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There is a real business there if they can control the costs and get the revenue right and make sure there was no financial fraud. Also, they can't shelve it e

by raiyu 7y ago

There is a real business there if they can control the costs and get the revenue right and make sure there was no financial fraud. Also, they can't shelve it easily because it's one of their largest investments so it would really destroy any chance of raising a second fund if they can't get this large investment to work. From a customer perspective, while a lot of people on Hackernews do rag on WeWork as a product, personally I think what they have done is tremendous, because we used coworking early on and if you ever stepped foot into a Regus you would immediately understand the difference. Now what they really need to do is clean the business up and see what's left, but there is a solid product there, and they should be able to make the revenue and cost side work.

mlthoughts2018 7y ago
I don’t dispute at all that there is a solid product, but it’s exactly the same as for Lyft & Uber. The value proposition to the end user is only worthwhile if prices are held at artificially low levels due to VC subsidy that makes the business inherently not profitable. Once you remove the subsidy and let costs elevate to the required level and/or cut back on amenities, locations, etc., to keep prices down, then the question is whether customers still want the remaining value proposition. In other words, of course consumers like upscale stuff at VC subsidized prices. That tells you nothing about whether there’s a core business idea or not.
the_watcher 7y ago
Yea, a coworking space with tech company polish, marketed to tech companies seems like it could easily win the market. It's a much smaller market and the valuation math is different, but I don't see why the business couldn't work.
_bxg1 7y ago
> if they can control the costs and get the revenue right and make sure there was no financial fraud And, you know, cut out the random tequila parties with live hip-hop performances

by raiyu 7y ago

mlthoughts2018 7y ago

I don’t dispute at all that there is a solid product, but it’s exactly the same as for Lyft & Uber. The value proposition to the end user is only worthwhile if prices are held at artificially low levels due to VC subsidy that makes the business inherently not profitable. Once you remove the subsidy and let costs elevate to the required level and/or cut back on amenities, locations, etc., to keep prices down, then the question is whether customers still want the remaining value proposition. In other words, of course consumers like upscale stuff at VC subsidized prices. That tells you nothing about whether there’s a core business idea or not.

the_watcher 7y ago

Yea, a coworking space with tech company polish, marketed to tech companies seems like it could easily win the market. It's a much smaller market and the valuation math is different, but I don't see why the business couldn't work.

_bxg1 7y ago

> if they can control the costs and get the revenue right and make sure there was no financial fraud And, you know, cut out the random tequila parties with live hip-hop performances