8 ms·

>What's the benefit to a large corporation doing this instead of lots of small companies? (The economies of scale need to outweigh the large corporate overhead.

• munificent 7y ago
  > What's the upside of having a giant corporation owning all coworking spaces, versus having many small and independent small businesses running and operating independent coworking spaces? Advantage to customers? Likely minimal. Advantage to the company itself: economies of scale and, likely more importantly, lack of competition allowing them to increase prices. The very clear trend across all sectors is that companies trend towards giant monopolistic behemoths unless some very strong regulatory force prevents it. People act like healthy, competitive, transparent markets just appear out of thin air, but they are an artificial creation of government.
  • jen20 7y ago
    The advantage to me with Spaces (which I believe is owned by Regus) is that I can do guest co-working in any city they happen to be present - and since I travel extensively, the bigger the network the better, as far as I'm concerned. Sadly WeWork do not appear to offer this option (or didn't last time I looked).
    • ageitgey 7y ago
      WeWork offers this if you sign up for an American Express Platinum Business card and take advantage of the free year of WeWork benefit. I can (and do!) book any WeWork in the world any day - all for $0. Yes, that's right, the free AMEX WeWork plan is significantly better than any WeWork plan you can buy. That's start-up logic for you. I stopped paying WeWork after 1-2 years as a paying customer because their free plan was better. I live in London and I can choose from any of 36 WeWork London locations for tomorrow along with anywhere else in the world. It's nice living off of VC money.
      • Wowfunhappy 7y ago
        What will you do after your free year is up?
        • stevarino 7y ago
          Same thing that he would have to do otherwise: shop the market for the best offer. ... Assuming any true competition is still in business in a year.
      • fro0116 7y ago
        Wow... this is actually quite tempting for $595! Are there any limits to how much you can make use of this offer or the kinds of spaces available? _Surely_ they won't let you just camp an entire private office in SF all year round when it's supposed to cost upwards of $1000 per month?
        • ageitgey 7y ago
          You can use it everyday as your main office, but you are limited to the hot desk areas and you can't use private offices.
      • jen20 7y ago
        Interesting - does this mean you have a _UK issued_ Amex Platinum Business? If so, I've not spotted this, despite having had one for years - and I need to rectify this! Many of the benefits only apply to US-issued cards.
        • ageitgey 7y ago
          I have a US-issued card.
    • tcc8 7y ago
      i think you are looking for wework global access https://www.wework.com/workspace/on-demand/global-access https://www.wework.com/workspace/on-demand/global-access
      • zilchers 7y ago
        I wanted to sign up for this as an individual, but you need to be at least a 10 person company, so I couldn’t. No idea why they’d have that restriction
        • jen20 7y ago
          That's the hurdle I hit with it last time I looked.
    • sbr464 7y ago
      I may be misunderstanding, but one of our offices is at a WeWork. I’m listed on the team and we have a ton of monthly credits that I’ll use while traveling in random cities, it’s convenient to have a place to work from.
    • goatinaboat 7y ago
      Every business-traveller orientated hotel like Marriott or Hilton has a “business centre” in which you can rent anything from a small meeting room by the hour to a space for a 500-person conference for a few days, all fully serviced and catered by the hotel too.
      • jen20 7y ago
        I usually stay at Marriotts, and the 'business centres' are often woeful - if not 'closed for renovation'. Not only that, but renting a meeting room for a couple of hours costs the same as a Spaces membership for a month.
    • szczepano 7y ago
      I was looking for that option too as I plan to travel for some time while working remotely and all I found is https://copass.org/plans https://copass.org/plans but didn't tried it yet. Is someone can write more about it it would be nice.
  • JJMcJ 7y ago
    > lack of competition allowing them to increase prices. There is so much commercial real estate that it's hard to imagine them in any kind of a monopoly situation.
    • mpokornyus 7y ago
      Rabois has suggested multiple times that one bull case for them is that the company becomes almost too big to fail. They'd be so large that even in an economic downturn they'd have the power to renegotiate lower rents with the commercial property owners.
      • hnick 7y ago
        And buy out failing, smaller competitors, plus lobby various local governments for a break/handout. Consistency of branding can't be overstated too. People turn to trust when times are hard.
    • AJ007 7y ago
      To the other response I can’t reply to - WeWork is also benefitting tremendously from all of the new build outs. Like hotels, condos, and apartments even the cheaper ones are nice when they are shiny and new. 10 years out, they aren’t going to look very good. The front loaded growth could be very damaging to their brand in the long term because of this. I’m not sure exactly how all of those contracts look with landlords, but someone is going to need money to spend to maintain them. If not, the person with brand new build outs is going to look more attractive. Now, maybe I’m wrong and run down office spaces don’t matter. Uber drivers all used to wear suits and their cars were pristine. Even UberBlack cars have holes in the seats and transmissions in poor condition. Uber is vastly largely today than it used to be. So that could be the trick, WeWork at scale but more as a necessity than anything else. If that is the case, then it is more a question of how much extra space other sorts of businesses, like coffee shops, want to keep free for customers.
  • navigatesol 7y ago
    Why is it that you believe these companies can suddenly raise prices and make money? We've been hearing about "economies of scale" in companies like Uber and Tesla for years, yet no sign of it yet. Price cuts and investor subsidization abound. And no competition in the real estate market? Please.
  • fragsworth 7y ago
    > People act like healthy, competitive, transparent markets just appear out of thin air, but they are an artificial creation of government. Thanks for this insightful comment. I never fully considered it, but yes - all healthy, competitive markets exist as a result of a government that fosters them.
    • apple4ever 7y ago
      That is not actually true. Its the reverse. All healthy, competitive markets exist as the result of a lack of government intervention. Lack of a competitive market is the result of government intervention.
  • JBSay 7y ago
    Clearly false as there is no regulation to prevent the formation of very large companies (anti-trust laws don't apply). In fact companies tend toward giant behemoths in part BECAUSE of government regulation. Small companies can't afford the enormous fixed cost of compliance the way large ones can. Regulations are a huge incentive for market consolidation and large corporations love writing new barriers to entry regulations.
    • jayko 7y ago
      I don't understand why you are getting downvoted. What you are saying is basic economics and I guess people in here are too ideologically invested to accept it. The claim that governments foster healthy competition when their effect is the exact opposite is ridiculous.
    • wonderwonder 7y ago
      This is a good point. My wife's company has a team consisting of a lawyer and 3 paralegals whose sole job is to review their marketing offers just to ensure they are in compliance.Every state has different rules. Smaller company would need a smaller team but even a single salary on the books just to comply is a large expense for a small business. Multiply this by other areas now such as licensing, insurance, etc. Just ensuring your every day work is not breaking the law becomes financially prohibitive.
  • red_trumpet 7y ago
    If they raise prices, someone else could locally open up a new coworking space with lower prices. The lack of advantage to costumers, which is your first point, means that customers go to the cheaper place. So the economics of scale (supposed that is a relevant factor) could provide WeWork with a higher profit margin, but to become dominant, they have to take a cut to this margin.
• goldcd 7y ago
  Well there's a clear advantage for b2b. Say you're a pretty large company and suddenly decide you want to open a dozen 'offices' in a dozen different countries. You just have to deal with one provider, one set of infrastructure etc. Plus if you decide you then want to consolidate to half-a dozen offices, it's easier to scale some up and some down. However companies like Regus have existed for ages - so not quite sure what WeWork brings, aside from being able spaff away profits to get you in the door.
  • wsinks 7y ago
    Weird hypothesis, but is what WeWork brings to the table that Regus doesn't is Silicon Valley brand recognition? Not that I'm in the market for office space, but I haven't heard about Regus until this comment.
    • lmm 7y ago
      Honestly as a programmer they have a name and reputation for providing nice offices that I can rely on. I recently agreed to take a job halfway around the world (interviewing via video chat), and when they asked if I had any questions about the office I was able to say "no, it's a WeWork and that's good enough for me". Surely that's got to be valuable to that tenant company.
      • jamiepenney 7y ago
        Is that Karat? We've got a few interviewers working out of WeWork offices.
      • JohnFen 7y ago
        > "no, it's a WeWork and that's good enough for me". Surely that's got to be valuable to that tenant company. Probably, but that knife does cut both ways. I know a number of people (including myself) who wouldn't be willing to use a WeWork facility again.
        • lmm 7y ago
• btown 7y ago
  Yea - is "brand consistency" actually a good thing for coworking spaces? Different tenants require different aesthetics, and can targeted marketing from coworking spaces that match that aesthetic out-market the name recognition of WeWork? And on-the-ground ops just require intuitive software to enforce standard operating procedures. The last two coworking spaces I've worked at both used different SaaS solutions for coworking-space management, with customer portals and all. I'm almost certain WeWork's edge has been commoditized.
• optimuspaul 7y ago
  > I like this way of thinking. WeWork isn't doing anything "new" - coworking spaces have existed for years. What's the upside of having a giant corporation owning all coworking spaces, versus having many small and independent small businesses running and operating independent coworking spaces? The answer to this question isn't obvious to me. An advantage I see as a customer is that I can go to any WeWork across the country and get a desk/coffee/etc for the day. I can get that from a few other coworking places, but I don't think any have the number of locations that WeWork does.
  • treis 7y ago
    I don't really see that use case. If you're in a different city, presumably, you're there to visit something physically located in that city. If not, why travel there? So during the day there's no need for an office. You'll be visiting the factory, client site, etc. that brought you there. For the rest of the time your hotel room comes with a desk and you can work there. Sure, there's probably some need for temporary surge office space like a insurance company setting up after a disaster. But that seems a pretty small niche to build a billion dollar business on.
• pbreit 7y ago
  WeWork already serves a big number of multi-location tenants (we are one) which I think will continue to grow and be the vast majority of of its businesses. Huge advantage.