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> So, does scale lend _any_ benefit? Certainly the "network" of locations might help...but what % of tenants are really and truely jet-setters off to many major cities, versus those that stay close to home and just need a regular space out of the house. I don't think scale is that vital in this view.

Spot on here. They are building for a world in which everyone is location-and-asset-independent. Don't need a car because we have Uber/Lyft. Don't need a home as we have Airbnb. Don't need an office as we have WeWork. Etc.

But the market of people who live that way is still small, and I think it will always be somewhat small, or at least limited. (It becomes much harder to live that way once you have a family, for example.)

And can they really end up opening spaces in all the places where location-independent, digital nomads want to go - e.g., all those beach resort towns in Thailand and exotic villages in Central/South America?

But even if they do, independent digital nomads are not the people who will sustain the business anyway, as independent freelancers are more costly to acquire and service, and harder to retain. Their bread-and-butter is mid-sized teams (5-20) and satellite staff for interstate/international companies.

They're often described as the Starbucks of office space [1].

But Starbucks doesn't succeed in every region it enters - certainly not ours [2], as we have our own many-decades-old coffee/cafe culture in which people much prefer independent cafes over large chains.

I'm sure this mentality will apply to co-working spaces just as much as cafes, in many places.

[1] https://www.inc.com/sonya-mann/wework-company-year-2017.html

[2] https://www.cnbc.com/2018/07/20/starbucks-australia-coffee-f...

> Don't need a home as we have Airbnb. Don't need an office as we have WeWork. Etc.

> But the market of people who live that way is [A] still small, and [B] will always be somewhat small

I agree with A, but not B. To me this is a classic disruptive tech scenario. Right now living in hotels and working in coffee shops is strictly worse than having a home and an office for almost everyone.

A few people who have very special needs are well served by coworking.

However, all of the different metered rental propositions (metered office rental, metered car rental, etc) offerings are getting better and better. They are all pretty bad but you can imagine what it would take for them to be great.

Will those experiences eventually catch up to long term home/office leases? Maybe. If enough services like that get good you open up interesting possibilities like a company that only exists for a week but can do everything a fixed company can do.

I find it difficult to predict what can and can’t happen here, so I think your “people will never want this” assessment is too hasty. If there are enough early adopters who will hold on and provide feedback and a small amount of revenue, that could produce something quite compelling over the next decade.

> I agree with A, but not B.

Yep, fair enough, and that's (part of) the bet WeWork is making and is what we'll watch play out over the coming years/decades. I don't feel strongly either way, I'm happy to wait and see.

> Right now living in hotels and working in coffee shops is strictly worse than having a home and an office for almost everyone

Maybe it's just the WeWork I've been it, but it was every bit as loud and distracting as a Starbucks. The glass fishbowl offices constantly remind you other people are walking around you. You see them, they see you. In addition, the one I was in had the bright idea of installing hardwood floors everywhere. Men and women in dress shoes and high heels would "clop clop clop" all day long.

You also never want to mix sales people with engineers. Or any job title that requires a good percent of the day socializing. Sales people are on the phone nonstop, usually running a script quite loudly. That's not even something you could get away with at most Starbucks. But WeWork on the other hand...

It surprises me that they don't offer quiet cubicles or areas of office space for quiet workers. I see noise of coworkers as a major complaint among office workers and the source of hatred for open concept offices. Do these WeWork offices not have separated work spaces?

While I could imagine a world where it is equal cost/quality to live a nomadic lifestyle or a fixed lifestyle - I'm dubious of the claim that most would prefer it as the risk profile is inherently higher than a fixed location and all else being equal people will prefer a lower risk living situation.

>> Don't need a home as we have Airbnb. Don't need an office as we have WeWork. Etc. >> But the market of people who live that way is [A] still small, and [B] will always be somewhat small

> I agree with A, but not B

Being a digital nomad is fun for a few years and then you want to settle to have relationships. Humans are social animals. This is unavoidable. Also, people want possesions, most people want to have their own touch on their own places because it makes them feel better. Home, sweet home is not just a place where you store your off season clothing.

WeWork is planning for the future, when we'll have instant teleportation between cities (obviously).

Wouldn't you just go home at the end of the day then?

> Don't need a car because we have Uber/Lyft. Don't need a home as we have Airbnb. Don't need an office as we have WeWork. Etc.

This is the "Stand on Zanzibar" / "Future Shock" world, and it looks alarmingly plausible. Alarming because all those things are so fragile to cashflow issues and the general insecurity problems of being a renter rather than an owner. And plausible because of what's currently happening with AirBnB: because it enables arbitrage between the "residential" and "hotel" prices, it has the potential to force all residential prices up to hotel levels.

>They are building for a world in which everyone is location-and-asset-independent. Don't need a car because we have Uber/Lyft. Don't need a home as we have Airbnb. Don't need an office as we have WeWork. Etc.

It’s easy to look at current trends and extrapolate from there but when I think of Wework, I am reminded of the time when selling ones home and moving to a shared boarding house was commonplace. Trends reverse, often quite quickly.

Smaller-scale co-working is also more affordable. You don't usually have a community manager for one thing. You don't impress people with fit-out or free beer or whatever. You just provide a likeable, reasonable space for people to share.

I co-own a 15-18 desk space and while we have churn, our setup costs were not especially high, we don't have staff (we are tenants ourselves) and we largely ignore the competition. We would be one of the more expensive spaces but uncompetitive on facilities/services - I think we have attracted people because we're simpler and quieter.

This. Fancy offices everywhere are an utterly unsustainable bubble. Remote work is growing strong and coworking places will become increasingly popular, but in the end people want a reasonably good place to work that is cheap, not a fancy socializing place. Wework would make sense if they provided this at large scale, instead they cater to a lifestyle crowd.

Like any big, multi city real estate broker, the benefit of scale is diversification over local real estate markets, and less risk.

A single WeWork in one city is risky due to fluctuations in real estate, economics, labor supply, competition, etc. a thousand locations are less risky, since the company can still exist even if a local market tanks for a year.

Global real estate markets are increasingly correlated so that geographic diversification no longer benefits a portfolio very much.

OTOH setting up a coworking space is not risky for real estate owners. Couple of desks and a coffee machine. Wework may be setting itself up to be airbnb'd by everyone who has available space in the future.

But doesn't that mean that WeWork could become the AirBnB by making itself the app/website where all of these independent landlords list their office spaces and where workers go to rent them?

Many sites , e.g. Coworker.co already exist . Running such a website seems to be easier than running an airbnb - the leases are daily passes and they dont seem to worry about cleaning fees & damages etc. The main takeaway for wework is that they are in the real estate space, this is an uber-competitive and regulated space which has been "disrupted" for millenia

> Maybe a location in Boulder has community climbing gear and/or a bouldering wall.

I mean, yeah there is a lot of climbing in Boulder, but a MUCH better resource would be a daycare. You'd have line out the door if you had a daycare in Boulder. Childcare costs in CO are crazy high, like ~$40k/year for 2 kids.