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Explain why. It’s literally Uber for offices. It could’ve worked if managed right.

AndrewDucker 3y ago
Uber has made losses every year, and only works because it is supported by VC money: https://fourweekmba.com/uber-losses-by-year/ https://fourweekmba.com/uber-losses-by-year/
Marazan 3y ago
Yes, exactly like Uber. "Mini-cab firm" is not a SV success story either.
- f6v 3y ago
  I bet you could come up with bullshit like: “WeWork is a platform! We can also do food delivery and sell other add-ons…”. Saudi investors would be delighted five years ago.
  - laratied 3y ago
    I am pretty sure "WeWork is a platform" was actually something they pitched. Or maybe it was WeWork as a service. WeWork labs was the most genius thing though. Build a tech lab straight up for no other reason than to have a tech lab for the optics of having a tech lab.
malermeister 3y ago
Uber isn't exactly financially viable, either.
EliRivers 3y ago
Is it Uber for offices? Uber's model is that individual people with cars and spare time effectively loan out that car and their time to people wishing to make journeys, with the two parties being connected and the deal arranged by Uber, who take a cut. All the vehicle ownership risk was shoved onto the driver, and in the event that there was suddenly zero demand somewhere, that risk also was borne by the driver (at least, until various jurisdictions started enforcing minimum wage so that drivers who had no rides all day still got paid). WeWork's model didn't appear to involve individual people with spare office capacity loaning it out for short periods to other people needing an office for a short while. WeWork's model appeared to be that WeWork itself leased office space, and rented it out to people. WeWork paid for the lease, and took on all the risk of that and all the risk of the demand vanishing.
neilk 3y ago
It’s not Uber for Offices. It’s AWS for offices. The AWS bet is that some companies, especially when starting out, will pay a high premium to not have to manage certain physical resources, and to have the flexibility to scale up or down easily.
- wongarsu 3y ago
  Which makes sense. Startups don't like signing 5-year lease agreements, so renting individual offices with all infrastructure taken care off is very attractive, and there are lots of companies offering that. But WeWork tried to sell a very specific brand of that, notably open-plan workspace with great interior design. Which is the opposite of "cheap office space where people can get stuff done", putting them in a tough spot when money isn't plentiful for startups. And it didn't help that was run like a Silicon Valley startup, but in a business where there are very little efficiencies of scale. Just about anyone can start a viable local competitor, allowing the market to adapt far quicker than any one company can.
- unusualmonkey 3y ago
  > The AWS bet is that some companies, especially when starting out, will pay a high premium to not have to manage certain physical resources, and to have the flexibility to scale up or down easily It's not even a high premium if you need what cloud offerings have. Management is expensive. Scaling is expensive. Security and compliance is expensive. Cloud isn't for everyone, but when you need what it offers it can be amazingly cost effective.
bombcar 3y ago
It’s sold as Uber for offices. But the majority of customers rent one office (car) and just use it for years. It’s like Hertz raising money on short term rental possibilities but all they do is lease cars to people long-term. As the other poster said, it’s kind of like how some percentage of AWS just uses it as a dumb server and probably they’d be better off just renting bare metal.
laratied 3y ago
Timing is everything and they had bad timing. The time for this company might still not have arrived yet. I just don't see what they could have done at the time and either way Covid would have bankrupted them.
- hef19898 3y ago
  Regus is doing reasonably well, providing the same services as WeWork. So the time was right, just that WeWork was both, a badly managed shit show, and a well executed money grift (millions forbthe name We paid from WeWork to Neuman and WeWork leasing expensive office space from Neuman). No business succeeds, or survives, under that management. Not that VCs care, as long they can dump their shares at some greater idiot down the line before things implode.
pessimizer 3y ago
From a quick google, Uber may have lost something like $37 billion dollars. $12B from 2014-2018 [https://www.statista.com/chart/17705/uber-revenue-costs-and-cumulative-operating-losses/ https://www.statista.com/chart/17705/uber-revenue-costs-and-...] $25B from 2019-2022 [https://therideshareguy.com/uber-statistics/ https://therideshareguy.com/uber-statistics/]

Uber has made losses every year, and only works because it is supported by VC money: https://fourweekmba.com/uber-losses-by-year/ https://fourweekmba.com/uber-losses-by-year/

Marazan 3y ago

Yes, exactly like Uber. "Mini-cab firm" is not a SV success story either.

f6v 3y ago
I bet you could come up with bullshit like: “WeWork is a platform! We can also do food delivery and sell other add-ons…”. Saudi investors would be delighted five years ago.
- laratied 3y ago
  I am pretty sure "WeWork is a platform" was actually something they pitched. Or maybe it was WeWork as a service. WeWork labs was the most genius thing though. Build a tech lab straight up for no other reason than to have a tech lab for the optics of having a tech lab.

malermeister 3y ago

Uber isn't exactly financially viable, either.

EliRivers 3y ago

Is it Uber for offices? Uber's model is that individual people with cars and spare time effectively loan out that car and their time to people wishing to make journeys, with the two parties being connected and the deal arranged by Uber, who take a cut. All the vehicle ownership risk was shoved onto the driver, and in the event that there was suddenly zero demand somewhere, that risk also was borne by the driver (at least, until various jurisdictions started enforcing minimum wage so that drivers who had no rides all day still got paid). WeWork's model didn't appear to involve individual people with spare office capacity loaning it out for short periods to other people needing an office for a short while. WeWork's model appeared to be that WeWork itself leased office space, and rented it out to people. WeWork paid for the lease, and took on all the risk of that and all the risk of the demand vanishing.

neilk 3y ago

It’s not Uber for Offices. It’s AWS for offices. The AWS bet is that some companies, especially when starting out, will pay a high premium to not have to manage certain physical resources, and to have the flexibility to scale up or down easily.

wongarsu 3y ago
Which makes sense. Startups don't like signing 5-year lease agreements, so renting individual offices with all infrastructure taken care off is very attractive, and there are lots of companies offering that. But WeWork tried to sell a very specific brand of that, notably open-plan workspace with great interior design. Which is the opposite of "cheap office space where people can get stuff done", putting them in a tough spot when money isn't plentiful for startups. And it didn't help that was run like a Silicon Valley startup, but in a business where there are very little efficiencies of scale. Just about anyone can start a viable local competitor, allowing the market to adapt far quicker than any one company can.
unusualmonkey 3y ago
> The AWS bet is that some companies, especially when starting out, will pay a high premium to not have to manage certain physical resources, and to have the flexibility to scale up or down easily It's not even a high premium if you need what cloud offerings have. Management is expensive. Scaling is expensive. Security and compliance is expensive. Cloud isn't for everyone, but when you need what it offers it can be amazingly cost effective.

bombcar 3y ago

It’s sold as Uber for offices. But the majority of customers rent one office (car) and just use it for years. It’s like Hertz raising money on short term rental possibilities but all they do is lease cars to people long-term. As the other poster said, it’s kind of like how some percentage of AWS just uses it as a dumb server and probably they’d be better off just renting bare metal.

laratied 3y ago

Timing is everything and they had bad timing. The time for this company might still not have arrived yet. I just don't see what they could have done at the time and either way Covid would have bankrupted them.

hef19898 3y ago
Regus is doing reasonably well, providing the same services as WeWork. So the time was right, just that WeWork was both, a badly managed shit show, and a well executed money grift (millions forbthe name We paid from WeWork to Neuman and WeWork leasing expensive office space from Neuman). No business succeeds, or survives, under that management. Not that VCs care, as long they can dump their shares at some greater idiot down the line before things implode.

pessimizer 3y ago

From a quick google, Uber may have lost something like $37 billion dollars. $12B from 2014-2018 [https://www.statista.com/chart/17705/uber-revenue-costs-and-cumulative-operating-losses/ https://www.statista.com/chart/17705/uber-revenue-costs-and-...] $25B from 2019-2022 [https://therideshareguy.com/uber-statistics/ https://therideshareguy.com/uber-statistics/]