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WeWork Isn’t a Tech Company

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Re: WeWork Isn’t a Tech Company

#151

Post by DebtDeflation »

tim333 wrote: post #100

I'm not sure the founder sees it as a tech or real estate company but something more: >In 2017, 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.” He has long maintained that categorizing WeWork as a real-estate concern is too limiting; it is a “community company” with huge ambitions. “We are here in order to change the wor…

>our energy and spirituality

>it is a “community company”

>“We are here in order to change the world,”

Can some explain to me what renting out shared workspaces has to do with any of this?

Re: WeWork Isn’t a Tech Company

#152

Post by fastball »

maratd wrote: post #108
chiefalchemist wrote: post #106

Earlier quoted context omitted.

They all need technolgy and came about because of the powerful handheld mobile device. The first three are at least software companies. Business and social changes aside, WeWork could have happened 20 years ago.

> They all need technolgy and came about because of the powerful handheld mobile device. I'm not sure why Uber is a tech company because you can order a taxi using your phone, but WeWork is not ... because you can reserve a room or space using your phone? Not all members pay for an office. Some of us are nomads and stay at whichever WeWork is convenient. We make reservations for space using our phone.

You've been able to book a taxi on your phone for decades - with your voice. Just like if WeWork had existed 60 years ago, you would've been able to book a space in your newest nomadic locale with a phone call.

The value prop of Uber was that you could be instantly and automatically matched with a nearby taxi (minimizing cost and time) and see those costs / timings in advance. That required[1] the internet and software, i.e. "tech".

[1] Ok, so hypothetically, you could've implemented Uber 60 years ago if the taxi company called every single one of their cabbies every time they got a phone booking, figured out which one was closest, sent them to your location, and then called you back to tell you "your cab will be there in 5 minutes". But tech made it VASTLY more efficient. Tech makes WeWork only marginally more efficient. Hence, not really a tech company.

In fact, I think "efficiency gains from developing tech" is probably the best way to determine if something is a tech company or not. SpaceX is a tech company because they're using advances in technology over the past 60 years, combined with their own advances in technology, in order to deliver a product (re-usable rockets) that is far more efficient than what we had before (and brings down cost appropriately).

Re: WeWork Isn’t a Tech Company

#153

Post by corodra »

dasil003 wrote: post #150
corodra wrote: post #147

Earlier quoted context omitted.

I can't remember where I heard this or who said it, but I do like it and use it as my own definition. A tech company is a company whose product is "easily" scalable with a few taps of the keyboard and clicks of the mouse. A game development company is a tech company. Selling one, two or a few thousand units is not that big of a deal. Now, we can argue that scalability in terms of cloud services is an issue. Think Ste…

What’s Uber?

A taxi company with an app that decided to just sub-contract its workforce.

Which was obviously brilliant and they don't need me to say that. But, I don't think it's a tech company. Adding drivers is not necessarily that easy. I know there's a metric-fuck-ton of them right now. But bandwidth to send a copy of software and hiring a new driver are two different things. Same with allocating cloud server space and doing a background check on someone. I think the definition needs somewhere in there, humans cannot be the bottleneck. Uber's bottleneck is in drivers (and municipal policies), not getting people to download and sign up for their app/service.

I mean seriously. What scales easier? Getting people to download an app or hiring drivers across the country that don't shank their passengers? Yes they did a good job at hiring a fuck ton of drivers quickly. But Carnegie did a great job at mass producing steel when others said it couldn't be done. Didn't make that a tech company either.

Re: WeWork Isn’t a Tech Company

#154

Post by Bagel »

dasil003 wrote: post #150
corodra wrote: post #147

Earlier quoted context omitted.

I can't remember where I heard this or who said it, but I do like it and use it as my own definition. A tech company is a company whose product is "easily" scalable with a few taps of the keyboard and clicks of the mouse. A game development company is a tech company. Selling one, two or a few thousand units is not that big of a deal. Now, we can argue that scalability in terms of cloud services is an issue. Think Ste…

What’s Uber?

By the definition above, clearly a “tech company”, no? Uber produces highly scalable tech, and can deploy it rapidly amongst a sea of contractors and riders- who are essentially consumers of the app.

Re: WeWork Isn’t a Tech Company

#155

Post by mbesto »

paxys wrote: post #10

I like that WeWork is finally forcing us to have the conversation about WTF a "tech company" even is. A company that sells software? Or one that employs a lot of engineers? Or companies that use a lot of tech in their operations? Companies with a presence in San Francisco and Kombucha on tap? Are big banks tech companies? Insurance providers? Hospitals, auto manufacturers, oil and gas... What isn't a tech company?

Tech isn't an industry, it's an operating model. The misnomer here is that it's being peddled as an industry in order to drive up valuations.

Re: WeWork Isn’t a Tech Company

#156

Post by Bagel »

corodra wrote: post #153
dasil003 wrote: post #150

Earlier quoted context omitted.

What’s Uber?

A taxi company with an app that decided to just sub-contract its workforce. Which was obviously brilliant and they don't need me to say that. But, I don't think it's a tech company. Adding drivers is not necessarily that easy. I know there's a metric-fuck-ton of them right now. But bandwidth to send a copy of software and hiring a new driver are two different things. Same with allocating cloud server space and doing…

Acquiring drivers can be seen equal to customer acquisition within a software company. Yes the bottleneck of Uber is recruitment, but is it also not customer acquisition at any software/“tech” company?

Re: WeWork Isn’t a Tech Company

#157

Post by mattrp »

tompetry wrote: post #143
rlucas wrote: post #20

It's a 1920s (pre-FDIC) bank, or a 2008-style risky financial instrument, like an Auction-Rate Preferred. WeWork's business model is "borrow short, lend long." That is, they accept very short term promises to pay (month to month leases from customers), and aggregate them to make very long term promises to pay (mutli year leases from suppliers). Keep the spread. This works as long as there are lots of customers who wi…

It's a very interesting thing they are doing though, one must admit. It really highlights to me the fact that pricing long-term leases is really hard. Companies (the tenants) are living, breathing things that change and evolve. Their staffing and office needs are constantly changing. Not to mention changes in remote working, be it 100% remote companies, or satellites within larger companies. This makes matching suppl…

Ive long held the view that there’s zero reason for them to be valued any higher than a REIT. Of course Reits typically generate a dividend and I don’t see we work doing that.... ever? Ps, I’ve also held the view since at least 2010 that Netflix shouldn’t be any higher valued than Lionsgate or hbo if it were its own entity. So you see where holding these views have gotten me. Ps, Spacex is a tech company.

Re: WeWork Isn’t a Tech Company

#158

Post by mattrp »

morpheuskafka wrote: post #133
nostromo wrote: post #24

Earlier quoted context omitted.

This isn't that dissimilar from lots of industries. Every airline that takes a loan to buy a plane is banking on future demand for air travel, for example. Or take Amazon Web Services, which is building data centers to lease out on a short term basis. Yes, there are tremendous risks involved, depending on the lease terms. But it's not at all unusual.

AWS is really a good comparison. It turned buying a server and getting an annual colo lease into "per-second" billing, and WeWork offers per-day pricing for office real estate instead of an annual lease.

That’s the aws of 2008. If you think that’s still what they do I would suggest revisiting your view. It’s not a very good comparison. I’d prefer to think of wework in the same ways that some might of thought of Enron.

Re: WeWork Isn’t a Tech Company

#159

Post by mattrp »

sharadov wrote: post #75
munk-a wrote: post #44

Earlier quoted context omitted.

I don't really buy that, WeWork is benefiting off of a demand that is constantly shifting hands - people who are using the workspace should be using it temporarily - maybe they're a contractor on sabbatical, maybe they're starting a company and don't have the momentum and size to consider a lease... but those needs will change. Airlines live an entirely different business, nobody but the super ridiculously rich will…

Your assessment of environs is right, they bought Meetup.com for that.

Does meetup have a revenue model?

Re: WeWork Isn’t a Tech Company

#160

Post by opportune »

briandear wrote: post #136
paxys wrote: post #10

I like that WeWork is finally forcing us to have the conversation about WTF a "tech company" even is. A company that sells software? Or one that employs a lot of engineers? Or companies that use a lot of tech in their operations? Companies with a presence in San Francisco and Kombucha on tap? Are big banks tech companies? Insurance providers? Hospitals, auto manufacturers, oil and gas... What isn't a tech company?

A tech company is a company that sells technology, not a company that uses it. An insurance company sells the product of insurance, how they do it is irrelevant — they still sell insurance. Apple is a tech company — they develop and sell technology. Uber is a tech company: they sell yield management systems to independent car owners who want to sell space in their car. A bank isn’t a tech company; they don’t sell tec…

By this argument, Google and Facebook aren't tech companies, since they make the vast majority of their revenues by selling advertising. Is that technology? The way in which they do their advertising perhaps is, but advertising itself is not really technology in the way a phone or copy of some software is.

I would argue that a tech company is a company which derives most of its real value through technology. And that it's a spectrum, not binary - companies that sell hardware and software licenses are more "tech" than companies that heavily leverage uniquely valuable technology to sell old-school goods and services. But those companies with uniquely valuable tech to sell old-school goods and services, like Google/FB (ads), Amazon (catalog retailer), Netflix (entertainment like cable) still derive most of their value from doing technological things, and I think that makes them tech companies, even though they don't directly sell tech

But still, WeWork is not really a tech company because their value isn't in their tech

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