10 ms·
WeWork nears bankruptcy
- zwieback 3y agoFrom the media coverage it appears WeWork was particularly dysfunctional but are the other giant "disruptors" (Uber, Zillow, meal kits), that went up against industries that were probably already pretty efficient, going to go down eventually as well?
- wordpad25 3y agoYeah in hindsight it's easy to act superior as if it was never going to work, but at least they tried something new, that's how all innovation happens
- wongarsu 3y agoIt worked for a remarkably long time, WeWork was founded all the way back in 2010. Back then coworking was somewhat new (the wikipedia article called it "an emerging trend" in the first revision in 2007). And WeWork did a lot to popularize it. In hindsight it seems obvious that the company was way over-valued, there aren't many efficiencies of scale or entry barriers; anyone with enough money to furnish an office and commit to a five-year lease can open a coworking space. Lots of people said so at the time too. I wonder if they would have been more successful if they hadn't gone the tech-VC route and become a "boring" real-estate business.
- readthenotes1 3y agoWith a creepy leader bilking the company it was more like a innovation in long cons
- morelisp 3y agoWhat was the new thing they tried?
- rcxdude 3y agowhat was baffling about wework's valuation is that it wasn't anything new at all: the product and business model already existed and was well understood, and well understood to not be worth anywhere near that much. The only new thing was the founder managed to convince a bunch of VCs that it was a tech company somehow.
- echelon 3y ago> Uber No. They've killed taxis, and they're way more convenient. Now their pricing will rise to match the actual business and the era of under-cost ride hailing will end. Their food delivery business will continue to battle it out with the other contenders until the market consolidates. > Zillow Realty sucks due to the MLS monopoly. Redfin is trying to break free of this. We'll see how it goes. In any event, modern home shopping almost always begins on one of these "tech" realty sites. > meal kits Anything with "kit" or "club" in the name is going to wither up and die.
- lock-the-spock 3y agoI don't think Uber is sustainable. It seems everyone is getting shafted - the drivers, the customers, the Investors. Their only profitable part is the food delivery service, which is neither novel nor particularly good in comparison to others. Once the Saudi/UAE-Softbank money dries up or gets cold feet Uber is dead. At this point I guess it is mainly a money laundering service, like the entire city of London property market.
- TedDoesntTalk 3y agoHow are customers getting shafted? Uber is still cheaper to the airport than a taxi (for me). I don’t use it for anything else, so genuinely curious.
- ghaff 3y agoI assume in this context it means not getting rides for way under what traditional cabs cost. But those prices are just pretty much what a ride costs. If you decided to structure your life around cheap on-demand rides, then you may have to make changes. For all their faults, Uber/Lyft/etc. did make hailing a ride using your phone a much better experience than cabs in many cities. Not for everything; I still use a car service for airport rides.
- nemo44x 3y ago> Uber is still cheaper to the airport than a taxi (for me). Sometimes. If you know the price it's obviously easy to compare. I do happen to know taxi prices from a few airports to central areas and Uber used to always be cheaper. Significantly cheaper years ago. Today it's a crap shoot and the taxi's are often faster since you don't have to wait. If the taxi is no more than 5$ more expensive then I take the taxi. I'd say it's about 50-50. Sometimes the Uber is a good deal ($10 or so) cheaper.
- paulpauper 3y agoStill waiting for Amazon to go out of business due to losses. or Netflix, Uber, or Tesla. Pundits are really bad at predicting this sort of stuff, and losses are not predictive of failure
- legitster 3y agoThere's a difference between overall corporate losses from outlays, and companies selling their products at a loss. Netflix may lose a ton of money QoQ, but they still make money for every new subscription.
- hef19898 3y agoMeal kits and most grocery delivery services will either go down on unit economics as soon as VC money dries up (I talked to some people doing beverage wholesale and distribution to restaurants and groccery stores, and they do offer a service for consumers as well that piggy backs on their larger volume runs, and they simply cannot meet the prices those start-ups offer). So, either those companies raise prices or go bust, or they try run a hail mary with the money they have in some huge market consolidation.
- maxdo 3y agoThis is sad . They are still unmatched
- badcppdev 3y agoIs that because they provided benefits at the expense of being a sustainable business?
- ryanjshaw 3y agoEverybody loves a free lunch.
- bdcravens 3y agoSo was MoviePass (in its original incarnation)
- rchaud 3y agowho doesn’t love companies that give you $2 back for every $1 you spend?
- paulpauper 3y agoyeah i wonder if that contributed also to it losing so much money. the same amenities that made wework so great also hastened its demise.
- readthenotes1 3y agoProbably more about elevated rents paid up the CEO then amenities
- MDWolinski 3y agoOne day, I hope, people will inherently understand that Market Value != Business Value. Particularly in these days of extremely high valuation. The stock market does not equal the economy. At best, it equals what 1% of the population thinks they can get out of the lower 99%.
- LanceH 3y agoDo you think that will happen before or after they understand the difference between debt and deficit?
- NickC25 3y agoAgreed. I also hope that people understand why certain industries or companies trade at certain multiples, and that a company that clearly isn't in that industry can't magically claim that they are so they get a huge multiple. WeWork is not tech. It was never tech. It will never be tech. It shouldn't have ever traded at tech multiples or valuations. The closest thing WeWork was to tech is that some tech workers worked out of places owned by WeWork. End of the day it's fucking real estate, nothing more, nothing less. Real estate that was poorly managed by a shady dude, nonetheless. But alas, people want hype, and even more people want to believe the hype.
- zeruch 3y ago"WeWork is not tech. It was never tech. It will never be tech. It shouldn't have ever traded at tech multiples or valuations." TBH, most tech shouldnt be traded at tech multiples of valuations.
- figassis 3y agoThat is also true, but the subset of companies that can be, does not include non tech companies. I mean, there are non tech companies that are worth a lot, lien coca-cola, or oil companies, or Walmart, but you can see what and how long it took to get there. They were not rocket ships.
- chollida1 3y ago
- outside1234 3y agoOpenAI
- chaps 3y agoUsed to use a co-working space for my own stuff. Mostly to get out of the house. In the two years I was there, in the same building, the co-working company changed three times. Mostly the same layout and all that, but everything/one else was cycled out. Good spot in the city, too. Nothing else to add except anecdata. Feels like a losing industry at the whim of the building owners. Also the upper management was filled with leeches.
- wongarsu 3y agoIn our town we have at least four different coworking spaces. All apparently profitable, none of them operated by big companies. It's a simple business model: commit to a long-term lease, add furniture and sublet the space in lots of small flexible short term leases. The setup also seems to be similar everywhere, with some mix of flexible desks, fixed desks and closed offices available. You mostly differentiate on location, how hip it looks, and what kind of community you can build. WeWork had efficiencies of scale on the looking hip part, but on the community building a local group can easily outcompete a multinational company.
- BobaFloutist 3y agoIt's like a hotel for offices. Or maybe more like a hostel.
- danielvaughn 3y agoI often work from home, but I've long been part of a coworking space down where I live. They've got a great model because they're a non-profit, and partake in all sorts of things to help local businesses, like accelerators, talks, etc. I feel like that's the right model for this type of thing, because it does seem like the unit economics don't work for profit-driven business. https://www.weare1909.org/ https://www.weare1909.org/
- abfan1127 3y agohow much of this coworking space is supported by taxes (via West Palm Beach Downtown Development Authority)?
- deleted 3y ago[deleted]
- linuxftw 3y agoNo one ever valued WeWork at $47B. Not for one minute of one day. These lofty numbers came exclusively from WeWork's own propaganda.
- nabogh 3y agoFrom Wikipedia: >In November 2018, SoftBank acquired a warrant to buy up to $3 billion worth of shares in the company by the end of September 2019 at a $42 billion valuation. Valuation comes from how much stake you buy blown out as if the rest of the shares cost that much. This naturally doesn't make a lot of sense because the price would go up as you bought the rest of the shares. Still the valuation is ball park correct it was just a complete cock-up on the buyers part.
- aleksiy123 3y agoWorked in one for 2 years and it was a good time. Beer Keg + Happy Hour Wine on Thursdays was a fun time. Too and it wasn't sustainable.
- legitster 3y agoIf anyone is ever pitching a non-tech product as a "tech" product, don't touch it with a 100 foot pole. For companies we traditional would consider "tech", the product margins (the cost for each unit of X you sell) needs to be non-linear, and approaching zero. It's clear that existing real estate and service industry investors laughed their heads off at WeWork's valuation. Adam Neumann's trick was to market his business to naive investors as "tech" and ride the rest as a speculative bubble. But fleecing the initial investors was tantamount to legalized fraud. Other famous businesses that are also "not-tech" include Spotify, Tesla, SpaceX, and Apple's hardware division.
- tristanb 3y agoWell if my Tesla, SpaceX and Apple isn't technology I don't know what is...
- legitster 3y agoWe're talking about "tech" as a stock market categorization. Tesla and SpaceX should flatly be compared to other manufacturing companies when evaluating their fundamentals. And I was pretty clear when I said Apple's hardware. Their real cash-cow is their app store.
- byteware 3y agowell for their definition of tech "approaching zero cost", the only tech companies are pure software ones, the cost of manifacturing a rocket can hardly approach zero
- ilrwbwrkhv 3y agoTotally. And my favourite: Netflix. They spent so much time and effort with the whole microservices architecture and being a "tech business" that they forgot that companies like PornHub do a much larger scale of video and networking than they do without any of that complex nonsense.
- dewey 3y ago
- nameless912 3y agoI was in a WeWork in London on the day of the original Softbank-induced meltdown 4 years ago. It was surreal to be in a building that you weren't sure still operated as a business, with employees who were unsure if they were in fact still employed. We were all taking bets on how many days it would take for us to be kicked out of the office, and our company immediately found us a hotel conference suite to rent while the office situation was sorted out. Of course, we were never evicted and WeWork somehow survived, but it was weird.
- logifail 3y ago> I was in a WeWork in London on the day of the original Softbank-induced meltdown 4 years ago Should we really blame Softbank for the meltdown? We can certainly blame them for believing Adam Neumann and investing to start with, but not for admitting their failure after the IPO mess.
- nameless912 3y agoI think the meltdown would have been less dramatic had it not been for softbank inflating their valuation to gargantuan size for basically no reason.
- sparrc 3y agoyes, a bank's job is to do due diligence, not to blindly believe anything a startup founder says without reading any of their bookkeeping.
- chasd00 3y agoI was at a company that had a pretty firm verbal commitment on a multi-million dollar software project with WeWork. When the meltdown happened our CEO got a call that the project was cancelled, the whole team we were working with at WeWork was getting let go and the guy on the call was getting let go as soon as he hung up. heh, it was pretty abrupt.
- neom 3y agoAlmost exactly a year ago they named a "Turn Around CEO": https://www.reuters.com/business/wework-appoints-david-tolley-ceo-2023-10-16/ https://www.reuters.com/business/wework-appoints-david-tolle...
- deepspace 3y agoWhenever I look at a coworking space, I feel like they are missing the point. Companies are globally distributed and people spend a LOT of time on conference calls, but most coworking spaces have an open layout that is at best not conducive to conference calls, and often they are not allowed. I have been working effectively remotely for the past 15 years. Until COVID hit, still commuted to the office, but had very little interaction with local co-workers for actual work. I did appreciate the social aspect, though—water cooler conversations, lunches, company events. Now that I am fully remote, I would appreciate the opportunity to get out of the house one or two days a week, but I am unable to find a single coworking space that offers private cubicles. They all want you to rent an entire meeting room for conference calls at an exorbitant price.
- mullingitover 3y agoBingo. I spent about six months working out of a reserved office at a WeWork, and because it was just a satellite office for my company, there were tons of conference calls I needed to be on. I couldn't join those calls in the open plan office, so I spent a ridiculous amount of time walking the halls of the WeWork trying to find an unoccupied booth. Half the time I couldn't find one, and when I did they were dark and cramped.
- xnx 3y agoA lot of self storage lockers would be better places to work from than WeWork.
- rickspencer3 3y agoThis very much matches my experience with co-working. When the time spent on calls went over 2 or 3 hours a day for me, my days became a constant hunt for comfortable and private places to make calls. I ended up making a room in my condo into an office. I did find co-working to be quite enriching though. I made a few friends, and it was nice to see some of the same faces each day. It was very key that none of the people that I socialized with at the co-working space were people that I was working with.
- kpennell 3y agoI think people often go to them in the afternoons, maybe when they have fewer calls. Or just grab a booth when they need to do a call that others shouldn't listen in on. Or just do the calls from the open area. I go to coworking space to get a bit of human interaction in my day after feeling isolated at home or on zoom.
- soasdfg 3y agoI'm surprised it's not already bankrupt honestly. No one working at a WeWork has ever asked me to badge in, or show any kind of proof that I have paid for a day pass to be there. Going there for team events is the same thing, everyone is supposed to pay for a day pass but does not so the entire day for 15 people ends up only costing whatever you spend on shared meeting rooms. It's pretty easy to just go into a meeting room that isn't reserved and use that for free, again with no checking from the staff there. I guess the private offices that people pay for there are making some money, but not enough to justify the massive real estate bill WeWork has to pay for the great locations they usually have space in.
- jameslk 3y agoAre these submissions on WeWork getting flagged for some reason? There’s been a few these in the past day that quickly gained a lot of points and have since fallen off the homepage quickly: https://news.ycombinator.com/item?id=38091216 https://news.ycombinator.com/item?id=38091216 https://news.ycombinator.com/item?id=38092585 https://news.ycombinator.com/item?id=38092585 https://news.ycombinator.com/item?id=38096508 https://news.ycombinator.com/item?id=38096508 Seems like it would be better for it not to be flagged if so since people seem to want to submit these and talk about it.
- gotaran 3y agoI’m a cofounder at a two person currently bootstrapped startup here in NYC. Do y’all know of any good coworking spaces? No frills, just one where we can work together at odd hours with monitors and some coffee. Even with commercial real estate as cheap as it is now, it feels more cost efficient to upgrade to a bigger apartment in Manhattan instead of getting a coworking space with a dedicated desk. It defies logic.
- spookybones 3y agoHighly recommend Bat Haus in Williamsburg. They often have deals too.
- kpennell 3y agoIn the Bay Area, I really recommend checking out the Groundfloor coworking spaces if you want a more social coworking space. I totally realize many people just want to put their heads down and crank. GF is not for you then. But I really like being able to banter and hang out in between work stretches. I tried wework for a month and it was absolutely silent. I asked someone if they'd ever seen someone use the ping pong table and nope. The weirdest thing about the wework was their library of books. It was simply the same 10 books repeated 15 times. Had an odd Truman Show type vibe. I can't believe how unfriendly the whole energy was at wework. And just had this stale corporate-ness to it that was unshakeable. I mean, they had these really cool custom neon signs. But I would have just taken that and invested it into other things.
- agloe_dreams 3y agoWework in NYC, maybe 5-6 years ago was so insanely warm. Everything you are looking for. Then the price crunch happened and things got shaky and then boom. none of that.
- deleted 3y ago[deleted]
- spookybones 3y agoThe only coworking space I use and love, which is still around and nearly as old as WeWork, is a 'mom-a-pop' one in Brooklyn that never franchised and is used by owners as their office. It has a decent community, including people outside of tech. Of course, they barely make any money.
- fairity 3y agoIt’s pretty obvious to me that WeWork, the brand, is going nowhere. With commercial real estate prices crashing and shift to hybrid work, this is actually the perfect time for WeWork’s business model to take off. The problem is they’re locked in long term leases that haven’t reset to today’s prices - an unnecessary cost base that wework will free themselves of through bankruptcy. If I had to guess, after going through bankruptcy, wework (or a direct competitor) will re-emerge as a billion dollar company. If I had time, I’d be looking into taking over their office spaces myself.