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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?

#171

Post by erik_seaberg »

kemitche wrote: post #111
sharadov wrote: post #30

Earlier quoted context omitted.

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

My naive view is that it's similar to the reason some companies use AWS rather than running their own data center. That is, it's worth it to pay the premium to not have to manage their own space, and have the flexibility to scale up/down their usage a bit more quickly than locking into multi-year leases.

Office space is sort of a commodity, though there's a lot of friction in lining it up. But the thing about datacenters is you need three with independent networks and power and cooling, and that's crazy expensive before you can actually fill three halls.

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

#173

Post by arcturus17 »

hoodwink wrote: post #140
rsuelzer wrote: post #129

Earlier quoted context omitted.

The article says they don't own property.

WeWork doesn’t own property the same way you don’t own your house. The bank does. You still have an asset though, and so do they. Their asset is what’s known as a leasehold interest. Riskier and shorter duration than owning real estate, but still an asset making this cash hemorrhaging talk complete bosh.

The presumption being of course that they’re going to be making a lot of money out of these investments, which is what us “laypeople” as you put it express doubts about when we see half-empty WeWork spaces? Which results in an over the top multiple valuation which has nothing to do with comparable competitors and which the CEO attributes to WeWork’s great vibes (no joke).

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

#174

Post by fredley »

zimpenfish wrote: post #167
baxtr wrote: post #20

Earlier quoted context omitted.

The ones I saw were very busy, and, filled by large corporates that wanted to be hip. I think for them value proposition is that they are able to hire some hipster people who don't want to work in the old buildings and also build some marketing stories around their "labs". That said, I "worked" in a WeWork for about 6 months and it was just terrible. Tiny offices, lots of visual distractions, lots of noise, many part…

> it was just terrible. Tiny offices, lots of visual distractions, lots of noise, many parties. I wouldn't ever do it again. Same (London, Shoreditch). Additionally we had relatively frequent and loud noises from the ceiling ("eeeeeNNGNGNGNGNGNNG") which they couldn't fix. But not once did they suggest we move offices to any one of the 30+ empty ones downstairs.

In Spitalfields. It's big, and sparsely occupied. There are 6 (or more?) other WeWorks within a five minute walk and all are ultra-prime locations - not cheap. The attitude to spending is unbelievable.

It's a terrible place to work. We recently moved out of the shared, fixed desk room which was relatively quiet into a glass office. There is no sound insulation whatsoever, you can hear every recruiter on the floor speaking their patter down the phone (loudly, because they have earbuds in) on repeat all day every day.

I also think WeWork will collapse eventually, it's just so clearly unsustainable. Maybe the hope is that they become 'too big to fail' first?

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

#175

Post by [deleted] »

winningcontinue wrote: post #163
onion2k wrote: post #162

Earlier quoted context omitted.

I don't think it's a matter of wanting to "be hip", but a case of recruiting being a huge problem for most companies. Renting out the 'cool' co-working spaces of WeWork probably isn't their long term goal. If BigCo has exhausted the talent in their city they have three options left: employ remote workers, pay people to relocate, or open satellite offices and pay a little more than then the local businesses to get peo…

I don't understand why BigCo would ever go with the last option after talent exhaustion. The former two make way more sense.

[deleted]

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

#176

Post by sokoloff »

xkcd-sucks wrote: post #125
kemitche wrote: post #111

Earlier quoted context omitted.

My naive view is that it's similar to the reason some companies use AWS rather than running their own data center. That is, it's worth it to pay the premium to not have to manage their own space, and have the flexibility to scale up/down their usage a bit more quickly than locking into multi-year leases.

Real estate is a real pain in the ass for small startups; it eats up like several man-months of companies that have no people dedicated to stuff like this. I do think wework is bullshit, but thinking back to the process of moving a company your point makes sense. And in earlyish-stave companies the CEO / bigwigs are most involved with moving and corporations' decisions are no more economically rational than those of…

WeWork is better than opening a satellite office in pretty much the same way that renting a hotel room is better than buying a house in a location that you're visiting. Once you've proven you have traction and it's going to be sustained, it makes sense to transition to your own real estate (owned or leased), but in the early days, it's better to wildly "overpay" for temporary, flexible, easy space.

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

#177

Post by sokoloff »

paulcole wrote: post #133
spaceman_2020 wrote: post #37

Earlier quoted context omitted.

So many of these unicorns seem so stupidly simple in hindsight. I'm in St Petersburg right now and the taxi outside the train station quoted an initial rate of EUR 50 to drive a grand total of 6km (after haggling, "just" EUR 30). I booked an Uber (operated under Yandex Taxi in Russia now) and the total price was just EUR 5 Take stodgy, often scammy, and downright consumer unfriendly industries, add transparency and a…

Most estimates put the cost of driving (in the US) at around $.50 to $.60 per mile. Assuming this is somewhat on par with Europe. Guy’s costs were likely around $1.50. After Uber’s cut he’s “making” like $3? Take someone else’s money, spend it aggressively, pretend like you can fix things in the future, and viola - you have a unicorn.

The cost of driving a marginal mile is probably more like $0.15-$0.20/mile. The total cost of ownership of a newish car is $0.50-0.60/mile.

If an Uber driver is driving with a car that they were already going to own anyway, they only need to cover the variable costs.

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

#178

Post by bob2001 »

sonnyblarney wrote: post #53

"“valuation and size today are much more based on our energy and spirituality than it is on a multiple of revenue.”" Literally valuation based on 'spirituality'. Not only do I call 'bubble' but also 'BS'. Very wary of companies leveraging 'morality' in whatever form (esp. all the way up to 'Spirituality'), unless it's somehow deeply authentic (i.e. a company that makes 'green' eqipment can claim 'greeness' that's fin…

yeah I'm surprised more ppl haven't commented on this as well.

'Donald Trump of Vegans' is a nice line.

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

#179

Post by ForHackernews »

onion2k wrote: post #162
baxtr wrote: post #20

Earlier quoted context omitted.

The ones I saw were very busy, and, filled by large corporates that wanted to be hip. I think for them value proposition is that they are able to hire some hipster people who don't want to work in the old buildings and also build some marketing stories around their "labs". That said, I "worked" in a WeWork for about 6 months and it was just terrible. Tiny offices, lots of visual distractions, lots of noise, many part…

I don't think it's a matter of wanting to "be hip", but a case of recruiting being a huge problem for most companies. Renting out the 'cool' co-working spaces of WeWork probably isn't their long term goal. If BigCo has exhausted the talent in their city they have three options left: employ remote workers, pay people to relocate, or open satellite offices and pay a little more than then the local businesses to get peo…

There's also option four: raise salaries. Historically, that's what companies have done when the labour market is tight.

Though obviously somebody must have crunched the numbers and decided these WeWork things are a cheaper bet.

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

#180

Post by scarface74 »

ralph84 wrote: post #145
bitcoinmoney wrote: post #128

Earlier quoted context omitted.

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.

No there really weren’t people saying FANGs were overvalued at their IPOs.

Facebook - was profitable and only IPOd because they had to. They had too many investors.

Apple - IPOd in the 80s

Amazon - maybe

Netflix - wasn’t seen as a tech company. Their business was just shipping DVDs.

Google - was a clear leader and already profitable at their IPO.

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