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How Did WeWork’s Adam Neumann Build a $47B Company?

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Re: How Did WeWork’s Adam Neumann Build a $47B Company?

#91

Post by nikanj »

jeremyjh wrote: post #76
sharadov wrote: post #15

I have the next billion-dollar business idea, an " Airbnb for coworking spaces". Convert your existing house to a co-working space. Looked at Wework, already pay too much for rent in the Bay area. I work from home, and would not mind the company. Got good coffee and great beer as well!

That works great for apartments zoned as commercial or mixed-use. I don't think that is common.

As Uber and AirBnB have demonstrated, caring about laws is so last millennium. As long as you get big enough, fast enough, the cities will probably bend and change things to accommodate you.

Re: How Did WeWork’s Adam Neumann Build a $47B Company?

#92

Post by Barrin92 »

harryh wrote: post #87
empath75 wrote: post #26

Earlier quoted context omitted.

They're signing expensive long term leases and then renting them for the short term at a loss, which is like exactly the opposite of how it's supposed to work.

Their unit economics are positive, not negative.

with a sufficiently creative definition of unit economics aka "community-adjusted EBITDA", sure. In the actual world, not so much.

Re: How Did WeWork’s Adam Neumann Build a $47B Company?

#93

Post by ikeyany »

avip wrote: post #47
wbronitsky wrote: post #33

Earlier quoted context omitted.

Came here to literally type "he didn't" thank you for doing it first!

There are 3 ways to gain Karma in this place: be first, be smarter or cheat.

Also "swing for low-hanging fruit, like vague I-told-you-so warnings whenever a security breach is disclosed".

Re: How Did WeWork’s Adam Neumann Build a $47B Company?

#94

Post by SI_Rob »

chaostheory wrote: post #79
AnimalMuppet wrote: post #51

Earlier quoted context omitted.

Their valuation is based on spirituality ? Are they a business, or a church? I mean, they can actually be more valuable than other such companies if they get the ambience right. Maybe that's what he meant. But if they're referring to the ambience as "spirituality", I cannot take them seriously. [Edit: And if by "spirituality" they mean something besides ambience, I still cannot take them seriously.] If I had more fai…

> Their valuation is based on spirituality? Are they a business, or a church? Maybe their investors saw value in their company culture? "The Best Startups Work a Lot Like Cults" -- Peter Thiel

Some of the most successful cults did effectively operate as "startups" bootstrapped by a counterpart religious service community, i.e. the Oneida Community and the Amana Colonies

Re: How Did WeWork’s Adam Neumann Build a $47B Company?

#95

Post by burger_moon »

sharadov wrote: post #30
spaceman_2020 wrote: post #23

My WeWork has three kinds of clients. The first kind sit in the dedicated desk area, work 10-12 hours/day and rarely leave the space for community events. They're either serious consultants/freelancers or just starting their own startups. The second kind sit in the shared desk area and basically dick around all day. They attend all the community events and use WeWork as mostly a networking/dating hub. Who they networ…

It's interesting that godaddy would opt for a wework rather than leasing office space and setting it up. Probably less cost and hassle?

Amazon also uses WeWork in a few locations, including Seattle. I would imagine since they're renting out multiple floors, they're getting a better than market price.

Re: How Did WeWork’s Adam Neumann Build a $47B Company?

#96

Post by mbesto »

hdpq wrote: post #16

I'll just go on the record to say that I think WeWork is the biggest deck of cards that is begging for a collapse. I've only been to a handful of locations, but they never seem busy and I'm not sure how they're making rent. Plus, not to mention, back in my day, when you did a startup and got funding from your rich uncle (not Uncle Rich), you grew your startup from your apartment, and when you outgrew that space, you…

WeWork, of all of the overvalued unicorns that exist today, will likely be hit the hardest during a recession.

Just watch.

Re: How Did WeWork’s Adam Neumann Build a $47B Company?

#97

Post by mbesto »

secabeen wrote: post #31
netaustin wrote: post #14

Earlier quoted context omitted.

The"real business" of WeWork et al seems to be selling an entrepreneurial vibe to big companies. Lots of folks in my distributed company work at WeWorks around the country, and most of their neighbors work for big companies. One of my colleagues is almost fully surrounded by a Dish Network call center. WeWork will even custom build for big customers — in fact, their Enterprise landing page is a good an index to their…

The question is, why would a F500 company rent space from WeWork at a double-digit markup when they can do it themselves? This is not super hard or special stuff, and F500 companies need to do it enough that they can maintain the expertise. If the answer is "wework allows us to be elastic with real estate as our needs shift", then WeWork will be in for a lot of hurt at the next recession. If the answer is "we are usi…

The answer is - these are not core office buildings for those F500's. They want capitally efficient (e.g. minimal up front investment), fast to market and appealing to a desired workforce. GE wanting to set up a R&D center to hire 100x 25-40 year old developers in Austin? Great model. When we hit a recession, those are the first jobs to go and then they have preferable (e.g. not left sitting with the asset) ways of winding those centers down if needed.

Think of it like having 3-year Reserved Instances in AWS instead buying your own hardware and running your own data center. Which would you choose today?

Re: How Did WeWork’s Adam Neumann Build a $47B Company?

#98

Post by robertAngst »

mdorazio wrote: post #2

Cynical answer: he convinced VCs that his particular brand of shared office space was better than everyone else's, actual revenue be damned, and they believed him . That's it. Straight from the article: "Neumann declared that WeWork’s “valuation and size today are much more based on our energy and spirituality than it is on a multiple of revenue.”"

In my lifetime we will learn if 'tech' companies are overvalued.

The fact that my friend, a total casual, is investing in Tesla and Apple via Robin Hood has me concerned the market is inflated with dumb money.

Re: How Did WeWork’s Adam Neumann Build a $47B Company?

#99

Post by matz1 »

AnimalMuppet wrote: post #51
mdorazio wrote: post #2

Cynical answer: he convinced VCs that his particular brand of shared office space was better than everyone else's, actual revenue be damned, and they believed him . That's it. Straight from the article: "Neumann declared that WeWork’s “valuation and size today are much more based on our energy and spirituality than it is on a multiple of revenue.”"

Their valuation is based on spirituality ? Are they a business, or a church? I mean, they can actually be more valuable than other such companies if they get the ambience right. Maybe that's what he meant. But if they're referring to the ambience as "spirituality", I cannot take them seriously. [Edit: And if by "spirituality" they mean something besides ambience, I still cannot take them seriously.] If I had more fai…

Church can be a lucrative business too. A well run church can generate nice profit.

Re: How Did WeWork’s Adam Neumann Build a $47B Company?

#100

Post by alasdair_ »

creaghpatr wrote: post #72
AnimalMuppet wrote: post #51

Earlier quoted context omitted.

Their valuation is based on spirituality ? Are they a business, or a church? I mean, they can actually be more valuable than other such companies if they get the ambience right. Maybe that's what he meant. But if they're referring to the ambience as "spirituality", I cannot take them seriously. [Edit: And if by "spirituality" they mean something besides ambience, I still cannot take them seriously.] If I had more fai…

>But if they're referring to the ambience as "spirituality", I cannot take them seriously. I dunno, the Catholic church is doing just fine in terms of revenues and real estate assets, and that's just one example. Then again, religious organizations get preferable tax treatment...maybe WeWork will eventually pivot to religion down the road.

Unlike WeWork, the Catholic Church (and the mormons and scientologists) have realized that the best tax shelters come from actually owning the property that is used, not leasing it.
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