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The language here indicates they think they are growing a "platform". I guess i don't really get how a global network of WeWork sites will add value to their c

The language here indicates they think they are growing a "platform". I guess i don't really get how a global network of WeWork sites will add value to their clientele. Are they expecting people to want to join WeWork over a local competitor because they know if they go to city X for business there will be a WeWork office available for them? Is that really worth a lot to their clients that they will pay a premium for it?

sonnyblarney 8y ago
The answer is definitely in the data, it's just obfuscated at this point. The question really boils down to unit profitability. If their 'already built out' offices are positive cash-flow businesses, than all this working capital expense makes sense. If not, no. I don't really think there's much of a platform effect, rather, brand, and that people know they can go somewhere and get what they expect for their offer. It's a decent concept given the degree of churn in businesses these days, and everyone wants at least a decent place to hang their hat during the day. But it's also easily subject to pomp and hype. Only the accountants really know :)
- tptacek 8y ago
  When we were there, there was supposed to be some kind of network of WeWork-resident and WeWork-adjacent businesses, like that you'd get your health insurance through a TriNet deal brokered through WeWork and stuff like that. It wasn't a serious offering and had nothing to do with why we took the space (reason: cheaper than the market, with better terms, until we were big enough to make an office cost-effective), but I suspect that's part of the "platform" WeWork hopes to build. It won't work, unless they make a bunch of ambitious acquisitions.
smt88 8y ago
I don't know if it's worth a lot, but it's worth something. One of my remote teams gives optional access to coworking spaces because we know that some people hate working from home. WeWork turned out to be more expensive than ad-hoc desks in other cities, though.
AndrewKemendo 8y ago
Are they expecting people to want to join WeWork over a local competitor because they know if they go to city X for business there will be a WeWork office available for them? Yes, that's one of their primary, explicit selling points. Is that really worth a lot to their clients that they will pay a premium for it? Yes, that's one of the major reasons people use WeWork instead of local office space rentals.
- manigandham 8y ago
  >> Yes, that's one of the major reasons people use WeWork instead of local office space rentals. A lot of it also seems to be the typical startup hype. I've seen many companies choose WeWork even though they only have 1 single static office space because it's the hip choice, even though they could easily spend half the money for twice the space and privacy.
- MarkMc 8y ago
  >> Is that really worth a lot to their clients that they will pay a premium for it? > Yes, that's one of the major reasons people use WeWork instead of local office space rentals. Perhaps another reason is that WeWork charges fees which are too low to cover all their expenses, and local competitors do not.
jedberg 8y ago
Reddit's former General Manager, as well as their former head of Community, have both worked for WeWork for a few years now. Their job has been to build community, through events, blogging, networking activities, etc. So yeah, they are trying to build a community that is sticky. That way, when you leave one company and go to the next, you'll go to your next company and request that they pay for you to stay at the WeWork you're already in.
- Reedx 8y ago
  Interesting. There are that many companies paying for their employees to work at WeWork? (instead of home or coffee shop - makes sense though if they're more productive)
  - fipple 8y ago
    If I’m hiring someone remotely for ~100K I don’t care one bit if they need another $10K for a space.
paranoidrobot 8y ago
If you're still experimenting in a local market, or just don't need that many staff - then going with a provider that provides a known set of features in random countries could be a lot more favourable than trying to find decent local coworking spaces or short-term rentals in each country. Having been exposed to some of the inane bullshit that you get from coworking spaces in some countries, having a known-good factor could be very valuable. We've had police turn up to the coworking space in one country and inform us that it was an unlawful occupancy. The police gave us until the end of the day to get all our stuff out. This was while we had important partners/clients in for meetings. Moving our 20-something people in that office out within a few hours was a nightmare, and basically killed a week in productivity, not to mention lost business opportunities/etc. One coworking space had hundreds of people, but only a 100MBit residential internet service hooked up to a bunch of home-grade wifi access points, and eeeeeveryone was running torrents, and the coworking space didn't care to police their network at all (not that they could, they didn't have any IT staff). We have people in a WeWork space in one country, and while it might not be fantastic, there's slightly less bullshit there than in other locations.

sonnyblarney 8y ago

The answer is definitely in the data, it's just obfuscated at this point. The question really boils down to unit profitability. If their 'already built out' offices are positive cash-flow businesses, than all this working capital expense makes sense. If not, no. I don't really think there's much of a platform effect, rather, brand, and that people know they can go somewhere and get what they expect for their offer. It's a decent concept given the degree of churn in businesses these days, and everyone wants at least a decent place to hang their hat during the day. But it's also easily subject to pomp and hype. Only the accountants really know :)

tptacek 8y ago
When we were there, there was supposed to be some kind of network of WeWork-resident and WeWork-adjacent businesses, like that you'd get your health insurance through a TriNet deal brokered through WeWork and stuff like that. It wasn't a serious offering and had nothing to do with why we took the space (reason: cheaper than the market, with better terms, until we were big enough to make an office cost-effective), but I suspect that's part of the "platform" WeWork hopes to build. It won't work, unless they make a bunch of ambitious acquisitions.

smt88 8y ago

I don't know if it's worth a lot, but it's worth something. One of my remote teams gives optional access to coworking spaces because we know that some people hate working from home. WeWork turned out to be more expensive than ad-hoc desks in other cities, though.

AndrewKemendo 8y ago

Are they expecting people to want to join WeWork over a local competitor because they know if they go to city X for business there will be a WeWork office available for them? Yes, that's one of their primary, explicit selling points. Is that really worth a lot to their clients that they will pay a premium for it? Yes, that's one of the major reasons people use WeWork instead of local office space rentals.

manigandham 8y ago
>> Yes, that's one of the major reasons people use WeWork instead of local office space rentals. A lot of it also seems to be the typical startup hype. I've seen many companies choose WeWork even though they only have 1 single static office space because it's the hip choice, even though they could easily spend half the money for twice the space and privacy.
MarkMc 8y ago
>> Is that really worth a lot to their clients that they will pay a premium for it? > Yes, that's one of the major reasons people use WeWork instead of local office space rentals. Perhaps another reason is that WeWork charges fees which are too low to cover all their expenses, and local competitors do not.

jedberg 8y ago

Reddit's former General Manager, as well as their former head of Community, have both worked for WeWork for a few years now. Their job has been to build community, through events, blogging, networking activities, etc. So yeah, they are trying to build a community that is sticky. That way, when you leave one company and go to the next, you'll go to your next company and request that they pay for you to stay at the WeWork you're already in.

Reedx 8y ago
Interesting. There are that many companies paying for their employees to work at WeWork? (instead of home or coffee shop - makes sense though if they're more productive)
- fipple 8y ago
  If I’m hiring someone remotely for ~100K I don’t care one bit if they need another $10K for a space.

paranoidrobot 8y ago

If you're still experimenting in a local market, or just don't need that many staff - then going with a provider that provides a known set of features in random countries could be a lot more favourable than trying to find decent local coworking spaces or short-term rentals in each country. Having been exposed to some of the inane bullshit that you get from coworking spaces in some countries, having a known-good factor could be very valuable. We've had police turn up to the coworking space in one country and inform us that it was an unlawful occupancy. The police gave us until the end of the day to get all our stuff out. This was while we had important partners/clients in for meetings. Moving our 20-something people in that office out within a few hours was a nightmare, and basically killed a week in productivity, not to mention lost business opportunities/etc. One coworking space had hundreds of people, but only a 100MBit residential internet service hooked up to a bunch of home-grade wifi access points, and eeeeeveryone was running torrents, and the coworking space didn't care to police their network at all (not that they could, they didn't have any IT staff). We have people in a WeWork space in one country, and while it might not be fantastic, there's slightly less bullshit there than in other locations.