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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

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.
specialist 7y ago
Further, AWS had Amazon as its first customer. Eat your own dog food and all that. I'm trying to think of a large business that could build (or did) an internal WeWork like division, and then offered that service to outside parties. Huh. I guess that'd be a big white collar employer that did project centric work. Like a big consulting firm. Or an IT services unit, like Microsoft or Oracle. Imagine Amazon bundling their own real estate, construction, facilities, space planning, and misc A/E/C functions as a service. For their own use. And then offering that service to outsiders. That's what WeWork should look like. -- I now predict that's exactly what Amazon will do. Amazon will compete with WeWork and others in this space. With the advantage of themselves as their own first customer. And unlimited capital.
- outworlder 7y ago
  > Further, AWS had Amazon as its first customer. Eat your own dog food and all that. Is that true though? I've read many stories about internal Amazon teams not being allowed to use AWS and that, for the longest time, it was for customers only.
  - alexatalktome 7y ago
    The alternative story told internally is that the predecessor to AWS originated from a white-label storefront offering sold to traditional retailers entering the digital world in the early 2000s. Edit: Target, Borders (the late bookstore) and gap were example users. It was called merchant.com (website url now redirects). Supposedly AWS came about when merchant.com and the main site became hard to manager resources for, so they were broken out into services and APIs a la AWS.
    - vineyardmike 7y ago
      Here is a good history of this for those interested. I had to search after seeing this. https://techcrunch.com/2016/07/02/andy-jassys-brief-history-of-the-genesis-of-aws/ https://techcrunch.com/2016/07/02/andy-jassys-brief-history-... I think more companies should look at selling their internal core-competencies to outsiders. It would make starting and managing businesses easier for everyone.
midnightclubbed 7y ago
Totally agree. AWS also operate out of a limited number of locations where they can optimize against their fixed costs (locations where they can negotiate power and bandwidth costs). Some of their running costs decrease when resources are not in use. WeWork needs thousands of locations in order to be attractive to the target market and empty desks are pretty much the same cost as a full one (ongoing lease per sqft). In San Diego there are just 2 WeWork locations, the closest being a 25 mile commute (through traffic hell) from my home. In order to be compelling they would need to be not much further than my local Starbucks.
amoitnga 7y ago
Comparison to Starbuck seems more reasonable

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.

specialist 7y ago

Further, AWS had Amazon as its first customer. Eat your own dog food and all that. I'm trying to think of a large business that could build (or did) an internal WeWork like division, and then offered that service to outside parties. Huh. I guess that'd be a big white collar employer that did project centric work. Like a big consulting firm. Or an IT services unit, like Microsoft or Oracle. Imagine Amazon bundling their own real estate, construction, facilities, space planning, and misc A/E/C functions as a service. For their own use. And then offering that service to outsiders. That's what WeWork should look like. -- I now predict that's exactly what Amazon will do. Amazon will compete with WeWork and others in this space. With the advantage of themselves as their own first customer. And unlimited capital.

outworlder 7y ago
> Further, AWS had Amazon as its first customer. Eat your own dog food and all that. Is that true though? I've read many stories about internal Amazon teams not being allowed to use AWS and that, for the longest time, it was for customers only.
- alexatalktome 7y ago
  The alternative story told internally is that the predecessor to AWS originated from a white-label storefront offering sold to traditional retailers entering the digital world in the early 2000s. Edit: Target, Borders (the late bookstore) and gap were example users. It was called merchant.com (website url now redirects). Supposedly AWS came about when merchant.com and the main site became hard to manager resources for, so they were broken out into services and APIs a la AWS.
  - vineyardmike 7y ago
    Here is a good history of this for those interested. I had to search after seeing this. https://techcrunch.com/2016/07/02/andy-jassys-brief-history-of-the-genesis-of-aws/ https://techcrunch.com/2016/07/02/andy-jassys-brief-history-... I think more companies should look at selling their internal core-competencies to outsiders. It would make starting and managing businesses easier for everyone.

midnightclubbed 7y ago

Totally agree. AWS also operate out of a limited number of locations where they can optimize against their fixed costs (locations where they can negotiate power and bandwidth costs). Some of their running costs decrease when resources are not in use. WeWork needs thousands of locations in order to be attractive to the target market and empty desks are pretty much the same cost as a full one (ongoing lease per sqft). In San Diego there are just 2 WeWork locations, the closest being a 25 mile commute (through traffic hell) from my home. In order to be compelling they would need to be not much further than my local Starbucks.

amoitnga 7y ago

Comparison to Starbuck seems more reasonable