WeWork has frittered away $46.7B in value as the stock sinks below ¢50
businessinsider.com
businessinsider.com
The article makes out like WeWork lost 47Bn over the last 5 years. No! It was probably worth 0 when the first IPO blew up. The only thing that kept it alive was Japanese face saving.
Now he is with Marc Andreessen (another hokey) in Saudi raising more money for the next hot air balloon.
What a delightful grift.
edit: to be serious... there's certainly a lot of difficulty in achieving what he did no matter the failure, but when we use the word work to compare an employee worker and a ceo owner, let's be more specific with what we mean. we all understand work here and we talk about its structures day in day out. a ceo's day to day work has you running memeified mental contortions to understand how it translates into customer or employee value. their duties have more to do with the operations and growth of a business in a competitive landscape. this isn't "work to produce", it's work to manage and grow an organization's marginal returns and to seek monopolization in market in various ways as far as the law permits. I personally don't have the same casual respect for these two categories of work in terms of their social worth and am skeptical when people talk of them as equally comparable when talking about things like respectability, social good, whose participation is necessary to produce something, etc
Grifting hedge funds maybe isn’t easy, but get no sympathy from me for “working hard.” Lots of people work hard.
Is this a reality though? I was desperate for work many years ago and all the part-time jobs were optimized for a specific time of the day - say 10 am to 2pm or thereabouts.
I can imagine a scenario where someone is holding down 2 jobs but 3, this is hard to comprehend?
For context, I should add I am in the UK where there are perverse incentives to only have one job where you work a maximum of 16 hours because this is where all the work-related benefits (welfare) start to fade away.
Not that I was claiming benefits but the 'benefit trap' is where most of the employers set their nets.
> I can imagine a scenario where someone is holding down 2 jobs but 3, this is hard to comprehend?
I only ever had two at a time, but it would have been possible to cobble three together (I effectively did this for a semester as I had two jobs, and was also commuting between two college campuses for classes). I managed 3.5 hours of sleep a night except for the weekend. And got to a point where the third energy drink of the day triggered a feeling of sleepiness.
For a person without a credential:
Early AM) Newspaper delivery or Load line at UPS/FedEX/DHL.
Regular hours) A regular job during the day
Evening hours) Unload line for UPS/FedEX/DHL
Weekends) Babysitting, or whatever.
Sleep) Good luck!
Most certainly in the age of the gig economy. Even my own partner has about 4 different jobs now - as a registered nurse. They don't necessarily add up to a massive number of hours a week but she'd no doubt prefer not to have to jump back and forth between so many employers, each with their own set of expectations and management styles etc. But she'd have to settle for a pretty crumby base salary for any sort of full time position.
Makes you start to understand why certain cultures vehemently upheld arranged marriages. Having kids with the wrong person makes for a lifetime of hell.
With that said, remember the following. While the economy is not zero sum and we can increase the amount of wealth in the world, power is zero sum. Power is finite and very scarce. You can create tremendous wealth and later find out it ended in the hand of a single person. And that person is not willing to share.
He clearly set out to make a lot of money with his scheme, and he did that successfully. Then he failed.
My wish is to die without a single penny in the bank. As I get older it gets clear how much time is worth. We have so little time to actually do what we want before we get too old.
As technology[1] increases power increases. It is social capital to convince others that is zero sum (holding the number of people constant).
[1] - and here I mean all technology, not what's commonly called 'tech' today.
> You can create tremendous wealth and later find out it ended in the hand of a single person. And that person is not willing to share.
Having a lot of money doesn't mean people have to do business with them. Undoubtedly some will, but you don't have to. It also doesn't prevent others from doing business with made-up currencies (e.g. Ithaca Hours, cryptocurrencies) or through barter.
But what if I own all the productive land? What if I own a corporation that manufactures a product you depend on? This is wealth.
If people won't take your money to defend your wealth, then your wealth belongs to whoever takes it. It's only the rule of law that allows material wealth to exist.
This is a very strong force, and is effectively insurmountable in most circumstances in lands with well-functioning governments. But things like the following do, very rarely, happen even in them: https://morbidology.com/the-town-that-got-away-with-murder/
It's all about getting the larger personal high score. Building a viable business is secondary.
You want to know the actual reason they’re doing this? It’s not because some restrictive laws were passed or to keep the physical toll low on the mom, etc. maybe it is, but that would be found in the marketing slide.
“We are too generous with how much leave we offer”
Everything is to extract as much value out of everyday things as possible. In this case, their thinking is along the lines of how can they can get women to stay in the office longer while the kid bakes at homes. Maybe offer a short leave after it’s ready. But the economy grinds harder since the woman employee didn’t have to take time off for doctors visits or to recuperate post birth.
90% of the ideas and products that come out of here have a solid dystopian underpinning to them.
https://www.dailymotion.com/video/x4jl2mm
I don't know if it's the best intro to the series, it was the final episode in fact.
https://georgerrmartin.com/notablog/2017/03/30/max-headroom-...
Mine was supposedly to be… hmmmmm, let me see now… the fourth episode of the series. My title was “Mister Meat.” Now, TV writing in those days was a two-step process: “story with option to teleplay,” they called it. You wrote a ‘story,’ a short plot outline with all the major beats and characters. Then, when the showrunners, studio, and network all approved it, you went on to write the teleplay.
“Mister Meat” never got that far, alas. The showrunners and my fellow Maxxies loved it, as I recall, but when ABC saw the story they reacted with horror. Way too disturbing and offensive, they announced, driving a spike firmly through my concept and sending me on my way. Which I why I never got hired onto MAX HEADROOM and wound up on staff on BEAUTY AND THE BEAST instead.
I got a second chance when MAX was picked up for a second season, however. As a freelancer, I got the choice assignment of writing the Christmas episode. And this time I went to town. Wrote the story, rewrote the story, wrote the teleplay, revised the teleplay. “Xmas” was the title of the episode, and it got as far as pre-production…
And then the show was cancelled. Rather suddenly and unceremoniously, I must say. America was spared from celebrating Xmas with Max.
"It's an off switch. She'll get years for that".
Parental leave is about bonding with the child and providing care for it while it is especially vulnerable. That's why it is called parental leave- some countries and a growing number of companies offer it to fathers as well.
Like I said in my post, the doctors visits while carrying the baby, the PVT due to stress and other factors, and the maternity/paternity leave (at companies I've worked they allow 6-9+ months maternity and 2-4 months for paternity). Companies know they will offer these leaves, but the in the lead up to that there is a lot of OOO and unrealized effort.
There are people at every company and at large who are crunching efficiency numbers while we sit there hammering out features and fixes.
The idea that the only reason artificial wombs are being investigated is "corporate greed wants workers to take less time off for pregnancy" is so far fetched it might just be the silliest conspiracy theory I've heard in awhile. The amount of money going into the design, research, regulatory hurdles etc will not be paid off by decreased PTO usage. If anything, it'll just get used up again when the infant inevitably gets sick or a care worker isn't available to watch them.
Thanks for the chuckle.
whatever makes you happy, making up whatever conclusion from what you read! FWIW I did not mention paternity/maternity in my post at all... 10/10 reading comp..
From your first post:
> In this case, their thinking is along the lines of how can they can get women to stay in the office longer while the kid bakes at homes. Maybe offer a short leave after it’s ready. But the economy grinds harder since the woman employee didn’t have to take time off for doctors visits or to recuperate post birth.
I argued that is an absurd justification, citing the rise of paternal leave (both availability and increased duration) as an example. I later argued that any PTO saved by not visiting the doctor would end up used as soon as the kid gets sick, needs someone to stay at home, etc.
To repeat myself, it will take an obscene amount of money to get an artificial womb to market. The payoff in doing so is certainly not going to be in the form of people taking less PTO.
The fact that someone literally said that, and was serious about it, was kind of f'd up to me. There are people like this everywhere, who think like this.
I don't personally think of "micro-optimizations" of people this way, code sure. That's probably why I'm could be a better entrepreneur lol.. This person probably thinks cool I save 1-2 weeks PTO per year x 1 million people is a lot of time saved.
Again, I am not talking about leaves, but rather the type of "vibe" that was given off by that statement.. I personally found that person's line of thinking objectionable and so I posted about it.
And you're right that a market transaction is the best measure of "good" that we have. To get some sense of "what society might pay" to limit or eliminate such a market, an analyst must resort to more difficult methods like cost-benefit analysis. It's a huge topic and is used by major governments.
for starters none of the companies mentioned did that themselves, train company didnt build infrastructure, supermarket didnt grow food, internet company didnt lay cable. Sure they provide some value I suppose in logistics or whatever but lets be real its not that hard given some capital. If they didn't someone else would gladly step in and do it instead, theres no world in which the customer is forced to actually go without.
You might say "but these are all distorted markets", and to that i'd say: they are pretty much the main points of interaction I and a lot of people have with the economy (and we can think of dozens more examples). If these are all exceptions, the market is one big exception.
I feel like making the world a better place requires a much greater standard than just "someone paid you for some resource/commodity you hoarded". I grant you sure, in a simplified model where there are countless competitors & perfect information available to all consumers, buisnesses would have to compete on providing good services, but thats not the world we live in.
It's frankly ridiculous that it's not enough reward to be richer than croesus, people want us to believe that they are moral because they got all that wealth.
I don't think conversations like this can ever progress when this constant misrepresentation takes place. No one is talking about hoarding. If I get paid to write someone some software, what hoarding happened?
I don't know why this is shocking. Money is a social construct so its allocation is also socially constructed. It is results oriented, but it's a more complicated kind of result than investment ROI.
For instance, Michael Spindler and Gil Amelio were paid more for their flopped tenure at Apple than I could ever hope to make. Gil walked away with nearly 8 million his final year after overseeing 708 million in loses. Good gig. Almost every c-level exec I've met at $1 billion+ firms leaves me with the same impression: "a charismatic overconfident idiot"
If you want to do things that require capital, knowing how this stuff actually works is required.
Which means there’s not as much buy long sell short as you’d expect, because they’re just competing directly with other leasers.
You can argue the pandemic merely accelerated remote work, so it was always probably a bad bet.
Stock price: https://finance.yahoo.com/quote/IWG.L/
As an operator WeWork adds so much value to us as we staff up all over the world. I love being able to go into any city and have a fun energetic and aesthetically beautiful environment. When I look at the WFH shift, I struggle to rationalize how companies wouldn’t rather utilize flex space as needed for group huddles than commit to long term leases. Their pricing is variable which is inflation resistant. Top line growing at 20% and they removed $2bn in run rate expenses. The list goes on…
Anyway I was wrong on literally every account. This was a huge (and expensive) lesson for me. Stocks always have room to go down no matter how low you came in at.
It still requires that everyone be in the same city more or less. Basically only applies to companies that had an office and now don't want one, and even then only for a while.
Once you're working fully remote anyway you're giving up one of its major advantages (geographically unconstrained hiring pool) by keeping to one city like that. If you find meeting in person to be advantageous enough to justify that, you probably should capitalize on it and just have an office.
It's one of those things that sounds good on paper, and kinda was good during some periods of the pandemic. But it's a compromised middle ground that realizes none of the advantages of committing to either approach.
Which makes it not very desirable as an investment.
Because larger companies have a stable enough need for space, even in the remote realm, to make it worthwhile to have long-term leases. Even if offices become group-meetup spaces rather than more traditional desk space, it still makes sense to run your own if your scale justifies it. A company like Microsoft for example has enough persistent need that they should just reformat their existing holdings to be group-meetup-y. They have no need for an intermediary like WeWork.
Which leaves the market only to companies too small to justify running their own offices - which coincidentally is the same market WeWork targeted pre-pandemic, so remote hasn't actually changed much, much less significantly expanded their TAM.
Also worth a heavy and hearty thumbs-up on the other reply: be aware if the service you love is because the company is very well-run or has some technological advantage... or if it's because you're being sold $100 worth of goods/services for $50.
Free shit is always a good product.
P.S. Is the about link in your profile correct? https://finsight.com/about/our-products seems to 404.
Thank you for the note on the link, updated it.
I used to work at Microsoft and loved the ability to fly to different cities and have a great workspace where everything "just works" and stimulating conversations with new people in the field. A valuable "invisible" tool of thought if you do R&D. I didn't think this could be possible if you didn't work at a bigco, but then along came WeWork.
I don't have access to their internal data so don't understand their complete model, but it seems to me they have significant value and could definitely comeback.
I bought FitBit heavy, dollar cost averaging in and at one point paid around $40 a share, and ended up losing a decent amount (I think my average price was $10 and GOOG bought it at $7), but here I am years later still wearing a FitBit and it's great. I hope the same happens with WeWork, that they survive this dip and figure out the economics (maybe getting acquired). Come to think of it, could be a good buy for GOOG–they could pitch Google Cloud heavy to all WeWork users.
Disclosure: I don't own any WeWork.
"Renting offices to work in" was never going to be a silicon valley style success, because it just can't scale that way.
Wealth represents an assessment of the value to humans of existing resources and it can go up and down based on the decisions of how to allocate that wealth.
There’s absolutely no controversy whatsoever about this concept despite your desire to not acknowledge it.
This concept isn’t particularly subtle or arguable. If you have a lot of food and you are wealthy and then you let it spoil you’re less wealthy.
Nobody else got that wealth (assuming you don’t count the microbes) and absent another source of resources then you are also dead.
Glutting the wealth creation is not fundamentally destructive - what if a specific location cannot actually sustain high production levels because their housing supply, energy supply, or talent supply is insufficient? What if unfettered growth will lead to a collapse that destroys a lot more value than the potential future wealth destroyed? What if a company heavily invests in business and retail construction and a global pandemic happens?
Wealth creation is impossible to separate from public policy. For Manhattan to exist, a large amount of money had to be poured into its fundamental blocks.
https://en.m.wikipedia.org/wiki/Parable_of_the_broken_window
If a house is destroyed in a fire, it loses its value as a house. Now you have the value of the land, which will be offset by the cost of clearing it. So the value of the land is below market. The asset has depreciated.
Large scale construction tends to be very good for the economy because it both increases economic activity (construction is expensive, and a lot of people get paid to do a lot of labor in the whole chain, from lamps to concrete to engineers to meal makers), and sets infrastructure that will be used by highly productive companies (white collar offices) to make a lot of money.
But there is no value transfer from rubble to construction companies. That asset owner took a hit.
So maybe the workers spent more money buying their lunches, but that's just extra inefficiency, and not extra economic acitivity. Just like the broken window, the workers spend more in one area and so have less money to spend elsewhere.
In economics this is called hedonic adjustment. The economy is improved because the workers value purchasing a lunch more than making their own.
It's cheaper to listen to the radio, or even buy a CD, than to go to a concert. Going to a concert is not seen as economically inefficient.
9 foot ceilings are not seen as economically inefficient compared to 8 foot ceilings. The additional foot is seen as value.
A house made of bricks is valued more than a house made of straw, despite them both functioning equally as well as long as a huffing and puffing wolf isn't around.
Etcetera.
Using the word "catastrophe" to describe a financial process not going in one's favor doesn't actually turn it into a natural disaster that physically destroys objects.
Asset depreciation is a fundamental concept that you should be familiar with, as it influences several aspects of your personal finance: https://www.investopedia.com/terms/d/depreciation.asp
Except the person who sold the stock for $100.
Person B now holds 0 in cash, and 100 in assets.
Fast forward 5 years. The stock price has crashed to 1 dollar.
Person A still holds 100 in cash and 0 in assets. Person B holds 0 in cash, and 1 in assets.
There was no transfer of 99 dollars back from Person B to Person A. Person A's holdings were invariant because they don't own the stock anymore. The losses brunt by Person B were not transferred to anybody else.
Money doesn't travel back in time.
Correct - the transfer happened when you bought the stock. What you have lost is the expectation of getting it back (or at least the expectation of getting it back today.)
The challenge for a company like Weework is that it's hard to identify what wealth they generate- at least for me.
In other words, what are they making (goods) or doing (services) that provides value to the world (wealth).
I suppose they'd say that their core value is making it easy to rent space quickly. This is certainly providing some value, but I hardly think it's one that's heavily differentiated.
I bring this up because the conflation of money and wealth is so often what gets people in trouble. Decoupling the two lets us examine what the value of a company is, at its core.
Post founder, WeWork was finding itself as a scalable office provider, where companies were willing to pay a premium for a flexible contract, and add or remove seats as needed. It was an interesting idea, and there were signs of growth. Then COVID happened. I'm surprised they are even still operating.
Stocks don't reprice without transactions.
If there was an overnight discovery of infinite energy supplies, Exxon would wake up to a very different price than the night before, as any potential buyers would severely reduce their upper boundary. Sellers would need to continually lower their price until it finds a willing buyer.
That could be me, for instance, putting a bid into the market because I read a hot tip on HN.
Or you may prefer to imagine an automated market-making model that moves its price for Ford because it just saw a big sell-off in GM.
Or consider prices at the open each day, which are set before any transactions take place.
Company X's stock are worth 100 dollars. A scandal breaks out, revealing that their second most important product must be removed from the market immediately due to health concerns. The company will survive, as it has other products, but it is clear that their income will go down and they will spend a fortune on litigation.
Suddenly Investor A wants to sell this stock, because they don't want to hold a risky asset. But who will buy it? Investor B is willing to buy this stock, and will reassess their targets, decide that this stock is now worth around 75, and only buy it at this price.
Investor A has two options now: hold a risky asset, or take a loss. If they decide to take a loss, the stock is now priced at 75. If they decide to hold it, then the price might be artificially 100, but this asset is not liquid now, as nobody is willing to buy it at 100.
So the price has already dropped, before any transactions happened.
See also pre market trading: https://www.investopedia.com/terms/p/premarket.asp
Consider the example of a company that is founded and immediately issues and sells a million shares for a dollar each, and then burns the dollars in a bonfire.
There’s less dollars at the end of the story. It’s not a zero sum game.
If you today form a company having 1 billion and 1 shares and I agree to buy 1 share from you for a dollar, you aren’t a billionaire.
If the stock market responds to sales by spooking investors who then sell at lower prices, then the market cap was always a scam. Exchange value of the collection of stock shares for the shareholders is actually not last_price * outstanding_shares but a much smaller amount that exponentially decreases as people sell out.
The use value for the company too is not represented by market cap because short term speculators aren't going to be around long enough to allow you to realize those investments as assets, and anyway there's a large contingent of shareholders who either don't understand or don't agree on company leadership's decisions, so the true value is much lower than depicted.
It's basic economics. Value is what can be done with the set of assets and the collective beliefs held about them, not the projection of such from some pseudo-equilibrium state.
However, big finance depends on you either believing their falsehoods or getting out quick enough that the grift is completed so that average Joes are left holding the bag. They're not on your side, so why continue playing by their rules?
"Food delivery services" was never going to be a silicon valley style success, because it just can't scale that way.
Neo taxi and food delivery companies are just matching apps that connect sellers with buyers and, in case of taxis, set prices.
Adding or removing a new service provider doesn’t have as much sunk costs as leasing a giant office space for several years.
Deliveroo, likewise: https://www.businessofapps.com/data/deliveroo-statistics/
These are not successful companies, except insofar as they are very successful at handing out investor money.
If you look up their losses per journey it's something completely trivial like 50c. Uber's customers are not that price sensitive so if they really did want to make a profit they could probably just raise their prices a little bit.
But I think the consensus is that (unlike Amazon) there is no more scale for them to reach which would make their business model profitable enough to justify the valuation - their only route to large profits is to destroy the rest of the competition and raise prices.
"On Monday morning, an Uber from Manhattan to JFK Airport was $100—nearly double the fixed yellow cab rate. But good luck finding a yellow cab" https://slate.com/business/2022/05/uber-subsidy-lyft-cheap-r...
The could have been profitable maybe if they didn't spend ~$400million on stock based comp!
You can make cabs dissapear, but copycats are a paradox because you are "validating" their business model with your "success", so they will cannibalize you
By now, I wouldn't believe Elon tellong me it's raining while being soaked in rain, waiting for one the millions of Tesla's robot taxis to pick me up.
The interest payments on the $12.5 billion of debt Musk offloading to its balance sheet to fund his 'purchase' is way more than that.
Basically Musk alone costs Twitter about the same as 4000 - 8000 employees. Which is why he had to fire that many people.. Seems like a great deal.
Not that I mind him running Twitter into the ground it's horrible format/platform for any meaningful communication aside from public single sentence public announcements..
If you had told me 6 months ago that I would grow to hate the clown emoji, I would have been bewildered.
Well yeah, but those authors, artists and journalists can only use Twitter to share links and images (and announcements) since no meaningful content can fit into 230 chars. The worst is when people split a single paragraph text into 5+ tweets, that just brain damage inducing UX....
IMHO removing the limit would've been the only good thing Musk did if it was available to everyone.
Netflix eases that problem by providing ISPs and other interested parties with racks full of what are essentially ultra-performant NAS systems [1] for free, but that's only realistic because the utter majority of Netflix's load comes from their top movies/series and it saves them all the egress fees and the ISPs a hefty chunk of their connectivity needs - ~15% of all Internet traffic is Netflix [2] and even serving a quarter of that by ISP-local caches takes off a lot of load.
Youtube, Vimeo and their smaller competitors, in contrast, have way too much different content to make such an expense worth it.
[1] https://openconnect.netflix.com/en/
[2] https://www.statista.com/chart/15692/distribution-of-global-...
Egress bandwidth is pretty cheap if you’re not paying a cloud provider for it.
"What people actually do at WeWork" - https://news.ycombinator.com/item?id=16292423
The only times I've found decent coworking spaces, they've been ad-hoc affairs to make use of an old building on cheap real estate. No software startups, nobody chasing VC money, no espresso machines, no free snacks (or maybe just a few sad granola bars for emergencies), just a solid wooden door, wifi, and natural light from a window. I don't think arrangements like that last, though.
It looks like the perfect place to do a meeting and go away, and indeed it looks like people do use it that way a lot. Also, you can rent it at the moment, without any planning. I imagine it's successful.
It is indeed not the kind of place you want to go to do quiet work. But spaces leading to quiet work are plentiful anyway.
The real value of the cowork space was to be around other entrepreneurial types and perhaps even meet a young and hot ambitious babe. The “work” was an excuse to just hang around the same place day after day.
A lot of "Silicon Valley success" fits this model too.
"Mini-cab firm" is not a SV success story either.
WeWork labs was the most genius thing though. Build a tech lab straight up for no other reason than to have a tech lab for the optics of having a tech lab.
WeWork's model didn't appear to involve individual people with spare office capacity loaning it out for short periods to other people needing an office for a short while. WeWork's model appeared to be that WeWork itself leased office space, and rented it out to people. WeWork paid for the lease, and took on all the risk of that and all the risk of the demand vanishing.
The AWS bet is that some companies, especially when starting out, will pay a high premium to not have to manage certain physical resources, and to have the flexibility to scale up or down easily.
It's not even a high premium if you need what cloud offerings have.
Management is expensive. Scaling is expensive. Security and compliance is expensive.
Cloud isn't for everyone, but when you need what it offers it can be amazingly cost effective.
It’s like Hertz raising money on short term rental possibilities but all they do is lease cars to people long-term.
As the other poster said, it’s kind of like how some percentage of AWS just uses it as a dumb server and probably they’d be better off just renting bare metal.
The time for this company might still not have arrived yet. I just don't see what they could have done at the time and either way Covid would have bankrupted them.
$12B from 2014-2018 [https://www.statista.com/chart/17705/uber-revenue-costs-and-...]
$25B from 2019-2022 [https://therideshareguy.com/uber-statistics/]
"WeWork has raised a total of $22.2B in funding over 23 rounds."
https://www.crunchbase.com/organization/wework/investor_fina...
But they weren't and it actually wasn't a bad idea. Good location, nice interior, "flexible" plans.
What I found thought is that buying these flexible plans is very clunky. For example, I wanted to try things out at first by getting hot desks for 5 people for a day. Installed their app and realized that I can book for only myself. Their support said that every employee must download the app and purchase their own hot desk.
This is extremely stupid! I am not going to ask the team to pay for their office and then reimburse them. The best solution I have is to make 5 accounts on the phones that I have access to.
So here I am with a service of theirs that I want to get, but they don't care enough to sell it to me.
Someone once said, SV values bigger failures than small success. Fail big.
The fact that this legendary con man has ultimately suffered no consequences for his actions demonstrates how the market is fatally irrational.
SoftBank was the real con person in the WeWork saga…Neumann just left them holding the bag, and they couldn’t successfully dump it on retail investors or sell it to a greater fool.
The reason VCs continue to back people like Neumann is they have succeeded many times (e.g, Uber, Postmates, Lyft, Chamath Palihapitiya’s SPACs, etc.).
They know they would do better.
Yes, he is the male Gwyneth Paltrow, and that is annoying.
But IMO WeWork is an awesome product that was executed really well, and Neumann's tech-bro spin to it was a big driver behind that (and Softbank sinking billions into them).
Every office was (and still is) in really cool locations and tastefully designed top to bottom. The community teams were usually hip and super friendly, and the offices themselves were really well thought out, both in appearances and in function.
Many say "but Regus did it first." Sure. Have you _actually been_ in a Regus property? More often than not, they look like doctor's office waiting rooms from the 80s! Also, did they even have an all-access pass system like WeWork did? Being able to hotdesk in another city anywhere in the world was super awesome.
Sure, WeWork was seeped in debt. But as far as I understand it, that's pretty much every real estate company!
If WeWork wasn't managed like a fucking coke-addled rave, I think they wouldn't be where they are. I had friends who worked there, and the incompetence they described was off the charts crazy.
https://pluralistic.net/2023/05/19/fake-it-till-you-make-it/
Softbank though is a bit of an outlier - maybe it was a one-hit-wonder with Alibaba. They don't appear to have invested like other VCs at any rate.
People say no value was lost with WeWork but that is very untrue. Hard working, misguided people and funds bought WeWork stock from the SPAC and let Adam Neumann turn lies and smokescreens into real cash. He’s no different than Elizabeth Holmes from Theranos except her lies involved something that can be proved was incorrect since it was medical testing. His real estate ideas were equally wrong and impossible. His net worth is now 2.2 billion.
Company is long gone. Founders and select investors for rich. Everyone else was left wondering how to feed their families.
https://news.crunchbase.com/startups/report-adam-neumann-ben...
smh. This really sets a new standard in grift.
Now, if he only had good kompromat on all those investors, he'd be up there with Jeffrey Epstein. Come to think of it...
The only thing I’m sad about is: Neumann is not rotting in jail. He defrauded investors, misled people yet he was actually rewarded with a golden parachute.
Per article he is now pushing some other junk product with rental housing. Probably buying up distressed properties, applying cheap aesthetic fixes, and jacking up the prices and pushing out people from their homes.
But that’s boring and not investable.
They are one of the few remaining vestiges of the "old" pre-social media Internet and are successful in getting people together without walled gardens.
Shame of the investors for giving this sky high valuation through SPAC.
What's bad about pension funds? People need, you know, to live off something when they are old.
The old model "we have a lot of kids and they will take care of us" no longer works as people have no kids...
The idea, as I understand it, was co-working spaces. They were there to optimize that, extracting the maximum profit in the way they leased stuff. Ok, fine.
Is co-working still going on? Has something desirable been lost? Were they creating any value that couldn't be recreated by someone else.
I can't care one way or another about fake valuation of market cap. But I do care if work is getting done, and that people are trying to find new ways to do it.
So can someone tell me if there is a there there or if this is just very rich people complaining that they didn't get richer?
Yes, coworking is still going on for many sole proprietors, small teams, and remote workers. Remote work does not mean work from home.
Why? Assets don't usually just vanish; they merely change hands. The spaces will physically be there. If an individual space is viable and has existing customers then the creditors will sell it to someone who will likely continue to run it. If it is not viable then it will go, but then it's hard to argue it had value.
tabloid-y source: https://nypost.com/2021/07/17/the-shocking-ways-weworks-ex-c...
Coworking will continue even as the providers of it come and go.
I'm sure co-working is still going on but I work at a fairly remote company and I don't know the last time I've been on a call with someone in a co-working space.
They're community spaces also, group get togethers of similar minded people abroad. The spaces are generally pretty good too. I've been to a bunch of events at my 'local' foreign wework.
They're expensive, but when you're working sometimes that doesn't matter so much or is paid for by your company.
Like Uber, they're not perfect but they enable a cool way to live for me.
But it will never be a good fit for VC funding. It's just a high quality, profitable small business with happy customers. The WeWork valuation never made any sense.
I would rather dump the $3,900 per year into my mortgage or other debt tbh.
It’s a great service for those of us who value it, and it’s popular enough that it’s not going anywhere. It is not, however, a billion dollar company lol.
Also that’s not the only variable in the equation it seems likely there’s at least one expense that could be cut.
>Things would be a lot different for Holmes if that’s what she did.
I think you're correct.
If Holmes would have actually had an excellent product or happy customers, Wework gives an idea of the much bigger scale of fraud that could have been accomplished.
If there was no greed involved whatsoever, and all were providing actual value added, odds are there would be more than one skyrocketing to beyond unicorn status, fully sustainable for the forseeable future.
Without further investment, just respectable returns.
-- https://www.bloomberg.com/opinion/articles/2019-10-23/how-do...
WeWork wasn't materially differentiated from Regus. That should clue in any investor on how to approach it.
These days, there is likely a greater opportunity for "Airbnb-for-coworking" at scale due to layoffs and slack in commercial real-estate occupancy. The main issue is integrating compatible identification and access control to ease badging. There are very few environments or situations where anything crucially secret ever occurs, and a peer vouching system and background check process should be enough to screen "is this person sane and not going to disrespect or disrupt the space?".
A better headline might be “irrational exuberance surrounding wework finally fades and the cold light of reality shines on their stock price”
It feels like a lot of investor-class losses are on the verge of being realized, and they are getting desperate.
Good trade.
They frittered the rest
Nearly everything got hammered. WeWork is just one of hundreds. Admittedly, they’re the poster child for this economic situation.
"Collaboration" by forcing employees back into the office doesn't work either.