6 ms·

And the company now seems to be valued as a real estate -- not a "tech" -- business... ...which makes sense, because WeWork is a real estate business, albeit o

by cs702 7y ago

And the company now seems to be valued as a real estate -- not a "tech" -- business... ...which makes sense, because WeWork is a real estate business, albeit one with an unproven model.

toast0 7y ago
Subletting is a pretty well proven business model. IWG, formerly Regus, has been offering office space in a substantially similar manner since 1989. The model works, if the short term leases balance out the long term leases and other costs.
- chrisseaton 7y ago
  > IWG, formerly Regus, has been offering office space in a substantially similar manner since 1989. Have you ever been to a Regus? Most souless depressing places on earth. WeWork was substantially different in quality.
  - xenospn 7y ago
    Regus is very depressing, I agree. Feels like a waiting room. I've never been to a WeWork (left corporate life before they became a thing), but I'm sure it's much better.
    - jedberg 7y ago
      I've been to both, and WeWork is definitely much better. But I'm not sure how much that has to do with the benefits or the decor. I think it's more because of the people they attract vs Regus -- young and bustling. It gives the place a more lively feel. OTOH, it could be because of all the fun toys that they attract that crowd.
  - phire 7y ago
    Wework is just Regus with better branding. Much like we now have up-market coffee shops. It's not innovative, just a perfected execution of an existing idea.
    - chrisseaton 7y ago
      Right, it's a lot better. Isn't that enough to build a good business on?
      - unlinked_dll 7y ago
        Only if the unit economics make sense. It doesn't matter how "good" your service is when you lose money acquiring customers. Your only strategy is market domination, which may work for some businesses, but not one where any market downturn would screw you six ways to Sunday.
      - ethbro 7y ago
        Depends on if there's enough demand for the service from people who consider Regus an unacceptable option. Starbucks built an empire on the unserved masses of people who (1) wanted to be people who went to coffee shops & (2) were scared to go to actual independent coffee shops. It seems a good path for WeWork to follow. Lower costs and broaden appeal, just enough to cater to people who won't use Regus.
        jjeaff 7y ago
        Is anyone really scared to go to an independent coffee shop? Seems like they just didn't want to go bad enough. But since Starbucks is everywhere, you no longer have to cross the street to drop in at a coffee shop.
        chrisseaton 7y ago
        > were scared to go to actual independent coffee shops Nobody's 'scared' to go to an independent coffee shop. This is a ridiculous snobby notion.
        everyone 7y ago
        Well if u have an extreme peanut allergy for example.. in a big corporate place everything is in a packet, just made in a big factory and you can get a list of the ingredients.. Whereas in a small cafe, they may have made the cakes themselves + put a cake with nuts next to a non-nut cake on the shelf. Personally, having a nut allergy, I feel less stressed by soulless corporate homogeneous food. Though still jusy much happier never going to any place of that ilk and having my own food (wayyy cheaper too).
  - notahacker 7y ago
    On the other hand, WeWork really isn't substantially different in quality from the many other businesses selling desks to startups. Regus being bland is probably something they consider a commercial edge tbf.
  - braythwayt 7y ago
    One of the problems we encounter when comparing companies and their product/service offerings is when we compare a self-sufficient business to a venture that is subsidizing its offering with investment capital. Uber was amazing in the early days, the cars were better than taxis, I remember getting driven around in a Mercedes and not having to pay a premium for the nicer car. And there were cars always available, because the drivers were getting good money for every ride. It turns out that these nicer features weren’t a consequence of software and maps and efficiently matching rides with cars, it was as simple as raising billions of dollars, and running the business at a loss. I suggest it’s the same with WeWork. Their nicer offices weren’t a question of vision or aesthetic taste or efficiencies from technology. They were nothing more than spending Softbank’s billions of dollars and running at a loss. I accept that you feel they were offering a higher-quality experience, but we have to come to grips with the fact that it was an illusion. They were never going to magically reach enough scale that they could break even or make money offering that service at that price to that “demographic” of customer. I feel like WeWork is in some way in a worse situation than Uber, DoorDash, and other “gig economy” businesses. Those businesses can squeeze their employees (that they classify as independent contractors in order to maximize the misery they can inflict). Who can WeWork squeeze? Nobody. The gig economy is nothing more than rolling back any and all protections for workers, but dressing it up as technological progress. What is WeWork’s story? There’s nobody to squeeze, no regulations to flout in order to cut costs. There’s no inefficiency that iPads and WiFi and digital services get rid of. So naturally, now that the money hose has been turned off, the squeeze is on WeWork and its customers.
    - chrisseaton 7y ago
      But I think WeWork can grow the market. Before I'd never consider going to a co-working space. Might as well go and sit in a grotty cupboard. Now I'm inspired to give it a go.
      - marcinzm 7y ago
        Until they cut the quality enough, to achieve profitability, that you no longer want to go but they're still on the hook for their long term leases.
  - maest 7y ago
    > WeWork was substantially different in quality. WeWork is also substantially different in price. In London, WW is probably 2x the price of a Regus office, for comparable location and surface area.
- therianthropie 7y ago
  I'm currently in a Regus office space and it's horrible. It's extremely expensive, extremely dry air, bad air conditioning, even in winter it's always hot, bad coffee for 1€ minimum per cup from a bad cleaned machine. I hope my company will move fast.
breatheoften 7y ago
I’ve really liked my wework space — recently I’ve started to see early signs of cost cutting ... They’ve moved the cold brew downstairs so there is only one tap instead of two and replaced it with a much lower quality cold brew (the old one was extremely good — from a super high quality local source)... it’s small but feels like it’s probably the beginning of what is likely to be a long quality decline ...
- meddlepal 7y ago
  Not in a WeWork anymore, but once was. A former co-worker said newly renovated WeWork's are also dropping the free beer, so another cost cutting measure.
  - mrits 7y ago
    I was at one in Austin for about 18 months. After the first few months we usually had to go ask them to unlock the taps ourselves. Some days there was nothing but Coors Light
    - blaser-waffle 7y ago
      For non-Austin readers, this is on par with a warcrime. Probably a joke in there about Shiner Bock too.
CerealFounder 7y ago
Thats not whats happening. This guy is an angel of death (to landlords). His career skills/responsibility is going to be to basically renegotiate every lease to make it viable for WW. Its going to cause problems.
unapologetic 7y ago
Now please treat Tesla as a car manufacturer instead of "Tech"

by cs702 7y ago

And the company now seems to be valued as a real estate -- not a "tech" -- business... ...which makes sense, because WeWork is a real estate business, albeit one with an unproven model.

toast0 7y ago

Subletting is a pretty well proven business model. IWG, formerly Regus, has been offering office space in a substantially similar manner since 1989. The model works, if the short term leases balance out the long term leases and other costs.

chrisseaton 7y ago
> IWG, formerly Regus, has been offering office space in a substantially similar manner since 1989. Have you ever been to a Regus? Most souless depressing places on earth. WeWork was substantially different in quality.
- xenospn 7y ago
  Regus is very depressing, I agree. Feels like a waiting room. I've never been to a WeWork (left corporate life before they became a thing), but I'm sure it's much better.
  - jedberg 7y ago
    I've been to both, and WeWork is definitely much better. But I'm not sure how much that has to do with the benefits or the decor. I think it's more because of the people they attract vs Regus -- young and bustling. It gives the place a more lively feel. OTOH, it could be because of all the fun toys that they attract that crowd.
- phire 7y ago
  Wework is just Regus with better branding. Much like we now have up-market coffee shops. It's not innovative, just a perfected execution of an existing idea.
  - chrisseaton 7y ago
    Right, it's a lot better. Isn't that enough to build a good business on?
    - unlinked_dll 7y ago
      Only if the unit economics make sense. It doesn't matter how "good" your service is when you lose money acquiring customers. Your only strategy is market domination, which may work for some businesses, but not one where any market downturn would screw you six ways to Sunday.
    - ethbro 7y ago
      Depends on if there's enough demand for the service from people who consider Regus an unacceptable option. Starbucks built an empire on the unserved masses of people who (1) wanted to be people who went to coffee shops & (2) were scared to go to actual independent coffee shops. It seems a good path for WeWork to follow. Lower costs and broaden appeal, just enough to cater to people who won't use Regus.
      - jjeaff 7y ago
        Is anyone really scared to go to an independent coffee shop? Seems like they just didn't want to go bad enough. But since Starbucks is everywhere, you no longer have to cross the street to drop in at a coffee shop.
      - chrisseaton 7y ago
        > were scared to go to actual independent coffee shops Nobody's 'scared' to go to an independent coffee shop. This is a ridiculous snobby notion.
        everyone 7y ago
        Well if u have an extreme peanut allergy for example.. in a big corporate place everything is in a packet, just made in a big factory and you can get a list of the ingredients.. Whereas in a small cafe, they may have made the cakes themselves + put a cake with nuts next to a non-nut cake on the shelf. Personally, having a nut allergy, I feel less stressed by soulless corporate homogeneous food. Though still jusy much happier never going to any place of that ilk and having my own food (wayyy cheaper too).
- notahacker 7y ago
  On the other hand, WeWork really isn't substantially different in quality from the many other businesses selling desks to startups. Regus being bland is probably something they consider a commercial edge tbf.
- braythwayt 7y ago
  One of the problems we encounter when comparing companies and their product/service offerings is when we compare a self-sufficient business to a venture that is subsidizing its offering with investment capital. Uber was amazing in the early days, the cars were better than taxis, I remember getting driven around in a Mercedes and not having to pay a premium for the nicer car. And there were cars always available, because the drivers were getting good money for every ride. It turns out that these nicer features weren’t a consequence of software and maps and efficiently matching rides with cars, it was as simple as raising billions of dollars, and running the business at a loss. I suggest it’s the same with WeWork. Their nicer offices weren’t a question of vision or aesthetic taste or efficiencies from technology. They were nothing more than spending Softbank’s billions of dollars and running at a loss. I accept that you feel they were offering a higher-quality experience, but we have to come to grips with the fact that it was an illusion. They were never going to magically reach enough scale that they could break even or make money offering that service at that price to that “demographic” of customer. I feel like WeWork is in some way in a worse situation than Uber, DoorDash, and other “gig economy” businesses. Those businesses can squeeze their employees (that they classify as independent contractors in order to maximize the misery they can inflict). Who can WeWork squeeze? Nobody. The gig economy is nothing more than rolling back any and all protections for workers, but dressing it up as technological progress. What is WeWork’s story? There’s nobody to squeeze, no regulations to flout in order to cut costs. There’s no inefficiency that iPads and WiFi and digital services get rid of. So naturally, now that the money hose has been turned off, the squeeze is on WeWork and its customers.
  - chrisseaton 7y ago
    But I think WeWork can grow the market. Before I'd never consider going to a co-working space. Might as well go and sit in a grotty cupboard. Now I'm inspired to give it a go.
    - marcinzm 7y ago
      Until they cut the quality enough, to achieve profitability, that you no longer want to go but they're still on the hook for their long term leases.
- maest 7y ago
  > WeWork was substantially different in quality. WeWork is also substantially different in price. In London, WW is probably 2x the price of a Regus office, for comparable location and surface area.
therianthropie 7y ago
I'm currently in a Regus office space and it's horrible. It's extremely expensive, extremely dry air, bad air conditioning, even in winter it's always hot, bad coffee for 1€ minimum per cup from a bad cleaned machine. I hope my company will move fast.

breatheoften 7y ago

I’ve really liked my wework space — recently I’ve started to see early signs of cost cutting ... They’ve moved the cold brew downstairs so there is only one tap instead of two and replaced it with a much lower quality cold brew (the old one was extremely good — from a super high quality local source)... it’s small but feels like it’s probably the beginning of what is likely to be a long quality decline ...

meddlepal 7y ago
Not in a WeWork anymore, but once was. A former co-worker said newly renovated WeWork's are also dropping the free beer, so another cost cutting measure.
- mrits 7y ago
  I was at one in Austin for about 18 months. After the first few months we usually had to go ask them to unlock the taps ourselves. Some days there was nothing but Coors Light
  - blaser-waffle 7y ago
    For non-Austin readers, this is on par with a warcrime. Probably a joke in there about Shiner Bock too.

CerealFounder 7y ago

Thats not whats happening. This guy is an angel of death (to landlords). His career skills/responsibility is going to be to basically renegotiate every lease to make it viable for WW. Its going to cause problems.

unapologetic 7y ago

Now please treat Tesla as a car manufacturer instead of "Tech"