I’ve really liked my wework space — recently I’ve started to see early signs of cost cutting ...
They’ve moved the cold brew downstairs so there is only one tap instead of two and replaced it with a much lower quality cold brew (the old one was extremely good — from a super high quality local source)... it’s small but feels like it’s probably the beginning of what is likely to be a long quality decline ...
Thats not whats happening. This guy is an angel of death (to landlords). His career skills/responsibility is going to be to basically renegotiate every lease to make it viable for WW. Its going to cause problems.
I once interviewed at wework for an engineering manager position....the projects they were working on were.... asinine... I couldnt nearly keep a stright face on what I felt they were pissing money away on. Funny I didnt pass the first
in person :).
Sorry I dont see value in spending millions in some ar rig to project how an office space may look. It would take thousands of buildings decked out to make.the cost worth it... how stupid...
Never really understood how WeWork was considered to be a “tech company” when in reality, at least to an outsider looking in, it was always a real estate company. I guess being a real estate company doesn’t attract as many investors and hype as a tech company does. Maybe I’m wrong and they are a tech company but it really does not appear like it. Makes way more sense for them to have some one with real estate experience run them rather than some tech exec.
They own a bunch of software companies like meetup and fieldlens. They were making a play to become the Creative Cloud or 365 of both building management and the gig economy workers.
That vision has been clipped now, before we ever saw a chance to see it finish playing out. If part of their valuation was future potential, then I agree they were worth more while trying to be something new, than they are as just a real estate shell.
The funny thing is that “value added economy-of-scale brand-driven tech-driven real estate” is pretty much just table-stakes real estate. The hotel industry has been doing this for decades and has never seen these kinds of multiples. The weird thing is that SoftBank should have known this years ago.
Because no one would entertain these ridiculous valuations unless they were told it was a tech play. Apparently that has been successful if justifying valuations that have no basis in reality.
Granted, most "tech" companies probably aren't tech companies. We just consider them tech for the following reasons:
- They're headquartered in Silicon Valley or some city like San Francisco, Portland, or New York.
- They have an app.
- They are adjacent to actual tech in some way.
- They portray the image of being innovative in some way.
WeWork has all of those, making them a "tech" company in the eyes of journalists and the average person, though for the life of me I don't know why someone would install the WeWork app.
The mass media pile-on to the WeWork story has been ridiculous and overblown.
I keep hearing references to Theranos and Enron as if the two companies are even comparable (they are not).
Theranos was an outright fraud. WeWork has over 500,000 paying customers in a fully viable real estate business as proven by Regus.
The supposed loss of “massive value on the order of Enron” was fictional as WeWork is a private company. This was the risk taking of a few institutional investors who wanted that kind of risk! Venture funds lose money on a majority of their picks. So obviously Softbank’s largest-in-history 100B venture fund is going to have largest-in-history venture losses.
It’s actually a good business at its lower valuation now! Ask Regus how valuable 500,000 customers with that kind of growth rate would be to them.
> Ask Regus how valuable 500,000 customers with that kind of growth rate would be to them.
I guess their 3bn market cap is a pretty good indication of what that kind of customer base is worth to them, given that they have acquired it without incurring massive losses per desk to do so. That's still a good deal north of WeWork's down round...
I think a better comp might be to Movie Pass because both business were growing like mad but with negative gross margins. Both got huge and then ran up to bankruptcy because they no longer had cash to burn to sustain growth at negative margins.
[+] [-] cs702|6 years ago|reply
...which makes sense, because WeWork is a real estate business, albeit one with an unproven model.
[+] [-] breatheoften|6 years ago|reply
They’ve moved the cold brew downstairs so there is only one tap instead of two and replaced it with a much lower quality cold brew (the old one was extremely good — from a super high quality local source)... it’s small but feels like it’s probably the beginning of what is likely to be a long quality decline ...
[+] [-] toast0|6 years ago|reply
The model works, if the short term leases balance out the long term leases and other costs.
[+] [-] CerealFounder|6 years ago|reply
[+] [-] unapologetic|6 years ago|reply
[+] [-] mharroun|6 years ago|reply
Sorry I dont see value in spending millions in some ar rig to project how an office space may look. It would take thousands of buildings decked out to make.the cost worth it... how stupid...
[+] [-] sidcool|6 years ago|reply
[+] [-] ArjA|6 years ago|reply
[+] [-] basch|6 years ago|reply
That vision has been clipped now, before we ever saw a chance to see it finish playing out. If part of their valuation was future potential, then I agree they were worth more while trying to be something new, than they are as just a real estate shell.
[+] [-] tootie|6 years ago|reply
[+] [-] btown|6 years ago|reply
[+] [-] rchaud|6 years ago|reply
[+] [-] mhdhn|6 years ago|reply
[+] [-] derision|6 years ago|reply
[+] [-] ravenstine|6 years ago|reply
- They're headquartered in Silicon Valley or some city like San Francisco, Portland, or New York.
- They have an app.
- They are adjacent to actual tech in some way.
- They portray the image of being innovative in some way.
WeWork has all of those, making them a "tech" company in the eyes of journalists and the average person, though for the life of me I don't know why someone would install the WeWork app.
[+] [-] Gusen|6 years ago|reply
[deleted]
[+] [-] pl0x|6 years ago|reply
[+] [-] ethanbond|6 years ago|reply
[+] [-] villgax|6 years ago|reply
[+] [-] pembrook|6 years ago|reply
I keep hearing references to Theranos and Enron as if the two companies are even comparable (they are not).
Theranos was an outright fraud. WeWork has over 500,000 paying customers in a fully viable real estate business as proven by Regus.
The supposed loss of “massive value on the order of Enron” was fictional as WeWork is a private company. This was the risk taking of a few institutional investors who wanted that kind of risk! Venture funds lose money on a majority of their picks. So obviously Softbank’s largest-in-history 100B venture fund is going to have largest-in-history venture losses.
It’s actually a good business at its lower valuation now! Ask Regus how valuable 500,000 customers with that kind of growth rate would be to them.
[+] [-] notahacker|6 years ago|reply
I guess their 3bn market cap is a pretty good indication of what that kind of customer base is worth to them, given that they have acquired it without incurring massive losses per desk to do so. That's still a good deal north of WeWork's down round...
[+] [-] nknealk|6 years ago|reply