Ben Thompson wrote an interesting article "What Is a Tech Company?" on Stratechery [1] recently where he discusses the trademark characteristics of tech companies and makes a convincing argument as to why WeWork is not one:
So what about companies like WeWork and Peloton that interact with the real world? Note the centrality of software in all of these characteristics:
- Software creates ecosystems.
- Software has zero marginal costs.
- Software improves over time.
- Software offers infinite leverage.
- Software enables zero transaction costs.
...
- WeWork claims it has a software-created ecosystem that connect companies and employees across locations, but it is difficult to find evidence that this is a driving factor for WeWork’s business.
- WeWork pays a huge percentage of its revenue in rent.
- WeWork’s offering certainly has the potential to improve over time.
- WeWork is limited by the number of locations it builds out.
- WeWork requires a consultation for even a one-person rental, and relies heavily on brokers for larger businesses.
Frankly, it is hard to see how WeWork is a tech company in any way.