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austenallred

Galloway always predicts that every tech company is a bubble. Every now and then he's right.

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Right, maybe not every tech company but he is wrong more often than he is right.

For example, he predicted both Amazon and Google would be 'losers' back in 2015.. oops:

https://www.forbes.com/sites/stevedenning/2015/04/09/the-fut...

From the article “For Galloway, the winner will be Macy’s, which has successfully gone online,”

Macy’s Stock https://g.co/kgs/8KZ1Kj

Prediction is a hard business.

Prediction is very difficult, especially if it's about the future. - Niels Bohr

I had previously heard this attributed to Yogi Berra, so I had to check. Apparently[1], it's an old Danish proverb.

[1]: https://quoteinvestigator.com/2013/10/20/no-predict/

So non-future prediction is also difficult it seems!

What pumped up their stock so much in 2015?

Levine is skeptical/amused by the nonsensical valuations but takes a more neutral stance, probably because he was never truly invested in/familiar with/cared that much about new technology and what people promise it can do. Galloway is more idealistic and Levine is more practical taking things at face value and breaking them down. They're both very knowledgeable and worth reading.

> ..probably because he was never truly invested in/familiar with/cared that much about new technology and what people promise it can do.

Where's the technology in WeWork?

It's a cornerstone of their brand relative to other office space leasing companies, and tech investors are how/where they got a lot of their funding. Check out their S-1, they mention "technology" 110 times:

"Technology is at the foundation of our global platform. Our purpose-built technology and operational expertise has allowed us to scale our core WeWork space-as-a-service offering quickly, while improving the quality of our solutions and decreasing the cost to find, build, fill and run our spaces. We have approximately 1,000 engineers, product designers and machine learning scientists that are dedicated to building, integrating and automating the complex systems we use to operate our business. As a result, we are able to deliver a premium experience to our members at a lower price relative to traditional alternatives."

https://www.sec.gov/Archives/edgar/data/1533523/000119312519...

1000 engineers for what? Again, where is the technology?

Maintaining internal frameworks, delivery pipelines, infrastructure, instrumentation and product roadmaps. Transitioning to new organizational structures. Internal hackathons and lunch ‘n learns. What am I forgetting?

Blog posts, conference talks, building at scale, open source contributions, core libs, platform, tools, dashboard migrations

Ping pong.

How did I forget?

It’s “tech theatre,” not tech. It’s how they got their funding, but reading what even the happy users on HN have had to say, the technology isn’t core to why people rent from them.

Nailed it. Brilliant.

> the technology isn’t core to why people rent from them

Okay, I'll bite: what is the core of their value-proposition? A cultural aesthetic? Cheap rent?

As a former WeWork tenant, their value proposition to customers is that they provide office space quickly and without any long term obligation in convenient, trendy locations. They're also very eager to beat competitors on price in my personal experience.

Since it's very easy to set up a competitor (at least in my area, since numerous knockoffs have been created in the last few years) their margins are low at best, and they have almost no customer lock-in, I have no idea what their value proposition is for investors.

I'm not sure about the price-beating anymore.

A few days ago I moved into a WeWork clone called JustCo. The spaces are much larger, look virtually identical and are in a neighbouring building. Price difference per month was $2300 vs $1600 + a month free. WeWork's best offer was 5% off if we signed for 12 months. No free beer here, but I've got a beer budget of $700 a month with the savings.

It seems WeWork's sales guys here in Sydney have very little freedom to discount.

We are current WeWork tenants. WeWork can’t even provide us an interface to manage and view who used WeWork credits in our org. We asked for a report and got a pdf after 2 days.

Tech my foot. The printer software is an abomination.

> The printer software is an abomination.

...that's a surprise....

If I recall correctly, there was also no uninstaller (at least on Mac, 2 years ago).

I found the best way to print in Wework is to email the document to the reception and have them print it for me.

After a year I never figured out how to print. You should be able to print from their app.

Oh, so they are a classic tech company, then.

He is bullish on AirBnB[0] and Shopify[1].

[0] https://www.vox.com/2018/10/26/18029008/pivot-kara-swisher-s...

[1] https://www.youtube.com/watch?v=m58YkxEjzT4

____

Edit

Linked to a better resource.

most tech companies are bubbles or at least unrealistically over valued. its just that if you keep believing the myth long enough, it starts being true.

In the long view, all tech companies are small bubbles. They don’t stick around and have no long term value.

What evidence do you have to support that conclusion?

Schumpeter

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