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WeWork IPO Shows It's the Most Magical Unicorn

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Re: WeWork IPO Shows It's the Most Magical Unicorn

#141

Post by mpswardle »

tomhoward wrote: post #69

I have a bit of knowledge of the co-working industry. I’m good friends with the founder of the first and long-dominant tech/creative co-working space in my Australian city, and I served on its advisory board in the past couple years, through what turned out to be a distressed sale of the business to its landlord, after it became insolvent and unsalvageable. There are several fundamental flaws with the concept that ma…

>1) Difficult/unpredictable/uncontrollable customer retention

I don't think this is the case in a lot of WeWorks anymore, i work in a WeWork and the majority of companies are now bigger corporates.

Goldman Sachs just took 2 floors in the WeWork next to us.

It's actually quite hard to find a largeish Co-Working space in London as it moves so quickly and so much space is being taken by corporates buying entire floors.

Re: WeWork IPO Shows It's the Most Magical Unicorn

#142

Post by bertil »

tomhoward wrote: post #69

I have a bit of knowledge of the co-working industry. I’m good friends with the founder of the first and long-dominant tech/creative co-working space in my Australian city, and I served on its advisory board in the past couple years, through what turned out to be a distressed sale of the business to its landlord, after it became insolvent and unsalvageable. There are several fundamental flaws with the concept that ma…

I’m wondering if all those problems aren’t WeWork’s moats.

They might not be able to do that well, but at scale, they can have most of that into effective processes. They are the only one who will have international comparison and dozens of addresses inside a city, so they can tell what to do near the historical center vs. the up-coming industrial run-down.

Having a great place to work is increasingly important and as you say, it’s hard to do. But it’s the one thing that you can do to attract workers that isn’t paying 5% more than competition — so unless WeWork isn’t 5% of salary more expensive than having your own office.

On a more cynical note, companies have been trying to treat support staff and strategic-decision-making executives differently: the cleaning staff, cooks at many tech companies are external contractors seemingly for that reason. That separation is being disputed when there’s a close tie between support and the main company. Having a brand like WeWork would severe that tie.

Re: WeWork IPO Shows It's the Most Magical Unicorn

#143

Post by SiempreViernes »

fastball wrote: post #97
tomhoward wrote: post #86

Earlier quoted context omitted.

> So, does scale lend _any_ benefit? Certainly the "network" of locations might help...but what % of tenants are really and truely jet-setters off to many major cities, versus those that stay close to home and just need a regular space out of the house. I don't think scale is that vital in this view. Spot on here. They are building for a world in which everyone is location-and-asset-independent. Don't need a car beca…

WeWork is planning for the future, when we'll have instant teleportation between cities (obviously).

Wouldn't you just go home at the end of the day then?

Re: WeWork IPO Shows It's the Most Magical Unicorn

#144

Post by cm2187 »

tomatocracy wrote: post #140
cm2187 wrote: post #139

Earlier quoted context omitted.

Plus I believe the City of London has a policy of avoiding owner occupied apartments blocks. Once a building is owned by 600 people, there is no way you can buy it, demolish it to build something more adapted to the new demand.

I'm not sure that's true, and in any case they can't really enforce that - if a building owner wants to sell individual units, they can sell them. The obvious counterexample to your point is the Barbican. Much of the Barbican is owner occupied and the vast majority of the flats there are privately owned (ie not local authority/housing association). I'm not sure but I think the Barbican still houses the majority of re…

It is possible that this policy didn’t exist in the 70s. To be honest I read that 10 years ago when I was looking into commercial real estate finance. They may also have evolved since.

Re: WeWork IPO Shows It's the Most Magical Unicorn

#145

Post by bertil »

OkGoDoIt wrote: post #128

One thing I never see mentioned in any analysis of WeWork is Regus, which does more or less the same thing but with less fanfare. They’ve been running coworking spaces and short term office rentals around the world for a long time. Do the two companies have similar business models? Can we look to Regus’s long history to better analyze WeWork’s prospects? It’s not like WeWork invested co-working spaces, so I don’t und…

I was genuinely surprised to read your impression of Regus. I worked at their offices twice and both times, I was surprised they were still in business.

The first time I’ve heard about WeWork, I was excited precisely because I thought Regus was hogging a necessary service.

Re: WeWork IPO Shows It's the Most Magical Unicorn

#146

Post by joelhaasnoot »

OkGoDoIt wrote: post #128

One thing I never see mentioned in any analysis of WeWork is Regus, which does more or less the same thing but with less fanfare. They’ve been running coworking spaces and short term office rentals around the world for a long time. Do the two companies have similar business models? Can we look to Regus’s long history to better analyze WeWork’s prospects? It’s not like WeWork invested co-working spaces, so I don’t und…

Regus is the 1990s business services company that has never heard of the internet...

Re: WeWork IPO Shows It's the Most Magical Unicorn

#147

Post by notahacker »

OkGoDoIt wrote: post #128

One thing I never see mentioned in any analysis of WeWork is Regus, which does more or less the same thing but with less fanfare. They’ve been running coworking spaces and short term office rentals around the world for a long time. Do the two companies have similar business models? Can we look to Regus’s long history to better analyze WeWork’s prospects? It’s not like WeWork invested co-working spaces, so I don’t und…

WeWork has a lot of brand differentiators from Regus (free beer and networking vs quiet efficient blandness for getting stuff done. Different strokes for different folks). But yes, there's nothing remotely new about the model (Workspace Group has also been doing it for three decades in the UK) and whilst these companies are certainly profitable, their valuations are somewhat closer to the real world.

Re: WeWork IPO Shows It's the Most Magical Unicorn

#148

Post by danpalmer »

OkGoDoIt wrote: post #128

One thing I never see mentioned in any analysis of WeWork is Regus, which does more or less the same thing but with less fanfare. They’ve been running coworking spaces and short term office rentals around the world for a long time. Do the two companies have similar business models? Can we look to Regus’s long history to better analyze WeWork’s prospects? It’s not like WeWork invested co-working spaces, so I don’t und…

I had a look at working in a Regus when I was on a long trip to a foreign country. The whole feeling was super stuffy.

I first had to have a sales call with someone who didn't really seem to know what they were talking about, then he wanted me to come and visit, then it became apparent that he was talking about the wrong location. The space was a very boring environment with a cheap fit-out. The price wasn't great.

I ended up working in a local co-working space. I walked in off the street and the owner showed me around. I said I was only there for a short period and he suggested some custom pricing. He was friendly and knew what he was talking about, the office manager was friendly and again had answers to everything I wanted to know and more. The space was interesting and felt nice to be in, while still providing a good working environment to put my head down and work in.

I've never worked in a WeWork, but I've visited a bunch, and they always strike me as much closer to the latter than the former.

Re: WeWork IPO Shows It's the Most Magical Unicorn

#149

Post by buboard »

prawn wrote: post #125
jngreenlee wrote: post #77

Earlier quoted context omitted.

I really like your analysis here and it made me think. Ultimately, for control of many of these issues, a localist approach is superior..understand the local culture, etc. Maybe a coworkery in La Jolla would have surfboard racks and a tacit understanding that surfing comes first...so allowance for wet gears (and showers) might be needed. Maybe a location in Boulder has community climbing gear and/or a bouldering wall…

Smaller-scale co-working is also more affordable. You don't usually have a community manager for one thing. You don't impress people with fit-out or free beer or whatever. You just provide a likeable, reasonable space for people to share. I co-own a 15-18 desk space and while we have churn, our setup costs were not especially high, we don't have staff (we are tenants ourselves) and we largely ignore the competition.…

This. Fancy offices everywhere are an utterly unsustainable bubble. Remote work is growing strong and coworking places will become increasingly popular, but in the end people want a reasonably good place to work that is cheap, not a fancy socializing place. Wework would make sense if they provided this at large scale, instead they cater to a lifestyle crowd.

Re: WeWork IPO Shows It's the Most Magical Unicorn

#150

Post by sgt101 »

lifeisstillgood wrote: post #39

The City of London is having a skyscraper boom at the moment - two major 100+ floor buildings are going up and you can hardly turn a corner without some crane or building work going on. I personally (and without any empirical evidence) think that there is no way London needs this much more office space, partly because "Brexit China Tariffs", but mostly because remote working and "just not in the office five days a we…

The reason for the boom is that building skyscrapers got a lot cheaper in the last 10 years as the techniques and approaches have been worked out in the Middle East and China. It's not really anything to do with the economy - just the chance to create a lot of office space cheap. I think that the other factor is the Queen Elizabeth line which will bring a lot of commuters from the west of london and outlying areas into city of london range. I expect docklands to be the big loser.
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