Was WeWork Ever Going to Work?
nytimes.com
nytimes.com
> What the ordinary person might interpret as a con game or sheer lunacy, the heavily credentialed investor, with his TED Talk understanding of things, will reliably regard as brilliant eccentricity.
When people hear about typical con games, like the Pigeon Drop [1], their reaction is often, "Thank goodness I'm so smart I'll never fall for a con!" But that's incorrect. Maybe I wouldn't fall for that con, but that just means the con wasn't for me.
Things like Theranos and WeWork fooled people who were plenty smart. But they are, like everybody, trying to model the world using 3 pounds of meat. It's not enough. We take shortcuts. And all of those shortcuts have flaws.
One of our industry's collective flaws is a belief in the genius, that revolutionary smart guy who's just so smartily smart that they see things the ordinaries don't, and will therefore be very successful. But that leaves us vulnerable to people who perform the tropes of genius. Hands up everybody who's had to work with an "architect" like that.
Another is of course the genius entrepreneur, who has a grand vision to transform the world. As we can see, investors just love that. They've been trained to love it by all the "genius entrepreneur" stories that are generated by finding somebody successful and then filling in the narrative mad-lib with events from their lives. And of course, finding that "genius" entrepreneur lets investors see themselves as geniuses of a different kind. It lets investors justify their belief they deserve to be super rich.
Let's hope things like Uber and Theranos and WeWork put enough holes in that myth that we'll stop being vulnerable to people who put on the genius outfit and do the genius performance. Because personally, I've been tired of it for years.
[1] https://abc7news.com/news/vallejo-man-loses-$10000-in-pigeon...
Now I can get an Uber almost anywhere.
In 2012 there where 233,900 cabs in the US which seems limited, but they would work very long hours. Uber’s actual change was mostly around increasing peak availability, but not nessisarily total availability as 1/2 of their drivers average 1 to 15 hours each week.
If that's getting done for SC (a relatively un-dense state) I think they're covering pretty much everywhere in the US.
TBH I think the page you linked to is more about SEO than about Uber's actual coverage.
Can you tell me a specific place that has good coverage from cabs where Uber doesn't operate?
Think smaller, Charles town WV official population 5,957 has taxi service. Edit: that was under the Baltimore map even though DC was closer. https://www.uber.com/global/en/cities/baltimore/
I also think they'll get the the Charles Town WVs of the world at some point.
Nowadays, almost every taxi company has an app, which emulates all the same functionality as Uber. Uber’s way of changing the world was one of user experience and logistics. Not the actual transportation, which as you call out, existed long before.
I'd say no. The cab industry was already tracking vehicle GPS circa 2005: http://www.taxi-library.org/mccurdy.htm
Google Maps Android launched in 2008. It doesn't take a genius to say, "What if..." And people did. Like this 2010 paper about experiments with Java apps to do taxi dispatch in Singapore: https://pdfs.semanticscholar.org/dddc/21e65523932240164d2bb4...
So people are giving Uber credit for something that would have happened anyhow. And they're doing that because Kalanick was the one most willing to burn money and break laws, not because he was such a creative genius.
But Uber was the first to successfully deliver taxi via app, which did actually transform the world.
Uber can meet demand since they don't own the cars nor the staff. The system automatically scales, something taxis can't do.
That is the innovation, not apps. Plenty of taxi companies all over the world had apps before Uber even existed.
What changed taxi transportation was ubiquitous personal computers with detailed screens, network connectivity, and GPS in literally everyone’s pocket.
As soon as it was technically possible to press a button on a portable device you already have and see a little car coming towards you on a map, hundreds of startup founders were going to try to do it, and did.
Before that something like Uber was impossible, after that it was inevitable. Just like something like YouTube and something like Netflix were inevitable.
That’s not to discount the very impressive work it takes to be the winner in such a fast moving market. But it’s not reasonable to credit them with the world transforming innovation, it was just the next logical step in an ongoing progression.
Like...I get what you are saying and I agree that something like Uber was inevitable. But someone still has to go out and do it.
Your argument means no business success deserves any credit, they all just inevitable .
Ford comes to mind, or Google. They had very strong competitive advantages due to a technically superior process or product. Cars and search engines were probably inevitable, but Ford and Google moved the technology forward a whole generation.
Uber made a pretty rudimentary mobile application, their real competitive advantage had more to do with success in financial sophistication and compliance/regulatory avoidance.
I do not know the context of Ford.
But it was also innovative in business terms. Search at the time was monetized like media properties: running a lot of ads that were at best tangential to what users were doing. They instead recognized that a lot of search wasn't great for monetization, but some of it -- where users were looking for something that could be purchased -- was very valuable. So instead of banner ads and all that nonsense, the ended up with AdWords. And instead of selling it via media sales execs, they made a self-serve bidding platform.
If Google had just had a slightly better algorithm, any of the better funded players could have taken them down. But Microsoft has been trying for years to break in and Google still has 90% of the market.
I also think you're giving Uber way too much credit. They are the dominant player because Kalanick was unusually terrible and because his investors gave a terrible person a lot of money. He didn't invent remote taxi dispatch (which was a telephone-era innovation) and he wasn't first in the anybody-with-a-car-can-be-a-taxi game (which was Lyft). He was just more willing to break laws and be a dick to competitors.
I believe that if Uber hadn't appeared on the scene, things would be about the same (by which I mean we'd have people ordering rides via smartphone) but in a healthier way (by which I mean not burning billions per year, less worker exploitation, fewer negative externalities, and healthier municipal regulation).
So I'll give plenty of credit to the smartphone pioneers, especially Palm and Apple. But not much to Kalanick.
But again, it's not the same thing as Holmes (fraudster) or Neumann (purveyor of fantastical bullshit).
I agree that WeWork's vision is now more obviously likely to fail than Uber's. But WeWork's transition from hero to goat happened quite recently. Uber got a cash infusion from their IPO that gives them something like 18 months runway, but with their stock down 30% from IPO, they can't do that forever. We'll see what happens when they have to break even. Especially if they have to start paying their workers fairly. And if the margins in that business turn sufficiently positive, I expect people will be eager to compete.
And even if they do manage to pull it together, I'm still comfortable putting Uber in that category, as Kalanick wasn't just an asshole, but a willful criminal who got his money through the same performative asshole/genius shtick. He may ultimately get away with it. But I think he's decreased the likelihood people will fall for it again.
If you're not desperately trying to convince yourself that this is an opportunity to make a lot of money, it's not so convincing.
This isn't a structural flaw in capitalism, that's expecting too much of capitalism.
Yes, because it's pretty easy to imagine a functioning social system based upon people not being people.
>that's expecting too much of capitalism.
That irrational behavior in the wasteful allocation of resources doesn't generate a negative feedback loop that causes even more waste?
Who said it didn't? I think you're missing my point. The irrational behavior is a flaw. But it's not fair to call it a structural flaw of capitalism. The flaw is prior to capitalism. It's like saying toilets are flawed because people piss on the seat.
Of course, no decision-making apparatus is perfect. Our current version of capitalism with all its flaws might be the optimal way to run a society. But we should be clear-eyed about those flaws.
[1] https://www.brainyquote.com/quotes/abraham_lincoln_395631
By your logic, literally every single endeavor that involves human decision-making is flawed in that exact same same way. Socialism is flawed because humans are in the loop. Representative democracies, monarchies, oligarchies, and anarchy are flawed because humans are in the loop. Both science and religion have the same flaw, because humans are in the loop.
It's not that it's untrue... It's just common to any venture where humans are in the loop, so it carries almost no information and isn't worth saying.
I guess capitalism is flawed because resources are not infinite? Is capitalism flawed because humans die? Is Usain Bolt flawed because he has only two legs?
American-style venture capitalism is almost unique in terms of the amount of resources a single person can allocate. I think only authoritarian regimes come close to letting one person decide to bet $12 billion on a poorly-considered vision.
Of course you will. The point about the greater fool theory is that the market system for equities generates a negative feedback loop rather than being dampened by rational actors in the system. This perpetuates an enormously wasteful misallocation of resources.
>I guess capitalism is flawed because resources are not infinite? Is capitalism flawed because humans die?
Something tells me that if I were talking about the soviet shoe factory principle you wouldn't be so eager to excuse socialist misallocation of resources. Could it be that your argument is based more upon tribalism than logic?
No, not at all. The exploiters would just be better at exploiting.
In finance and economics, the greater fool theory states that the price of an object is determined not by its intrinsic value, but rather by irrational beliefs and expectations of market participants.
By definition... the problem disappears if actors are rational. This is not a contentious matter of argument. It's in the definition.
The VC model is fundamentally susceptible to this stuff.
However the company was just simply not run very well, was very unfocused on all sorts of random side businesses/acquisitions, and was massively bloated in terms of its team.
Ultimately it was a good idea poorly executed from a business standpoint. The market has clearly turned (for the better most would say) in that people want to see real businesses with real sustainable business models. Fruit water on tap and glossy marketing materials don’t replace the core fundamentals of a good business. It’s refreshing to see the market finally calling BS and expecting more.
I don't think WeWork was doomed from the start. I think their execution was sloppy. I think they made some short-sighted financing decisions which they are paying for now. I think they have a long uphill battle, but I do think that there is something of value that they are providing.
That's not how most people use WeWork. 40% in my building (they have 2 floors) are long-term leases from big companies. I don't have anything but anecdotal evidence for my next statement, but I have a lot of data points: the rest are primarily remote workers for non-small businesses.
Of course, there are startups that use WeWork and others. I don't think they're the majority.
We wanted to use WeWork but it was too expensive to be practical for us, and we ended up getting a deal with a local coworking space. I imagine this was the case for most startups looking to start an office out of WeWork.
So I'm inclined to agree with you that the demand was there, but the execution was poor.
The business model, at its core, is a fine one. But it's one that's already out there, working fine in a slow, normal, boring way for companies like Regus. I've used Regus spaces, they're fine. They're not cool, trendy startup collab spaces with beanbags and baristas, but AFAICT they are actually more conducive to real grown-up business use.
Maybe there is a market for a more startup-focused temporary office space business. But it's not one that's going to shake the foundations of the world, nor bring in 100x the investment for VCs.
Steve Jobs was known for walking around Reed College barefoot in the snow, but that didn't stop him & Woz from building Apple.
Second this article is not that at all. It’s contribution was entirely in its headline. The rest of the article is a high school essay of rhetorical filler to meet the demand for anti-capitalist theatre.
While many would have the natural inclination to agree with the conclusion, this article is not the best example of the argument unless you are tracking the politics of society’s increasingly negative views of Silicon Valley.
Finally the New York Times style inspired me to write equally pretentiously. How did I do? :)
Most people are more scared of looking silly than they are excited about getting rich. The handful who aren't occasionally make a bad investment (Theranos, WeWork, etc.) but also a lot of them become centimillionaires and billionaires.
I'm definitely in the "more scared of looking silly" category, but I like to think I also have the self-awareness to recognize this as a character flaw, and not broadcast it proudly and obliviously to the whole world in the NYT.