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Comment by paulcole | Hacker News Reader

All this talk about WeWork being a total disaster actually got me to sign up for a membership. I figure if they were losing so much money they must be offering a high-end product for too low of a price.

So far, I’ve loved it compared to working out of my apartment. There’s almost nobody there. Work areas are comfortable, furniture is great, building is really fancy, it’s secure, there’s really good free food and coffee, shower, bike room.

I’m telling everybody I know to take advantage of it now while SoftBank is still footing most of the bill.

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the criticism about WeWork wasn't the product itself, it was the fact that somehow it was being valued like a software startup despite being just a standard low margin real estate and co-working business

My wife was all excited about this company, and I'm like, it's an executive suite. There's already one in every business park.

But there's a selection bias for trendy folks, whereas many executive suites can be quite the opposite.

I wonder how much it would cost if SoftBank wasn't footing the bill haha.

I find it hilarious that you state no one is there even at these prices. I imagine an investor reading that.

His scribbling on the slide reminds me of the gnomes' plan for making major $$$ from collecting underpants on South Park. How was he going to get to those numbers?

I assume with the pandemic that many companies aren't renewing any contracts they have. And relatively few individuals are going to pay for even a discounted co-working space out of their own pocket just so they don't need to work out of their apartments.

Yeah - a dedicated desk is usually >$400/m.

After taxes, this is >10% of income for >70% of the population.

If Americans in cities didn't already spend >60% of their after tax income on rent - I could see this being more popular.

There's just not enough people that make enough money and don't work at a good company that already has nice offices for this to make sense.

I agree, in theory, WeWork is a lot better to work at than most people's apartments. I'm not convinced enough people have enough money.

And, under normal circumstances, there are libraries, coffeeshops, parks with WiFi, etc. I live in an exurban house with an office and other space but even if I lived in the ~1 hr drive city away in a studio, I'd time-slice among free/cheap working options before I'd pay $400+/month for a dedicated co-working space for myself. I could afford to do so but I wouldn't.

I said this in another comment but the 3-month introductory rate I got is $150/month going up to $300/month after that.

The biggest advantage I’ve seen over libraries/coffeeshops is that I’m expected to be there working all day and it’s fine for me to hog a desk/space as long as I want to. I don’t have to think about whether I’m being selfish or bothering anybody else.

Plus the WeWorks have really great quiet booths for phone calls which very few free/cheap options have.

> After taxes, this is >10% of income for >70% of the population.

Wouldn’t this cost be a business expense and so best compared to pre-tax income?

Not when the employees are the ones paying, which is what GP was referring to.

Nope. I pay this out of my own pocket (I’m a full-time employee) and it’s not deductible expense in the USA.

The weworks here are 90%+ vacant

WeWork has honestly always had a pretty great product. Their problems were terrible management that overspent and tremendous overinvestment acting like the demand for the product was enough to justify owning half the office space in major American cities. Similarly, McDonald's has a perfectly good product, but if the CEO was throwing penthouse parties with hookers, cocaine, and Dom every weekend, and they tried to open a McDonald's on every single street corner in the world's top 100 cities, they'd quickly go out of business.

Too many unicorns don't seem willing to accept that it's perfectly fine to have a niche product that serves its market, but it's a finite market and will never take over the world.

> There’s almost nobody there

perhaps due to the pandemic?

How long will it last before SB starts shutting everything down? Also how much are you paying? Really good deal I guess?

$150/month for 3 months for access to the common areas/shared workspaces (not a private room/office). After that it goes up to $300.

It’s about 3 miles from my apartment so I just jog there with my stuff (or bike). When I jog, I take a shower and change. So it’s a good way to make myself be more active than I was mid-pandemic.

I figure even at the full price, that’s like $15 per work day, and I usually have an espresso, a Stumptown cold brew, and a snack during the day (or meal if there’s something free/good). Plus on the days I don’t get free lunch, I’m more motivated to meal prep and take a healthy good lunch instead of just snacking while I work in my apartment.

After all this, I’m surprised to hear they’re still providing the free things.

I think they’re getting sample-size stuff from brands to use for some of the giveaways, which is a smart approach. And they are a little stingy with the cold brew. They seem to disable the tap around lunchtime.

A few times there’s been free meals from local restaurants. I’m hoping they get some kind of discount in exchange for the marketing.

Absolutely, the Moviepass strategy

With Moviepass, they had to pay money to the movie theaters every time somebody went to see a movie. This isn’t quite the situation WeWork is in.

I think it’s more like a movie theater or gym.

They’re already paying for this big empty building. If they can drop the price a bit and get interest, the marginal cost of one more body isn’t that high. But drop the price too much and it hurts the brand/image/value to those willing to pay full price.

Fair point

I really like the idea of having more comfortable common spaces, and I would have no problem paying a fee for that. I miss being able sit in my college library's beautiful reading room any time I want. I guess WeWork's initial execution was bad, but I hope the general industry succeeds.

I don’t think their execution was ever bad to be honest, it’s just literally impossible to execute their business model in a way that justifies the insane valuation they were getting.

WeWork's initial execution wasn't bad, as far as I can tell. It was their business model that failed, not the product delivery.

It strikes me as a perfectly reasonable business model for anything other than an enormous startup. Not every thing can grow to a million billion, not everything should.

This is exactly what happened with moviepass- their success was their downfall as even VC money ain't endless.

Even though the VC bill will eventually come due, the moviepass analogy doesn’t quite hold up. Moviepass was in a situation where they were selling discount tickets and then paying the movie theaters for (essentially) full price tickets.

WeWork has these big empty buildings with the lights on, whether anybody uses them or not. Adding one more body doesn’t increase their costs that much. So discounting a membership at least helps bring some cash in and gets a new person interested in the service.

The more people used their service, the more money Moviepass lost. With WeWork, they need more people to sign up to have a chance at getting out of the mess they’re in.

Very true, I take back my very flawed analogy.

This makes me want to watch the wework doc that just dropped. I obviously have much to learn about the whole deal.

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