4 ms·

WeWork is essentially a financial engineering play: they convert few large long-term leases on buildings to many small short-term leases. This is a very similar

by gaius 8y ago

WeWork is essentially a financial engineering play: they convert few large long-term leases on buildings to many small short-term leases. This is a very similar business to banks issuing 25-year mortgages with monthly repayment - it’s called “maturity transformation”. If their customers disappear, WeWork is still on the hook for those long-term leases. Buildings like to work in 20-25 year timescales, I think very very few tenants would stay in a WeWork that long.

puranjay 8y ago
Where do you see coworking as a concept in the next decade? I haven't used WeWork but I've been a customer of plenty of different coworking spaces. I've had complaints with all of them, but they still beat working from home as far as productivity goes - for me at least. I do feel that most coworking spaces, WeWork included, get the entire concept fundamentally wrong. They all market their "networking" opportunities and "hip" work spaces. Do serious workers eveb want that? All I need is a quiet office where I'm left alone to work in a private cabin. I couldn't care less for the artisanal coffee or funky furniture. I do hope there is a coworking competitor that gives me a no nonsense, quiet place to work in
- krn 8y ago
  > They all market their "networking" opportunities and "hip" work spaces. [...] All I need is a quiet office where I'm left alone to work in a private cabin. I think targeting co-working spaces at people interested in "networking opportunities" increases profitability, because they are much more likely to accept open floor plans. > I do hope there is a coworking competitor that gives me a no nonsense, quiet place to work in It has been available for ages and is called Public Library.
  - Tempest1981 8y ago
    Public Libraries with built-in cafes -- there's an idea!
  - dazc 8y ago
    In the UK, libraries are anything but quiet places. The best you can hope for is a 'quiet area' which is just above or next to the free creche and kids play area. This in addition to loud conversations and general poor behaviour from other library users which is rarely challenged by staff.
- gaius 8y ago
  They all market their "networking" opportunities and "hip" work spaces. Do serious workers eveb want that? We have a good idea what a "serious" WeWork looks like already: Regus. WeWork occupies what seems to be a bit of a weird niche: they are almost as casual as taking your laptop to Starbucks and they seem to go out of their way to provide distractions from work too, whereas the Regus experience is just like having a more-expensive version of a real office. It's a private area, you have the key, dedicated network connectivity, support from "the building" when you need it. I see companies use Regus to bootstrap themselves into a new city while they hunt for real space for example, and Regus seems happy with that as a use case, whereas WeWork would like you to stay there. Right now the gig economy is very fashionable and WeWork is riding that trend but this is too tied up with both fashion and politics to make the future of it very clear. Are people really going to want to spend their entire careers in a giant Starbucks, what happens if the tax code changes to make freelancing unattractive (e.g. IR35 in the UK)? What if WeWork becomes the corporate behemoth and people do go back to actually hip independent coffee shops, or coop work spaces? What if some technological development starts to favour large companies again? Armies of freelancers are fine if you are building websites but could you make a biotech or a space firm or green energy firm or whatever out of freelancers in cow-orking spaces? I dunno.
  - fyfy18 8y ago
    > they are almost as casual as taking your laptop to Starbucks and they seem to go out of their way to provide distractions from work too I tried my first WeWork here in London a month ago, and this is exactly how it felt to me. Maybe that mixed with a college campus vibe. Definitely not a place to go if you want to get serious work done.
- danepowell 8y ago
  WeWork wouldn't be profitable on a private cabin model, as lovely as that sounds. Pitching the open floorplan as a "networking" perk is just a necessary evil, or good marketing, depending on how you look at it.
  - andor 8y ago
    I have worked from a few WeWorks and copies thereof in Berlin. Most of the floor area is private offices, and the tenants tend to be quite enterprisey. Think Daimler, Deutsche Bahn, etc. For the usual startup, WeWork is way too expensive.
    - edanm 8y ago
      > For the usual startup, WeWork is way too expensive. Why do you say that? What are the alternatives that startups have? Here in Tel Aviv at least, if you're a 5-10 person startup, you can either take the painful, long process of renting an office, which is both expensive in its own right, takes a lot of your time, and has a serious issue - you don't know what size you need! The alternative is to go to WeWork, where you can start working almost immediately, have everything taken care of for you without thinking, and have peace of mind that you can scale to more offices within the WeWork as necessary (unless it's at capacity, but there're usually vacancies). I'm not saying this necessarily a good business model for WeWork, but for startups, it's a great deal.
      - hobofan 8y ago
        For the 5-10 people phase in Berlin, there is also the option for other coworking spaces that are cheaper. For startups that go through an accelerator here, there is also often the option to have a place in their (private) coworking spaces at okay rates. Beyond 10 people, most startups here realistically don't have that explosive growth in employees, so you can rent an office 3x your current size, and still come out cheaper than WeWork. In the mean-time you can sublet the empty space to other smaller startups on a quarterly basis until you need it yourself. I realize that in other cities, the situation might be a different one, but at least in Berlin there are very few startups that have the luxury to of a "fuck profitability"/explosive growth strategy, which are realistically the ones that can afford a WeWork for more than a few months.
- kpennell 8y ago
  I'm on the other side. Most coworking spaces I've tried are too quiet. Not enough interaction. If I wanted to be left alone, I could just stay home. It's the human interaction that's keeping me sane.
  - mcbits 8y ago
    If I were to rent an office as a freelancer, it would be for two reasons. One reason is to establish a routine where I wake up, put on my work costume, leave the house, and go to a place where I shall be productive each day. Normal office "hi, how are ya"s would probably add to the authenticity, but constant chatter would be distracting. The other reason is to have a professional environment to invite clients. If the place is full of people lounging in beanbag chairs, sipping coffee and yakking, then I know a nice coffee shop that would be a lot cheaper.
    - speedplane 8y ago
      Three reasons to have an office: 1. Vanity: Impress clients with a cool lobby / conference room (WeWork's free beer and ping-pong tables often does the job well, especially when folks are used to cubicles) 2. Focus: A space to sit quietly without distraction; open office space totally fails here, and I'm pretty people listen to music while working in these environments solely to cancel out the noise of others. 3. Collaboration: Having smart people around you makes you smarter. This work in a traditional office, but I've been to a few WeWorks where I was pretty uninspired with the people around me. It was not that they were dumb, but that they worked in industries so far off from my own (fashion v. law) that we had almost nothing to talk about. I've run my startup for quite some time. I normally rent fancy conference rooms at hourly rates or go to trendy restaurants for #1 (they're expensive, but better/cheaper than getting a monthly plan). I learned to focus at home for #2 (takes some time to get used to). By far, #3 is the hardest, but literally every person I hired was in a different state or abroad, so having a physical office wouldn't have helped unless I forced them to move.

by gaius 8y ago

puranjay 8y ago

Where do you see coworking as a concept in the next decade? I haven't used WeWork but I've been a customer of plenty of different coworking spaces. I've had complaints with all of them, but they still beat working from home as far as productivity goes - for me at least. I do feel that most coworking spaces, WeWork included, get the entire concept fundamentally wrong. They all market their "networking" opportunities and "hip" work spaces. Do serious workers eveb want that? All I need is a quiet office where I'm left alone to work in a private cabin. I couldn't care less for the artisanal coffee or funky furniture. I do hope there is a coworking competitor that gives me a no nonsense, quiet place to work in

krn 8y ago
> They all market their "networking" opportunities and "hip" work spaces. [...] All I need is a quiet office where I'm left alone to work in a private cabin. I think targeting co-working spaces at people interested in "networking opportunities" increases profitability, because they are much more likely to accept open floor plans. > I do hope there is a coworking competitor that gives me a no nonsense, quiet place to work in It has been available for ages and is called Public Library.
- Tempest1981 8y ago
  Public Libraries with built-in cafes -- there's an idea!
- dazc 8y ago
  In the UK, libraries are anything but quiet places. The best you can hope for is a 'quiet area' which is just above or next to the free creche and kids play area. This in addition to loud conversations and general poor behaviour from other library users which is rarely challenged by staff.
gaius 8y ago
They all market their "networking" opportunities and "hip" work spaces. Do serious workers eveb want that? We have a good idea what a "serious" WeWork looks like already: Regus. WeWork occupies what seems to be a bit of a weird niche: they are almost as casual as taking your laptop to Starbucks and they seem to go out of their way to provide distractions from work too, whereas the Regus experience is just like having a more-expensive version of a real office. It's a private area, you have the key, dedicated network connectivity, support from "the building" when you need it. I see companies use Regus to bootstrap themselves into a new city while they hunt for real space for example, and Regus seems happy with that as a use case, whereas WeWork would like you to stay there. Right now the gig economy is very fashionable and WeWork is riding that trend but this is too tied up with both fashion and politics to make the future of it very clear. Are people really going to want to spend their entire careers in a giant Starbucks, what happens if the tax code changes to make freelancing unattractive (e.g. IR35 in the UK)? What if WeWork becomes the corporate behemoth and people do go back to actually hip independent coffee shops, or coop work spaces? What if some technological development starts to favour large companies again? Armies of freelancers are fine if you are building websites but could you make a biotech or a space firm or green energy firm or whatever out of freelancers in cow-orking spaces? I dunno.
- fyfy18 8y ago
  > they are almost as casual as taking your laptop to Starbucks and they seem to go out of their way to provide distractions from work too I tried my first WeWork here in London a month ago, and this is exactly how it felt to me. Maybe that mixed with a college campus vibe. Definitely not a place to go if you want to get serious work done.
danepowell 8y ago
WeWork wouldn't be profitable on a private cabin model, as lovely as that sounds. Pitching the open floorplan as a "networking" perk is just a necessary evil, or good marketing, depending on how you look at it.
- andor 8y ago
  I have worked from a few WeWorks and copies thereof in Berlin. Most of the floor area is private offices, and the tenants tend to be quite enterprisey. Think Daimler, Deutsche Bahn, etc. For the usual startup, WeWork is way too expensive.
  - edanm 8y ago
    > For the usual startup, WeWork is way too expensive. Why do you say that? What are the alternatives that startups have? Here in Tel Aviv at least, if you're a 5-10 person startup, you can either take the painful, long process of renting an office, which is both expensive in its own right, takes a lot of your time, and has a serious issue - you don't know what size you need! The alternative is to go to WeWork, where you can start working almost immediately, have everything taken care of for you without thinking, and have peace of mind that you can scale to more offices within the WeWork as necessary (unless it's at capacity, but there're usually vacancies). I'm not saying this necessarily a good business model for WeWork, but for startups, it's a great deal.
    - hobofan 8y ago
      For the 5-10 people phase in Berlin, there is also the option for other coworking spaces that are cheaper. For startups that go through an accelerator here, there is also often the option to have a place in their (private) coworking spaces at okay rates. Beyond 10 people, most startups here realistically don't have that explosive growth in employees, so you can rent an office 3x your current size, and still come out cheaper than WeWork. In the mean-time you can sublet the empty space to other smaller startups on a quarterly basis until you need it yourself. I realize that in other cities, the situation might be a different one, but at least in Berlin there are very few startups that have the luxury to of a "fuck profitability"/explosive growth strategy, which are realistically the ones that can afford a WeWork for more than a few months.
kpennell 8y ago
I'm on the other side. Most coworking spaces I've tried are too quiet. Not enough interaction. If I wanted to be left alone, I could just stay home. It's the human interaction that's keeping me sane.
- mcbits 8y ago
  If I were to rent an office as a freelancer, it would be for two reasons. One reason is to establish a routine where I wake up, put on my work costume, leave the house, and go to a place where I shall be productive each day. Normal office "hi, how are ya"s would probably add to the authenticity, but constant chatter would be distracting. The other reason is to have a professional environment to invite clients. If the place is full of people lounging in beanbag chairs, sipping coffee and yakking, then I know a nice coffee shop that would be a lot cheaper.
  - speedplane 8y ago
    Three reasons to have an office: 1. Vanity: Impress clients with a cool lobby / conference room (WeWork's free beer and ping-pong tables often does the job well, especially when folks are used to cubicles) 2. Focus: A space to sit quietly without distraction; open office space totally fails here, and I'm pretty people listen to music while working in these environments solely to cancel out the noise of others. 3. Collaboration: Having smart people around you makes you smarter. This work in a traditional office, but I've been to a few WeWorks where I was pretty uninspired with the people around me. It was not that they were dumb, but that they worked in industries so far off from my own (fashion v. law) that we had almost nothing to talk about. I've run my startup for quite some time. I normally rent fancy conference rooms at hourly rates or go to trendy restaurants for #1 (they're expensive, but better/cheaper than getting a monthly plan). I learned to focus at home for #2 (takes some time to get used to). By far, #3 is the hardest, but literally every person I hired was in a different state or abroad, so having a physical office wouldn't have helped unless I forced them to move.