5 ms·

Yes, I realize that We Work is a very questionable business model, but it's a bit unfair to evaluate it during the pandemic. I'm sure many investors are betting

Yes, I realize that We Work is a very questionable business model, but it's a bit unfair to evaluate it during the pandemic. I'm sure many investors are betting on people wanting to leave their home to work. If corporations downsize and give up their office space, that could me a big jump in customers. Once the pandemic fades.

dahdum 5y ago
Even if that happens and they reduce vacancy from 44% to 10%, it looks like each location will still barely cover the location operating expense, with nothing leftover to cover the others. In my admittedly naive view it’s a pretty gory sight.
- gregoriol 5y ago
  It seems to be a common feature of startups nowadays, thinking of Uber and many others: disruption by just burnin money
  - nielsbot 5y ago
    This isn't new. I'm old enough to remember Kozmo.com and Webvan https://en.wikipedia.org/wiki/Kozmo.com https://en.wikipedia.org/wiki/Kozmo.com https://en.wikipedia.org/wiki/Webvan https://en.wikipedia.org/wiki/Webvan
  - nowherebeen 5y ago
    It's more about passing the bucket to the next person. These VC startups are betting the fact that once reality hits, they will be long gone.
- redis_mlc 5y ago
  It's much worse than that. WeWork doesn't own most of their locations. As leases expire, their landlords can jack up rent until WeWork loses the leasehold improvements. This is the same fatal flaw that most US restaurants face, and why even successful ones move after 5 years. FYI: A few programmers have asked me, "What's wrong with WeWork? It's a great idea - nice offices!" Those people are ignoring the business model, which is horrific, as the article mentions. Also, temp spaces charge extra by the hour for meeting rooms. Even though tenants know this in advance, they get bitchy when they receive the itemized bill, and dump on fellow staff and even outside attendees - "You know, we had to pay $100 for that meeting room, and we didn't sign a deal. Did we really need to book a meeting room?", etc.
ckastner 5y ago
The pre-pandemic numbers are just as bad, though.

dahdum 5y ago

Even if that happens and they reduce vacancy from 44% to 10%, it looks like each location will still barely cover the location operating expense, with nothing leftover to cover the others. In my admittedly naive view it’s a pretty gory sight.

gregoriol 5y ago
It seems to be a common feature of startups nowadays, thinking of Uber and many others: disruption by just burnin money
- nielsbot 5y ago
  This isn't new. I'm old enough to remember Kozmo.com and Webvan https://en.wikipedia.org/wiki/Kozmo.com https://en.wikipedia.org/wiki/Kozmo.com https://en.wikipedia.org/wiki/Webvan https://en.wikipedia.org/wiki/Webvan
- nowherebeen 5y ago
  It's more about passing the bucket to the next person. These VC startups are betting the fact that once reality hits, they will be long gone.
redis_mlc 5y ago
It's much worse than that. WeWork doesn't own most of their locations. As leases expire, their landlords can jack up rent until WeWork loses the leasehold improvements. This is the same fatal flaw that most US restaurants face, and why even successful ones move after 5 years. FYI: A few programmers have asked me, "What's wrong with WeWork? It's a great idea - nice offices!" Those people are ignoring the business model, which is horrific, as the article mentions. Also, temp spaces charge extra by the hour for meeting rooms. Even though tenants know this in advance, they get bitchy when they receive the itemized bill, and dump on fellow staff and even outside attendees - "You know, we had to pay $100 for that meeting room, and we didn't sign a deal. Did we really need to book a meeting room?", etc.

ckastner 5y ago

The pre-pandemic numbers are just as bad, though.