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> It says they take long-term leases and sell short-term leases. That seems straightforward and potentially lucrative if they're adding value, making it easier
by foobar1962 7y ago
> It says they take long-term leases and sell short-term leases. That seems straightforward and potentially lucrative if they're adding value, making it easier to find suitable short-term office space, etc.
When times get tough the startups go back to their parent's garages or basements and don't renew their short term leases. WeWork is stuck with their long-term leases.
- wongarsu 7y agoConversely while times are good startups are willing to pay premium for short term leases, either to expand quickly if times stay good or to go back to some garage if times get tough. The business model is essentialy similar to an insurance, they make money by taking on other people's risks. Of course WeWork doesn't operate financially like this. The business model is sound in principle, but WeWork's execution seems ill conceived (except for the personal enrichment of the CEO).