WeWork is set to become the No. 1 tenant of London office space
bloomberg.com
bloomberg.com
There are a bunch of coworking space accelerators in silicon valley which are occupied by some small unprofitable divisions of megacorps, their “alpha bets”
The only truly stupid bets are the illegal and/or unauthorized ones.
I'll let you know when it comes to my employer (BigCo in the Midwest) because it will mean the trend has ended.
At a conference I attended recently, one of the WeWork chief data scientists presented on their process for analyzing cities and determining venues for expansion. The detail with which WeWork acquires and analyzes public and private demographic data is incredible. Based on their information, they are making highly targeted decisions about property acquisition. From my perspective, when compared to any other real estate entity, I can wholeheartedly say that what they are doing the right thing.
Also note McDonald’s burgers are not very different than burger kings, and Starbucks is not better than any other chains. The secret sauce doesn’t have to be in the actual product.
At year-end 2016, McDonald's had ~37k restaurants, of which ~15% were company-operated and 85% were franchised. (The filing expresses a long-term goal to be ~95% franchised.) Of the franchised restaurants, ~70% were "conventional franchisees". Under both the company-operated and conventionally franchised models, McDonald's "generally owns the land and building or secures long-term leases".
I believe it is this real estate-focused setup that drives the comparison between WeWork and McDonald's in various comments.
The sole drawback is they're an unmaintained dump and working in one is an utterly miserable experience. I had the very very unfortunate experience of working at 995 Market and these worthless idiots couldn't even get their elevators to regularly work, and just plain didn't give a damn. Who doesn't enjoy a nice 15 minute break while you wait for an elevator (both ways)? The offices are tiny and LOUD. Some other idiot decided to make the floors hardwood; a single person in heels walking down the long shared corridors goes CLACK CLACK CLACK. The walls are transparent glass so you are distracted by every bit of movement. There's no sound insulation so you get to listen to the office 3 doors down discuss their thanksgiving plans. I really can't say enough bad things about it.
But hey, there's lemon water in the kitchen! (In a leaky carafe that makes a puddle on the counter every day. Naturally.)
There's a reason why landlords like long term leases and I can't imagine wework is immune to the pressures of a down market.
Our company eventually left, in part because we employees made it clear we were very unhappy inside wework.
You can get a desk in Oakland for $340/month or a private office for $730/month. If I had a small apartment in a city and worked primarily freelance, I'd consider something like that, if only for the quality of life.
Working from home hasy many perks. But the downside is that you get actually lazy.
I should move out to an office for the sake of my mental and physical health.
First, here (tel aviv) the basic wework costs range from $150 to $600 depending on location and frills (eg private office). This sounds like pretty standard pp office costs. They tend to be well liked by the people who work there. Well kept, well located, social, etc. Unless paying money for office workspace is ipso facto a luxury good, this seems like a regular good. Money for services at market rates.
Second, people working there range. There are some are "startups" without definitional grey areas but these're just some of the tenants. There are external employees of regular companies. All the work from home people that prefer a shared office, at least part of the time. Apartments and cafes are still active, but it turned out there's room in the market.
The way I see this is (1) internet has created more demand for flexible offices. (2) The older versions of this were pretty crappy, so these guys moved in.
As to wework as an investment... IDK. But, you could say that about a lot of companies. As a company offering a product to a market for a price, seems like a fine company. The product is sensible. People like it. It will vary geographically, but seems perfectly plausible that wework-like offices will grow to house 1m workers.
Wework opertionalizes all of things putting them in position of being able to arbitrage this disconnect in the market.
They lease large commercial (multi-story) offices from owners and building management companies and rent out to 100s of small businesses in the same space.
[0] https://www.bloomberg.com/news/articles/2017-12-06/wework-be...
For a non-tech freelancer, it's a good place to be: comparably high-level people, decent free coffee and beers. For a tech freelancer "community area" tends to be extremely noisy, with annoying pop music playing loud enough to distract, dogs barking, cleaning ladies "chatting" to each other (in China chatting is usually a 90 dB+ affair). During lunch, everything turns into eating surfaces as people here are accustomed to getting food delivered. Some food is extremely smelly, which can be very distracting if you need to finish something and didn't eat yet.
Offices are quieter, but they're really tiny, basic and dark, and very expensive compared to other market offers, at least in China. Shanghai has many managed offices, together with coffees, printers and set-up Wifi.
Speaking of Wifi, all Wework locations in China I've been to have awful speeds, during workdays, it's sometimes a 30-50 KBps crawl, in evenings a bit better. Of course, you need to bring your own VPN to access anything outside China.
They were also pushing for 6-9 month commitments from tenants.
And the effect? Just about every WeWork I've ever been in is exactly the same: full of wantrepreneurs with extreme delusions of grandeur. Only problem is that the talent, work ethic, and product vision don't match. Walk through one at 7:30, 8:00p, the same hours that you'd expect a hungry founder to be grinding it out and it's dead empty. Maybe it's because the free cucumber water is gone.
Or, to put it another, perhaps more callous way: WeWork is what happens when everyone listens to Gary Vaynerchuk. And all the while WeWork trades at an absurd multiple over just about every other realty holding company.
Interesting... how so? (I've never been to such a place)
Its awesome that more people are even dreaming of changing the world, starting businesses and have a support infrastructure and culture to do it.
Would you rather we aspired to cube farms instead?
But that doesn't make it factually untrue that WeWork disingenuously leverages those dreams to feed its growth. There's a reason why Simon Cowell was as compelling as he was: he was the only one who was actually honest with people when he told them that they were wasting their time pursuing their dreams of stardom. Everyone I've ever met associated with WeWork, comparably speaking, is Paula Abdul.
It's unsustainable - because a lot of the companies that are there, frankly, are losers and will churn out quickly - and they need to constantly refill the supply at the bottom of that pyramid. That supply is not infinite, and most certainly not at the rate they're expanding.
And again, the ultimate salient point here is that they've got orders of magnitude less property under management and yet they're trading at higher multiples than just about every other realty holding company.
It's bubblicious, bro. All the feel-good bullshit about wanting to disrupt the world doesn't change that.
What strikes me as cynical is creating a culture that attracts daydreamers with little chance of success and then turning around and selling investors on something else.
> Walk through one at 7:30, 8:00p, the same hours that you'd
> expect a hungry founder to be grinding it out
Overall I found it a decent place to work. It was definitely better than working from home all the time. The wantrepreneur vibe was indeed pretty strong and socially it was kind of cliquey and too-cool-for-you. The space and location were good though. For me as a solo founder/coder it served its purpose and felt worth the price in spite of there being plenty of room for improvement.
What’s with the British English-style conjugation in the byline—I thought Bloomberg was US-based?
(Also, City of London != London.)