3 ms·

Short term rentals are an inferior good. An economic downturn could lead to more business for them

greglindahl 7y ago
Past experience says WeWork will end up bankrupt. "This time it's different"
Gene_Parmesan 7y ago
Any earlyish startup (smaller than a certain size) that's facing cash flow problems during a larger economic downturn would likely just move to a remote-only model, maybe with very short-term rentals for high-stakes meetings. No, it's not ideal, but if the survival of the business is at stake, cutting out your coworking fees seems like the easiest way to reduce overhead. I'm no economist, but to me, it seems that short term rentals can't be an inferior good if a large percentage of startups are already currently using them. You'd need a majority of them to be leasing a traditional office space in order for coworking to be seen as a viable lesser option. And I don't really see larger, more established startups that do have traditional office space (like Duolingo for instance) moving out into a WeWork.
- rhizome 7y ago
  Any earlyish startup (smaller than a certain size) that's facing cash flow problems during a larger economic downturn would likely just move to a remote-only model, maybe with very short-term rentals for high-stakes meetings. Do you know any companies that have made this kind of transition?
  - ghaff 7y ago
    I'm not sure the combination of downturn and co-working spaces pitched for relatively short-term startup spaces has existed before. I would note that I know of larger companies that are shifting people to remote who don't consistently use their assigned office space if capacity has gotten tight.
- golemiprague 7y ago
  In a small startup the cost of one employee is usually much more than the cost of renting desks so I don't see how moving to work from home will solve the problem, cutting 20% from everybody's salaries will give you better results.
notahacker 7y ago
Not when the companies that wish they could shorten their lease terms tend to be stuck with them (and sometimes, after shedding some employees, with a lot of additional space they could let out short term...). WeWork also isn't at the cheap or flexible end of the short term office space rental market - it's very much a product designed to appeal to a particular type of company starting out. They could pivot, but so could other people with office space they can't lease out...

Past experience says WeWork will end up bankrupt. "This time it's different"

Any earlyish startup (smaller than a certain size) that's facing cash flow problems during a larger economic downturn would likely just move to a remote-only model, maybe with very short-term rentals for high-stakes meetings. No, it's not ideal, but if the survival of the business is at stake, cutting out your coworking fees seems like the easiest way to reduce overhead. I'm no economist, but to me, it seems that short term rentals can't be an inferior good if a large percentage of startups are already currently using them. You'd need a majority of them to be leasing a traditional office space in order for coworking to be seen as a viable lesser option. And I don't really see larger, more established startups that do have traditional office space (like Duolingo for instance) moving out into a WeWork.

rhizome 7y ago
Any earlyish startup (smaller than a certain size) that's facing cash flow problems during a larger economic downturn would likely just move to a remote-only model, maybe with very short-term rentals for high-stakes meetings. Do you know any companies that have made this kind of transition?
- ghaff 7y ago
  I'm not sure the combination of downturn and co-working spaces pitched for relatively short-term startup spaces has existed before. I would note that I know of larger companies that are shifting people to remote who don't consistently use their assigned office space if capacity has gotten tight.
golemiprague 7y ago
In a small startup the cost of one employee is usually much more than the cost of renting desks so I don't see how moving to work from home will solve the problem, cutting 20% from everybody's salaries will give you better results.

notahacker 7y ago

Not when the companies that wish they could shorten their lease terms tend to be stuck with them (and sometimes, after shedding some employees, with a lot of additional space they could let out short term...). WeWork also isn't at the cheap or flexible end of the short term office space rental market - it's very much a product designed to appeal to a particular type of company starting out. They could pivot, but so could other people with office space they can't lease out...