WeWork chases new financing as cash crunch looms | Hacker News Reader

WeWork chases new financing as cash crunch looms

ft.com

114 pointspaulsutter135 comments

This could be the best situation for Softbank. WeWork is obviously in desparate need of cash, no one is going to touch it with a ten foot pole. Softbank is too invested for it to fail. They can buy up 50% of the equity remaining for any sort of investment since they will have a gun to their head the company will have to accept or go bankrupt. Adam Neumann's shares will become worthless in the process and new shares will be issued for the new co-CEOs.

So with $11B in capital committed to WeWork at the end of the whole mess Softbank can end up with 90% ownership. Get the company on track financially and see if they can bring it to an IPO in the next 2-3 years when they have solved their financial issues. And hopefully realize some sort of return, or at the very least not leave a $9B hole in their vision fund.

He already ferreted away $700m. He'll be fine.

Well.. if you call that living...

And then borrowed $300-some million secured against his WeWork shares

I just did some work to get together info for an investor due diligence questionnaire and I LOLed when I came to a long series of questions at the end that I swear were an itemized list of all the shenanigans that went on at WeWork. Loans of that sort were one of the items.

Sucks to be that bank

You better hope he did that in a squeaky clean way - if there‘s just the slightest hint of embezzlement, you can be sure there‘s going to be an army of SoftBank lawyers trying to make a case.

That number is so misleading. I wish the media/prof Galloway would stop referencing it.

The $700M number is a mix of a $300M secondary sale to SoftBank and a $400M loan to purchase stock options.

We don't know enough to say how far ahead (or behind) he is. He likely exercised his stock options at a highly inflated value, which means his AMT bill must be huge. Not only that, he is sitting on stock that is rapidly diminishing in value, and there's a non-zero chance it could be worth 0.

So he has maybe $150M cash after the $300M sale + ??? value of stock from exercising $400M in options.

And his liability is his capital gains bill from the $300M sale + the $400M loan to pay back + AMT bill from the exercise of stock options.

> he has maybe $150M cash

$150m is enough to be fine too :)

His worth is assets - liabilities. I'm saying his liabilities look huge, much more than $150M.

He surely owns his stock outright, not as options, since he founded the company.

No, that isn't how options work. Everyone needs to pay...it's just usually when you found a company you're buying options for fractions of a penny.

See https://www.axios.com/behind-wework-founders-700m-cash-out-3... for more info on the $400M loan - it's not clear if it's to purchase his stock options or to pay for AMT...it's likely additional options he was granted through the years at a higher strike price.

When you found the company you own the shares. You divy out options when you, the founder, hire or make deals. You could alternatively also give actual shares (usually VCs get a share %)

See the axios article. The $400M was a loan to exercise stock options. You can acquire more options after founding a company as part of a bonus or additional comp...

Per the article, “part” of the loan was to exercise stock options, but seriously as founder most of his stock he would already own outright

> Neumann used some of the $400 million in loans to exercise stock options in WeWork, per the source.

That's not usually how it works (WeWork doesn't follow the usual pattern, so they might not have done this). Generally, companies that plan to raise money incorporate, and founders are given options at the strike price at time of founding (generally so small to be effectively free), which vest over time. You also create an option pool that's already reserved for hiring. Founders don't generally hire someone and give away equity they already control, it's almost always from a pool specifically reserved for this.

There are startup school lectures on how this works in practice at YC if you want to learn more.

The face amount on the stock is usually so small that you immediately exercise them for a few hundred or few thousand dollars and file an 83(b)

Founders need to purchase shares in the company they found.

The shares are extremely cheap as the company has no assets, but you still need to physically wire money to the company bank account.

Source: https://stripe.com/docs/atlas/issuing-stock

Those stock sales weren't squeaky clean and there are numerous reports. Some have it as loans that are backed by stock, which means no stock was actually sold. Other accounts have it that he used some of the proceeds of the $700MM to actually buy even more WeWork shares which makes absolutely no sense as any financial advisor would tell you to diversify your holdings, not use borrowed money to leverage up on an investment that is 99.9999% of your net worth.

He's also bought personal and business properties and there are reports that he will have to sell some assets to close some financial holes that he is encountering.

I mean with the way WeWork was run, it's not surprising the his own personal finances are mimicing that of WeWork - a house of cards that needed to keep the merry go round working in order not to fall apart. He was definitely banking on a successful IPO, but looks like there maybe personal fallout from all of this for him as well.

Not to mention that now that they have new co-CEOs in there they will be looking through the books so if there are any financial irregularities, such as has been reported of potentially costs being booked as revenue (wtf?) - then there maybe further legal action against him.

I think this story will continue to unfold for some time.

I think this assumes there’s some inner core of WeWork that is worth saving. I mean, maybe Softbank will fall for a sunk cost fallacy and pursue it irrationally, but I don’t see why that would be useful instead of just founding a different company to do that small kernel of an idea at much lower scale.

It’s actually a big if to me whether there even is a kernel of a business idea. Even if there is, can it (assuming massive rehabilitation) generate profits of a sufficient level for Softbank to care?

There is a real business there if they can control the costs and get the revenue right and make sure there was no financial fraud.

Also, they can't shelve it easily because it's one of their largest investments so it would really destroy any chance of raising a second fund if they can't get this large investment to work.

From a customer perspective, while a lot of people on Hackernews do rag on WeWork as a product, personally I think what they have done is tremendous, because we used coworking early on and if you ever stepped foot into a Regus you would immediately understand the difference.

Now what they really need to do is clean the business up and see what's left, but there is a solid product there, and they should be able to make the revenue and cost side work.

I don’t dispute at all that there is a solid product, but it’s exactly the same as for Lyft & Uber.

The value proposition to the end user is only worthwhile if prices are held at artificially low levels due to VC subsidy that makes the business inherently not profitable.

Once you remove the subsidy and let costs elevate to the required level and/or cut back on amenities, locations, etc., to keep prices down, then the question is whether customers still want the remaining value proposition.

In other words, of course consumers like upscale stuff at VC subsidized prices. That tells you nothing about whether there’s a core business idea or not.

Yea, a coworking space with tech company polish, marketed to tech companies seems like it could easily win the market. It's a much smaller market and the valuation math is different, but I don't see why the business couldn't work.

> if they can control the costs and get the revenue right and make sure there was no financial fraud

And, you know, cut out the random tequila parties with live hip-hop performances

There is a business. Long-term real estate leases that then sublease the space short term is an established business model. It just doesn't trade at the same multiples.

This seems like a nearly completely unrelated point.

> I think this assumes there’s some inner core of WeWork that is worth saving.

It seems directly related to your first sentence, doesn't it?

No. The general viability of subleasing as a business is not meaningfully related to the points about whether a subset of WeWork’s current corporate entity can produce a viable business.

Yes, it is. It is, quite literally, the actual business part of WeWork.

No, WeWork is a certain brand and corporate entity. For example, reputation problems may mean that reducing operations to this smaller scale subleasing strategy would not succeed for WeWork. Or similarly, the profit level may be too smal for the investors to care, given projections of how long it would take to get their money back.

You’re missing the point. WeWork is in a position where it likely cannot cut operations and shrink into a smaller scale version of the same business model.

But does that make any sense if the attraction was that, run by Neumann, it was going to take over the world? Just because people lost faith in him doesn't mean there is a replacement for him that would justify putting more investment in. If it's just a real estate company, maybe it's not even worth close to $11B.

I don’t understand how this company employed 1500+ programmers, PMs and data science people. What did they do? I guess not much, as 500 of them got laid off recently.

Analytics, logging, "Artificial Intelligence", the latest Fad in devops/application development, System administration duties, help desk duties, hiring/interviewing duties (you don't get to 1500+ without A LOT of this!), the refactoring after the clusterf* of using the latest Fad in devops/application development.

"BIG" data pipelines, managing an Elasticsearch cluster, PM for the design of app 1, PM for the design of App 2, (for probably dozens of apps), QA teams, Design teams, Localization teams, Accessibility teams, SEO and marketing automation teams, teams to build out their CRM, and the all important management layer to interface all these teams together!

This, this ladies and gentlemen, is how Silicon Valley changes the world.

Totally agree, but I guess this is how they tried to brand themselves as a tech company and not just an office space provider.

A small team could have written all the software for WeWork to do what it actually does. Each location could run it on an Intel NUC or similar. Central cloud could be moderately sized, maybe a dozen instances.

That would be efficient, but ironically it would not have attracted so much investment because fewer buzzwords. It would have been a better way to run a business that sells office space but a less effective way to run a business that sells its stock.

In a top heavy severely demand constrained economy it is far more profitable to sell stock than goods or services.

And with all of that, they couldn't even setup their wework networks more securely, even as little as blocking device discovery and port scanning.

The comical thing is how often their systems are down. When I was in a WeWork we used to get free coffee all the time because they couldn't accept payments at the moment.

Coffee is always free at WeWork. The one from the machine as well as from the Barista.

Unless this is a development from within the last year, this is not universal.

When I was at a WeWork last year, kombucha and cold brew on tap was out of service at least 50% of the time. I took this as mismanagement then, now I wonder if it was simply cost-cutting.

I'm currently at a WeWork. They run out of sparkling water in the morning and fail to replenish it until around 2:00pm. I'm under the impression that they wait until then so people don't drink all the sparkling water when they eat lunch.

Careful! It's easy and fun to make fun of WeWork for calling itself a "tech" company, but we might be throwing rocks in glass houses.

How many of us are currently working at """tech""" companies right now?

I used to work for a startup bank. They used to always say "we're not a bank, we're a tech company with a banking license"..

Even when I interned it proto-dinosaur Allstate they called themselves "a tech company that happens to sell insurance".

It does sound absurd and annoying, but for businesses like that it's good reminder that they'll probably get their market share eaten away if they don't stay on top of things by someone that can move faster or cheaper with their underlying technology stack.

Or they are hoping for a higher stock price by calling themselves tech companies?

Stock markets don't listen to glib slogans like that.

I've been to a lot of conferences over the past few years where CEOs/CTOs stood up and said "we're planning to become a tech company", or words to that effect. It's become a totally standard announcement, no more meaningful than "innovation is in our core values" or "we value diversity".

The motivation is a mix of fear and ambition. Almost all industries are stagnating or declining:

https://www.wsj.com/articles/why-do-the-biggest-companies-ke...

The graph of the gap in productivity growth is the important thing here. The top 5% most productive firms captured nearly all economic growth (that wasn't merely due to population growth). And there's a lot of evidence that the top 5% of firms are essentially tech companies or at least have very high IT spending.

I think there was some other story I read lately that claimed almost all wage growth up until recently came from wage growth at tech firms.

Every industry has seen how tech startups or bigger tech firms can enter an industry and "disrupt" it, rapidly capturing huge control of the market through superior execution. So they all want to be like that. I know of one company where the senior management apparently goes and sits with Facebook employees once a month, to "learn how to be a tech firm"!

My experience has been none of them really understand what tech firms are or why they're different, and wouldn't be willing to do what it takes to be one, even if they did.

Is this B...? Really wondering what culture is like there now, though the CEO seemed to have ambition the recruitment process was really weird. The in-house HRM/recruiter basically warned me he was narcissistic and was still code reviewing everything, often publicly shaming you when you made mistakes. Whether I was okay with that and often doing unpaid overtime as it was quite common. This was a few years ago so not sure what it's like there right now or if the situation improved.

I am even more baffled that 1500 engineers accepted an offer at a company that's clearly a fraud. And it would have taken one Google search about their prospective employer to have seen this.

If you work at or did work at We, what was your reasoning? Did you have any?

I don’t think it was as obvious as it is now. Plus a lot of engineers work at companies which are blatant VC plays with little chance of viability, outside of acquisition. Those companies just don’t burn as hot or as fast as WeWork.

Even so, surely the revenue numbers were shared internally at some point. After which, anyone who could would have run for the hills.

Unless you're stuck in a job where you're below market in exchange for equity, as long as the checks keep clearing, you're not really incentivized to run for the hills. Keep your resume fresh, sure. Though we can make presumptions about what having WW on your resume will do reputation-wise, it sounds like it was a good opportunity to also fill it with a ton of buzz words.

I guess. But I bet the work environment was terrible. Why waste time? Life is too short, pull the trigger and leave. If you can.

I'm sure they worked for a paycheck, providing the critical infrastructure needed to property manage that many office spaces and customers.

WeWork has tens of thousands of customers who for the most part are able to seamlessly come and go, check out conference rooms, pay for various one-offs, and their membership fees.

Did they need 1500 engineers to build all of that, no. But when you take venture capital in the expectation of growth, you have to grow.

Nope, there's not enough work to go around for that many rats.

https://twitter.com/modestproposal1/status/10855834347880202...

>What did they do?

My guess would be 'very little', though I have no facts to back that up. It's just a staggering number given what the company does.

I've worked at a place like this. The job was as easy as it was cushy. Two week sprint plans could be completed in literally 3-4 days... but they just kept on hiring. I often heard the word "growth", but I have no idea as to why their interpretation of the word was desirable.

In contrast, I have also worked at two sucessful biotech companies. At the first we developed automated microscopy systems used by pathologists, as well as image viewing/analysis applications and your typical data management type interfaces. I worked on the scanner/image processing team. We were a team of six, three of which were software devs. The other software team (the data management / viewing stuff) had about eleven people. We were the most successful company in our domain, and our competition was the likes of Zeiss and Hamamatsu (one of which later purchased us.)

At my next company we successfully released a prognostic test for late stage colon cancer using CTC's found in the blood stream. In the course of doing so we had to write all sorts of integrations on top of an image viewing application, reporting systems, and the core bits (scanning + image analysis + local data management + R&D tooling.) We had a team of ~4 devs over a three year period.

When I read about stuff like this I'm just mystified.

People like easy money. Anyone with ambition, opportunity, talent and foresight would likely have left We after a month and never looked back.

Or they used their cushy job, high salary, and low expected work output as a nice way to fund and work their side projects. If you leave work energized from not doing much, you have plenty of energy to burn off building something.

I know plenty of ambitious and talented developers who work at menial jobs to cash a paycheck and pay for their side projects.

Huh? What do your acquaintances do then for 8 hours, sleep?

Get to work at 9-10am. Work slowly doing trivial things. Eat long lunches. Go to the gym. Leave by 5pm. Get home by 6pm, and have the energy to get back on the computer.

Where as I have absolutely no desire to look at a computer when I GET to work, let alone after work.

Sounds like a FAANG.

This is exactly my position. I have job where I can get most of my daily work done in 2 hours. I spend the rest of my time on my side projects.

> My guess would be 'very little', though I have no facts to back that up

Almost exactly 2 years back, when interviewing around for a position, I talked with WeWork (along with several other firms). I attempted to ask their recruiters on the phone about how they use computers. I didn't walk away with a very strong understanding of how they used computers, but what I did manage to take away was that they wanted to be a software provider for firms that used their office space.

With broad ambitions like that, I am not confident that they had enough focus to deliver meaningful software products without them being a massive drain on their resources. I will also note that this was months before they bought Teem in 2018.

Hey, I work on automated microscopy systems too! I'm the only dev though, rest of the team is optics/biologists. It's surprising how few solutions there are for incubated microscopes.

Nice. It's a niche industry still for sure, and I didn't work on live cell imaging that would require incubation (we had a process that would keep the cells in good shape via a live cell medium.)

It's interesting work. Sounds like you're an in house dev in a research company or maybe academics? I went from device development in my first job to applications in my second.

Something like that. The institute bills itself as the link between the two, so we do a wide range of things. I got hired to do image processing work, but as things tend to go am now being leveraged anywhere they need software. Can't complain though, interesting work with a world class team.

What's more amazing is that as far as I could observe, the software that they had was terrible. As one example, in order to use a printer, you had to install this enormous, incredibly slow and invasive java program on your computer, which was very difficult to use.

They could have put a couple of developers on something that allowed you to upload a PDF to their website and have it be printed, and it would have improved the experience of their core product significantly.

It's been like 3 years since I worked in a WeWork location but it seemed like they were doing a lot of wheel reinventing, they had their own social network site, their own room reservation system (actually something that makes sense, but it sucked), probably their own printer manager, chat app, mobile app, billing system and who knows what else. I could believe they employed a hundred programmers to just clone popular apps, and thinking they were "providing value" but the actual software was classic shovelware.

Interesting that Goldman Sachs pumped up their valuation to $60-90 billion at one point, but now won’t give them a lifeline:

“ Goldman Sachs, one of WeWork’s investors, advisers and customers, had been among a consortium of banks willing to lend $6bn had the IPO succeeded but has so far sat out the new financing discussions out of concern about the level of uncertainty surrounding the company, one person said.”

My first thought was related to this: hhow is it possible that one moment the company is ready for an IPO, with all the due diligence that comes with it and backing of financial giants, and then next month be desperate for cash? Isn’t there some sort of fraud going on in this situation?

The company believed it was ready for an IPO, but all the potential IPO investors disagreed after reading the S-1 and doing some diligence. In a sense the system worked well in that regard.

The big issue was with the private investors letting the CEO do whatever he wanted and pushing the valuation up very high.

It's clear that investment banks are incentivized to maximally value a company. Valuing a company is pretty simple, in that you can tweak certain values in, say cash flow analyses and depreciation projections to literally make billions of dollars appear on paper. They have complete deniability in that, at whatever moment, their proprietary analyses and due diligence appears in a prospectus that public markets are supposed to just trust in good faith. That way, when the banks capture the spread on an IPO (difference in price guaranteed to a firm vs IPO price), the banks can offload shares en masse to investors and gain the spread, only paying capital gains taxes. It's pretty much theft, unless you are a very very early investor, to sell stock in something like WeWork as an investment bank. Financial giants aren't like other companies. If they don't make deals every single day, they will die. They have no product, nothing to offer that improves and compounds upon previous products (save, perhaps, for algorithmic trading software). Are we really surprised that this bloated corpse of an industry known for churn, extreme burnout, and grift would overvalue an IPO when it serves them?

> how is it possible that one moment the company is ready for an IPO...and then next month be desperate for cash?

An IPO is fundamentally a fundraising event, so it makes some sense.

The harder question would be why is some successful, well-funded company looking do dilute shareholders for even more funding.

Matt Levine at Bloomberg had an excellent explanation of the dynamics at play in his newsletter recently [1]. The bankers are incentivized to inflate the valuation in order to win the IPO mandate and all the fees that come with it. They then run into the awkward step of walking back that number to something that the market might accept.

[1]: https://www.bloomberg.com/opinion/articles/2019-09-09/we-mig...

Perhaps someone in the property business can illuminate something for me.

I read somewhere that WeWork runs each site as a separate business. Can this really be true? It would seem to allow them to let each entity go bankrupt, which doesn't seem to be a sensible thing for the landlord to want to expose himself to. Sure he gets the building back, but you'd think there's then no advantage to renting it out to WeWork, since despite being a large entity they can just default on you anyway?

Don't know for sure but they might run each one as a separate business but have the parent company guarantee the rent. I don't think many landlords would sign long expensive leases otherwise.

[Edit] Actually looks like the parent company only guarantees a small percentage of leases:

https://allwork.space/2019/08/wework-guarantees-a-small-port...

I did some consulting once for a company that managed rooftop space for building operators to lease to telcos and what not and it was totally normal one company to "own" multiple buildings but for each building to be its own LLC.

This seems to be a common practice. My parents live in a highrise that has construction defects and it took years to extract money to repair the building because the LLC that sold the building to the condo association had no cash or assets anymore.

My accountant advised our business to setup a separate business to own the building we wanted to buy. It silos the liabilities of each. Also, you have some flexibility in how much you charge yourself for rent. Depending on which company might owe more taxes, you may want to adjust that rate up and down. In our case, the property business outlived the primary business turned out to be another benefit of decoupling them.

Liabilities makes sense. I used to be at a remote sensing company that was leasing a plane and when we were close to buying instead the CFO said, we need to start a new company for the liabilities.

To be fair (not blaming you here), but this seems incredibly dodgy.

This is essentially the monopolisation of the market on multiple fronts without any of the consequences to you as a business.

For example, you are taking away business from renters who could be making money on rent but also spending that money keeping the buildings safe.

Not as sure this should be legal, let’s say.

It also means that if you have a building, and you put a sofa in the lobby, and carpets, and energy efficient light bulbs, and a pressure washer in the utility closet, and you hire someone to do security and maintenance (or contract it out to a third party service), and you set up some deal with Amazon to put lockers in the lobby — then you can sell all that stuff just by selling the LLC, and maintain all the contracts as you wish. Or, you can sell 10% stakes in the LLC to 8 different investors (keeping 20% for yourself), and not worry about eight 10% stakes in the building's pressure-washer.

Corporations are basically containerization technology for ownership, and "a building" is a decent place to set a container boundary.

It's normal practice in the commercial property business. Everyone does it.

It’s pretty standard to stand up a shell corp for each piece of real estate you own/manage to take advantage of tax laws and protect yourself from property liability.

Does anyone here on HN use WeWork spaces and enjoy them? I'm not suggesting they are bad, I honestly don't know.

Ignoring the business model, the CEO, the failed IPO, do YOU or do you not enjoy that actual offering of WeWork?

Typing this from my desk in a WW. The location is great, building is good, the facilities are good, there's quite a nice dynamic about the place. No complaints, it's very smooth and well-organized. Lots of staff to run the place too.

I just started working out of a space in Boston last month and it's been sublime. There's always a WeWork in whatever city I'm traveling to and at 25$ per day (beyond my usual credits), it's really affordable to have an office while traveling to both work and host clients.

It's been fantastic for our fast-growing SaaS startup. We've been able to spin up offices in 4 international cities in the last 18 months with very few issues, and our teams are productive and happy with the spaces.

I manage one of the new offices and have LOVED the responsiveness of the local WeWork team, the facilities, the infrastructure, and it's lightyears better than the previous office we were occupying. I don't have to worry about office-related issues any longer.

That is, if WeWork stays solvent and doesn't go bankrupt.

It's really too bad because their core business (renting office space) is done really well. Maybe a bankruptcy and restructuring would be good for their business, or maybe it will cause them to explode.

It seems like the value that they are offering is just outsourced-office-management then. Am I wrong in thinking that? It's hard for me to parse what WeWork was "trying" to become. A real estate company that manages offices? An office management company that also does real estate?

That's kind of exactly the point. IMO there are a lot of unicorns out there that have pretty decent business models (Uber/Lyft, WeWork, delivery services, etc.) The problem is they are probably worth much less than their investors paid for them, because everyone is discovering that once the VC subsidies go away after the "growth at all cost" mentality, these are actually pretty low margin businesses that don't warrant their "tech" valuations.

Yup. Other issue for many of them (which WeWork actually should be less exposed to) is that, most of it hardly being rocket science, "blow money until monopoly" seems to forget that customer subsidies

A. aren't r&d/infrastructure,

B. will have to be earned back, and not just 1:1 either...

So even if whatever competition is knocked out, anyone entering the space after that, and not saddled with legacy funnycost, won't need your efficiencies and economies of scale to manage an edge in pricing. And market dominance can't negate lack of friction for eg drivers and riders to run a second, third, fourth app all at once.

But the sun appears to be settling on bizarro cargo culting Amazon being seen as a viable business model.

As a consumer I'll miss it!

Management, location, and community. Hospitality. Basically, Wework is a hotel for awake business-focused people, with all the tweaks needed to make that work. It's kinda why Arlo SoHo NYC (hotel) reminded me of one. The real estate line never made much sense to anyone who ever was in one, I think Bloomburg started it. (Though real estate was the business that Adam used to screw everyone so, maybe that was his personal business lol)

The bet behind WeWork is that there's a ton of value currently being left on the table in outsourced office management; that everyone's doing it wrong, and doing it right is worth untold billions of dollars.

I'm not sure I can get behind that bet, but it's not an inherently absurd idea. Imagine explaining to someone in the early 70s why Wal-Mart is going to grow from a Southern department store chain to the largest company in the US.

That's a big part of it. But their scale and presence also means they get to do things that have been invaluable for us, like being able to book meeting rooms in and have access to other WeWork premises with low effort.

I was skeptical, but it's excellent, and they have the nicest view on the city.

Before we sold, we had WeWork offices in Denver and NY and used a similar competitor in Austin. They worked great and we were happy with them. But they were also a commodity and we chose based on price and lack of lock-in.

I don’t work in one but have visited three of them here in Berlin quite recently for meetings. The one in Friedrichshafen on the Spree is pretty nice. Great view.

The other ones more in Mitte had way too much of a semi hipster hotel lobby feel. Everyone was just too fashionable and cool for my taste.

I used to work for a company that rented a WeWork space to meet with clients in NYC. I only opted to work out of it once or twice, for a change of scenery from my typical office. I think the location was the main perk, since I then got to spend a day in NYC.

Working fully remote now and I enjoy that much more than being in any office setting.

Turns out most of us enjoy any exchange in which we receive goods whose value far exceeds what we pay for them.

Same reason I love cheap ride share trips[1] and NYC ferry rides[2]. I'd probably really enjoy winning the mega millions jackpot with a $5 ticket too (though perhaps not? [3]).

[1] https://www.vice.com/en_us/article/zmjew8/were-all-killing-u...

[2] https://ny.curbed.com/2019/3/28/18285731/nyc-ferry-swimming-...

[3] https://time.com/4176128/powerball-jackpot-lottery-winners/

WeWork is the most expensive option in our city for managed offices, by a large margin. It's not cheap.

Have you tried to negotiate? If they have any competitors, they'll beat those prices just by asking in my experience.

Yes we negotiated, received discounts, and have a dedicated person working our account since we're growing into new countries and adding lots of offices.

It's still much more expensive than the competition (and absolutely worth the increased expense).

Who knew venture capitalists would unknowingly fund this socialist dream?

Side note, I miss the East River ferry. It made my commute 100x more enjoyable than the subway (except when the ferries would leave my dock early and then yell at me for it).

What do you mean "miss"? There's plenty of ferry routes across the East River. Quite possibly more now than ever before.

Ha, I don't live there anymore! The actual "miss"!

Quite love the space but it suffers from the too-little-too-much paradox. It costs too much for casual use (compared to like a starbucks) but costs reasonable amounts for hardcore use (compared to say, getting a larger apartment) and the gains in QOL are massive over working from home. It's a pretty great place to work..that likely costs more to run than they charge.

I have used WeWorks on occasion when traveling and was always happy with the offering. Currently I use the major local coworking space when I need one or a coffee shop. If there were a WeWork in my city, I would consider it again.

There aren't tons of them, but I really prefer the Galvanize coworking spaces [1] -- the crowd is a more diverse mix of people, and they feel more laid back to me.

[1]: https://www.galvanize.com/entrepreneur#campuses

Our company has a 9 and 6 person office in NYC. The space is clean, there are conference rooms available when we need them, and mostly everything works well enough. We mostly don't care about any of the community stuff, just that it is an effective way to get space without a long term lease or the need to worry about an office build out.

I just visited my boss in a WeWork space in San Jose, and it is the closest thing I've found so far to my idea of hell. The offices there have a unique combination of feeling exposed (from all the glass everywhere) and claustrophobic (from the tiny offices everywhere).

That is hilarious. Best description yet that I’ve heard of the WeWork vibe

I prefer the following:

"It felt like a yuppie aquarium."

https://www.reddit.com/r/finance/comments/c93agd/wework_isnt...

We have a small office for up to 12 people in Atlanta and it's great. Super easy to work with, spaces are top notch, you get larger office amenities without a large office. I can easily see this growing massively in future for distributed teams.

Fancy space, lots of perks, terrible place to get stuff done. Glass walls mean everywhere is loud, you can hear everyone's phone calls on the entire floor. Desks were wobbly, offices cramped.

Once they hired a steel band to play in the reception area for most of Summer (as part of a branded event(?) called 'The Endless Summer of We'...). Bonkers.

I dont mind at all when foolish 'investors' give me free money

I'm currently typing this message from a WeWork. I've been at 3 different locations so far and this one is the nicest, overlooking Tower Bridge and Tower Hill in London. Absolutely stunning office, not as dull and dark as the other WeWorks I was before and nice community here and as always great free coffee, but apart from that, there's nothing unique about WeWork. It's just a nice office, and unless the space is in a stunning location like the one at Tower Hill in London, it's actually wearing off very very quickly.

Such a shame ... time to pony up some more of that "vision" Softbank.

In the other news..

WeWork India looks to raise $200 million

https://www.livemint.com/companies/news/wework-india-to-rais...

Unlike other Asian markets such as China and Japan, We Co. operates on a revenue and profit-sharing model with its Indian partner...3 years ago it entered the country through a brand franchise agreement.

non-paywalled link: http://archive.is/g1g6E

Just as a datapoint - Wework‘s largest competitor IWG has 4x as many locations, makes 3 billion $ revenue and $150 million profit. Not really where a tech company would want to be. Its market cap is at around 4 billion. What is different for Wework that would warrant a higher valuation other than the clout of its founder and, arguably, much nicer offices?

I don't understand the WeWork business model. Landlords are all around you. Companies sometimes prefer to own a property rather than lease because over the time, you only lose money renting. Explain pls, how is WeWork different than all the other commercial landlords?

http://archive.is/g1g6E

thank you

No! Not the most magical unicorn!

well i mean they let an umbrella shut down an office for 2 days instead of just breaking the window which would have cost less than days of being shutdown, so are we surprised?

Whats going to happen with their meetup.com subsidiary?

WeBankrupt

WeOuttaWork

Can’t wait to see WeWork crumble. If they had done an IPO I was hoping to open up a short position.

If WeWork does run out of cash, I’ll be pulling money out from my tech stocks and holding cash for a while.

Don't understand your linkage to tech stocks…

WeWork are a property company

I think their comment is a little apocalyptic but I can say that wework going under could possibly trigger a large number of mid-small-size startups losing their spaces and possibly ending up out of business.

Startups aren't going out of business because they don't have a place to work from. They'll go out of business when funding dries up because valuations are in question now.

Surely most of these startups could just move to competitors or go remote for a few weeks/months? Part of the advantage of being a mid-small startup is the mobility and flexibility.

Those companies will have their employees work from home, go to a WeWork competitor, or set up a permanent office.

One of the many wonderful benefits of using WeWork is that it's very easy to stop using their service.

The theory is that WeWork is a canary. It’s a shit company propped up by dumb investor cash. If it collapses and runs out of money, it could be a sign that investment in tech in general is drying up, probably because money isn’t flowing as easily as it once did and less startups are raising the cash to rent expensive WeWork office space, basically some things are happening and it’s better not to be heavily invested in case of sudden moves.

It has nothing to do with startups losing office space.

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