7 ms·

I'll just go on the record to say that I think WeWork is the biggest deck of cards that is begging for a collapse. I've only been to a handful of locations, but

by hdpq 7y ago

I'll just go on the record to say that I think WeWork is the biggest deck of cards that is begging for a collapse. I've only been to a handful of locations, but they never seem busy and I'm not sure how they're making rent. Plus, not to mention, back in my day, when you did a startup and got funding from your rich uncle (not Uncle Rich), you grew your startup from your apartment, and when you outgrew that space, you got a bigger apartment. (ala Silicon Valley style) I dunno, I can't put my finger on it, but I think this whole thing is a massive game of charades...

baxtr 7y ago
The ones I saw were very busy, and, filled by large corporates that wanted to be hip. I think for them value proposition is that they are able to hire some hipster people who don't want to work in the old buildings and also build some marketing stories around their "labs". That said, I "worked" in a WeWork for about 6 months and it was just terrible. Tiny offices, lots of visual distractions, lots of noise, many parties. I wouldn't ever do it again.
- onion2k 7y ago
  I don't think it's a matter of wanting to "be hip", but a case of recruiting being a huge problem for most companies. Renting out the 'cool' co-working spaces of WeWork probably isn't their long term goal. If BigCo has exhausted the talent in their city they have three options left: employ remote workers, pay people to relocate, or open satellite offices and pay a little more than then the local businesses to get people. WeWork is enabling the last option at scale. Renting managed office is a viable business model that's been happening for decades. Whether there's enough of a market to make WeWork work is another question, but there might be. Anecdotally, a large insurer recently opened a new office in my city here in the UK because they've had 40 open positions in their London office for years. They've already filled half those positions. They wouldn't have done that without renting a large office on a business park.
  - winningcontinue 7y ago
    I don't understand why BigCo would ever go with the last option after talent exhaustion. The former two make way more sense.
    - onion2k 7y ago
      A big company that's resisted remote working will find it hard to integrate remote people in to their teams. Remote is great, but unless everyone is in favor of it it can fail horribly - a manager who insists on having oversight of what people are doing at any given moment will kill any chance of remote workers being productive. Consequently if you have a big team at 'head office' who aren't used to or good at managing remote people then remote won't work. Paying people to relocate from a small city to the most expensive place in the country is exceptionally difficult and expensive. Many developers here in the UK see London as a really bad place to live unless you're paid more than £100,000. Developer wages in London are often not £100,000.
    - deleted 7y ago
      [deleted]
  - ForHackernews 7y ago
    There's also option four: raise salaries. Historically, that's what companies have done when the labour market is tight. Though obviously somebody must have crunched the numbers and decided these WeWork things are a cheaper bet.
    - alexgmcm 7y ago
      I agree - but it makes sense to try to spread work out in other cities rather than have all the jobs in London with soaring CoL and struggling infrastructure.
- gbersac 7y ago
  Really? I'm working in wework Lafayette right now and I love WeWork, so many free stuff (even beer!), beautiful building in a well placed location... I love it.
  - hrktb 7y ago
    The frame of reference matters. In Paris at least Wework offices are relatively clean, well managed, and modern compared to most offices. But compared to a decent traditional office, they are: - noisy (always someone phoning while walking around because they couldn't get a booth, even when recruiting or doing otherwise sensitive discussions) - more agitated (at a point there was people trying electric scooters in the corridor) - some offices are just gloomy (some don't have any windows, with no natural light coming in from any direction) I think we could see them as the McDonald of offices: a know quantity that passes some threshold. It's better than a random sandwich place next to a tourist trap, but not as good as a decent well managed (although slightly pricier) restaurant.
- zimpenfish 7y ago
  > it was just terrible. Tiny offices, lots of visual distractions, lots of noise, many parties. I wouldn't ever do it again. Same (London, Shoreditch). Additionally we had relatively frequent and loud noises from the ceiling ("eeeeeNNGNGNGNGNGNNG") which they couldn't fix. But not once did they suggest we move offices to any one of the 30+ empty ones downstairs.
  - fredley 7y ago
    In Spitalfields. It's big, and sparsely occupied. There are 6 (or more?) other WeWorks within a five minute walk and all are ultra-prime locations - not cheap. The attitude to spending is unbelievable. It's a terrible place to work. We recently moved out of the shared, fixed desk room which was relatively quiet into a glass office. There is no sound insulation whatsoever, you can hear every recruiter on the floor speaking their patter down the phone (loudly, because they have earbuds in) on repeat all day every day. I also think WeWork will collapse eventually, it's just so clearly unsustainable. Maybe the hope is that they become 'too big to fail' first?
  - bigzyg33k 7y ago
    I actually know why this is! If you're referring to the WeWork I think you are, it shares a building with Scape, a student accommodation I used to live in - the kids who live there are fairly loud, and the plumbing is quite weird and noisy
    - zimpenfish 7y ago
      Yeah, that's what the engineers claimed but then it was only happening in our small office and it would alternate between "very frequent" and "gone for days" which makes their explanation somewhat unbelievable.
empath75 7y ago
The whole unicorn bubble seems to be ruthless exploitation of the sunk cost fallacy.
burtonator 7y ago
> I'll just go on the record to say that I think WeWork is the biggest deck of cards that is begging for a collapse. I've only been to a handful of locations, but they never seem busy and I'm not sure how they're making rent. VCs are paying the rent silly. It's VCs all the way down.
- florakel 7y ago
  The VC will cash out with the IPO. That’s the new strategy. Drive companies to valuations higher than the market cap of many S&P500 companies and then sell them to the “free market” (Uber, Lyft). Great deal for the involved VCs and banks. Is the end result a sustainable business...? who knows...? who cares...?
  - bitcoinmoney 7y ago
    47b$. Wow, even AMD making real products is not even worth that. How does one hedge an s&p 500 fund that buys all these stupid unicorns?
    - ralph84 7y ago
      I agree WeWork is overvalued, but the whole thesis behind an index fund is you can’t reliably pick winners and losers. If you can, there’s no need for an index fund. There were plenty of naysayers calling FANG overvalued at their IPOs as well. If you didn’t hold those stocks for the last 10 years you missed out on most of the overall market’s gains.
      - scarface74 7y ago
        No there really weren’t people saying FANGs were overvalued at their IPOs. Facebook - was profitable and only IPOd because they had to. They had too many investors. Apple - IPOd in the 80s Amazon - maybe Netflix - wasn’t seen as a tech company. Their business was just shipping DVDs. Google - was a clear leader and already profitable at their IPO.
mbesto 7y ago
WeWork, of all of the overvalued unicorns that exist today, will likely be hit the hardest during a recession. Just watch.
- bitcoinmoney 7y ago
  How do I protect my VTSAX investment if we work goes public and is included in the basket??
  - gowld 7y ago
    Buy a complementary short position, or convert to a less total market index, or don't worry about it because it would be a miniscule portion of VTSAX.
  - WrtCdEvrydy 7y ago
    VWUSX is the only one who has bought IPOs (Uber and Lyft) in the past. VTSAX usually only dips in technology for large companies.
  - patio11 7y ago
    By doing nothing because you will have less than a basis point of WeWork exposure.
    - mbesto 7y ago
      This. And they might not put it in the basket. IIRC there is talk that dual-ownership-stock co's are usually debated on whether they go in the basket for obvious (which, let's be honest, WeWork will do, cuz it's hip). Also, want some more downside protection but want to bet on the market? Check out Fidelity's contrafund.
  - hudibras 7y ago
    The whole point of VTSAX is that you don't have to worry about how well any one company does.
  - laluser 7y ago
bitxbit 7y ago
I am waiting to buy Herman Miller chairs for pennies on the dollar. Remember those days?
- crawdog 7y ago
  The number of auctions in the early 2000s was staggering! Furniture and art were the two cheapest items to buy...
  - lobotryas 7y ago
    Any idea how to find these auctions for when history repeats itself?
    - arbuge 7y ago
      Craigslist, Facebook Marketplace, etc. (I'm guessing here that Craigslist and Facebook will survive.)
      - metildaa 7y ago
        Craigslist seems to be dying as people use Facebook Marketplace, OfferUp and LetGo to buy used items. The end of the personals section combined with heavy advertising by the aforementioned new entrants is causing a slow user bleed from Craigslist.
        JamesBarney 7y ago
        And the terrible user experience of having a stranger say "I know we agreed on $200, but now that we've half way loaded it into my car I think $150 would be more fair."
        metildaa 7y ago
        Terrible experiences happen to me way more on the newer platforms I listed. People are literally crazy on those new platforms, I've had death threats (from a user which OfferUp never banned) and various other threats on those 3 platforms. Facebook, OfferUp and LetGo all ignored my complaints. Craigslist over the past 2 years has had zero issues, I've interacted with fairly even keel 40+ year old people that are easy to work with. The "no lowballers, I know what I got" crowd has mostly departed Craigslist.
avocado4 7y ago
WeWork is just too expensive here in SF. Easier to just rent an office or work from cofounder's home.
boh 7y ago
The consensus on Wall Street has WeWork nowhere near its $47B valuation. Like Uber/Lyft, its size is more a consequence of VC investment, rather than organic growth. Plus the management isn't particularly scrupulous with how they allocate those funds. The CEO, for instance, buys property himself and then rents it to WeWork (for a profit obviously). VCs let him get away with it because their business is no longer to fund and help create sustainable companies, but rather to gather as much money into a "unicorn" as they can and then pawn it off to the public markets who ultimately pay the bill.

by hdpq 7y ago

baxtr 7y ago

The ones I saw were very busy, and, filled by large corporates that wanted to be hip. I think for them value proposition is that they are able to hire some hipster people who don't want to work in the old buildings and also build some marketing stories around their "labs". That said, I "worked" in a WeWork for about 6 months and it was just terrible. Tiny offices, lots of visual distractions, lots of noise, many parties. I wouldn't ever do it again.

onion2k 7y ago
I don't think it's a matter of wanting to "be hip", but a case of recruiting being a huge problem for most companies. Renting out the 'cool' co-working spaces of WeWork probably isn't their long term goal. If BigCo has exhausted the talent in their city they have three options left: employ remote workers, pay people to relocate, or open satellite offices and pay a little more than then the local businesses to get people. WeWork is enabling the last option at scale. Renting managed office is a viable business model that's been happening for decades. Whether there's enough of a market to make WeWork work is another question, but there might be. Anecdotally, a large insurer recently opened a new office in my city here in the UK because they've had 40 open positions in their London office for years. They've already filled half those positions. They wouldn't have done that without renting a large office on a business park.
- winningcontinue 7y ago
  I don't understand why BigCo would ever go with the last option after talent exhaustion. The former two make way more sense.
  - onion2k 7y ago
    A big company that's resisted remote working will find it hard to integrate remote people in to their teams. Remote is great, but unless everyone is in favor of it it can fail horribly - a manager who insists on having oversight of what people are doing at any given moment will kill any chance of remote workers being productive. Consequently if you have a big team at 'head office' who aren't used to or good at managing remote people then remote won't work. Paying people to relocate from a small city to the most expensive place in the country is exceptionally difficult and expensive. Many developers here in the UK see London as a really bad place to live unless you're paid more than £100,000. Developer wages in London are often not £100,000.
  - deleted 7y ago
    [deleted]
- ForHackernews 7y ago
  There's also option four: raise salaries. Historically, that's what companies have done when the labour market is tight. Though obviously somebody must have crunched the numbers and decided these WeWork things are a cheaper bet.
  - alexgmcm 7y ago
    I agree - but it makes sense to try to spread work out in other cities rather than have all the jobs in London with soaring CoL and struggling infrastructure.
gbersac 7y ago
Really? I'm working in wework Lafayette right now and I love WeWork, so many free stuff (even beer!), beautiful building in a well placed location... I love it.
- hrktb 7y ago
  The frame of reference matters. In Paris at least Wework offices are relatively clean, well managed, and modern compared to most offices. But compared to a decent traditional office, they are: - noisy (always someone phoning while walking around because they couldn't get a booth, even when recruiting or doing otherwise sensitive discussions) - more agitated (at a point there was people trying electric scooters in the corridor) - some offices are just gloomy (some don't have any windows, with no natural light coming in from any direction) I think we could see them as the McDonald of offices: a know quantity that passes some threshold. It's better than a random sandwich place next to a tourist trap, but not as good as a decent well managed (although slightly pricier) restaurant.
zimpenfish 7y ago
> it was just terrible. Tiny offices, lots of visual distractions, lots of noise, many parties. I wouldn't ever do it again. Same (London, Shoreditch). Additionally we had relatively frequent and loud noises from the ceiling ("eeeeeNNGNGNGNGNGNNG") which they couldn't fix. But not once did they suggest we move offices to any one of the 30+ empty ones downstairs.
- fredley 7y ago
  In Spitalfields. It's big, and sparsely occupied. There are 6 (or more?) other WeWorks within a five minute walk and all are ultra-prime locations - not cheap. The attitude to spending is unbelievable. It's a terrible place to work. We recently moved out of the shared, fixed desk room which was relatively quiet into a glass office. There is no sound insulation whatsoever, you can hear every recruiter on the floor speaking their patter down the phone (loudly, because they have earbuds in) on repeat all day every day. I also think WeWork will collapse eventually, it's just so clearly unsustainable. Maybe the hope is that they become 'too big to fail' first?
- bigzyg33k 7y ago
  I actually know why this is! If you're referring to the WeWork I think you are, it shares a building with Scape, a student accommodation I used to live in - the kids who live there are fairly loud, and the plumbing is quite weird and noisy
  - zimpenfish 7y ago
    Yeah, that's what the engineers claimed but then it was only happening in our small office and it would alternate between "very frequent" and "gone for days" which makes their explanation somewhat unbelievable.

empath75 7y ago

The whole unicorn bubble seems to be ruthless exploitation of the sunk cost fallacy.

burtonator 7y ago

> I'll just go on the record to say that I think WeWork is the biggest deck of cards that is begging for a collapse. I've only been to a handful of locations, but they never seem busy and I'm not sure how they're making rent. VCs are paying the rent silly. It's VCs all the way down.

florakel 7y ago
The VC will cash out with the IPO. That’s the new strategy. Drive companies to valuations higher than the market cap of many S&P500 companies and then sell them to the “free market” (Uber, Lyft). Great deal for the involved VCs and banks. Is the end result a sustainable business...? who knows...? who cares...?
- bitcoinmoney 7y ago
  47b$. Wow, even AMD making real products is not even worth that. How does one hedge an s&p 500 fund that buys all these stupid unicorns?
  - ralph84 7y ago
    I agree WeWork is overvalued, but the whole thesis behind an index fund is you can’t reliably pick winners and losers. If you can, there’s no need for an index fund. There were plenty of naysayers calling FANG overvalued at their IPOs as well. If you didn’t hold those stocks for the last 10 years you missed out on most of the overall market’s gains.
    - scarface74 7y ago
      No there really weren’t people saying FANGs were overvalued at their IPOs. Facebook - was profitable and only IPOd because they had to. They had too many investors. Apple - IPOd in the 80s Amazon - maybe Netflix - wasn’t seen as a tech company. Their business was just shipping DVDs. Google - was a clear leader and already profitable at their IPO.

mbesto 7y ago

WeWork, of all of the overvalued unicorns that exist today, will likely be hit the hardest during a recession. Just watch.

bitcoinmoney 7y ago
How do I protect my VTSAX investment if we work goes public and is included in the basket??
- gowld 7y ago
  Buy a complementary short position, or convert to a less total market index, or don't worry about it because it would be a miniscule portion of VTSAX.
- WrtCdEvrydy 7y ago
  VWUSX is the only one who has bought IPOs (Uber and Lyft) in the past. VTSAX usually only dips in technology for large companies.
- patio11 7y ago
  By doing nothing because you will have less than a basis point of WeWork exposure.
  - mbesto 7y ago
    This. And they might not put it in the basket. IIRC there is talk that dual-ownership-stock co's are usually debated on whether they go in the basket for obvious (which, let's be honest, WeWork will do, cuz it's hip). Also, want some more downside protection but want to bet on the market? Check out Fidelity's contrafund.
- hudibras 7y ago
  The whole point of VTSAX is that you don't have to worry about how well any one company does.
- laluser 7y ago

bitxbit 7y ago

I am waiting to buy Herman Miller chairs for pennies on the dollar. Remember those days?

crawdog 7y ago
The number of auctions in the early 2000s was staggering! Furniture and art were the two cheapest items to buy...
- lobotryas 7y ago
  Any idea how to find these auctions for when history repeats itself?
  - arbuge 7y ago
    Craigslist, Facebook Marketplace, etc. (I'm guessing here that Craigslist and Facebook will survive.)
    - metildaa 7y ago
      Craigslist seems to be dying as people use Facebook Marketplace, OfferUp and LetGo to buy used items. The end of the personals section combined with heavy advertising by the aforementioned new entrants is causing a slow user bleed from Craigslist.
      - JamesBarney 7y ago
        And the terrible user experience of having a stranger say "I know we agreed on $200, but now that we've half way loaded it into my car I think $150 would be more fair."
        metildaa 7y ago
        Terrible experiences happen to me way more on the newer platforms I listed. People are literally crazy on those new platforms, I've had death threats (from a user which OfferUp never banned) and various other threats on those 3 platforms. Facebook, OfferUp and LetGo all ignored my complaints. Craigslist over the past 2 years has had zero issues, I've interacted with fairly even keel 40+ year old people that are easy to work with. The "no lowballers, I know what I got" crowd has mostly departed Craigslist.

avocado4 7y ago

WeWork is just too expensive here in SF. Easier to just rent an office or work from cofounder's home.

boh 7y ago

The consensus on Wall Street has WeWork nowhere near its $47B valuation. Like Uber/Lyft, its size is more a consequence of VC investment, rather than organic growth. Plus the management isn't particularly scrupulous with how they allocate those funds. The CEO, for instance, buys property himself and then rents it to WeWork (for a profit obviously). VCs let him get away with it because their business is no longer to fund and help create sustainable companies, but rather to gather as much money into a "unicorn" as they can and then pawn it off to the public markets who ultimately pay the bill.