4 ms·

Their unit economics are positive, not negative.

• Barrin92 7y ago
  with a sufficiently creative definition of unit economics aka "community-adjusted EBITDA", sure. In the actual world, not so much.
  • harryh 7y ago
    You are confusing unit economic vs profitability. They are very different things. If I manufacture a widget for $1 and sell it for $.50 then my unit economics are negative and, unless I manage to either lower manufacturing costs or raise prices I am in trouble forever. If I manufacture a widget for $1 and sell it for $1.50 then my unit economics are positive. My company might still be unprofitable due to other expenses though (R&D, Marketing, whatever). This is the situation that WeWork is in.
    • Barrin92 7y ago
      I am aware of the difference. If you look at their numbers, their literal unit economics are negative, if you employ normal EBITDA. They don't, they employ a so called "adjusted EBITDA", which last year flatout discounted 150 million in marketing as non-recurring trying to make the argument that you just made. But this is hilarious number fudging, because obviously a lot of marketing budget is recurring and goes towarss retaining existing customers and should go into a unit cost metric. They do the same thing that uber did, which is pretending that they can magically 'scale' and that they are a tech company, when in reality they are a real estate business siphoning money out of investors, pretending their losses are somehow magically going to turn into profit.
      • treis 7y ago
        >I am aware of the difference. If you look at their numbers, their literal unit economics are negative, if you employ normal EBITDA. I don't think you are aware of the difference. EBITDA takes overhead into account and is not unit economics.