Telework killed it since they were left with empty buildings.
Man, just terrible timing overall. If not for COVID, they could have pivoted into something a little more long lasting. But COVID just blindsided them, as it did many others.
If they had some more time they could have pivoted to supporting hybrid work for companies that have a geographically distributed work force. As much as I love working from home, there are some times when it's better to be in person, and WeWork could let people work hybrid without having to move across the country.
Yeah, and dynamically rent out spaces for single meetings and stuff if you want to go overseas to meet a client or something. This is what I initially thought it was for back when I first heard about it.
Imagine a team in some satellite office in India is having trouble with something, they ship out a specialist there to fix it, and they can rent out spaces from wework for meeting up and stuff.
Weren't they fumbling a sure thing, even before that? I thought they were slightly on fire by mid-2019.
Lol, no. It was alllllllllll fake the entire time. It's just that once the IPO had happened and the founder ran off with his billions, they really had to try to make this completely unworkable business model work
"In retrospect, Neumann’s knack for amassing billions of dollars in venture capital with no viable business model was one of the greatest scams of the twenty-first century."
He had WeWork renting the buildings from him, the founder of WeWork. That's some A+ grifting right there.
It sure did. Interesting model, but just not quite right.
There were other factors like investors treating it like a tech stock rather than real estate and wasteful spending, but companies moving to telework really killed it.
Yeah weren't they doing all this weird things to try and become the next big tech company even though their whole business model is essentially leasing?
Perfect example of a company that tried to go too big
I feel like they did that because a real estate leasing company would probably have a stricter dress code than a tech startup
I had access to a WeWork office for a while. It was fine for solo work or getting a couple of colleagues together for quiet conversations, but their meetings rooms sucked. There was no way to discuss or whiteboard anything confidential in one since the walls were all clear glass and the soundproofing was nonexistent. The whole setup felt like it was created by someone who was going for a ”cool startup office” aesthetic but hadn’t ever actually worked in one.
Heh.
We were looking at a wework and I asked, why don't the space between different companies get tinted glass or dividers and the sales guy straight out told me this is the environment we are building here.
What. Where is my organisation's privacy?
At least my other office could have a personal room for your company even if the meeting rooms were shit.
Why is Softbank involved in so many business investments that go sour? I've lost track of the number of articles I've read that go something like, "Softbank invests in X. X's value is tumbling."
I think a lot of the issue is that softbank had the idea of if they can invest a bit and get a good amount of growth, how about they invest a ton more from the outset and "guarentee" insane growth. They did that with a few startups and it worked, then they did it with WeWork and it spectacularly backfired. The basic premise of WeWork was pretty sound until the real estate market started going up in price, which kind of blew up the margins that WeWork lived in. That and a frankly financially crazy CEO kind of ruined it.
WeWork never made much sense. The entire business is just co-working spaces and regular office space rental. There's nothing special about it at all.
I think the special part was having smaller rental spaces and that feeling of having coworkers in an office that weren't actually your coworkers. I used to deliver to a lot of we work and we work type places and I sort of got the appeal for startups. Some definitely didn't have privacy like another commenter mentioned.
In the beginning, WeWork definitely was about renting to smaller companies (or individuals) at reasonable prices, providing decent (if not upscale) accomodations. That’s probably a decent little business.
But their CEO had (or at least, promoted) delusions about WeWork providing a fundamentally different experience. Some of those delusions were IIRC software projects he claimed would allow renters to automate and improve their network and electricity use. He sold this bullshit on talk shows, and gave this as a reason that WeWork wasn’t just another renter of office space. In reality, they didn’t have the expertise to do anything like he claimed, and it all came to nought.
Maybe if he hadn’t been spending money like a fleet of drunken sailors, much of it on himself or vanity projects, they might’ve not cratered as badly, or at least as quickly.
And that's a perfectly reasonable business, but nothing revolutionary.
If their business would have been co-working franchises, in the sense that you can have an office everywhere and with some set standards, it could even have been a good business. But it's low-margin, nothing like Google or Facebook.
Totally. But Adam Neumann wasn’t going to settle for “low-margin”, nosirree! Low margins don’t buy you jets and mansions.
No no; you see - it was in the cloud.
That means it should be patentable and it will provide 38% returns over four years. Trust me, bro.
Y'know, there was this documentary with Zero Mostel and Gene Wilder...
flawed investment philosophy?
Thanks to Elon I misread your comment for a bit
This is the company that the press unanimously decided everyone needed to hear about in 2019, and you couldn't avoid mentions of it. Good riddance.
Haven't read the article yet, but I highly recommend watching WeCrashed, a mini series about wework and it's fall
It’s a good one!
sourcing an article from foxbusiness is insane, so many other places for the same story. fuck fox. really.
A combination of people moving to remote work, office property values taking, and general mismanagement.
Never heard of them but I'm a little skeptical a company like that could even have had a valuation that high.
If you were a tech worker 20 miles from a wework building, you got a LOT of swag and invites to events. It was weekly for me.
In the era of low interest rates, a lot of stupidly-high valuations happened in tech. Many of those idiotic valuations were predicated on the idea that companies could afford to lose money for a long time in pursuit of “market share”, and then pivot to profitability when they wanted that. Never mind that if your business model is fundamentally about being the cheaper alternative while losing money — waving at Uber — the only path to being profitable goes through gaining monopoly powers and hiking prices to much higher levels that consumers will hate — waving at Uber again.
The truly dumb thing about WeWork’s valuation was that it was being valued as if it were a tech stock. It was a renter of office space, period. All of its “secret tech sauce” was a combination of lies and aspirational bullshit from its bullshit-artist CEO.
Oh yeah, that's completely stupid. Getting really sick of these 'undercut-everyone-monopolize' companies. Good to see them burn in that case. Wonder if we'll look back on this era as a bubble.
If you’re interested in some of the gory WeWork details, I can recommend either reading The Cult of We: WeWork, Adam Neumann, and the Great Startup Delusion, or (if you have an Apple+ subscription) watching We Crashed.
I frankly don’t understand how so many people didn’t quickly peg Adam Neumann as a charlatan. I guess everyone was more worried about Fear Of Missing Out than Fear Of Losing All My Money, and it drove some really dumb investments in WeWork.
The evaluation was nothing short of a fraudulent scheme.
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