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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?

#141

Post by rexreed »

eckmlj wrote: post #46
cangencer wrote: post #32

Earlier quoted context omitted.

See https://www.spacesworks.com/ which is basically Regus with a different brand name. I am using their co-working in Copenhagen since a few months and quite happy so far.

Interesting, I did not know Spaces was under IWG! They are here in DC as well. Materially the office space is the same offering as WeWork, but there is a noticeably different vibe/sheen that is hard to pin down. Neither appeals to me as I find it hard to focus / get work done in coworking places like this, but WeWork just feels better executed / 'cooler' at first blush.

I've been to that Spaces Noma in DC many times, and I immediately said to my coworker that it was a "cheap imitation of WeWork". The same entrepreneurs in glass cages concept, the same barista upfront, but without any real originality. I don't like the WeWork vibe but at least there's some original thought going into it. Spaces is just an imitation, but you know what, does it matter? From a business perspective, immitation is the sincerest form of flattery, even if it feels like a cheap imitation.

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

#142

Post by hdpq »

florakel wrote: post #126
burtonator wrote: post #84

Earlier quoted context omitted.

> 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. VCs are paying the rent silly. It's VCs all the way down.

The VC will cash out with the IPO. That’s the new strategy. Drive companies to valuations higher than the market cap of many S&P500 companies and then sell them to the “free market” (Uber, Lyft). Great deal for the involved VCs and banks. Is the end result a sustainable business...? who knows...? who cares...?

Not all VCs are above water on their Uber investment.

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

#143

Post by patio11 »

bitcoinmoney wrote: post #127
mbesto wrote: post #96

Earlier quoted context omitted.

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

How do I protect my VTSAX investment if we work goes public and is included in the basket??

By doing nothing because you will have less than a basis point of WeWork exposure.

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

#144

Post by harryh »

Barrin92 wrote: post #92
harryh wrote: post #87

Earlier quoted context omitted.

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.

You are confusing unit economic vs profitability. They are very different things.

If I manufacture a widget for $1 and sell it for $.50 then my unit economics are negative and, unless I manage to either lower manufacturing costs or raise prices I am in trouble forever.

If I manufacture a widget for $1 and sell it for $1.50 then my unit economics are positive. My company might still be unprofitable due to other expenses though (R&D, Marketing, whatever). This is the situation that WeWork is in.

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

#145

Post by ralph84 »

bitcoinmoney wrote: post #128
florakel wrote: post #126

Earlier quoted context omitted.

The VC will cash out with the IPO. That’s the new strategy. Drive companies to valuations higher than the market cap of many S&P500 companies and then sell them to the “free market” (Uber, Lyft). Great deal for the involved VCs and banks. Is the end result a sustainable business...? who knows...? who cares...?

47b$. Wow, even AMD making real products is not even worth that. How does one hedge an s&p 500 fund that buys all these stupid unicorns?

I agree WeWork is overvalued, but the whole thesis behind an index fund is you can’t reliably pick winners and losers. If you can, there’s no need for an index fund. There were plenty of naysayers calling FANG overvalued at their IPOs as well. If you didn’t hold those stocks for the last 10 years you missed out on most of the overall market’s gains.

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

#146

Post by intuitionist »

emiliobumachar wrote: post #103
avip wrote: post #47

Earlier quoted context omitted.

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

Not that I plan to try, but what do you mean by "cheating"?

It’s a reference to a scene in the film _Margin Call_.

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

#147

Post by intuitionist »

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.

Yeah, but it took them like 300 years to get to cash flow positive. Today’s religious investors aren’t willing to wait that long.

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

#148

Post by omni »

dlock wrote: post #65

So i work out of a competitors place here in south east asia (indonesia to be specific), for the guys here from the region they probably know who im talking about. This coworking space was initially funded by a local VC but then low and behold softbank just invested, wework is also here in indonesia. I (last year) had to downsize my startup because some areas of business didnt do so well so i moved into this coworkin…

Friendly suggestion: adding some line breaks / paragraphs to a post this long will make people much more likely to read it.

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

#149

Post by Barrin92 »

harryh wrote: post #144
Barrin92 wrote: post #92

Earlier quoted context omitted.

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

You are confusing unit economic vs profitability. They are very different things. If I manufacture a widget for $1 and sell it for $.50 then my unit economics are negative and, unless I manage to either lower manufacturing costs or raise prices I am in trouble forever. If I manufacture a widget for $1 and sell it for $1.50 then my unit economics are positive. My company might still be unprofitable due to other expens…

I am aware of the difference. If you look at their numbers, their literal unit economics are negative, if you employ normal EBITDA. They don't, they employ a so called "adjusted EBITDA", which last year flatout discounted 150 million in marketing as non-recurring trying to make the argument that you just made.

But this is hilarious number fudging, because obviously a lot of marketing budget is recurring and goes towarss retaining existing customers and should go into a unit cost metric.

They do the same thing that uber did, which is pretending that they can magically 'scale' and that they are a tech company, when in reality they are a real estate business siphoning money out of investors, pretending their losses are somehow magically going to turn into profit.

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

#150

Post by avocado4 »

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 is just too expensive here in SF. Easier to just rent an office or work from cofounder's home.
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