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For a contrasting view, consider this tweet from @patio11 https://twitter.com/patio11/status/1161796809741627392 https://twitter.com/patio11/status/116179680974

For a contrasting view, consider this tweet from @patio11 https://twitter.com/patio11/status/1161796809741627392 https://twitter.com/patio11/status/1161796809741627392 > In 2025, every Fortune 500 company will have 10k+ remote workers, and every purchasing department will approve a reimbursement for WeWork with no questions asked. The actual bull case for WeWork is similar to Uber: there may be a massive trend, and WeWork is positioning itself to be the winner. With Uber it's the push to self-driving cars, and with WeWork it's the corporate move away from massive campuses and office buildings. In this new landscape, WeWork has extremely strong branding, experience, and a valuation that suggests it is the biggest player in the space.

addicted 7y ago
Real Estate is also a much bigger business than taxi cabs. The big bet on them I suspect is that any upcoming recession will probably lead to a lot of companies wanting to reduce their office costs. They may want to switch to WeWork managing their office spaces much like tech companies want to switch to Amazon Microsoft or IBM managing their IT infrastructure.
- laurentl 7y ago
  Have you seen WeWork’s prices? It’s much more expensive to host a team in WeWork than just about anywhere else (including in your own corporate headquarters). I can understand companies wanting to variabilize office costs, but the first thing they’ll do is launch an RfQ... and WeWork’s fancy offices and free beer are not going to be much help there.
MrBuddyCasino 7y ago
I'm afraid he is correct, BigCorps are the main tenants as far as I can see. Which is sad, because WeWork is as fake and psychopathic as its CEO.
- dragonwriter 7y ago
  But Big Corps can do math; whether they will be the main tenants if WeWork ever stops dumping to gain business is less clear. Big Corps have been working with the whole space of available real estate options to optimize costs longer than WeWork has existed; I don't see where WeWork had any stickiness.
  - MrBuddyCasino 7y ago
    BigCorps have „Innovation Labs“, where things are „cooler“ than in main corporate because bean bags. Value proposition is attracting employees that wouldn’t consider joining otherwise. This is them outsourcing this to WeWork, and I can see how they don’t want to be involved in running such an operation. Remember that BigCorp is not price sensitive.
    - dragonwriter 7y ago
      > Remember that BigCorp is not price sensitive. BigCorps are very price sensitive in the sense of minimizing cost per value and aggressively leveraging their size to do that. They aren't price sensitive in the sense that if something has a value proposition that justifies the cost (even if it's not a short payoff, and even if it's a large absolute price) they have an easy time finding money. They may also sometimes seem but to be price sensitive in the first sense because they tend to have lots of small fiefdoms where exceptions to aggressive optimization can survive as long as their shake is not too big and/or the right authorities have bought in, but that's an exception to the general rule and isn't going to cover a massive aren't of remote workers at each BigCorp.
mstade 7y ago
This line of reasoning makes sense to me. Anecdata: most of the top tier banks I've worked with or at now have 3-4 people per desk, with more and more people working almost 100% remotely. When I started working with banks about eight years ago, I was usually laughed out the room when suggesting we should allow remote working. I became a kind of pilot case for 100% remote working about four years ago, and nowadays people in the same teams can go months without meeting in person because if they aren't remote all the time they come in to the office on different days.
goatinaboat 7y ago
In 2025, every Fortune 500 company will have 10k+ remote workers But what does that mean, exactly? I mean, imagine I'm an employee of BigBank in BigCity. My options are work from their office in the centre of town, work from my house wearing my pyjamas or... get dressed for work and commute into the centre of town, and sit in a WeWork instead and then charge it back on expenses because... reasons? I have better coffee and better wifi at my house...
- deleted 7y ago
  [deleted]
- treis 7y ago
  > I mean, imagine I'm an employee of BigBank in BigCity. Companies like BigBank will have offices in dozens of cities around the world with frequently shifting office needs. A WeWork type company can definitely fill a role for them. But that niche is already filled and it's a tough business. At this point WeWork is renting out space for less than they paid for it. Obviously that's good for market share but not a good sign for long term viability.
- evgen 7y ago
  Imagine you are an employee of MidSizedBank in MidSizedCity but happen to live and work in BigCity because your company has enough business with BigCity companies that it makes sense to have a local presence for face to face meetings. MidSizedBank isn't quite sure how much business they will actually be doing out of BigCity over the next five years and do not want to commit to a space just yet but currently have six people in BigCity and have teams day-tripping in for 2-3 days every couple of weeks. WeWork provides the space and general office infrastructure and MidSizedBank has flexibility for this remote team. The WeWork I am at in London is filled with companies like this. Docker's UK team, PagerDuty's EU branch, more small quant teams than you can shake a stick at, etc. You may have better coffee and wifi at your house, but the rest of your team is not interested in crashing in your kitchen all day...
  - TheOtherHobbes 7y ago
    If WW can do this, so can any competitor - large and small. UK retail is about to implode, so there's going to be plenty of competition in the co-working space as landlords and local business associations agree that reduced rent from light office occupancy is better than no rent from shops. That may not quite serve the MidSizeMarket - but just as easily, larger competitors with stronger branding and sales efforts could move in. Especially after a downturn. So WW is horribly exposed. It has no real first-mover advantage, no long-term loyalty from customers, and serious financial issues.
phonon 7y ago
All that may be true--but any F500 will (or already has) strike a heavily discounted deal with WeWork. And WeWork already has small gross margins. And WeWork is still shouldering the risk of matching heavy long terms obligations with short term revenues. And F500 companies have already been doing exactly that for decades with Regus.
Traster 7y ago
That's a really compelling argument for why WeWork will be a successful office space rental company. That would mean WeWork somehow loses 90% of its value and is still successful...
dragonwriter 7y ago
If I believed patio11’s 2025 projection, I'd also think by 2030 every Fortune 500 would be looking to optimize their remote-working costs by identifying their steady baseline needs in each major metro, acquiring leases to meet that dedicated capacity, and only allowing individual reimbursements for workers they don't have dedicated space available for (possibly on a day-to-day basis.) But, I’m not convinced that his 2025—6 years from now—vision is even approximately correct.
philwelch 7y ago
The bull case is that there is a vaguely WeWork-shaped market opportunity, and WeWork exists. The bear case focuses on the flaws in WeWork itself. Is WeWork going to sort themselves out before someone else overcomes their market incumbency?
ohashi 7y ago
There is little network effects for office space vs taxi availability. Second, Regus is larger (more revenue, more locations iirc). Regus is profitable. That's just a direct coworking/office space globally company. WeWork isn't even a leader. It's just shiny bullshit.

addicted 7y ago

Real Estate is also a much bigger business than taxi cabs. The big bet on them I suspect is that any upcoming recession will probably lead to a lot of companies wanting to reduce their office costs. They may want to switch to WeWork managing their office spaces much like tech companies want to switch to Amazon Microsoft or IBM managing their IT infrastructure.

laurentl 7y ago
Have you seen WeWork’s prices? It’s much more expensive to host a team in WeWork than just about anywhere else (including in your own corporate headquarters). I can understand companies wanting to variabilize office costs, but the first thing they’ll do is launch an RfQ... and WeWork’s fancy offices and free beer are not going to be much help there.

MrBuddyCasino 7y ago

I'm afraid he is correct, BigCorps are the main tenants as far as I can see. Which is sad, because WeWork is as fake and psychopathic as its CEO.

dragonwriter 7y ago
But Big Corps can do math; whether they will be the main tenants if WeWork ever stops dumping to gain business is less clear. Big Corps have been working with the whole space of available real estate options to optimize costs longer than WeWork has existed; I don't see where WeWork had any stickiness.
- MrBuddyCasino 7y ago
  BigCorps have „Innovation Labs“, where things are „cooler“ than in main corporate because bean bags. Value proposition is attracting employees that wouldn’t consider joining otherwise. This is them outsourcing this to WeWork, and I can see how they don’t want to be involved in running such an operation. Remember that BigCorp is not price sensitive.
  - dragonwriter 7y ago
    > Remember that BigCorp is not price sensitive. BigCorps are very price sensitive in the sense of minimizing cost per value and aggressively leveraging their size to do that. They aren't price sensitive in the sense that if something has a value proposition that justifies the cost (even if it's not a short payoff, and even if it's a large absolute price) they have an easy time finding money. They may also sometimes seem but to be price sensitive in the first sense because they tend to have lots of small fiefdoms where exceptions to aggressive optimization can survive as long as their shake is not too big and/or the right authorities have bought in, but that's an exception to the general rule and isn't going to cover a massive aren't of remote workers at each BigCorp.

mstade 7y ago

This line of reasoning makes sense to me. Anecdata: most of the top tier banks I've worked with or at now have 3-4 people per desk, with more and more people working almost 100% remotely. When I started working with banks about eight years ago, I was usually laughed out the room when suggesting we should allow remote working. I became a kind of pilot case for 100% remote working about four years ago, and nowadays people in the same teams can go months without meeting in person because if they aren't remote all the time they come in to the office on different days.

goatinaboat 7y ago

In 2025, every Fortune 500 company will have 10k+ remote workers But what does that mean, exactly? I mean, imagine I'm an employee of BigBank in BigCity. My options are work from their office in the centre of town, work from my house wearing my pyjamas or... get dressed for work and commute into the centre of town, and sit in a WeWork instead and then charge it back on expenses because... reasons? I have better coffee and better wifi at my house...

deleted 7y ago
[deleted]
treis 7y ago
> I mean, imagine I'm an employee of BigBank in BigCity. Companies like BigBank will have offices in dozens of cities around the world with frequently shifting office needs. A WeWork type company can definitely fill a role for them. But that niche is already filled and it's a tough business. At this point WeWork is renting out space for less than they paid for it. Obviously that's good for market share but not a good sign for long term viability.
evgen 7y ago
Imagine you are an employee of MidSizedBank in MidSizedCity but happen to live and work in BigCity because your company has enough business with BigCity companies that it makes sense to have a local presence for face to face meetings. MidSizedBank isn't quite sure how much business they will actually be doing out of BigCity over the next five years and do not want to commit to a space just yet but currently have six people in BigCity and have teams day-tripping in for 2-3 days every couple of weeks. WeWork provides the space and general office infrastructure and MidSizedBank has flexibility for this remote team. The WeWork I am at in London is filled with companies like this. Docker's UK team, PagerDuty's EU branch, more small quant teams than you can shake a stick at, etc. You may have better coffee and wifi at your house, but the rest of your team is not interested in crashing in your kitchen all day...
- TheOtherHobbes 7y ago
  If WW can do this, so can any competitor - large and small. UK retail is about to implode, so there's going to be plenty of competition in the co-working space as landlords and local business associations agree that reduced rent from light office occupancy is better than no rent from shops. That may not quite serve the MidSizeMarket - but just as easily, larger competitors with stronger branding and sales efforts could move in. Especially after a downturn. So WW is horribly exposed. It has no real first-mover advantage, no long-term loyalty from customers, and serious financial issues.

phonon 7y ago

All that may be true--but any F500 will (or already has) strike a heavily discounted deal with WeWork. And WeWork already has small gross margins. And WeWork is still shouldering the risk of matching heavy long terms obligations with short term revenues. And F500 companies have already been doing exactly that for decades with Regus.

Traster 7y ago

That's a really compelling argument for why WeWork will be a successful office space rental company. That would mean WeWork somehow loses 90% of its value and is still successful...

dragonwriter 7y ago

If I believed patio11’s 2025 projection, I'd also think by 2030 every Fortune 500 would be looking to optimize their remote-working costs by identifying their steady baseline needs in each major metro, acquiring leases to meet that dedicated capacity, and only allowing individual reimbursements for workers they don't have dedicated space available for (possibly on a day-to-day basis.) But, I’m not convinced that his 2025—6 years from now—vision is even approximately correct.

philwelch 7y ago

The bull case is that there is a vaguely WeWork-shaped market opportunity, and WeWork exists. The bear case focuses on the flaws in WeWork itself. Is WeWork going to sort themselves out before someone else overcomes their market incumbency?

ohashi 7y ago

There is little network effects for office space vs taxi availability. Second, Regus is larger (more revenue, more locations iirc). Regus is profitable. That's just a direct coworking/office space globally company. WeWork isn't even a leader. It's just shiny bullshit.