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I'm sure I'll get downvoted for this, but I actually just signed up to be a (thankfully month-to-month) WeWork customer for a HotDesk today in Phoenix, and it's

I'm sure I'll get downvoted for this, but I actually just signed up to be a (thankfully month-to-month) WeWork customer for a HotDesk today in Phoenix, and it's actually been a pretty great experience: Great space, nice people, reasonable IT, I was up and running and working within 30 minutes of doing my tour. And yes I've had a cup of the famous We Kombucha. This particular location just opened 3 weeks ago and is apparently already at 70% capacity with a mix of enterprises and startups. Even my Hotdesk membership can't start officially until Oct 1 because they're apparently sold out (though walking around there's plenty of space). Based on these surface observations, the core business at least seems "plausibly profitable". But all the crazy side businesses like co-living just seems like overexpansion to me. I'll politely decline as an investor, but I'm happy to sign up as a lowest-tier, month-to-month customer.

asah 7y ago
Friend reports the same. But hotdesking doesn't support a $10+B valuation.
nikanj 7y ago
There’s a massive jump from plausibly profitable, to a umptillion billion unicorn. Of course re-leasing office space can be profitable, companies have been doing that profitably for decades - if not centuries. But those companies have not received Silicon Valley valuations
vegannet 7y ago
The reason WeWork is great is because investors are subsidising our memberships, just like Uber is cheap because investors are shovelling in cash. WeWork has the potential for profitability if you take away the ridiculousness but the ridiculousness _is_ WeWork: co-working spaces have existed for years, companies like IWG (Regus) offer the same as WeWork and they're profitable... because they don't have a full time bar staff, a live DJ and a skateboard ramp in their lobby. Yes, the new flagship WeWork in London has a skateboard ramp and live DJ in the lobby. When WeWork fails (and their spaces are scooped up by the mature players in the market) the ridiculousness will disappear and we'll be left the same space that has been available all along. I like WeWork, WeWork has value, but ping-pong and baristas don't make for 10x valuations.
- SirensOfTitan 7y ago
  The superfluous perks are a red herring, they’re not why WeWork doesn’t work. Regus filed for bankruptcy after the dotcom collapse for similar reasons WeWork is struggling: taking a bunch of long term leases and re-leasing them out as short term leases to economically vulnerable businesses is a recipe for disaster.
  - silasdavis 7y ago
    Why is it? If there is a steady supply of economically vulnerable businesses and you charge a relative markup?
    - doomrobo 7y ago
      Because they have long-term liabilities with short-term income agreements. If there's market downturn, all those companies that were their customers disappear. But the bank doesn't disappear and We still owes them their monthly mortgage payment.
  - IAmGraydon 7y ago
    Everyone keeps parroting this same statement because they don’t really understand how commercial real estate works. First of all, there are many creative ways to exit a commercial lease. I won’t go into it, but do some research. Landlords would rather have a paying tenant in the space than go chase a bankrupt company in court. Second, they are charging several times the PSF rate they are paying to the landlords, which acts as a hedge against volatility. You pay a higher interest rate for higher risk credit - this is basically analogous. Third, there’s nothing stopping them from subleasing the space to larger, lower risk tenants if the market calls for it. Source: I work in commercial real estate.
ben509 7y ago
My company was in WeWork for roughly 2017. I had your initial impression, it does look good and you can certainly get up and running quickly. But after a while, my feeling was that it really seemed to be poorly thought out as an office space. I get the appeal of natural light, but you were looking right at your neighbors. The hardwood floors look great, but everyone with heels is banging away, and there was generally no soundproofing. So many decisions seemed to prioritize looking hip over being functional. And the details weren't well done. Their tech platform, their attempt at social media, the printers and space reservation and such, all look nice at first and then you realize how unpolished they are after using them for a while.
- joshpadnick 7y ago
  Yeah, I've noticed this, too. It definitely optimizes for the initial "Oh wow" walk-in experience. But day-to-day could well be different. As one example, I'm drowning out their hip background music with my earphones and something that enables me to actually concentrate.
  - mguerville 7y ago
    Yeah I was at Wework (2 separate locations in SF) and found it subpar as a working environment. Very hard to concentrate and most printers offline half the time while meeting rooms and phone booths are lacking in numbers to the point of not being something you can really count on.
nwsm 7y ago
My company was at a WeWork for 6 months or so, and now our new self-owned office is staffed by WeWork employees. They man the front desk, keep fridges and coffee stocked, put on monthly events, etc. No complaints as a customer.
rossdavidh 7y ago
Not necessarily anything (that I know of) wrong with being a WeWork customer, if it suits you. Lots of people who are Uber customers, too, and there's nothing wrong with that even if you think Uber is basically a taxicab company and will never make a profit. The question was whether or not it made sense to value them at 10x what competitors are. I have read that something like $10billion has been shoveled into them, and they are probably are reasonably-priced $4billion company. That doesn't mean there's no value there, just that someone paid 2.5x that value, and now can't find a buyer for 10x.
silasdavis 7y ago
I mean... There's free beer. Your can bring a dog. I can bring my two year old. Fixed desk £450/month in London's Old Street. Its pretty good on the small scale consumer side. Fixed desk in a shared area with plenty of light. Towards sibling comment... I'd prefer sacred defecatory silence but the toilets are the only place I notice any music.
megaremote 7y ago
> I was up and running and working within 30 minutes of doing my tour. Have you ever done workshare places before? I put my laptop down and start working. 30 mins seems a long time for that.
yashap 7y ago
Yeah, in my company’s “main city” we have traditional offices with long term leases that we furnish and operate ourselves. Our headcount in these offices is pretty stable, so it makes sense. But we’ve got a bunch of decent sized, sales/marketing focused international offices, and they’re mostly WeWorks. They’re great! These international sales offices can quickly spring up and grow, but also quickly scale down or close. For satellite offices that can easily get way bigger OR way smaller over the next year, the flexibility WeWork provides, and the fact that they handle furnishing and operating the offices is huge. Plus they’re beautiful offices with free beer and whatnot, so (most) people enjoy working in them. WeWork clearly has terrible corporate governance, and we’ll see if they can keep the product great while moving towards profitability. But for now they do have a really nice product for a lot of companies (and some individuals). They’re like AWS for offices - flexibility and “managed by someone else” is almost as nice for offices as it is for servers.
Nemo_bis 7y ago
Reasonable IT? Are you paying for an encrypted wi-fi? https://www.cnet.com/news/weworks-weak-wi-fi-security-leaves-sensitive-documents-exposed/ https://www.cnet.com/news/weworks-weak-wi-fi-security-leaves...
bengale 7y ago
I'm not sure anyone is knocking the service WeWork provides. We have an office in there, managed to negotiate a great discount. Staff are happy in there. I wouldn't invest in it though.

asah 7y ago

Friend reports the same. But hotdesking doesn't support a $10+B valuation.

nikanj 7y ago

There’s a massive jump from plausibly profitable, to a umptillion billion unicorn. Of course re-leasing office space can be profitable, companies have been doing that profitably for decades - if not centuries. But those companies have not received Silicon Valley valuations

vegannet 7y ago

The reason WeWork is great is because investors are subsidising our memberships, just like Uber is cheap because investors are shovelling in cash. WeWork has the potential for profitability if you take away the ridiculousness but the ridiculousness _is_ WeWork: co-working spaces have existed for years, companies like IWG (Regus) offer the same as WeWork and they're profitable... because they don't have a full time bar staff, a live DJ and a skateboard ramp in their lobby. Yes, the new flagship WeWork in London has a skateboard ramp and live DJ in the lobby. When WeWork fails (and their spaces are scooped up by the mature players in the market) the ridiculousness will disappear and we'll be left the same space that has been available all along. I like WeWork, WeWork has value, but ping-pong and baristas don't make for 10x valuations.

SirensOfTitan 7y ago
The superfluous perks are a red herring, they’re not why WeWork doesn’t work. Regus filed for bankruptcy after the dotcom collapse for similar reasons WeWork is struggling: taking a bunch of long term leases and re-leasing them out as short term leases to economically vulnerable businesses is a recipe for disaster.
- silasdavis 7y ago
  Why is it? If there is a steady supply of economically vulnerable businesses and you charge a relative markup?
  - doomrobo 7y ago
    Because they have long-term liabilities with short-term income agreements. If there's market downturn, all those companies that were their customers disappear. But the bank doesn't disappear and We still owes them their monthly mortgage payment.
- IAmGraydon 7y ago
  Everyone keeps parroting this same statement because they don’t really understand how commercial real estate works. First of all, there are many creative ways to exit a commercial lease. I won’t go into it, but do some research. Landlords would rather have a paying tenant in the space than go chase a bankrupt company in court. Second, they are charging several times the PSF rate they are paying to the landlords, which acts as a hedge against volatility. You pay a higher interest rate for higher risk credit - this is basically analogous. Third, there’s nothing stopping them from subleasing the space to larger, lower risk tenants if the market calls for it. Source: I work in commercial real estate.

ben509 7y ago

My company was in WeWork for roughly 2017. I had your initial impression, it does look good and you can certainly get up and running quickly. But after a while, my feeling was that it really seemed to be poorly thought out as an office space. I get the appeal of natural light, but you were looking right at your neighbors. The hardwood floors look great, but everyone with heels is banging away, and there was generally no soundproofing. So many decisions seemed to prioritize looking hip over being functional. And the details weren't well done. Their tech platform, their attempt at social media, the printers and space reservation and such, all look nice at first and then you realize how unpolished they are after using them for a while.

joshpadnick 7y ago
Yeah, I've noticed this, too. It definitely optimizes for the initial "Oh wow" walk-in experience. But day-to-day could well be different. As one example, I'm drowning out their hip background music with my earphones and something that enables me to actually concentrate.
- mguerville 7y ago
  Yeah I was at Wework (2 separate locations in SF) and found it subpar as a working environment. Very hard to concentrate and most printers offline half the time while meeting rooms and phone booths are lacking in numbers to the point of not being something you can really count on.

nwsm 7y ago

My company was at a WeWork for 6 months or so, and now our new self-owned office is staffed by WeWork employees. They man the front desk, keep fridges and coffee stocked, put on monthly events, etc. No complaints as a customer.

rossdavidh 7y ago

Not necessarily anything (that I know of) wrong with being a WeWork customer, if it suits you. Lots of people who are Uber customers, too, and there's nothing wrong with that even if you think Uber is basically a taxicab company and will never make a profit. The question was whether or not it made sense to value them at 10x what competitors are. I have read that something like $10billion has been shoveled into them, and they are probably are reasonably-priced $4billion company. That doesn't mean there's no value there, just that someone paid 2.5x that value, and now can't find a buyer for 10x.

silasdavis 7y ago

I mean... There's free beer. Your can bring a dog. I can bring my two year old. Fixed desk £450/month in London's Old Street. Its pretty good on the small scale consumer side. Fixed desk in a shared area with plenty of light. Towards sibling comment... I'd prefer sacred defecatory silence but the toilets are the only place I notice any music.

megaremote 7y ago

> I was up and running and working within 30 minutes of doing my tour. Have you ever done workshare places before? I put my laptop down and start working. 30 mins seems a long time for that.

yashap 7y ago

Yeah, in my company’s “main city” we have traditional offices with long term leases that we furnish and operate ourselves. Our headcount in these offices is pretty stable, so it makes sense. But we’ve got a bunch of decent sized, sales/marketing focused international offices, and they’re mostly WeWorks. They’re great! These international sales offices can quickly spring up and grow, but also quickly scale down or close. For satellite offices that can easily get way bigger OR way smaller over the next year, the flexibility WeWork provides, and the fact that they handle furnishing and operating the offices is huge. Plus they’re beautiful offices with free beer and whatnot, so (most) people enjoy working in them. WeWork clearly has terrible corporate governance, and we’ll see if they can keep the product great while moving towards profitability. But for now they do have a really nice product for a lot of companies (and some individuals). They’re like AWS for offices - flexibility and “managed by someone else” is almost as nice for offices as it is for servers.

Nemo_bis 7y ago

Reasonable IT? Are you paying for an encrypted wi-fi? https://www.cnet.com/news/weworks-weak-wi-fi-security-leaves-sensitive-documents-exposed/ https://www.cnet.com/news/weworks-weak-wi-fi-security-leaves...

bengale 7y ago

I'm not sure anyone is knocking the service WeWork provides. We have an office in there, managed to negotiate a great discount. Staff are happy in there. I wouldn't invest in it though.