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Flexibility is king, and while compared to a traditional office lease, WeWork et al. are flexible, they still lock you into a contract, albeit a shorter one. W

Flexibility is king, and while compared to a traditional office lease, WeWork et al. are flexible, they still lock you into a contract, albeit a shorter one. We're a small business, we rent out a couple offices, but we've downsized. Especially with more WFH, a co-working space is criminally expensive for occasional usage. In my area, a startup has formed[0] offering desks at an HOURLY rate. Consistent decor, internet, staff, etc. across all locations. At the end of the day we still need a place to meet up in-person occasionally, this works for our use case perfectly. [0] https://www.lauft.work/ https://www.lauft.work/

amluto 4y ago
It’s not just startups. There are established players like Regus.
jnwatson 4y ago
Super confused. There is nothing new with WeWork other than perhaps cooler interior design. Renting an office room by the hour/month has been a thing for a very long time. Regus/IWG was founded in 1989.
hinkley 4y ago
Flexibility is king for small operations - unless you're a restaurant. Moving a storefront to a new location loses half of your customers, and for restaurants that's even worse. The tax you pay for wholesale goods includes the costs of logistics - the forethought, the scaling, the redundancy. If all of that were free then you'd get everything straight from the manufacturer for half the price. It might be that there's a business model for a WeWork-style company that actually works, but I'm not sure this is it. There are a number of companies where most of their hard assets are real estate, and we joke about them being real estate companies masquerading as something else (eg, McDonald's, and Sears before malls died). If they owed buildings outright they might have something as well. In many cities the number of landlords that own 80% of the available space is actually a pretty small number. What a WeWork would be doing is hiring charismatic people to build relationships with those companies to try to establish long term leases at a more favorable rate than you or I could ever hope for, particularly during a down economy when you can spin it as doing them a huge favor. Possibly by taking additional discounts for clauses like, "I can move you to a different suite in the same building in these situations" because maybe there will be a day when the guys on the fifth and sixth floor really want the fourth floor and meanwhile the tenants on the 3rd floor are downsizing. Some people will pay for those sorts of contingency. If even half of that is reasonable, then you might be looking for a shared space company that's backed by a hedge fund, rather than VC's, because you're looking for a company that is watching the downward trends in the market, not the upward ones. But I don't get the impression they did any of that.
- julianlam 4y ago
  > Possibly by taking additional discounts for clauses like, "I can move you to a different suite in the same building in these situations" because maybe there will be a day when the guys on the fifth and sixth floor really want the fourth floor and meanwhile the tenants on the 3rd floor are downsizing. Some people will pay for those sorts of contingency. What's interesting is this is exactly what happened to me and my existing office lease. Every tenant on multiple floors wanted to downsize, landlord wanted to do a complete teardown and rebuild of my floor, and so we all played musical offices and we all got what we wanted. No WeWork style contracts needed, it was all laid out in the office lease agreement, that the landlord could do something like this.

amluto 4y ago

It’s not just startups. There are established players like Regus.

jnwatson 4y ago

Super confused. There is nothing new with WeWork other than perhaps cooler interior design. Renting an office room by the hour/month has been a thing for a very long time. Regus/IWG was founded in 1989.

hinkley 4y ago

Flexibility is king for small operations - unless you're a restaurant. Moving a storefront to a new location loses half of your customers, and for restaurants that's even worse. The tax you pay for wholesale goods includes the costs of logistics - the forethought, the scaling, the redundancy. If all of that were free then you'd get everything straight from the manufacturer for half the price. It might be that there's a business model for a WeWork-style company that actually works, but I'm not sure this is it. There are a number of companies where most of their hard assets are real estate, and we joke about them being real estate companies masquerading as something else (eg, McDonald's, and Sears before malls died). If they owed buildings outright they might have something as well. In many cities the number of landlords that own 80% of the available space is actually a pretty small number. What a WeWork would be doing is hiring charismatic people to build relationships with those companies to try to establish long term leases at a more favorable rate than you or I could ever hope for, particularly during a down economy when you can spin it as doing them a huge favor. Possibly by taking additional discounts for clauses like, "I can move you to a different suite in the same building in these situations" because maybe there will be a day when the guys on the fifth and sixth floor really want the fourth floor and meanwhile the tenants on the 3rd floor are downsizing. Some people will pay for those sorts of contingency. If even half of that is reasonable, then you might be looking for a shared space company that's backed by a hedge fund, rather than VC's, because you're looking for a company that is watching the downward trends in the market, not the upward ones. But I don't get the impression they did any of that.

julianlam 4y ago
> Possibly by taking additional discounts for clauses like, "I can move you to a different suite in the same building in these situations" because maybe there will be a day when the guys on the fifth and sixth floor really want the fourth floor and meanwhile the tenants on the 3rd floor are downsizing. Some people will pay for those sorts of contingency. What's interesting is this is exactly what happened to me and my existing office lease. Every tenant on multiple floors wanted to downsize, landlord wanted to do a complete teardown and rebuild of my floor, and so we all played musical offices and we all got what we wanted. No WeWork style contracts needed, it was all laid out in the office lease agreement, that the landlord could do something like this.