien, referring to the vacancies posted on the site.
Four private investors have pumped a total of $1 million into the venture. The company says it expects to secure more in venture capital.
VIPdesk.com is an offshoot of 13-year-old Capitol Concierge, which places human concierges in office buildings. Like e-Space, it has been negotiating for discounts from merchants based on the purchasing power of multiple tenants. VIPdesk.com has lined up 28 vendors of flowers, chocolates and gifts, as well as 40 suppliers of business products and services. The list includes Musicland Stores Corp.'s Sam Goody chain, Sunglass Hut International Inc., Prudential Insurance Co. of America and International Business Machines Corp.
Merchants see the building portals as a way to target new buyers. "There are customers out there that +the office-building portalst can reach which we haven't yet," says Joe Meyers, senior account manager at Omaha Steaks, the direct marketer of filet mignons and T-Bone steaks, which plans to have a presence on the VIPdesk.com sites.
Mary Naylor, the 36-year-old founder of VIPdesk.com, had established relationships with many of these vendors through Capitol Concierge, which she founded in 1987 in her mother's basement with a $2,000 loan. Last year, Ms. Naylor decided to take the concierge model online. She raised $3.75 million in December from venture capitalists including Scripps Ventures, of New York; Pennsylvania Early Stage Partners, of Wayne, Pa., and Women's Growth Capital Fund, of Washington.
VIPdesk.com's building portals have a twist: They give tenants the option of working with "virtual assistants," which are like personal concierges. Working the phones either from home or from a call center in Laurel, Md., the assistants help portal visitors find a haircutter, for example, or a snow-shoveler. VIPdesk.com is in talks with CarrAmerica Realty Corp., a Washington real-estate owner and manager, to set up sites in 326 of its buildings.
At present, EggSystems.com's service in the U.S. is less comprehensive than its rivals: It offers tenants only the ability to make maintenance requests. EggSystems plans to add e-commerce options soon. A venture-capital fund advised by Schroder Capital Partners Asia, of Singapore, has invested a little over $1 million in Eggsystems.com and has committed to an additional $1 million, the company says.