Max Child and James Wilsterman had a problem in their startup’s Hayes Valley office: employees huddled around a Nintendo Switch playing “Super Smash Bros.” loudly throughout the day.
There simply wasn’t enough of that happening anymore.
The duo are the founders of Volley, which makes AI voice-controlled video games. Playing games — their own and the competition’s — is crucial for developers. But the vibe at the company’s Hayes Valley headquarters shifted once they started seriously growing in headcount last year.
“Our last space became too open for its own good,” Child said. “It got to the point where people were conscious about talking out loud since we were all right next to each other. It started taking on the vibe of a library.”
So when they went looking for a new location, it was about finding more space for people to stretch out while maintaining the casual, creative vibe that Volley was founded on.
Enter the Phelan Building at 760 Market St., one of downtown San Francisco’s signature flatiron buildings located on the edge of Union Square. The neighborhood wasn’t an initial frontrunner in the eyes of Volley’s founders during their search this spring, but they ultimately found its “industrial-chic” aesthetic and preserved historic character suited them best.
So much so, the company signed a three-year lease for the entire ninth floor this month, Child and Wilsterman told The Standard.
Not only do they now have multiple living rooms spaced out across the office, but the company’s first ever gaming room is also in the process of being built where the second kitchen used to be.
The new office, which totals nearly 25,000 square feet, doubles the size of Volley’s previous office in Hayes Valley, and has a view up Market Street all the way to the Ferry Building from well-placed windows in the corner kitchen. The century-old property has been renovated over time by tech tenants that include Figma, Medium, and Dropbox.
Volley will start by subleasing the floor from logistics company Flexport before converting to a two-year lease with the landlord. The founders declined to disclose the rent price but said it was a “great deal.”
In an office market defined by the retreat of Big Tech firms, this year’s wave of leasing activity for spaces between 3,000 and 20,000 square feet has been a bright spot, indicating that San Francisco is in the early stages of a commercial real estate upswing.
Leading that charge have been artificial intelligence tenants, which have leased nearly 1 million square feet of office space this year, according to real estate firm JLL.
Child and Wilsterman were roommates when they founded Volley in 2016 based on the belief that “talking to smart computers” was the future of video gaming. At that time, most consumers’ idea of digital agents revolved around Apple’s Siri and Amazon’s Alexa.
But as the technology around large language models reached new heights with the arrival of ChatGPT, so did Volley, which creates AI agents to interact with players on games like “Jeopardy!” and “Wheel of Fortune” that can be played on smart TVs and devices.
The company had fewer than 10 employees in 2019 and grew to nearly 80 by the end of its biggest year of sales, 2023, Wilsterman said. Volley, which in July raised $55 million in Series C funding, hopes to double its headcount in its new office.
Volley employees moved into the Phelan Building at the start of the month and found their workplace divided into two parts, with product and engineering teams on one side of a central hallway and business operations on the other. The office is officially a hybrid workplace, but the nature of Volley’s games — which are meant to be played in groups — lend themselves to in-person testing and troubleshooting.
“It’s been nice to have spaces broken up for different purposes,” said Wilsterman, whose personal office doubles as a conference room.
After interviewing many of the city’s top real estate agents, Child and Wilsterman opted to work with Dan Johnson and John Diepenbrock of Raise Commercial, the upstart firm that most recently represented OpenAI on its new leases in Mission Bay.
“They have a deep understanding of tech and speak the same language as us,” Wilsterman said of Raise Commercial.
Admittedly, Union Square wasn’t top of mind for the Volley founders when they embarked on their search, but recent efforts to reinvigorate the area, along with the completion of the Central Subway in 2023 have made it more attractive, Johnson said.
“It’s one of those places where you have to put the negative headlines aside and come see it for yourself,” Diepenbrock added.
The brokers started their careers at competing legacy real estate firms before joining forces at Raise just before the pandemic. “The boom cycles in San Francisco always start small,” Johnson said. “We have a deep pool of startups we’re excited about that will be ready to move into bigger space in the coming years.”
This sort of ecosystem is what has kept the founders of Volley, both transplants, in the city despite the pandemic. The proximity to other AI entrepreneurs has pushed the technology to new heights, Child said.
“This is the most exciting time in tech I’ve ever felt since being here,” Child said. “How cool is it that the next big thing consistently originates from here?”