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It will be interesting how this all plays out. WeWork’s model wasn’t new (Regis has been doing real estate subdivision arbitrage for years) they just made that

It will be interesting how this all plays out. WeWork’s model wasn’t new (Regis has been doing real estate subdivision arbitrage for years) they just made that model cooler and added some free beer and a few other perks but it’s still the same business. Someone from WeWork recently told me they are a digital experiences company and not a real estate company. Increasingly the market seems to be calling BS on that. There’s very much a demand for WeWork type services and it meets a real need but it’s a low margin low multiple real estate arbitrage play not a high multiple tech play. WeWork has way too many people and far too much overhead relative to the business they are actually in despite pretending to be something else. WeWork also seems to be getting very unfocused buying up lots of other businesses and getting way beyond their core real estate play. Given that, shifting market views and their extreme leverage with long term leases I wish them well but this could get real ugly real quick.

dvtrn 8y ago
Someone from WeWork recently told me they are a digital experiences company and not a real estate company. Did you ask them what this meant, or did the conversation effectively die there? I'd be curious to hear straight from the horse's mouth what the horse thinks 'digital experiences company' means.
- code4tee 8y ago
  I was trying to be polite and didn’t push it too much, but it was similar to descriptions coming out in the press. They want to run schools, housing and all aspects of your life but as a digital experience. The gist though was that these were all just existing needed but boring businesses with low valuations. WeWork’s strategy seems to be “but we can run an elementary school and it should command a wild valuation because it’s not a school it’s a WeSchool.” It wasn’t a convincing argument.
  - dvtrn 8y ago
    Completely fair. I was just curious because looking at so many of these types of companies that on the face look just like another real estate/cab/hotel (WeWork/Uber,Lift/AirBnb respectively) company but are convinced "no we're %synonym laden description of what a cab company does%", I start to wonder how thoroughly convinced of these descriptions your non-C-level employee is.
hobofan 8y ago
> they are a digital experiences company The problem also is that the experience also sucks. I've been working out of WeWork and other coworking/office rental spaces in Berlin and WeWork is by far the worst of it while also costing 2-3 times as much. Excerpt from the things I experienced at one WeWork location over the last year: - Broken AC in the whole building during a very hot summer - Water dripping from the ceiling in the hallway for about two weeks (which also left ugly stains, which I think are still there to this day) - Regular recurring construction noise during working hours, to this day (one year after opening!)

dvtrn 8y ago

Someone from WeWork recently told me they are a digital experiences company and not a real estate company. Did you ask them what this meant, or did the conversation effectively die there? I'd be curious to hear straight from the horse's mouth what the horse thinks 'digital experiences company' means.

code4tee 8y ago
I was trying to be polite and didn’t push it too much, but it was similar to descriptions coming out in the press. They want to run schools, housing and all aspects of your life but as a digital experience. The gist though was that these were all just existing needed but boring businesses with low valuations. WeWork’s strategy seems to be “but we can run an elementary school and it should command a wild valuation because it’s not a school it’s a WeSchool.” It wasn’t a convincing argument.
- dvtrn 8y ago
  Completely fair. I was just curious because looking at so many of these types of companies that on the face look just like another real estate/cab/hotel (WeWork/Uber,Lift/AirBnb respectively) company but are convinced "no we're %synonym laden description of what a cab company does%", I start to wonder how thoroughly convinced of these descriptions your non-C-level employee is.

hobofan 8y ago

> they are a digital experiences company The problem also is that the experience also sucks. I've been working out of WeWork and other coworking/office rental spaces in Berlin and WeWork is by far the worst of it while also costing 2-3 times as much. Excerpt from the things I experienced at one WeWork location over the last year: - Broken AC in the whole building during a very hot summer - Water dripping from the ceiling in the hallway for about two weeks (which also left ugly stains, which I think are still there to this day) - Regular recurring construction noise during working hours, to this day (one year after opening!)