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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

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.
- toomuchtodo 7y ago
  The question you should ask is: If Regus couldn't grow the market beyond where it's at, what gives WeWork a competitive advantage that it could.
  - chrisseaton 7y ago
    > The question you should ask is: If Regus couldn't grow the market beyond where it's at, what gives WeWork a competitive advantage that it could I already answered that - a pleasant environment - that's their competitive advantage. Regus aren't able (or don't want to) meet that part of the market.
    - braythwayt 7y ago
      From a business perspective, “a pleasant environment” is not a competitive advantage. For it to be a competitive advantage, we need to understand why, structurally, WeWork can offer this and Regus can’t. By way of analogy, if we say that Amazon’s pricing is a “competitive advantage,” we can also explain what Amazon has done structurally that makes their pricing hard to copy. Anybody can set a low price on a product or service, but not everybody can do so and make money. Same with WeWork. If a nice environment is a competitive advantage, we can point to something in WeWork’s structure that makes it difficult for Regus to duplicate. If Regus can duplicate it without difficulty, then we need to rethink whether it’s an advantage, or simply something you happen to prefer, but doesn’t matter. By way of a different analogy, consider free coffee in hotel rooms. Everybody prefers it, but for decades you got it in motel chains, but not from the big hotel operations. Why idn’t they offer free coffee? Because their customers were actually corporations, and the things that mattered to corporations were centralized billing, locations close to airports and business centres, and so forth. This allowed the big hotels to drag their feet on in-room amenities like free coffee or free WiFi. It wasn’t nearly the competitive advantage it appeared to be.
      - toomuchtodo 7y ago
        Great comment, very insightful.
  - 7y ago
geofft 7y ago
My coworkers and I got a lot of good meals out of SpoonRocket, which would deliver to your home or office door in Oakland for $6, later $8, within minutes of placing an order. Their claim was they were cutting costs by offering one choice of meal per day, so they could put drivers on the road even before people were ordering (and also use economies of scale in meal prep). The latter was true as far as it went - we eventually learned that gig drivers would just park in our parking lot at 11:45 and wait for orders. But that didn't help with pricing. They were actually just VC-subsidized, and we all knew they'd shut down eventually.
- maest 7y ago
  I'm using this service called MealPal. It's ~GBP 5 for a meal, as long as your preorder it the previous evening (or same day early morning). You can get meals that retail for GBP 8 using this service. So that's a 37% discount in an industry that is notorious for its tight margins. My first thought when I heard of it was "oh wow, better sign up before their VC money runs out"

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.
toomuchtodo 7y ago
The question you should ask is: If Regus couldn't grow the market beyond where it's at, what gives WeWork a competitive advantage that it could.
- chrisseaton 7y ago
  > The question you should ask is: If Regus couldn't grow the market beyond where it's at, what gives WeWork a competitive advantage that it could I already answered that - a pleasant environment - that's their competitive advantage. Regus aren't able (or don't want to) meet that part of the market.
  - braythwayt 7y ago
    From a business perspective, “a pleasant environment” is not a competitive advantage. For it to be a competitive advantage, we need to understand why, structurally, WeWork can offer this and Regus can’t. By way of analogy, if we say that Amazon’s pricing is a “competitive advantage,” we can also explain what Amazon has done structurally that makes their pricing hard to copy. Anybody can set a low price on a product or service, but not everybody can do so and make money. Same with WeWork. If a nice environment is a competitive advantage, we can point to something in WeWork’s structure that makes it difficult for Regus to duplicate. If Regus can duplicate it without difficulty, then we need to rethink whether it’s an advantage, or simply something you happen to prefer, but doesn’t matter. By way of a different analogy, consider free coffee in hotel rooms. Everybody prefers it, but for decades you got it in motel chains, but not from the big hotel operations. Why idn’t they offer free coffee? Because their customers were actually corporations, and the things that mattered to corporations were centralized billing, locations close to airports and business centres, and so forth. This allowed the big hotels to drag their feet on in-room amenities like free coffee or free WiFi. It wasn’t nearly the competitive advantage it appeared to be.
    - toomuchtodo 7y ago
      Great comment, very insightful.
- 7y ago

geofft 7y ago

My coworkers and I got a lot of good meals out of SpoonRocket, which would deliver to your home or office door in Oakland for $6, later $8, within minutes of placing an order. Their claim was they were cutting costs by offering one choice of meal per day, so they could put drivers on the road even before people were ordering (and also use economies of scale in meal prep). The latter was true as far as it went - we eventually learned that gig drivers would just park in our parking lot at 11:45 and wait for orders. But that didn't help with pricing. They were actually just VC-subsidized, and we all knew they'd shut down eventually.

maest 7y ago
I'm using this service called MealPal. It's ~GBP 5 for a meal, as long as your preorder it the previous evening (or same day early morning). You can get meals that retail for GBP 8 using this service. So that's a 37% discount in an industry that is notorious for its tight margins. My first thought when I heard of it was "oh wow, better sign up before their VC money runs out"