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Everyone? Virtually nobody thinks or thought WeWork was a high margin software company. Your comment is a narrative that has been regurgitated over and over aga

Everyone? Virtually nobody thinks or thought WeWork was a high margin software company. Your comment is a narrative that has been regurgitated over and over again, yet who are these magical people who think WeWork is akin to Facebook? Look at any article written about WeWork in the last 4 years. Every single article will regurgitate the Real Estate company pretending to be a tech company thing.

puranjay 7y ago
The people that matter - the investors - valued WeWork like a high margin software company. Then WeWork itself tried to value itself like a high margin software company in its S-1. Because WeWork's margins and revenue are similar to another very similar company - Regus - yet their valuation is more than 10x
- pembrook 7y ago
  WeWork and its investors did not try to value it like a high margin software company. WeWork was valued like a standard, overly optimistic growth company. This is another narrative invented by tech journalists who don’t understand how valuation works. Regus is a mature company with no plans for massive growth. Of course their Value (p/e of under 20 I believe) is going to reflect that. Meanwhile, look at any non-tech company in growth stage. Take Shake Shack for example. Their P/E ratio is 170. Chipotle had a p/e of 400 a few years ago. Nobody thinks Shake Shack and Chipotle are tech companies. These valuations reflect the prospects of growth—-not misplaced beliefs about restaurants being tech companies.
  - jjeaff 7y ago
    Adam Nuemann was certainly trying to push the "tech company" narrative. I heard a few old interviews with him and he was always sure to mention their "technology platform" and how they spent a very long time developing it. So he must have thought someone was swallowing that.
  - throwaway3563 7y ago
    The latest Wework TV ads sell it as an “operating system” for workspaces, among much other showy language filled with business-transforming technology buzzwords. It definitely sounds like they’re marketing as some unique proprietary tech, and I wouldn’t be surprised at all if the aim was to justify their absurd valuation figures.
    - pembrook 7y ago
      Except, every company in 2019 is marketing themselves as if they have some unique proprietary tech. I just saw an ad for Holiday inn that did this. None of these things mean smart investors (or even customers) are being hoodwinked by this marketing nonsense however.

puranjay 7y ago

The people that matter - the investors - valued WeWork like a high margin software company. Then WeWork itself tried to value itself like a high margin software company in its S-1. Because WeWork's margins and revenue are similar to another very similar company - Regus - yet their valuation is more than 10x

pembrook 7y ago
WeWork and its investors did not try to value it like a high margin software company. WeWork was valued like a standard, overly optimistic growth company. This is another narrative invented by tech journalists who don’t understand how valuation works. Regus is a mature company with no plans for massive growth. Of course their Value (p/e of under 20 I believe) is going to reflect that. Meanwhile, look at any non-tech company in growth stage. Take Shake Shack for example. Their P/E ratio is 170. Chipotle had a p/e of 400 a few years ago. Nobody thinks Shake Shack and Chipotle are tech companies. These valuations reflect the prospects of growth—-not misplaced beliefs about restaurants being tech companies.
- jjeaff 7y ago
  Adam Nuemann was certainly trying to push the "tech company" narrative. I heard a few old interviews with him and he was always sure to mention their "technology platform" and how they spent a very long time developing it. So he must have thought someone was swallowing that.
- throwaway3563 7y ago
  The latest Wework TV ads sell it as an “operating system” for workspaces, among much other showy language filled with business-transforming technology buzzwords. It definitely sounds like they’re marketing as some unique proprietary tech, and I wouldn’t be surprised at all if the aim was to justify their absurd valuation figures.
  - pembrook 7y ago
    Except, every company in 2019 is marketing themselves as if they have some unique proprietary tech. I just saw an ad for Holiday inn that did this. None of these things mean smart investors (or even customers) are being hoodwinked by this marketing nonsense however.