15 ms·

The WeWork IPO

246 points by denzil_correa 7y ago

mabbo 7y ago
The bull case for WeWork is really well laid out here. And what it tells me is that a well-run company competing with WeWork would (or will) destroy them. Imagine a WeWork competitor that launches in a few years, at the bottom of the coming recession, that isn't doing sketchy financial things to make their founder wealthy. They could match or undercut WeWork's prices at a time when WeWork will probably be barely alive (if they make it that long) and still make money. "AWS for Offices" is a great story, but it forgets that AWS has some serious competition now. Hardware as a service stopped being a disruption and became the norm with a competitive market. So too will "offices as a service" if WeWork's model is correct.
- streetcat1 7y ago
  I am not for or against wework. However, they do have first mover advantage for prime locations. I.e. it is not just cheaper rents. Also, the founder dealing is not that relevant to the future of the company. Yes, he is a public persona, but for the day to day operations, I believe that there are operational personal that make the decisions.
- southerndrift 7y ago
  What if WeWork is a bet on a future where no recession is going to happen? If the zero-interest money policy continues, then the amount of money increases and prices will slightly go up. No competitor can get the low rents that WeWork has secured.
  - human20190310 7y ago
    If the thesis is that no recession will happen, and that money is free, why not just borrow money and dump it into an S&P 500 index fund and skip all the actual work?
    - southerndrift 7y ago
      Guess what buybacks are! The problems for anybody else are diminished returns and the limited amount of banks that are willing to give you money for nothing.
- mdorazio 7y ago
  To be clear, the WeWork model is not new. Flexible office space in multiple locations has been a thing for decades from companies like Regis. I've used several of them without issue since before WeWork was even announced. What WeWork did was make it cool/startup-friendly and market the hell out of it while charging a premium that companies flush with investor cash can afford to pay out.
bryanlarsen 7y ago
AFAICT, Uber, Lyft, AirBnB & WeWork's valuation can only be justified via the natural monopoly angle: network effects and all that. Ben's AWS comparison is apt because I don't think many people consider AWS to be a natural monopoly. It has huge lock-in and a huge first-mover advantage, but is not a natural monopoly.
- braythwayt 7y ago
  But what is the lock-in with WeWork? It’s not like you have to rewrite the way you conduct meetings if you move from WeWork to ACME. With things like hotels and travel companies, there is a hidden lock in with their integration with enterprise back end systems. If there is any lock in, that’s my first guess as to where it would be: Big companies would integrate with WeWork tightly, and there would a lot of friction in setting up another company account, similar to what happens when big companies have a process around becoming an approved vendor.
  - bryanlarsen 7y ago
    Isn't WeWork mostly used by small companies? Changing the address of a company's "headquarters" is a PITA when you have a million other things to do that actually progress you towards the goal of making customers happy.
    - braythwayt 7y ago
      This is very true, but a lot of software companies begin selling to SMB, but move "up" to Enterprise companies once they have traction.
braythwayt 7y ago
Refreshingly, this article opens by stating the strong case FOR WeWork’s business, before getting down to asking whether this is a sound investment given the founder’s behaviour and the structure of the company. But when it does turn its attention to that, it is as unflinching in its criticism as it was optimistic in its appraisal of the business opportunity: Everything taken together hints at a completely unaccountable executive looting a company that is running as quickly as it can from massive losses that may very well be fatal whenever the next recession hits.
- mrtksn 7y ago
  Wouldn't recession make business real estate dirt cheap for WeWork too? Wouldn't it make flexible business spaces even more valuable when things are uncertain? At first glance, maybe a recession can enable WeWork to acquire lot's of real estate under really favorable conditions and make it's premium when the recession is over. Don't you think so? Also I'm under impression that the WeWork ysers are not the well funded companies but smaller companies and contractors and those people usually make money on their services, instead of relying on funding keeps flowing intil they exit.
  - bradstewart 7y ago
    If they have a lot of capital available, maybe. But the likely scenario (my opinion): they're stuck with big multi-year leases to property owners, most of their existing customers do not renew their short-term leases because of the economy, and WeWork's existing cash reserves can't come close to covering the short fall until the market picks up. EDIT: Grammar.
  - maxerickson 7y ago
    The problem is that they are heavily leveraged at current prices. Like if WeWork had a great business model after a massive recession, so would a competitor that didn't have an awful legacy portfolio to deal with.
  - jvagner 7y ago
    A recession now will make their already signed real estate too expensive, and that will happen when people dial back in discretionary expenses.
Kaslyn 7y ago
>Everything taken together hints at a completely unaccountable executive looting a company that is running as quickly as it can from massive losses that may very well be fatal whenever the next recession hits. Absolutely spot on
rrggrr 7y ago
IMHO: Great stock to own if/when its trading about 50% down from its IPO. I feel similarly concerning Slack.
- goatinaboat 7y ago
  If WeWork is valued similarly to its real (no pun intended) sector - which is not tech - it is worth 5-10% of its supposed market cap.
- human20190310 7y ago
  Why? I don't see how being down 50% is some kind of vaccine against being down 100%.
  - quaquaqua1 7y ago
    This is a really good comment. I remember when Blue Apron looked sensible at a 70% discount-- the stock is now at a 90% discount since its IPO.
- ApolloFortyNine 7y ago
  IMHO: Once Slack hits 50%, it must be on its way out. Slack is one of the most easily replaceable tech 'unicorns'. Your company could decide tomorrow to use one of the many competitors (or clones, since they all look just about the same) and the biggest downside for you would be having to resubscribe to channels. And that's if they don't build a migration tool for you. They're not even that great at what they do, they have regular downtime.
  - ValentineC 7y ago
    > Slack is one of the most easily replaceable tech 'unicorns'. Your company could decide tomorrow to use one of the many competitors (or clones, since they all look just about the same) and the biggest downside for you would be having to resubscribe to channels. As a tech community organiser, Slack's biggest appeal is that our members usually already have the desktop and mobile apps installed because of work, so it's relatively easy to onboard everyone by just asking them to add another workspace.
xwdv 7y ago
Before the next recession hits, WeWork will be the first to die. I hope someone from WeWork reads this, and knows it to be true.
- ProAm 7y ago
  Isn't this why all the companies are IPO'ing currently? Lyft and Uber hit the 10-year investment marker and were essentially forced to exit, but all the others I feel just see the writing on the wall and know they can't outlast a multi-year recession.
  - xwdv 7y ago
    Can’t say much about others but WeWork has been the product of a frothy bull market for a long time where anybody with a half decent startup could pick up generous venture capital. But when that market tightens up, and we see less new startups coming out and with less money than before, those startups will take a hard sobering look at their finances and decide they simply can’t afford to blow money on shitty overpriced hipster co-working spaces, which unfortunately for WeWork is the only product they offer. WeWork will run into cashflow problems and that will be the end of it.
    - i_cant_speel 7y ago
      What would be the alternative for small companies who want to have some kind of space to co-locate? If they feel like they can't afford something like We Work, they probably aren't willing to commit to a dedicated office space. Also, it isn't just tiny startups that are using We Work. The article stated that 40% of their revenue comes from large enterprises. The money will be much slower to dry up for the large, established companies.
      - vichu 7y ago
        You do realize WeWork doesn't have a monopoly on shared office spaces? In fact, they aren't even the biggest player in the space - Regus is.
127001brewer 7y ago
Matt Levin recently wrote about this too: https://www.bloomberg.com/opinion/articles/2019-08-19/we-looks-out-for-our-selves https://www.bloomberg.com/opinion/articles/2019-08-19/we-loo...
m3at 7y ago
Relevant thread on WeWork as well by Scott Galloway, from a few days back: https://news.ycombinator.com/item?id=20724260 https://news.ycombinator.com/item?id=20724260
mrosett 7y ago
I'm glad Ben laid out the bull case simply because nobody else is doing that. However, the analogy to AWS isn't compelling. First, running data centers is a much bigger challenge (technically, organizationally, and financially) than running your own office space. That's why AWS can maintain 30% gross margins and still be cheap at the price. By contrast, it's hard to imagine WeWork getting that kind of margin for repackaging leases (and adding beer and smugness into the mix.) With the rise of serverless computing and similar technologies, there's also the question of utilization. Setting up your own server for an occasional request is expensive because you end up using some small percentage. of the capacity. AWS can make a lot of margin by pooling and smoothing demand for those occasional services. I don't think there's a good analogy in the office space category: maybe shared kitchens? Your average small business is much better at managing it utilization percentage for office space than for compute.
- julianozen 7y ago
  While this is true, the ability to get space in a new city for exactly as many employees as needed, without having to have someone on the ground who knows local neighborhoods is pretty compelling. By going with WeWork a company has reasonable assurance that the location will be in a good place, have nice amenities for happy employees, and have the comfort knowing they are purchasing the right amount of space for their current needs and can expand or contract quickly. This makes expansion much quicker and lower risk. Sure a company doesn’t need to offer beer or kombucha or be in central working districts, but not having to figure out all this info on their own when they just need a few rooms in a remote city is what companies are paying for. Like scalable sever infrastructure, the benefit isn’t the cost savings, so much as not having to hirer experts for things outside your business domain.
  - icebraining 7y ago
    The alternative isn't having someone on the ground, it's hiring a reputable rentals agency that deals with international clients.
    - SolarNet 7y ago
rossdavidh 7y ago
So, this brings us to the possibility that WeWork is a symptom of a broader problem, which is that all that money which central banks have been printing since 2008 has mostly gone into doing stupid stuff. Eventually, the reality beneath the accounting always comes to the fore. In 2008, the reality that spending so much labor and resources on ever bigger houses for people who already had houses, didn't really produce much benefit (probably not even for the people living in the new houses). The money glut printed since 2008 has mostly not gone into new productive capacity, it has gone into a lot of software-related hooey like Slack, WeWork, Uber, and various new social networks. I don't even think these have improved the target sectors that much, far less have they been worth the labour and other resources put into them. It feels like another Fiscal Crisis is coming.
- onlyrealcuzzo 7y ago
  All that money did not go to fund "hooey" tech companies. $450B total has gone into VC since 2009. Stock buybacks in 2018 for U.S. companies alone was $1.1T. Total global QE is $12.3T. U.S. stock buybacks alone could be about $5.3T--or an order of magnitude more than global VC investment.
  - sol_remmy2 7y ago
    I'm not sure why you're trying to draw a connection between stock buybacks and QE when there isn't one. Stock buybacks are just tax-optimized dividends.
    - linuxftw 7y ago
      Stock buybacks are a misappropriation of capital fueled by QE/low interest rate environments.
- tjr225 7y ago
  I feel like Slack is a little out of place there. It provides a pretty great platform for work collaboration. I haven't used teams, but it's pretty great compared to say, Skype for Business, for instance.
goatinaboat 7y ago
2006 was the year that Amazon launched Amazon Web Services, a computer hardware business that leveraged the commoditization of hardware I’m not sure that’s true. IIRC AWS started as a way to monetise the excess capacity that Amazon had to have on-hand anyway to cope with spikes.
- Illniyar 7y ago
  As far as I understand it, amazon did not use AWS servers for their Amazon store infrastructure at all, at least not in the beginning. So it didn't actually "monetize excess capacity" rather it saw an opportunity and seized it with completely new investment.
- sterwill 7y ago
  That story doesn't appear to be true. https://www.networkworld.com/article/2891297/the-myth-about-how-amazon-s-web-service-started-just-won-t-die.html https://www.networkworld.com/article/2891297/the-myth-about-...
cde-v 7y ago
This guy just gets off on being contrarian. Don't ask him the color of the sky.
- JackFr 7y ago
  Put another way, "I can't address his arguments."
  - cde-v 7y ago
    I'm not saying he doesn't do his research or argue well. I am saying all he does is write contrarian articles on every topic.
Multiplayer 7y ago
Having used wework for a couple of businesses, and left after 12 months or so, I have a slightly different view. I think wework is a noisy, distracting and expensive pit stop on the way to remote work. The company turnover at the weworks we were at was remarkable, to me. I don’t know the root causes (business closing? Unsatisfied?) but it seemed very transient. Our businesses moved to fully remote and enjoyed a significant rise in productivity each time. Wework feels like a massive bet on open plan offices. They didn’t work for us.
- Gene_Parmesan 7y ago
  Is that what the actual spaces of a WeWork are like? I've never done co-location/co-working spaces, only offices. But if they really are open planned, that sounds like a nightmare. Open office plans are bad enough when it's just your team. Sharing one with people from all sorts of different teams? No thank you. So much research out there showing how bad open plans are for productivity and employee happiness.
  - phlakaton 7y ago
    It's a little worse than open space. Imagine that your office is a conference room with glass walls, and many/most people try to get work done in the lunch area. That commons is a fun space, and easy to plop down in, but not super-conducive to productivity. On the plus side, some vendors come along with free beignets if you'll just listen to their pitch.
- aczerepinski 7y ago
  Agreed. If I could buy stock in “remote work” I’d do that way before buying stock in We.
- unreal37 7y ago
  Companies entering a new market will rent a spot for their "6 person team" at WeWork. And within a year they'll transition to a real office. WeWork is indeed a pitstop. A pitstop to better offices for companies on the rise. Or a pitstop to working from home for people who think they need an office to work from but eventually don't.
Traster 7y ago
The thing that bothers me about the comparison between WeWork and AWS is that Amazon builds, owns and operates AWS data centres. Wework largely doesn't own the properties. I think that's a pretty important distinction. Also, whilst a normal business can't really build a "AWS competitor for Chicago" the "A WeWork competitor for Chicago" seems like a much bigger threat. If the only way that WeWork can win those situations is by running at a loss in competitive markets and then monopoly pricing in other markets you've got two choices: Either they'll never make money because they'll always be loss leading, or they're facing being broken up by a regulator.
- yuy910616 7y ago
  This is such a valid point. I have some similar thoughts. Kinda reminds me of the Uber case recently. Think everyone has collectively realized that the moat is not as strong, and must go 'city by city'. WeWork seems to be operating on the same shallow moat as Uber, rather than AWS
- shiftpgdn 7y ago
  WeWork generally does 15+ year deals on their leased space. What is the real lifespan of the average office building?
  - fastball 7y ago
    It must be a helluva lot longer than 15 years.
    - TheCoelacanth 7y ago
      And more importantly, the land under the building lasts much, much longer.
- fastball 7y ago
  Exactly. I'm currently working from a co-working space that I like far more than any WeWork I've ever tried, and it is cheaper.
- 7y ago
webwielder2 7y ago
>The tech industry generally speaking is hardly a model for good corporate governance I’d love to know what industry is!
docker_up 7y ago
I lived through the dot-com bust. In Silicon Valley, there were scores of "technology parks" that were completely abandoned for years afterwards when the bust hit. This is a company that can thrive in a Fed-fueled ZIRP economy that only goes up. If we don't dip into recession and keep growing for the next 15 years, this company will be genius. But if there's ever a stumble in the road, it's also the type of company that immediately collapses on itself. I also can't stress enough how detrimental Softbank has been and will be to Silicon Valley. They are dumping billions into companies that have no business being alive and if/when the econonmy collapses, it's going to be bad for the entire world. It's like preventing forest fires that clean up dead brush and instead sets up for a huge uncontrollable forest fire. I'm personally trying to figure out how to protect myself, whether it's through buying US Treasuries, or gold or diversifying my cash in various currencies. But personally I don't think the fund is going to survive and there will be terrible repercussions from it.
- petra 7y ago
  What repercussions do you see for the fund not surviving ?
  - docker_up 7y ago
    The biggest repercussion I see is many, many companies goes belly up all at the same time, with lots of unemployment and a massive shock to the economy. Companies going bankrupt happen all the time, but if their demise is prevented because they keep getting capital injections from Softbank, then once there's a systemic event so big that they can't get their next infusion, then they will all go bankrupt in one fell swoop with a bunch of companies going bankrupt, the companies providing those companies services going bankrupt, hundreds of thousands out of jobs, etc. Imagine if WeWork went bankrupt right now. All their employees would be fired, and all the companies that provide services (catering, janitorial, Salesforce? AWS/GCP? etc) would layoff those employees. The bankruptcy trustees would be making a mad dash to try to sell their assets before the markets collapsed, depressing the markets. This is obviously a worst case scenario but that's what basically happened during the dotcom bust.
- 7y ago
WhompingWindows 7y ago
The comparison between WeWork and AWS the author attempts to make in the bull case is deeply flawed, IMO. He states the AWS story: commoditizing servers and allowing new customers to get in cheaply/quickly/easily. Then he compares to that to We Work...well, don't many customers already have libraries, cafes, and their own homes to potentially work from? Did AWS customers have numerous server options to easily use in case they needed to save money? How are these comparable? Adding ping pong tables and surveillance tech to an open office work space is vastly less useful than AWS. And corporate entities, surely WeWork will rely on those and not just contractors/freelancers/entrepeneurs, right? Well, corporations in a recession would likely lay workers off, so this dream WeWork has of gaining corporate partners seems unlikely in the next 5 years, if a recession is to hit as everyone claims. These corporate players will probably have excess office space of their own, never mind paying for more. I appreciate attempting to present the bull case, but comparing WeWork to AWS is laughable.
- sturgill 7y ago
  I thought his AWS comparison was more favorable than it seems you did. I remember launching a startup in 2009 and our head investor (who was a CFO at a bespoke insurance firm) was floored when he saw our financial docs and that we were able to make our infrastructure expenses OpEx instead of CapEx. As AWS got its start making it easy for startups to get access to infrastructure, the bull case for WeWork is that startups choose that environment over signing a traditional lease. It’s not that a startup can’t work out of a coffee shop, just like we could have theoretically run our own email servers. But a physical location and address has advantages and WeWork opens that to more people with less friction than the pre-WeWork options. But that’s the bull case. I’m not a financial analyst and I’m not your financial analyst so this isn’t financial advice, but my risk profile tells me to pass on this opportunity...
  - majewsky 7y ago
    > [He] was floored when he saw [...] that we were able to make our infrastructure expenses OpEx instead of CapEx. Can someone ELI5 to me why spending a dollar on OpEx is better than spending a dollar on CapEx?
xivzgrev 7y ago
I respect the hell out of this author but this article to me fell a little short of his usual rigor/insight. Two points I would’ve like to see him analyze given the AWS metaphor 1) gross margins - this article reports 15-20% not 30% AWS https://news.crunchbase.com/news/gross-margins-wework-and-the-public-comp-question/ https://news.crunchbase.com/news/gross-margins-wework-and-th... Maybe AWS was able to improve GM over time and the author expects similar trend but he should explore this given the whole biz is built around variable income. 2) comparing the core competency between AWS and WeWork. He only gives this lip service and assumes the two are the same but I don’t agree. I buy the argument that There’s core competencies in server management. In the old days servers were pretty basic - you buy, install, and turn on. Done. But then companies realized all that fixed supply was expensive so they made server supply dynamic, being able to dial up and down on short notice. That, plus integrations with lots of dev tools, necessitated a lot of software on top of the hardware. So now a company can invest precious engineers in managing that, or can use AWS or Google cloud, where the fixed costs of developing that software scale infinitely. Plus add on new requirements around security, etc and it’s a lot for a company to manage in house. Compare this to office space. The fixed cost of lease is NOT scalable (only so many people you can fit in a building), and the core tasks of managing an office are...basically the same as they’ve always been. Sure you have some new design trends and IT requirements, but it’s slow moving. And who manages office space? HR and IT, which while valuable, aren’t forcing companies into trade offs between working on that or new product features / revenue driving opps. I definitely agree wework is valuable for the flexibility. I just don’t really see mass adoption from large companies in the long term. Sure some large company may temporarily use them when they enter a new market but they will revert to managing themselves once they feel confident in signing their own lease.
- yuy910616 7y ago
  Call it post-vacation hangover...Your point is very well made tho. Completely agree that office space != Cloud Service.
rwmj 7y ago
Regus (IWG) have been doing this for nearly 20 years. Apart from the slightly funkier interior decoration, what's the big difference?
- yuy910616 7y ago
  Scale. # of locations.
- gist 7y ago
  Marketing and branding and some small coolness that matters. Real estate is emotional everyone already knows that when buying a house. You buy on emotion. Used to be the case in the past with autos also. (Not so much now though.) Saying what's the difference (valid question not pointed toward you) with Wework vs. IWG is like saying 'why a Porsche vs. a Chevy' or even 'Why a 911 vs. a Corvette'. It's not explained by things other than emotion over a brand. I say this as someone who has purchased many 911's and wouldn't touch a Corvette with a 10 foot pole. Doesn't matter the price or the performance. It's all in my head but that head is pretty emotional about that type of purchase. (One other thing is it's likely that the people makeup of a wework office is much different than that of a IWG office (I am making a guess here I don't know but suspect it is). As such it's the same as 'why starbucks vs. dunkin donuts' for coffee. Very generally the people sitting and getting coffee at starbucks appear physically different than the ones sitting in a dunkin donuts.
- doppp 7y ago
  Nothing. Regus has 2.5 million customers but WeWork has only about over a quarter of a million. I live in a public housing estate in Singapore and there's a Regus Business Lounge in our estate's public library. We aren't even talking about the central business district, here. I think WeWork has a lot more to catch up on in terms of scale and reach. Right now they're just building up hype like a tech company but really, they're just in the property space.
  - kevstev 7y ago
    _Nothing_ This is the key "problem." WeWork is a boring real estate business that is trying to frame itself as some massive scale startup. Add in growth fueled by a ton of VC money (not earnings), tons of leverage, not even for owned property, but leases, some questionable deals with the CEO, insane hype and trying to redefine accounting metrics, and in the end you have a "boring" business dressed up in a pretty hype coat made of red flags.
dbuder 7y ago
I disagree that WeWork has a lack of competition, they are getting crushed in China and many local businesses are undercutting them. I'm shocked landlords sign leases with an entity they cannot sue.
wallflower 7y ago
The AWS analogy is flawed because there is a “lock in” to the ecosystem of AWS services outside EC2 once you start using those services. Terraform aside, it is not easy to divest of AWS once you invest in it for your infrastructure. WeWork, on the other hand, has very little “lock in”. Not much to stop your business from moving out.
stephc_int13 7y ago
The growing trend or working remotely is clearly contrarian to this case. As a startup co-founder and CEO, I've never found their offer compelling enough, way too pricey to put it bluntly. And I really think that remote work is here to stay and grow.
- not_a_moth 7y ago
  Not exactly. It actually took me a while to figure out that WeWork even offers this, but for $45 a month you can have access to pretty much any common area at any WeWork, with a per-visit fee ($25-$50) and 2 credits per month. In other words, I can travel and work remotely, and maybe once or twice a week check into a WeWork for a proper work space, unlimited coffee, and a bit of camaraderie and networking. For $100-$200 a month.
  - stephc_int13 7y ago
    Ok, maybe that's just me, but I do not find that compelling either. I never really managed to work efficiently on a laptop or with a lot of strangers around. If it was quiet as a library and equipped with real desktop screens (at least two) and good keyboards, my opinion might be different. And if working on a laptop is your thing, you might as well do that from an actual library or a Starbuck...
    - isostatic 7y ago
      > Ok, maybe that's just me, but I do not find that compelling either. I never really managed to work efficiently on a laptop or with a lot of strangers around. That's corporate hot desking for you.
      - stephc_int13 7y ago
        I know, I once worked at a startup where I made the mistake to ask for a laptop instead of a good old boring workstation, figuring that I might want to use it from home sometimes... I did only once. My desk was a bit too close to the conference room and I could hear people talking aloud on the phone, it was overall extremely unpleasant. Of course I could kinda work with the laptop and the noise, but I never attained the magic -flow-
734129837261 7y ago
I've started working in Mexico City as a European software engineer. My job offers 100% remote work and that allows me to work from anywhere. My home includes a girlfriend and her incidental home office, so I went searching for office space for myself, thinking it would be affordable in CDMX. There are like 7 WeWork locations and tons of other state of the art places to work. But for a private office sized to place one desk chair I'd be paying well over €500 euros per month. And it won't be a corner office, it'll be a glass-surrounded cubicle without a view. So, instead, I went to look on AirBNB. I could rent a full apartment for about the same amount of money, except this would come with a view, with a couch, a shower, kitchen, weekly cleaning service, and all kinds of nice things. But I kept on looking. There are numerous extremely luxurious buildings in the city where middle to high class people live. And a lot of them have rooms for rent. So I considered my own office room inside an apartment I share with 2 others. I can lock the door and I get 2 pets for free. Best of all: The building is only 2 years old. They have a full sized gym on the 22nd floor, 7 swimming pools of which 2 olympic sized ones and 2 infinity pools, free saunas, free yoga and spinning lessons every day, a bowling alley and gaming hall, an indoor soccer field, et cetera. So I took that. The building even comes with integrated office rooms and a full floor with couches and desks and tables and ping-pong tables and table-tennis tables and a grand view of the city. So it's not like they're against people working from there. The problem with WeWork is that they aren't that interesting, not even in cities that are more expensive. The credits you get only allow you to switch locations until they run out, and then you need to purchase new ones for a lot of money. They should really do a few things: 1. Look at the area they're in, at the very least be cheaper than AirBNB when it comes to offering a space to work from. 2. Once someone is a member, allow them to work from ALL WeWork locations (in the public areas). No credits cost, nothing. 3. On the website, per location, clearly show how crowded it is and how crowded it is expected to be that day. They're way too expensive for what amounts to a crowded and noisy library. At least in a library people are expected to keep quiet so you can work. At WeWork I've been told you're to expect people coming up to you. Side note: WeWork might be a great choice for companies who want to rent their first office space. That's not something I looked into.
jpalomaki 7y ago
Slack grew, because anybody from your organization could just acquire the tool. No need to talk with IT. What if same thing hapoened for office space. BYOD and support for remoting allows people to work anywhere. If marketing finds the company HQ unattractive, they could just move elsewhere. Does it actually make sense for different teams to be stuck in one location. Should they instead work close to customers or partners?
inflatableDodo 7y ago
>"The obvious competitor is a company called IWG, with 3,306 locations and 445k workstations at the end of 2018. WeWork, in comparison, had 528 locations and 604k workstations as of June 30, 2019. Note the date mismatch — this isn’t a perfect comparison — but that only makes the point that these are two very different companies: WeWork had only 466k workstations at the end of 2018; a year earlier, when the Wall Street Journal pointed out that WeWork’s then-valuation was 5x IWG’s (it is now 13x), WeWork had a mere 150k, while IWG had 414k." There are a ton of obvious competitors, they are not big, but they are everywhere, at least in the UK. Hotdesk rental has been a common SME thing for ages.
olivermarks 7y ago
https://www.bloomberg.com/news/articles/2019-08-20/wework-analyst-warns-ipo-filing-a-masterpiece-of-obfuscation https://www.bloomberg.com/news/articles/2019-08-20/wework-an...
nathanvanfleet 7y ago
Why does this article keep calling WeWork a software company??????
- TheCoelacanth 7y ago
  Because there's no way to justify their ludicrous valuation if you admit that they are a real estate company.
AtlasBarfed 7y ago
AWS has data lock-in and offers fundamental capability-altering abilities to its customers. And it can't be replicated without a massive influx of capital to jumpstart (Microsoft, Google, etc). WeWork has hundreds of competitors, including every building in a downtown with unused office space, to say nothing of better organized entities.

246 points by denzil_correa 7y ago

The bull case for WeWork is really well laid out here. And what it tells me is that a well-run company competing with WeWork would (or will) destroy them. Imagine a WeWork competitor that launches in a few years, at the bottom of the coming recession, that isn't doing sketchy financial things to make their founder wealthy. They could match or undercut WeWork's prices at a time when WeWork will probably be barely alive (if they make it that long) and still make money. "AWS for Offices" is a great story, but it forgets that AWS has some serious competition now. Hardware as a service stopped being a disruption and became the norm with a competitive market. So too will "offices as a service" if WeWork's model is correct.

streetcat1 7y ago
I am not for or against wework. However, they do have first mover advantage for prime locations. I.e. it is not just cheaper rents. Also, the founder dealing is not that relevant to the future of the company. Yes, he is a public persona, but for the day to day operations, I believe that there are operational personal that make the decisions.
southerndrift 7y ago
What if WeWork is a bet on a future where no recession is going to happen? If the zero-interest money policy continues, then the amount of money increases and prices will slightly go up. No competitor can get the low rents that WeWork has secured.
- human20190310 7y ago
  If the thesis is that no recession will happen, and that money is free, why not just borrow money and dump it into an S&P 500 index fund and skip all the actual work?
  - southerndrift 7y ago
    Guess what buybacks are! The problems for anybody else are diminished returns and the limited amount of banks that are willing to give you money for nothing.
mdorazio 7y ago
To be clear, the WeWork model is not new. Flexible office space in multiple locations has been a thing for decades from companies like Regis. I've used several of them without issue since before WeWork was even announced. What WeWork did was make it cool/startup-friendly and market the hell out of it while charging a premium that companies flush with investor cash can afford to pay out.

bryanlarsen 7y ago

AFAICT, Uber, Lyft, AirBnB & WeWork's valuation can only be justified via the natural monopoly angle: network effects and all that. Ben's AWS comparison is apt because I don't think many people consider AWS to be a natural monopoly. It has huge lock-in and a huge first-mover advantage, but is not a natural monopoly.

braythwayt 7y ago
But what is the lock-in with WeWork? It’s not like you have to rewrite the way you conduct meetings if you move from WeWork to ACME. With things like hotels and travel companies, there is a hidden lock in with their integration with enterprise back end systems. If there is any lock in, that’s my first guess as to where it would be: Big companies would integrate with WeWork tightly, and there would a lot of friction in setting up another company account, similar to what happens when big companies have a process around becoming an approved vendor.
- bryanlarsen 7y ago
  Isn't WeWork mostly used by small companies? Changing the address of a company's "headquarters" is a PITA when you have a million other things to do that actually progress you towards the goal of making customers happy.
  - braythwayt 7y ago
    This is very true, but a lot of software companies begin selling to SMB, but move "up" to Enterprise companies once they have traction.

braythwayt 7y ago

Refreshingly, this article opens by stating the strong case FOR WeWork’s business, before getting down to asking whether this is a sound investment given the founder’s behaviour and the structure of the company. But when it does turn its attention to that, it is as unflinching in its criticism as it was optimistic in its appraisal of the business opportunity: Everything taken together hints at a completely unaccountable executive looting a company that is running as quickly as it can from massive losses that may very well be fatal whenever the next recession hits.

mrtksn 7y ago
Wouldn't recession make business real estate dirt cheap for WeWork too? Wouldn't it make flexible business spaces even more valuable when things are uncertain? At first glance, maybe a recession can enable WeWork to acquire lot's of real estate under really favorable conditions and make it's premium when the recession is over. Don't you think so? Also I'm under impression that the WeWork ysers are not the well funded companies but smaller companies and contractors and those people usually make money on their services, instead of relying on funding keeps flowing intil they exit.
- bradstewart 7y ago
  If they have a lot of capital available, maybe. But the likely scenario (my opinion): they're stuck with big multi-year leases to property owners, most of their existing customers do not renew their short-term leases because of the economy, and WeWork's existing cash reserves can't come close to covering the short fall until the market picks up. EDIT: Grammar.
- maxerickson 7y ago
  The problem is that they are heavily leveraged at current prices. Like if WeWork had a great business model after a massive recession, so would a competitor that didn't have an awful legacy portfolio to deal with.
- jvagner 7y ago
  A recession now will make their already signed real estate too expensive, and that will happen when people dial back in discretionary expenses.

Kaslyn 7y ago

>Everything taken together hints at a completely unaccountable executive looting a company that is running as quickly as it can from massive losses that may very well be fatal whenever the next recession hits. Absolutely spot on

rrggrr 7y ago

IMHO: Great stock to own if/when its trading about 50% down from its IPO. I feel similarly concerning Slack.

goatinaboat 7y ago
If WeWork is valued similarly to its real (no pun intended) sector - which is not tech - it is worth 5-10% of its supposed market cap.
human20190310 7y ago
Why? I don't see how being down 50% is some kind of vaccine against being down 100%.
- quaquaqua1 7y ago
  This is a really good comment. I remember when Blue Apron looked sensible at a 70% discount-- the stock is now at a 90% discount since its IPO.
ApolloFortyNine 7y ago
IMHO: Once Slack hits 50%, it must be on its way out. Slack is one of the most easily replaceable tech 'unicorns'. Your company could decide tomorrow to use one of the many competitors (or clones, since they all look just about the same) and the biggest downside for you would be having to resubscribe to channels. And that's if they don't build a migration tool for you. They're not even that great at what they do, they have regular downtime.
- ValentineC 7y ago
  > Slack is one of the most easily replaceable tech 'unicorns'. Your company could decide tomorrow to use one of the many competitors (or clones, since they all look just about the same) and the biggest downside for you would be having to resubscribe to channels. As a tech community organiser, Slack's biggest appeal is that our members usually already have the desktop and mobile apps installed because of work, so it's relatively easy to onboard everyone by just asking them to add another workspace.

xwdv 7y ago

Before the next recession hits, WeWork will be the first to die. I hope someone from WeWork reads this, and knows it to be true.

ProAm 7y ago
Isn't this why all the companies are IPO'ing currently? Lyft and Uber hit the 10-year investment marker and were essentially forced to exit, but all the others I feel just see the writing on the wall and know they can't outlast a multi-year recession.
- xwdv 7y ago
  Can’t say much about others but WeWork has been the product of a frothy bull market for a long time where anybody with a half decent startup could pick up generous venture capital. But when that market tightens up, and we see less new startups coming out and with less money than before, those startups will take a hard sobering look at their finances and decide they simply can’t afford to blow money on shitty overpriced hipster co-working spaces, which unfortunately for WeWork is the only product they offer. WeWork will run into cashflow problems and that will be the end of it.
  - i_cant_speel 7y ago
    What would be the alternative for small companies who want to have some kind of space to co-locate? If they feel like they can't afford something like We Work, they probably aren't willing to commit to a dedicated office space. Also, it isn't just tiny startups that are using We Work. The article stated that 40% of their revenue comes from large enterprises. The money will be much slower to dry up for the large, established companies.
    - vichu 7y ago
      You do realize WeWork doesn't have a monopoly on shared office spaces? In fact, they aren't even the biggest player in the space - Regus is.

127001brewer 7y ago

Matt Levin recently wrote about this too: https://www.bloomberg.com/opinion/articles/2019-08-19/we-looks-out-for-our-selves https://www.bloomberg.com/opinion/articles/2019-08-19/we-loo...

m3at 7y ago

Relevant thread on WeWork as well by Scott Galloway, from a few days back: https://news.ycombinator.com/item?id=20724260 https://news.ycombinator.com/item?id=20724260

mrosett 7y ago

I'm glad Ben laid out the bull case simply because nobody else is doing that. However, the analogy to AWS isn't compelling. First, running data centers is a much bigger challenge (technically, organizationally, and financially) than running your own office space. That's why AWS can maintain 30% gross margins and still be cheap at the price. By contrast, it's hard to imagine WeWork getting that kind of margin for repackaging leases (and adding beer and smugness into the mix.) With the rise of serverless computing and similar technologies, there's also the question of utilization. Setting up your own server for an occasional request is expensive because you end up using some small percentage. of the capacity. AWS can make a lot of margin by pooling and smoothing demand for those occasional services. I don't think there's a good analogy in the office space category: maybe shared kitchens? Your average small business is much better at managing it utilization percentage for office space than for compute.

julianozen 7y ago
While this is true, the ability to get space in a new city for exactly as many employees as needed, without having to have someone on the ground who knows local neighborhoods is pretty compelling. By going with WeWork a company has reasonable assurance that the location will be in a good place, have nice amenities for happy employees, and have the comfort knowing they are purchasing the right amount of space for their current needs and can expand or contract quickly. This makes expansion much quicker and lower risk. Sure a company doesn’t need to offer beer or kombucha or be in central working districts, but not having to figure out all this info on their own when they just need a few rooms in a remote city is what companies are paying for. Like scalable sever infrastructure, the benefit isn’t the cost savings, so much as not having to hirer experts for things outside your business domain.
- icebraining 7y ago
  The alternative isn't having someone on the ground, it's hiring a reputable rentals agency that deals with international clients.
  - SolarNet 7y ago

rossdavidh 7y ago

So, this brings us to the possibility that WeWork is a symptom of a broader problem, which is that all that money which central banks have been printing since 2008 has mostly gone into doing stupid stuff. Eventually, the reality beneath the accounting always comes to the fore. In 2008, the reality that spending so much labor and resources on ever bigger houses for people who already had houses, didn't really produce much benefit (probably not even for the people living in the new houses). The money glut printed since 2008 has mostly not gone into new productive capacity, it has gone into a lot of software-related hooey like Slack, WeWork, Uber, and various new social networks. I don't even think these have improved the target sectors that much, far less have they been worth the labour and other resources put into them. It feels like another Fiscal Crisis is coming.

onlyrealcuzzo 7y ago
All that money did not go to fund "hooey" tech companies. $450B total has gone into VC since 2009. Stock buybacks in 2018 for U.S. companies alone was $1.1T. Total global QE is $12.3T. U.S. stock buybacks alone could be about $5.3T--or an order of magnitude more than global VC investment.
- sol_remmy2 7y ago
  I'm not sure why you're trying to draw a connection between stock buybacks and QE when there isn't one. Stock buybacks are just tax-optimized dividends.
  - linuxftw 7y ago
    Stock buybacks are a misappropriation of capital fueled by QE/low interest rate environments.
tjr225 7y ago
I feel like Slack is a little out of place there. It provides a pretty great platform for work collaboration. I haven't used teams, but it's pretty great compared to say, Skype for Business, for instance.

goatinaboat 7y ago

2006 was the year that Amazon launched Amazon Web Services, a computer hardware business that leveraged the commoditization of hardware I’m not sure that’s true. IIRC AWS started as a way to monetise the excess capacity that Amazon had to have on-hand anyway to cope with spikes.

Illniyar 7y ago
As far as I understand it, amazon did not use AWS servers for their Amazon store infrastructure at all, at least not in the beginning. So it didn't actually "monetize excess capacity" rather it saw an opportunity and seized it with completely new investment.
sterwill 7y ago
That story doesn't appear to be true. https://www.networkworld.com/article/2891297/the-myth-about-how-amazon-s-web-service-started-just-won-t-die.html https://www.networkworld.com/article/2891297/the-myth-about-...

cde-v 7y ago

This guy just gets off on being contrarian. Don't ask him the color of the sky.

JackFr 7y ago
Put another way, "I can't address his arguments."
- cde-v 7y ago
  I'm not saying he doesn't do his research or argue well. I am saying all he does is write contrarian articles on every topic.

Multiplayer 7y ago

Having used wework for a couple of businesses, and left after 12 months or so, I have a slightly different view. I think wework is a noisy, distracting and expensive pit stop on the way to remote work. The company turnover at the weworks we were at was remarkable, to me. I don’t know the root causes (business closing? Unsatisfied?) but it seemed very transient. Our businesses moved to fully remote and enjoyed a significant rise in productivity each time. Wework feels like a massive bet on open plan offices. They didn’t work for us.

Gene_Parmesan 7y ago
Is that what the actual spaces of a WeWork are like? I've never done co-location/co-working spaces, only offices. But if they really are open planned, that sounds like a nightmare. Open office plans are bad enough when it's just your team. Sharing one with people from all sorts of different teams? No thank you. So much research out there showing how bad open plans are for productivity and employee happiness.
- phlakaton 7y ago
  It's a little worse than open space. Imagine that your office is a conference room with glass walls, and many/most people try to get work done in the lunch area. That commons is a fun space, and easy to plop down in, but not super-conducive to productivity. On the plus side, some vendors come along with free beignets if you'll just listen to their pitch.
aczerepinski 7y ago
Agreed. If I could buy stock in “remote work” I’d do that way before buying stock in We.
unreal37 7y ago
Companies entering a new market will rent a spot for their "6 person team" at WeWork. And within a year they'll transition to a real office. WeWork is indeed a pitstop. A pitstop to better offices for companies on the rise. Or a pitstop to working from home for people who think they need an office to work from but eventually don't.

Traster 7y ago

The thing that bothers me about the comparison between WeWork and AWS is that Amazon builds, owns and operates AWS data centres. Wework largely doesn't own the properties. I think that's a pretty important distinction. Also, whilst a normal business can't really build a "AWS competitor for Chicago" the "A WeWork competitor for Chicago" seems like a much bigger threat. If the only way that WeWork can win those situations is by running at a loss in competitive markets and then monopoly pricing in other markets you've got two choices: Either they'll never make money because they'll always be loss leading, or they're facing being broken up by a regulator.

yuy910616 7y ago
This is such a valid point. I have some similar thoughts. Kinda reminds me of the Uber case recently. Think everyone has collectively realized that the moat is not as strong, and must go 'city by city'. WeWork seems to be operating on the same shallow moat as Uber, rather than AWS
shiftpgdn 7y ago
WeWork generally does 15+ year deals on their leased space. What is the real lifespan of the average office building?
- fastball 7y ago
  It must be a helluva lot longer than 15 years.
  - TheCoelacanth 7y ago
    And more importantly, the land under the building lasts much, much longer.
fastball 7y ago
Exactly. I'm currently working from a co-working space that I like far more than any WeWork I've ever tried, and it is cheaper.
7y ago

webwielder2 7y ago

>The tech industry generally speaking is hardly a model for good corporate governance I’d love to know what industry is!

docker_up 7y ago

I lived through the dot-com bust. In Silicon Valley, there were scores of "technology parks" that were completely abandoned for years afterwards when the bust hit. This is a company that can thrive in a Fed-fueled ZIRP economy that only goes up. If we don't dip into recession and keep growing for the next 15 years, this company will be genius. But if there's ever a stumble in the road, it's also the type of company that immediately collapses on itself. I also can't stress enough how detrimental Softbank has been and will be to Silicon Valley. They are dumping billions into companies that have no business being alive and if/when the econonmy collapses, it's going to be bad for the entire world. It's like preventing forest fires that clean up dead brush and instead sets up for a huge uncontrollable forest fire. I'm personally trying to figure out how to protect myself, whether it's through buying US Treasuries, or gold or diversifying my cash in various currencies. But personally I don't think the fund is going to survive and there will be terrible repercussions from it.

petra 7y ago
What repercussions do you see for the fund not surviving ?
- docker_up 7y ago
  The biggest repercussion I see is many, many companies goes belly up all at the same time, with lots of unemployment and a massive shock to the economy. Companies going bankrupt happen all the time, but if their demise is prevented because they keep getting capital injections from Softbank, then once there's a systemic event so big that they can't get their next infusion, then they will all go bankrupt in one fell swoop with a bunch of companies going bankrupt, the companies providing those companies services going bankrupt, hundreds of thousands out of jobs, etc. Imagine if WeWork went bankrupt right now. All their employees would be fired, and all the companies that provide services (catering, janitorial, Salesforce? AWS/GCP? etc) would layoff those employees. The bankruptcy trustees would be making a mad dash to try to sell their assets before the markets collapsed, depressing the markets. This is obviously a worst case scenario but that's what basically happened during the dotcom bust.
7y ago

WhompingWindows 7y ago

The comparison between WeWork and AWS the author attempts to make in the bull case is deeply flawed, IMO. He states the AWS story: commoditizing servers and allowing new customers to get in cheaply/quickly/easily. Then he compares to that to We Work...well, don't many customers already have libraries, cafes, and their own homes to potentially work from? Did AWS customers have numerous server options to easily use in case they needed to save money? How are these comparable? Adding ping pong tables and surveillance tech to an open office work space is vastly less useful than AWS. And corporate entities, surely WeWork will rely on those and not just contractors/freelancers/entrepeneurs, right? Well, corporations in a recession would likely lay workers off, so this dream WeWork has of gaining corporate partners seems unlikely in the next 5 years, if a recession is to hit as everyone claims. These corporate players will probably have excess office space of their own, never mind paying for more. I appreciate attempting to present the bull case, but comparing WeWork to AWS is laughable.

sturgill 7y ago
I thought his AWS comparison was more favorable than it seems you did. I remember launching a startup in 2009 and our head investor (who was a CFO at a bespoke insurance firm) was floored when he saw our financial docs and that we were able to make our infrastructure expenses OpEx instead of CapEx. As AWS got its start making it easy for startups to get access to infrastructure, the bull case for WeWork is that startups choose that environment over signing a traditional lease. It’s not that a startup can’t work out of a coffee shop, just like we could have theoretically run our own email servers. But a physical location and address has advantages and WeWork opens that to more people with less friction than the pre-WeWork options. But that’s the bull case. I’m not a financial analyst and I’m not your financial analyst so this isn’t financial advice, but my risk profile tells me to pass on this opportunity...
- majewsky 7y ago
  > [He] was floored when he saw [...] that we were able to make our infrastructure expenses OpEx instead of CapEx. Can someone ELI5 to me why spending a dollar on OpEx is better than spending a dollar on CapEx?

xivzgrev 7y ago

I respect the hell out of this author but this article to me fell a little short of his usual rigor/insight. Two points I would’ve like to see him analyze given the AWS metaphor 1) gross margins - this article reports 15-20% not 30% AWS https://news.crunchbase.com/news/gross-margins-wework-and-the-public-comp-question/ https://news.crunchbase.com/news/gross-margins-wework-and-th... Maybe AWS was able to improve GM over time and the author expects similar trend but he should explore this given the whole biz is built around variable income. 2) comparing the core competency between AWS and WeWork. He only gives this lip service and assumes the two are the same but I don’t agree. I buy the argument that There’s core competencies in server management. In the old days servers were pretty basic - you buy, install, and turn on. Done. But then companies realized all that fixed supply was expensive so they made server supply dynamic, being able to dial up and down on short notice. That, plus integrations with lots of dev tools, necessitated a lot of software on top of the hardware. So now a company can invest precious engineers in managing that, or can use AWS or Google cloud, where the fixed costs of developing that software scale infinitely. Plus add on new requirements around security, etc and it’s a lot for a company to manage in house. Compare this to office space. The fixed cost of lease is NOT scalable (only so many people you can fit in a building), and the core tasks of managing an office are...basically the same as they’ve always been. Sure you have some new design trends and IT requirements, but it’s slow moving. And who manages office space? HR and IT, which while valuable, aren’t forcing companies into trade offs between working on that or new product features / revenue driving opps. I definitely agree wework is valuable for the flexibility. I just don’t really see mass adoption from large companies in the long term. Sure some large company may temporarily use them when they enter a new market but they will revert to managing themselves once they feel confident in signing their own lease.

yuy910616 7y ago
Call it post-vacation hangover...Your point is very well made tho. Completely agree that office space != Cloud Service.

rwmj 7y ago

Regus (IWG) have been doing this for nearly 20 years. Apart from the slightly funkier interior decoration, what's the big difference?

yuy910616 7y ago
Scale. # of locations.
gist 7y ago
Marketing and branding and some small coolness that matters. Real estate is emotional everyone already knows that when buying a house. You buy on emotion. Used to be the case in the past with autos also. (Not so much now though.) Saying what's the difference (valid question not pointed toward you) with Wework vs. IWG is like saying 'why a Porsche vs. a Chevy' or even 'Why a 911 vs. a Corvette'. It's not explained by things other than emotion over a brand. I say this as someone who has purchased many 911's and wouldn't touch a Corvette with a 10 foot pole. Doesn't matter the price or the performance. It's all in my head but that head is pretty emotional about that type of purchase. (One other thing is it's likely that the people makeup of a wework office is much different than that of a IWG office (I am making a guess here I don't know but suspect it is). As such it's the same as 'why starbucks vs. dunkin donuts' for coffee. Very generally the people sitting and getting coffee at starbucks appear physically different than the ones sitting in a dunkin donuts.
doppp 7y ago
Nothing. Regus has 2.5 million customers but WeWork has only about over a quarter of a million. I live in a public housing estate in Singapore and there's a Regus Business Lounge in our estate's public library. We aren't even talking about the central business district, here. I think WeWork has a lot more to catch up on in terms of scale and reach. Right now they're just building up hype like a tech company but really, they're just in the property space.
- kevstev 7y ago
  _Nothing_ This is the key "problem." WeWork is a boring real estate business that is trying to frame itself as some massive scale startup. Add in growth fueled by a ton of VC money (not earnings), tons of leverage, not even for owned property, but leases, some questionable deals with the CEO, insane hype and trying to redefine accounting metrics, and in the end you have a "boring" business dressed up in a pretty hype coat made of red flags.

dbuder 7y ago

I disagree that WeWork has a lack of competition, they are getting crushed in China and many local businesses are undercutting them. I'm shocked landlords sign leases with an entity they cannot sue.

wallflower 7y ago

The AWS analogy is flawed because there is a “lock in” to the ecosystem of AWS services outside EC2 once you start using those services. Terraform aside, it is not easy to divest of AWS once you invest in it for your infrastructure. WeWork, on the other hand, has very little “lock in”. Not much to stop your business from moving out.

stephc_int13 7y ago

The growing trend or working remotely is clearly contrarian to this case. As a startup co-founder and CEO, I've never found their offer compelling enough, way too pricey to put it bluntly. And I really think that remote work is here to stay and grow.

not_a_moth 7y ago
Not exactly. It actually took me a while to figure out that WeWork even offers this, but for $45 a month you can have access to pretty much any common area at any WeWork, with a per-visit fee ($25-$50) and 2 credits per month. In other words, I can travel and work remotely, and maybe once or twice a week check into a WeWork for a proper work space, unlimited coffee, and a bit of camaraderie and networking. For $100-$200 a month.
- stephc_int13 7y ago
  Ok, maybe that's just me, but I do not find that compelling either. I never really managed to work efficiently on a laptop or with a lot of strangers around. If it was quiet as a library and equipped with real desktop screens (at least two) and good keyboards, my opinion might be different. And if working on a laptop is your thing, you might as well do that from an actual library or a Starbuck...
  - isostatic 7y ago
    > Ok, maybe that's just me, but I do not find that compelling either. I never really managed to work efficiently on a laptop or with a lot of strangers around. That's corporate hot desking for you.
    - stephc_int13 7y ago
      I know, I once worked at a startup where I made the mistake to ask for a laptop instead of a good old boring workstation, figuring that I might want to use it from home sometimes... I did only once. My desk was a bit too close to the conference room and I could hear people talking aloud on the phone, it was overall extremely unpleasant. Of course I could kinda work with the laptop and the noise, but I never attained the magic -flow-

734129837261 7y ago

I've started working in Mexico City as a European software engineer. My job offers 100% remote work and that allows me to work from anywhere. My home includes a girlfriend and her incidental home office, so I went searching for office space for myself, thinking it would be affordable in CDMX. There are like 7 WeWork locations and tons of other state of the art places to work. But for a private office sized to place one desk chair I'd be paying well over €500 euros per month. And it won't be a corner office, it'll be a glass-surrounded cubicle without a view. So, instead, I went to look on AirBNB. I could rent a full apartment for about the same amount of money, except this would come with a view, with a couch, a shower, kitchen, weekly cleaning service, and all kinds of nice things. But I kept on looking. There are numerous extremely luxurious buildings in the city where middle to high class people live. And a lot of them have rooms for rent. So I considered my own office room inside an apartment I share with 2 others. I can lock the door and I get 2 pets for free. Best of all: The building is only 2 years old. They have a full sized gym on the 22nd floor, 7 swimming pools of which 2 olympic sized ones and 2 infinity pools, free saunas, free yoga and spinning lessons every day, a bowling alley and gaming hall, an indoor soccer field, et cetera. So I took that. The building even comes with integrated office rooms and a full floor with couches and desks and tables and ping-pong tables and table-tennis tables and a grand view of the city. So it's not like they're against people working from there. The problem with WeWork is that they aren't that interesting, not even in cities that are more expensive. The credits you get only allow you to switch locations until they run out, and then you need to purchase new ones for a lot of money. They should really do a few things: 1. Look at the area they're in, at the very least be cheaper than AirBNB when it comes to offering a space to work from. 2. Once someone is a member, allow them to work from ALL WeWork locations (in the public areas). No credits cost, nothing. 3. On the website, per location, clearly show how crowded it is and how crowded it is expected to be that day. They're way too expensive for what amounts to a crowded and noisy library. At least in a library people are expected to keep quiet so you can work. At WeWork I've been told you're to expect people coming up to you. Side note: WeWork might be a great choice for companies who want to rent their first office space. That's not something I looked into.

jpalomaki 7y ago

Slack grew, because anybody from your organization could just acquire the tool. No need to talk with IT. What if same thing hapoened for office space. BYOD and support for remoting allows people to work anywhere. If marketing finds the company HQ unattractive, they could just move elsewhere. Does it actually make sense for different teams to be stuck in one location. Should they instead work close to customers or partners?

inflatableDodo 7y ago

>"The obvious competitor is a company called IWG, with 3,306 locations and 445k workstations at the end of 2018. WeWork, in comparison, had 528 locations and 604k workstations as of June 30, 2019. Note the date mismatch — this isn’t a perfect comparison — but that only makes the point that these are two very different companies: WeWork had only 466k workstations at the end of 2018; a year earlier, when the Wall Street Journal pointed out that WeWork’s then-valuation was 5x IWG’s (it is now 13x), WeWork had a mere 150k, while IWG had 414k." There are a ton of obvious competitors, they are not big, but they are everywhere, at least in the UK. Hotdesk rental has been a common SME thing for ages.

olivermarks 7y ago

https://www.bloomberg.com/news/articles/2019-08-20/wework-analyst-warns-ipo-filing-a-masterpiece-of-obfuscation https://www.bloomberg.com/news/articles/2019-08-20/wework-an...

nathanvanfleet 7y ago

Why does this article keep calling WeWork a software company??????

TheCoelacanth 7y ago
Because there's no way to justify their ludicrous valuation if you admit that they are a real estate company.

AtlasBarfed 7y ago

AWS has data lock-in and offers fundamental capability-altering abilities to its customers. And it can't be replicated without a massive influx of capital to jumpstart (Microsoft, Google, etc). WeWork has hundreds of competitors, including every building in a downtown with unused office space, to say nothing of better organized entities.