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WeWork Isn’t a Tech Company

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Re: WeWork Isn’t a Tech Company

#161

Post by mattrp »

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?

There’s a helpful framework for this conversation created by Salim Ismail called exponential organizations. Instead of trying to bucket companies as tech or non tech, he recommends you look at their attributes to determine whether or not they are capable of exponential growth. For example, I think their case study of github indicated it was one of the few companies that had all of the possible attributes for exponential growth nailed. Anyway I don’t want to spend a bunch of time regurgitating the idea here but it might be helpful to take a look at it.

Re: WeWork Isn’t a Tech Company

#162

Post by tehwebguy »

chiefalchemist wrote: post #110
polygotdomain wrote: post #66

Earlier quoted context omitted.

Each WeWork office has an SPE that's just for that lease. Every landload wants WeWork on the lease, but won't get it, as WeWork tends to have significant leverage with either the space that they're going after or the desire to have WeWork on the rent roll. When things are booming, WeWork is advantageous for landlords, and appraisers/the market/potential buyers will underwrite that space positively. However, there's m…

> The losers in the WeWork deal are the landlords, as they're bearing a lot of the risk, and get minimal upside. Couldn't this be interpreted differently? That is, landlords are having less and less choice. Something from WW is better than an empty building. Is WW a canary of sorts? It tells us about changes in the economy (less growing small to mid-size companies in major metro area?), as well as the health and stre…

Yeah like is it even really downside?

Tenant defaults on their lease? OK, kick them out and get someone else in. What's the big deal?

Re: WeWork Isn’t a Tech Company

#163

Post by CrazyStat »

rhacker wrote: post #146
CrazyStat wrote: post #124

Earlier quoted context omitted.

Uber is a tech company because their primary business is providing an app. If they owned or leased a million cars to provide their service then they would not be a tech company. If WeWork was AirBnB for work spaces then I'd call them a tech company. But they're not.

So you're saying Uber is a tech company for being what it is. But it wouldn't be a tech company if it is exactly what it is today but also owns the cars the driver's use? So by that logic if Uber ever does migrate completely to a self-driving taxi system, it is no longer a tech company.

Yeah, pretty much. They would be a fleet management company at that point. They might be more high-tech than most fleet management businesses, but their core business would be fleet management, not tech.

Re: WeWork Isn’t a Tech Company

#164

Post by tehwebguy »

DebtDeflation wrote: post #148
arcticbull wrote: post #114

Earlier quoted context omitted.

Stripe is absolutely a tech company. They're a B2B SAAS company. They provide software that connects e-commerce platforms with actual payment processors. Uber isn't at taxi company, since it doesn't own or operate taxis. Conceptually it's a platform for connecting independent taxi operators with customers, like Expedia or Craigslist or eBay. Airbnb isn't a hotel company, since it doesn't own or operate hotels. Concep…

>Uber isn't at taxi company, since it doesn't own or operate taxis. Conceptually it's a platform for connecting independent taxi operators with customers Uber is a moonshot bet on re-imagining transportation when autonomous vehicles become a reality. If that reality never materializes, Uber either raises prices and sees its growth rate and valuation crash back down to earth or it goes out of business.

At least nobody said Uber is a "data" company like they used to. Five years of Uber telling me the driver is "5 minutes away" for 20 minutes straight when I request a pickup at LAX tells me they don't even look at their data!

Re: WeWork Isn’t a Tech Company

#165

Post by braythwayt »

DebtDeflation wrote: post #148
arcticbull wrote: post #114

Earlier quoted context omitted.

Stripe is absolutely a tech company. They're a B2B SAAS company. They provide software that connects e-commerce platforms with actual payment processors. Uber isn't at taxi company, since it doesn't own or operate taxis. Conceptually it's a platform for connecting independent taxi operators with customers, like Expedia or Craigslist or eBay. Airbnb isn't a hotel company, since it doesn't own or operate hotels. Concep…

>Uber isn't at taxi company, since it doesn't own or operate taxis. Conceptually it's a platform for connecting independent taxi operators with customers Uber is a moonshot bet on re-imagining transportation when autonomous vehicles become a reality. If that reality never materializes, Uber either raises prices and sees its growth rate and valuation crash back down to earth or it goes out of business.

It’s also a moonshot bet that when autonomous vehicles become a reality, Uber will wind up on top. I don’t know about that at all.

IBM owned everything in sight in computing, amd when PCs cam along, it improbably wound up owning them for a short while too...

Then MS took over. They owned everything in sight, but stumbled when the Internet came around, and then again in mobile. They’ve roared back, but they don’t own everything in sight.

Uber’s valuation doesn’t leave room for stumbles and settling for roaring profitability. It’s a bet that when the inflection point comes, they will own everything and keep owning everything.

It could happen, but it takes more than just autonomous vehicles becoming a reality for their valuation to become real.

Re: WeWork Isn’t a Tech Company

#166

Post by braythwayt »

Apocryphon wrote: post #137
Thrymr wrote: post #127

Earlier quoted context omitted.

In this context I take "tech" to mean software, as in arbitrarily scalable with an exponential growth curve. (Not that that can last forever in software, either, but it is growth potential that drives valuations.)

While you're not wrong, aliasing tech (or even "high-tech") to mean exclusively software seems quite insulting to the rest of technologies.

Here’s a proposal:

“Technology” means the same thing it always has, but the abbreviation “Tech” is slang for computing, the subject of the current industrial revolution.

Re: WeWork Isn’t a Tech Company

#167

Post by bradleyjg »

secabeen wrote: post #70
polygotdomain wrote: post #66

Earlier quoted context omitted.

Each WeWork office has an SPE that's just for that lease. Every landload wants WeWork on the lease, but won't get it, as WeWork tends to have significant leverage with either the space that they're going after or the desire to have WeWork on the rent roll. When things are booming, WeWork is advantageous for landlords, and appraisers/the market/potential buyers will underwrite that space positively. However, there's m…

Are those SPEs durable against legal challenges that pierce the veil and eliminate the protections for We?

Generally speaking courts are much more reluctant to look behind special purpose vehicles in contract than they are in tort, especially so when dealing with sophisticated parties.

As polygotdomain wrote landlords know that want We on the lease, ask for it, don't get it, and sign anyway. Short of a smoking gun showing outright fraud courts are unlikely to disregard that bargain.

Re: WeWork Isn’t a Tech Company

#168

Post by simonh »

dsl wrote: post #105
goatinaboat wrote: post #80

Earlier quoted context omitted.

Maturity transformation, to give it its proper name, isn’t inherently a bad business; it’s how your bank transforms your weekly or monthly pay packet into a 25-year mortgage. But - and here is the crucial point - it is not tech .

Uber isn't tech, it is a taxi company. Stripe isn't tech, it is a payment processor. Airbnb isn't tech, it is a hotel. SpaceX isn't tech, it is a defense contractor.

All those companies compete in those domains using novel technology. What is the novel technology in WW?

Re: WeWork Isn’t a Tech Company

#169

Post by momokoko »

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…

Because someday, if it works out, they won't be on the lease at all. Real estate owners will pay them a fee for their facility to be in the WeWork network. The current leases they hold are there to get the flywheel going on the network effect.

Re: WeWork Isn’t a Tech Company

#170

Post by sverhagen »

tehwebguy wrote: post #162
chiefalchemist wrote: post #110

Earlier quoted context omitted.

> The losers in the WeWork deal are the landlords, as they're bearing a lot of the risk, and get minimal upside. Couldn't this be interpreted differently? That is, landlords are having less and less choice. Something from WW is better than an empty building. Is WW a canary of sorts? It tells us about changes in the economy (less growing small to mid-size companies in major metro area?), as well as the health and stre…

Yeah like is it even really downside? Tenant defaults on their lease? OK, kick them out and get someone else in. What's the big deal?

If they've discounted upfront there going down overall...?
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