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> but it seems that the last couple of really huge unicorn companies have all been based on BS(We Work), Fraud(Theranos), and untenable business models (Uber).

> but it seems that the last couple of really huge unicorn companies have all been based on BS(We Work), Fraud(Theranos), and untenable business models (Uber). What I don't understand, and this is an honest question for this crowd: aren't these viable businesses, in and of themselves? Maybe this is a stupid question. This is probably what allowed them to run so far on what they actually were, but here's the question anyway. For instance, WeWork seems to be an AWS-for-office-space. Is that not a useful business? If I own a contract for space that can be slotted into anywhere in the world I might want to sit, is that not a useful thing to pay for? One might argue that, if I had the resources to truly care about a world-wide smorgasbord of office spaces to choose from at any given time, I'd have enough resources to lease my own building(s). But it still seems like something the market needs. Did it have to be a one-hundred-billionaire-minting business to rent space into that kind of market? Theranos seems like a useful thing, and there seems to be an opening in the market for it. Are the cost mechanics of the available technology and the opportunity not aligned? Is there no way to run an economically-viable company providing a blood tester unit with a more-limited set of tests? Did it have to be a unicorn, end-all-be-all, existing-testing-company-destroyer to make any money? You see where I'm going now. Does Uber need to suck all the money into their pockets to fund their self-driving car efforts (or wherever all this money is going) in order for any of it to work? Surely there's a model of ride sharing through an app that doesn't have to suck, pay their drivers well, and is a sustainable business, right? Does it really have to be the "Uber-of-cars," so to speak, in order to exist at all? Is the only game left in the Valley, now, unicorns? All others need not apply?

richardwhiuk 7y ago
The problem with WeWork is that it's business is fundamentally rubbish. It has long leases for buildings, and short leases for customer, so it's basically failure scenario number 1 for an economic downturn. And yes, if you act as a startup, and hire engineers assuming you are startup, you better be a unicorn.
metalliqaz 7y ago
> For instance, WeWork seems to be an AWS-for-office-space. Is that not a useful business? If I own a contract for space that can be slotted into anywhere in the world I might want to sit, is that not a useful thing to pay for? One might argue that, if I had the resources to truly care about a world-wide smorgasbord of office spaces to choose from at any given time, I'd have enough resources to lease my own building(s). But it still seems like something the market needs. Did it have to be a one-hundred-billionaire-minting business to rent space into that kind of market? I think about it from the other direction. WeWork leases office space and parcels it out to temporary tenants. But, what's to stop the management companies that already own the office space to do the same thing? Why pay a middle man? WeWork would take the risk and prove the model effective in a particular area, then their own suppliers could undercut them. Theranos was trying to sell technology that doesn't exist.
- mertd 7y ago
  Most management companies are local. One can kind of see how WeWork would work by being bigger than all management companies and having a global presence. Assuming their kind of risk in a robust economy is lucrative. But I fail to see how WeWork could ever weather a recession, US or global.
- epiphanitus 7y ago
  > WeWork leases office space and parcels it out to temporary tenants. But, what's to stop the management companies that already own the office space to do the same thing? Why pay a middle man? WeWork's business model kind of reminds me of MoviePass in that they are very dependent on vendors who could also be their competitors. And there's the risk that the economy slows down and people cancel their memberships but they still have long term leases to pay...
- gbronner 7y ago
  Office brokerage is super-inefficient. If you are looking for up to a few thousand square feet, the current search process is terrible and slow. WeWork commoditizes this aspect, and has a reputation for being an expensive, if fair landlord.

richardwhiuk 7y ago

The problem with WeWork is that it's business is fundamentally rubbish. It has long leases for buildings, and short leases for customer, so it's basically failure scenario number 1 for an economic downturn. And yes, if you act as a startup, and hire engineers assuming you are startup, you better be a unicorn.

metalliqaz 7y ago

> For instance, WeWork seems to be an AWS-for-office-space. Is that not a useful business? If I own a contract for space that can be slotted into anywhere in the world I might want to sit, is that not a useful thing to pay for? One might argue that, if I had the resources to truly care about a world-wide smorgasbord of office spaces to choose from at any given time, I'd have enough resources to lease my own building(s). But it still seems like something the market needs. Did it have to be a one-hundred-billionaire-minting business to rent space into that kind of market? I think about it from the other direction. WeWork leases office space and parcels it out to temporary tenants. But, what's to stop the management companies that already own the office space to do the same thing? Why pay a middle man? WeWork would take the risk and prove the model effective in a particular area, then their own suppliers could undercut them. Theranos was trying to sell technology that doesn't exist.

mertd 7y ago
Most management companies are local. One can kind of see how WeWork would work by being bigger than all management companies and having a global presence. Assuming their kind of risk in a robust economy is lucrative. But I fail to see how WeWork could ever weather a recession, US or global.
epiphanitus 7y ago
> WeWork leases office space and parcels it out to temporary tenants. But, what's to stop the management companies that already own the office space to do the same thing? Why pay a middle man? WeWork's business model kind of reminds me of MoviePass in that they are very dependent on vendors who could also be their competitors. And there's the risk that the economy slows down and people cancel their memberships but they still have long term leases to pay...
gbronner 7y ago
Office brokerage is super-inefficient. If you are looking for up to a few thousand square feet, the current search process is terrible and slow. WeWork commoditizes this aspect, and has a reputation for being an expensive, if fair landlord.