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What makes WeWork so unique and powerful that it managed to paint itself as a unicorn? AirBnB has network effect for the huge market of "a place to sleep at wh

What makes WeWork so unique and powerful that it managed to paint itself as a unicorn? AirBnB has network effect for the huge market of "a place to sleep at while travelling". This requires matching customers with providers frequently, and the same customer will use the same platform and a different provider. Uber has the same for "a car to take me somewhere". Again, repeat customers, different provider every time. WeWork seems to be... a company that runs coworking and office spaces. What advantage does it have over any other company that runs coworking spaces? Why would a customer choose them over any other coworking space/landlord in a city where they want a coworking space/office? Most customers don't make that decision often enough for WeWork to benefit from any sort of lock-in/network effect. Why do/did people ascribe more value to WeWork than to a random collection of coworking spaces with the same square footage? (Did they?)

dannyw 7y ago
Poor investment decisions and hubris by SoftBank.
wpietri 7y ago
I think Uber is a big cause of the problem here. Companies like Google and Facebook got investors thinking that a tech thing that a lot of people used must be worth a lot of money. Uber came along and legitimately made something that a lot of people loved, and if you didn't look too hard, it looked like a tech thing. Plus it spent years getting bigger and bigger rounds of investment, so it looked like a rock star. Everybody wanted to be "Uber for X", never mind that Uber was losing money hand over fist, still does, and may never stop. WeWork went with the same formula, hoping to cash in similarly: Uber for office space! Shiny thing that people like in a market that is a pain in the ass! Amazing growth! Sure, the technology gloss was a little thinner, a little hazier. But the CEO was even more arrogant, more of a performative visionary than Kalanick, so that compensated for a while. Unfortunately for WeWork, Lyft and Uber IPOd and didn't do so well. Tesla's not looking so healthy either, and let's not forget Theranos. So investors are starting to get wise to the fact that even if a "tech visionary" has gotten investment, grown quickly, and gotten a lot of good press, it doesn't mean it's a good stock to buy. So yes, from an analytical perspective, it makes no sense. An oversupply of investment money and tech hype meant a lack of discipline, meaning a dreamer or a scammer (if in the end there's a difference) could try to build an empire, and investors would either fall for it or believe that they had a good chance of cashing out in an IPO before the house of cards collapsed. (For a parallel example, consider Groupon, which is now trading at 10% of its IPO price.)
- bob33212 7y ago
  I think Apple is a bigger driver of the investment than Google or FB. When the first IPOD came out few investors saw that Jobs was executing on a vision that would create a trillion dollar company. Those same type of investors are afraid of missing the next Jobs. A CEO is better off taking actions which will cause investors to think she may be the next Jobs. And they are right to be afraid, engineering advances can be unpredictable. What if a AI developer at TSLA discovers a new approach to reinforcement learning tomorrow? Or what if Holmes had found the Einstein of blood science?

dannyw 7y ago

Poor investment decisions and hubris by SoftBank.

wpietri 7y ago

I think Uber is a big cause of the problem here. Companies like Google and Facebook got investors thinking that a tech thing that a lot of people used must be worth a lot of money. Uber came along and legitimately made something that a lot of people loved, and if you didn't look too hard, it looked like a tech thing. Plus it spent years getting bigger and bigger rounds of investment, so it looked like a rock star. Everybody wanted to be "Uber for X", never mind that Uber was losing money hand over fist, still does, and may never stop. WeWork went with the same formula, hoping to cash in similarly: Uber for office space! Shiny thing that people like in a market that is a pain in the ass! Amazing growth! Sure, the technology gloss was a little thinner, a little hazier. But the CEO was even more arrogant, more of a performative visionary than Kalanick, so that compensated for a while. Unfortunately for WeWork, Lyft and Uber IPOd and didn't do so well. Tesla's not looking so healthy either, and let's not forget Theranos. So investors are starting to get wise to the fact that even if a "tech visionary" has gotten investment, grown quickly, and gotten a lot of good press, it doesn't mean it's a good stock to buy. So yes, from an analytical perspective, it makes no sense. An oversupply of investment money and tech hype meant a lack of discipline, meaning a dreamer or a scammer (if in the end there's a difference) could try to build an empire, and investors would either fall for it or believe that they had a good chance of cashing out in an IPO before the house of cards collapsed. (For a parallel example, consider Groupon, which is now trading at 10% of its IPO price.)

bob33212 7y ago
I think Apple is a bigger driver of the investment than Google or FB. When the first IPOD came out few investors saw that Jobs was executing on a vision that would create a trillion dollar company. Those same type of investors are afraid of missing the next Jobs. A CEO is better off taking actions which will cause investors to think she may be the next Jobs. And they are right to be afraid, engineering advances can be unpredictable. What if a AI developer at TSLA discovers a new approach to reinforcement learning tomorrow? Or what if Holmes had found the Einstein of blood science?