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The most egregious such company (WeWork) actually being an NYC company.
by ummonk 7y ago
The most egregious such company (WeWork) actually being an NYC company.
- olliej 7y agoUber and Lyft both make losses that are directly proportional to their usage. Eg more users or more trips will only ever increase their losses. WeWork makes a lot of money for the CEO - I recall he used a large amount of money he cashed out during earlier rounds to buy the building that We leases.
- RandomBacon 7y agoThat's equally genious and stupid. WeWork has to be successful to be able to pay the lease. If WeWork is successful then he can continue to make money from WeWork via being a CEO. He should have 'diversified'.
- olliej 7y agoIt's even better - people clearly need office space, so even if WeWork fails he can lease to other people. If WeWork fails to pay for their lease he can take them to court - and I would not be surprised if there are some fun creditor priorities in the bankruptcy terms of the lease agreements. Seriously, I appreciate screwing the VC funders, but it does kind of demonstrate the kind of guy he is.
- jdsully 7y agoIf WeWork fails it will likely be because people don’t need office space (i.e. a recession).
- olliej 7y agoMuch like Uber and Lyft, we work runs at a loss that scales with usage. In the event that continually losing ever increasing amounts of money somehow results in bankruptcy all of the people currently leasing office space will probably try to lease the building space directly.
- xvedejas 7y agoIf you want to be geographically technical about it, Stripe is not a Silicon Valley company, but rather a company in a nearby city called San Francisco. Both Stripe and WeWork do seem to follow the "silicon valley model", however.
- dehrmann 7y agoWeWork is somewhat different. Its deflated valuation is because of a creative governance and self-dealings, rapid growth, and a tech-like valuation. If they paused expansion, they're basically Regus with better decor and more risk in a recession. Fundamentally, their business is viable, even without growth.