4 ms·
I'm not sure why all these negativity. WeWork's business model is no different than buying wholesale and selling retail. Or owning a mall and selling pieces to
by sytelus 7y ago
I'm not sure why all these negativity. WeWork's business model is no different than buying wholesale and selling retail. Or owning a mall and selling pieces to individual shops. It's an old idea and old business model. WeWork is able to sell 200 sq ft for $5000/month. Think about that for a bit. Their strength is diversification by multi-tenancy which means even if x% of customers fissals, you got others to pay for the cost. They are tech company in a sense they enable instant on-demand exchange of goods online just like on-demand renting of cars or scooters. They are fast movers and online-first company. We don't know if they are losing money just in growth markets or also in mature markets. If later is true then I would be worried about their cost structure and long term viability. Otherwise at their current ability to successfully convince customers to pay top dollars, they should be awesomely profitable once they stop bleeding in growth markets.
- robryan 7y agoThe negativity is around how they are asking to be valued. They want to be valued at tech company revenue multiples but are running a real estate business. As the article evaluates unlike a tech company there is really no opportunity for exponential growth without also adding a proportional amount to their costs.