5 ms·

The WeWork story is so bizarre we can’t even get outraged about it

36 points by elorant 7y ago

Traster 7y ago
Ok, I'm done talking about WeWork from a business perspective. Let's move on to something more interesting. One of the things that I think we need to start thinking about is the concept of implied preference. Until now, co-working spaces have been open-plan, with large amounts of glass and no sound-deadening. All of these features are things that we all assumed were a revolution. WeWork had all these things, WeWork was hugely successful, so we had our revealed preference. No matter what you might say, it turns out you want to work in a noisy office with no privacy and free craft beer. I've heard no end of people who personally dislike that, yet it's the standard that every 'successful' coworking space has. I'd like to consider the idea that all of these things are actually (contrary to popular opinion) terrible and the reason people were putting up with them was because WeWork was selling office space for 50 cents on the dollar. The result we've seen in the market, is obviously you and I can't go out and sell office space for 50 cents on the dollar. So instead we follow the signalling- we all start companies renting out glass offices with no sound-deadening and craft beer. We're optimising for the wrong thing. We're looking at WeWork thinking they revolutionized the experience, but actually they didn't. So what does this all mean? Well what if the companies that are trying to compete with WeWork catch on to the truth behind this. Start breaking up the spaces for more privacy, more quiet space, less craft beer and more productivity. If people take the right lesson from this we could end up with spaces that are actually optimized to what office workers want, rather than forcing everyone to work in the equivalent of a busy starbucks simply because that's what we learned from WeWork.
- api 7y ago
  I can't wrap my head around beer at work. Zero productivity for the most part, though I have rarely experienced the Ballmer peak in the domain of bug fixing.
  - perl4ever 7y ago
    I was told once that even tiny amounts of alcohol affect Minesweeper performance. That's different from programming, though.
  - matthewmacleod 7y ago
    One of my previous employers was based in a WeWork for a bit. The beer was something we took advantage of once every couple of weeks, having a pint or two after work. It was nice to have easily available beer and a bit of free space without the effort of having to plan or organise anything more formal, particularly in a city where every pub is absolutely rammed in the evening. No productivity compromise whatsoever.
  - Traster 7y ago
    To be honest, my office has a kitchen with beer stocked in the fridge. The thing is, once it's there, it turns into your responsibility. I've never witnessed anyone drink a beer before 4pm on a Friday. I've witnessed people chilling and having a beer at 6:30-7pm. It helps you chill out and unwind when you're working late or you're chatting with co-workers. It would be practically unthinkable to have one whilst other people are hard at work though.
- deleted 7y ago
  [deleted]
- importpandas 7y ago
  As Nassim Taleb would say: "Pple think they prefer restaurants 1) quiet so they can tawk, 2) roomy, 3) no line. Yet they flock to 1) loud, 2) cramped restaurants 3) w/50 min wait. Never ask pple what they want, watch what they do."
  - birdyrooster 7y ago
    Ppl think they prefer good things Yet they put up with less than good Never ask people what they think is good, because they will put up with less than good. Sound advice, Nassim’s abstraction is as tight as a drum. /s
    - perl4ever 7y ago
      It is fair to say that a lot of people might be uncomfortable stopping at a new restaurant with no cars parked outside and nobody eating inside. Even if someone told you it was good, you start second guessing, wondering why they don't have any business. I think perhaps it's not feasible for a restaurant business to always have some people but not be crowded. If there are some customers most of the time, then it's going to be very crowded when it's busiest.
  - GhostVII 7y ago
    People certainly want quiet roomy restaurants with no line, but they also want good food. All of those downsides are a consequence of being known for having good food.
  - Nasrudith 7y ago
    Number 3 is just plain unsustainable - while people prefer short waits if there is high demand lines will form. Just because people will tolerate them doesn't mean the preferences aren't real. The unspoken zeroth priority is food that they enjoy.
- deleted 7y ago
  [deleted]
- badrabbit 7y ago
  Humbly disagree with your last conclusion. While I agree about wanting a private+quite space. The real demand is for a solution that pleases everyone. Open and noisy floors with free beer,glass divided spaces, sound proofed spaces,secure access controlled rooms,etc... Being able to arrange desired environment at desired scale is the real value. If you have 20 team members with 5 remote and you work on extremely sensitive/confidential stuff. Maybe you have 8 devs that need to work in a quite space out of which half prefer free beer and an open relaxing area to take a break. Maybe you need a very secure meeting room that are friendly to having all your remote workers and on site staff easily book a time and collaborate. Maybe you have creative people and managers that want easy access to them and you want it to resemble an open space. If a company can rent empty floors on office buildings and deploy desired configurations for multiple tenants... I think that's the real "WeWork" demand. Imagine if a remote worker wants to come into the office for a few weeks and wants a privacy friendly quiet office, "WeWork" would deploy that space on the same floor othet your other staff (or as close as possible) for those few weeks,after that the space would be reclaimed for use by any other tenant. You can even upsell different room configurations and designs. Heck,if it was me I would even offer converted shipping containers ,doesn't matter so long as I can make the office space config look and feel identical.
  - mncharity 7y ago
    And 1080p glasses arrive next year. Beginning of the next big platform migration and software rewrite. But we're still tied to keyboards. "Screenless" laptop use relaxes some ergonomic constraints, so perhaps comfy chair and floor work might see an up tick. And head tracking means you're looking in more directions, which expands potential distractions. Perhaps "I have nicely blank walls and quiet visual field" becomes desired. "Are sofas and eye googles the next cost-optimized office plan?" But HUD and ambient information seems to have a different feel than the current laptop, phone, and wall screen combo. Sure you could point your phone at someone and get information, but simply seeing people with a halo of information is pragmatically very different. And we haven't even started to talk about how that might change organizational opportunities and constraints. Or the office infrastructure to support them. We're entering poorly scouted territory.
- Nasrudith 7y ago
  Well the underlying problem is usually the same as enterprise software - the users and the purchasere are often different. The 50 cent on a dollar coild fit with the "want it cheap" crowd which is the same fundamental reason as the open office in many cases. It ignores the other costs to productivity. Those who just want an office to themselves can usually get it at home - minus the separated work space aspect of course.
draw_down 7y ago
... if you didn’t work there, and Softbank isn’t spending your money, why would you get outraged?
code4tee 7y ago
Setting aside the dumpster fire that was WeWork’s business model, the product was just fundamentally not that good. In cities where competitors popped up WeWorks were often the bottom of the market in terms of places one actually wanted to work. Sure the places looked hipper and more modern than previous iterations of coworking, but it was just generally an unpleasant place to work. It was very difficult to get any actual work done.
ncmncm 7y ago
I wonder what the CEO knows, that it took that much money to keep him quiet.
- omosubi 7y ago
  I think he knew it was a dumpster fire, but regardless, SoftBank had to pay him to give up his shares if they wanted control of the company
valenciarose 7y ago
The intersection of the sunk cost fallacy and super-voting shares are the root of this ridiculousness. There's nothing unique about Neumann. Charlatans like him are everywhere. What's interesting about this case is that both labor and capital were screwed by the willingness of an investor to accept the existence super-voting share with an extreme ratio.
- perl4ever 7y ago
  I think Matt Levine made a good point, whether or not he was being serious - regardless of what you think of Neumann ethically, he, like an effective short-seller, provided valuable information to the market in the process of profiting for himself. The outcome seems to be that (a) WeWork is no longer going to waste money like it was, and (b) other investors and businesses may be deterred from following in their footsteps. The loss in purported market value is just the difference between the dreams of mania and their deflation. As they say, if you can't be a good example, you'll just have to be a terrible warning.
throwGuardian 7y ago
> maybe the indictment needed here should be aimed at capitalism, which enabled such an absurd and outrageous outcome What an absolutely ridiculous, botched up non sequitur. As if capitalism inherently favors the corrupt, while socialism magically kills evil. Washington Post only continues to exist because of the generosity (??) of a billionaire, who is the very product of the evil evil capitalism that this writer dispises, is sweet irony, and reminiscent of the massive cognitive dissonance afflicting the modern American socialist.

36 points by elorant 7y ago

Ok, I'm done talking about WeWork from a business perspective. Let's move on to something more interesting. One of the things that I think we need to start thinking about is the concept of implied preference. Until now, co-working spaces have been open-plan, with large amounts of glass and no sound-deadening. All of these features are things that we all assumed were a revolution. WeWork had all these things, WeWork was hugely successful, so we had our revealed preference. No matter what you might say, it turns out you want to work in a noisy office with no privacy and free craft beer. I've heard no end of people who personally dislike that, yet it's the standard that every 'successful' coworking space has. I'd like to consider the idea that all of these things are actually (contrary to popular opinion) terrible and the reason people were putting up with them was because WeWork was selling office space for 50 cents on the dollar. The result we've seen in the market, is obviously you and I can't go out and sell office space for 50 cents on the dollar. So instead we follow the signalling- we all start companies renting out glass offices with no sound-deadening and craft beer. We're optimising for the wrong thing. We're looking at WeWork thinking they revolutionized the experience, but actually they didn't. So what does this all mean? Well what if the companies that are trying to compete with WeWork catch on to the truth behind this. Start breaking up the spaces for more privacy, more quiet space, less craft beer and more productivity. If people take the right lesson from this we could end up with spaces that are actually optimized to what office workers want, rather than forcing everyone to work in the equivalent of a busy starbucks simply because that's what we learned from WeWork.

api 7y ago
I can't wrap my head around beer at work. Zero productivity for the most part, though I have rarely experienced the Ballmer peak in the domain of bug fixing.
- perl4ever 7y ago
  I was told once that even tiny amounts of alcohol affect Minesweeper performance. That's different from programming, though.
- matthewmacleod 7y ago
  One of my previous employers was based in a WeWork for a bit. The beer was something we took advantage of once every couple of weeks, having a pint or two after work. It was nice to have easily available beer and a bit of free space without the effort of having to plan or organise anything more formal, particularly in a city where every pub is absolutely rammed in the evening. No productivity compromise whatsoever.
- Traster 7y ago
  To be honest, my office has a kitchen with beer stocked in the fridge. The thing is, once it's there, it turns into your responsibility. I've never witnessed anyone drink a beer before 4pm on a Friday. I've witnessed people chilling and having a beer at 6:30-7pm. It helps you chill out and unwind when you're working late or you're chatting with co-workers. It would be practically unthinkable to have one whilst other people are hard at work though.
deleted 7y ago
[deleted]
importpandas 7y ago
As Nassim Taleb would say: "Pple think they prefer restaurants 1) quiet so they can tawk, 2) roomy, 3) no line. Yet they flock to 1) loud, 2) cramped restaurants 3) w/50 min wait. Never ask pple what they want, watch what they do."
- birdyrooster 7y ago
  Ppl think they prefer good things Yet they put up with less than good Never ask people what they think is good, because they will put up with less than good. Sound advice, Nassim’s abstraction is as tight as a drum. /s
  - perl4ever 7y ago
    It is fair to say that a lot of people might be uncomfortable stopping at a new restaurant with no cars parked outside and nobody eating inside. Even if someone told you it was good, you start second guessing, wondering why they don't have any business. I think perhaps it's not feasible for a restaurant business to always have some people but not be crowded. If there are some customers most of the time, then it's going to be very crowded when it's busiest.
- GhostVII 7y ago
  People certainly want quiet roomy restaurants with no line, but they also want good food. All of those downsides are a consequence of being known for having good food.
- Nasrudith 7y ago
  Number 3 is just plain unsustainable - while people prefer short waits if there is high demand lines will form. Just because people will tolerate them doesn't mean the preferences aren't real. The unspoken zeroth priority is food that they enjoy.
deleted 7y ago
[deleted]
badrabbit 7y ago
Humbly disagree with your last conclusion. While I agree about wanting a private+quite space. The real demand is for a solution that pleases everyone. Open and noisy floors with free beer,glass divided spaces, sound proofed spaces,secure access controlled rooms,etc... Being able to arrange desired environment at desired scale is the real value. If you have 20 team members with 5 remote and you work on extremely sensitive/confidential stuff. Maybe you have 8 devs that need to work in a quite space out of which half prefer free beer and an open relaxing area to take a break. Maybe you need a very secure meeting room that are friendly to having all your remote workers and on site staff easily book a time and collaborate. Maybe you have creative people and managers that want easy access to them and you want it to resemble an open space. If a company can rent empty floors on office buildings and deploy desired configurations for multiple tenants... I think that's the real "WeWork" demand. Imagine if a remote worker wants to come into the office for a few weeks and wants a privacy friendly quiet office, "WeWork" would deploy that space on the same floor othet your other staff (or as close as possible) for those few weeks,after that the space would be reclaimed for use by any other tenant. You can even upsell different room configurations and designs. Heck,if it was me I would even offer converted shipping containers ,doesn't matter so long as I can make the office space config look and feel identical.
- mncharity 7y ago
  And 1080p glasses arrive next year. Beginning of the next big platform migration and software rewrite. But we're still tied to keyboards. "Screenless" laptop use relaxes some ergonomic constraints, so perhaps comfy chair and floor work might see an up tick. And head tracking means you're looking in more directions, which expands potential distractions. Perhaps "I have nicely blank walls and quiet visual field" becomes desired. "Are sofas and eye googles the next cost-optimized office plan?" But HUD and ambient information seems to have a different feel than the current laptop, phone, and wall screen combo. Sure you could point your phone at someone and get information, but simply seeing people with a halo of information is pragmatically very different. And we haven't even started to talk about how that might change organizational opportunities and constraints. Or the office infrastructure to support them. We're entering poorly scouted territory.
Nasrudith 7y ago
Well the underlying problem is usually the same as enterprise software - the users and the purchasere are often different. The 50 cent on a dollar coild fit with the "want it cheap" crowd which is the same fundamental reason as the open office in many cases. It ignores the other costs to productivity. Those who just want an office to themselves can usually get it at home - minus the separated work space aspect of course.

draw_down 7y ago

... if you didn’t work there, and Softbank isn’t spending your money, why would you get outraged?

code4tee 7y ago

Setting aside the dumpster fire that was WeWork’s business model, the product was just fundamentally not that good. In cities where competitors popped up WeWorks were often the bottom of the market in terms of places one actually wanted to work. Sure the places looked hipper and more modern than previous iterations of coworking, but it was just generally an unpleasant place to work. It was very difficult to get any actual work done.

ncmncm 7y ago

I wonder what the CEO knows, that it took that much money to keep him quiet.

omosubi 7y ago
I think he knew it was a dumpster fire, but regardless, SoftBank had to pay him to give up his shares if they wanted control of the company

valenciarose 7y ago

The intersection of the sunk cost fallacy and super-voting shares are the root of this ridiculousness. There's nothing unique about Neumann. Charlatans like him are everywhere. What's interesting about this case is that both labor and capital were screwed by the willingness of an investor to accept the existence super-voting share with an extreme ratio.

perl4ever 7y ago
I think Matt Levine made a good point, whether or not he was being serious - regardless of what you think of Neumann ethically, he, like an effective short-seller, provided valuable information to the market in the process of profiting for himself. The outcome seems to be that (a) WeWork is no longer going to waste money like it was, and (b) other investors and businesses may be deterred from following in their footsteps. The loss in purported market value is just the difference between the dreams of mania and their deflation. As they say, if you can't be a good example, you'll just have to be a terrible warning.

throwGuardian 7y ago

> maybe the indictment needed here should be aimed at capitalism, which enabled such an absurd and outrageous outcome What an absolutely ridiculous, botched up non sequitur. As if capitalism inherently favors the corrupt, while socialism magically kills evil. Washington Post only continues to exist because of the generosity (??) of a billionaire, who is the very product of the evil evil capitalism that this writer dispises, is sweet irony, and reminiscent of the massive cognitive dissonance afflicting the modern American socialist.