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Wework loses $5200/customer, lost $1.3B in H1/2019
- blatchcorn 7y agoGood. We don't need businesses like WeWork, we need non-for-profit collectives and incubators
- intopieces 7y agoWhy not? What makes this particular use case not suitable for profit?
- liveoneggs 7y agotheir operations, obviously
- rsuelzer 7y agoTheir mission statement.
- tiborsaas 7y agoMaybe they are making not so smart decisions with their locations? I've seen two WeWork places close to each other in the heart of London's financial district. They could rent a huge warehouse on the edge of the city centre, but that would attract probably a different audience they aim for. If they generate $1.3B loss with those prices[0] then how they see a way to make a profit? It's not like self driving coffee machines will save them :) I don't get it. [0]https://www.wework.com/buildings/5-merchant-square--london https://www.wework.com/buildings/5-merchant-square--london
- intopieces 7y agoBusinesses make dumb decisions all the time, it doesn’t mean their business model isn’t suitable, in some moral sense, for profit. Unless I am misreading the comment?
- crispyporkbites 7y agoYes I too would like not for profit incubators so I can sit in them for free, build my business/collect my six figure wage and retire with lots of profits
- ohyea 7y agoJust because something is nonprofit doesn't mean it's services are free. Among other tings it means that all profits go towards furthering the organization instead of to a group of investors or shareholders. Source: I worked at a non-profit.
- briandear 7y agoSome people legit just want a place to work. They aren’t trying to join a social movement or make a statement. They want to give someone money and in exchange, someone gives them a desk. Saying we don’t need WeWork (or other for-profit cowork places,) is like saying that hotels should close down in favor of business travelers staying on communes. There is both room for and value from both for-profit and non-profit versions of these things.
- projectramo 7y agoWeWork may be billed as a for-profit company but, for all intents and purposes, it is a non-profit.
- jakozaur 7y agoThe We Company got inflated financial model. However, the mentioned metric dollars lost per customer is a vanity metric. It does not mean much. E.g. Wework earns several times more than Uber per customer. It seems there are more upfront cost to fitout the new office vs. find a driver contractor.
- brink 7y ago> The company plans to lost $2.7b in 2019 overall. This article is like 5 sentences. They couldn't bother to read it twice before posting?
- crimsonalucard 7y agoWith Uber tightening it's hires, the housing market slump and this... is the bubble beginning to pop? All we need is for one big, big event to occur.
- kahnjw 7y agoAdd to that investor pessimism driving bond yields down or inverting them, a trade war, bad global growth numbers, and investors sucking every last penny out of the stock market while there is still time. That's all you need for a downturn. That said I'm not predicting a huge downturn. As long as there is some political correction back towards the center or left, which there usually is after a downturn, they'll be driving the Dow to 35k+ in no time. History repeats itself.
- situational87 7y agoThe pattern has been established clearly with Uber. All the investors need to get paid off, so force the IPO. Doesn't matter if there is zero profit and no plans to make profit long or short term. Gotta have our exit! The exit is the only thing that matters anymore. It's appalling that the IPO market has been subverted into a blatant open air scam that our government deems perfectly legal and acceptable. It's despicable and makes me ashamed to work in tech. The whole shell game around who actually owns the shares and controls things through multiple complicated legal entities is just another huge red flag. When this all blows up the only winners will be armies of lawyers who untangle this mess.
- thefounder 7y ago>> It's despicable and makes me ashamed to work in tech. Don't be ashamed! Uber has had a positive influence in the taxi industry. We finally have a decent service and we don't have to pay vip prices (it's subsidised by investors). I'm not sure if it's the case with "we work" as well because the investor might just overpay the founder's lease agreements.
- mlonkibjuyhv 7y agoBut what will we be left with after the investor money has dried up?
- alex_duf 7y agoI mean the exit game only works if there are people to buy. Before buying there's some minimum due diligence to do
- alexashka 7y agoI'm not familiar with the process - what part of it is a scam? What makes tech a unique sector that makes this possible?
- michaelt 7y agowhat part of it is a scam? Imagine if I had a car that was falling apart, and I sold it for much more than it was worth to some chump who didn't spot the many faults I knew it had. Maybe I put a floor mat over the rust and use thicker oil so they don't hear the rattle in the engine. 100% legal, and by some people's standards not even a scam. Caveat emptor, nothing personal it's just business. Other people would say I was a rip-off merchant for not being upfront about the faults, and that people shouldn't do business with me until I mend my ways. I wouldn't have sold that car to a friend or family member - unless perhaps they had a car repair shop, and even then I'd point out every fault - and shouldn't an honest businessman treat every customer that way? situational87 is the second type of person, and thinks WeWork is the IPO equivalent of a car that's falling apart. What makes tech a unique sector that makes this possible? It's not unique to tech - just tech has lots of IPOs of companies that are losing money.
- klinskyc 7y agoThe $5200 customer is somewhat meaningless, because WeWork customers spend a lot more with WeWork than Uber or Chewy custotmers do. Would be more interesting to see as a percentage.
- zaroth 7y agoHate on WeWork all you like, but this is a shoddy article and a shoddy metric. Their losses divided by their number of customers might equal $5,200, but that tells us roughly nothing. Maybe they have found a way to print money so they are growing aggressively? I'd much rather meaningful metrics showing how awful WeWork actually is, than vanity metrics.
- jbob2000 7y agoWeWork is a real estate investment company masquerading as a work space company. As long as real estate continues to provide big returns, I don't think Wework will ever care about losing money on customers. Big money is investing in WeWork because its set up to swallow real estate all over the world. If you had buckets of cash and wanted to do this yourself, it would be really difficult and time consuming.