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Some WeWork Board Members Seek to Remove Adam Neumann as CEO

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Re: Some WeWork Board Members Seek to Remove Adam Neumann as CEO

#161

Post by [deleted] »

hbbio wrote: post #100
thedogeye wrote: post #53

WeWork is a useful product. Office real estate is broken for startups. Landlords make us take 5-10 year leases when startup planning horizons are almost never longer than 18 months. WeWork earning 30-40% margins by allowing us to take shorter terms that better fit our needs. Should be a good business.

There is clearly a market for WeWork... and many competitors. WeWork is and will be a great company, no matter what. WeWork main competitor is Regus, founded in 1989. Regus is now present worldwide with revenues of 2.535 billion GBP (2018). Their market cap is a mere 3.68 billion! There are also tons of smaller companies in that sector which are not international (mostly 1/2 countries) with much lower valuations. So,…

[deleted]

Re: Some WeWork Board Members Seek to Remove Adam Neumann as CEO

#162

Post by emagdnim2100 »

Everyone likes to pile on WeWork, and I get it, but as someone who dealt with both startup and solo office leases in the pre-WeWork era: my God is WeWork's model comparatively amazing as a customer. The spaces are nice, there are no headaches, you can purchase the exact amount of space and duration you need, and you have a guaranteed decent place to do some work or just hang out anywhere you travel.

The "no competitive advantage / anyone can do this" crowd is sort of ignoring the fact that no one did, at least for folks that care about the things I mention.

Re: Some WeWork Board Members Seek to Remove Adam Neumann as CEO

#163

Post by samsonradu »

cure wrote: post #159
chrisseaton wrote: post #145

Earlier quoted context omitted.

Have you ever been in a Regus office? They're horrible spaces. They don't get it . WeWork is a lot nicer. That's why they're worth a lot more.

Yeah. Regus offices are dreadfully bland. Also, they nickel and dime you for every little thing (you want an hour of wifi for that meeting room you booked? it's going to cost you...). Regus is also very expensive, as office space goes.

This could be due to the fact that margins are slim and they're trying to make a profit?

Re: Some WeWork Board Members Seek to Remove Adam Neumann as CEO

#164

Post by komali2 »

emagdnim2100 wrote: post #162

Everyone likes to pile on WeWork, and I get it, but as someone who dealt with both startup and solo office leases in the pre-WeWork era: my God is WeWork's model comparatively amazing as a customer. The spaces are nice, there are no headaches, you can purchase the exact amount of space and duration you need, and you have a guaranteed decent place to do some work or just hang out anywhere you travel. The "no competiti…

There's definitely pay per 6 minute desks in every city I've worked in in the USA, did you mean something else?

Re: Some WeWork Board Members Seek to Remove Adam Neumann as CEO

#165

Post by CPLX »

rossdavidh wrote: post #86
notyourday wrote: post #74

Earlier quoted context omitted.

> Preferred shares existed before Facebook, and it may not the be norm, but there's a reason we no longer see the hostile takeovers from the 80's. That has nothing to do with preferred shares. Most of public companies adopted poison pills aka shareholder right protection plans which work along the lines of this: 1. If someone acquires a certain percentage of company shares without board of directors agreeing to it, t…

While there are issues with Zuckerberg, I think it bears noting that the FB IPO wasn't done because he needed the money, but rather because they were forced too by law because too many people had ownership. So, he didn't give great terms in the IPO because he didn't really need any cash; FB was already cashflow-positive. This is a marked contrast to WeWork.

That's not correct at all, there's no rule requiring companies to go public.

And even if he didn't need cash, an IPO creates an incredible opportunity to use shares as a currency to fund high-dollar acquisitions, which he has most certainly taken advantage of.

Re: Some WeWork Board Members Seek to Remove Adam Neumann as CEO

#166

Post by golemiprague »

Gene_Parmesan wrote: post #87
shartshooter wrote: post #58

Earlier quoted context omitted.

Short term rentals are an inferior good. An economic downturn could lead to more business for them

Any earlyish startup (smaller than a certain size) that's facing cash flow problems during a larger economic downturn would likely just move to a remote-only model, maybe with very short-term rentals for high-stakes meetings. No, it's not ideal, but if the survival of the business is at stake, cutting out your coworking fees seems like the easiest way to reduce overhead. I'm no economist, but to me, it seems that sho…

In a small startup the cost of one employee is usually much more than the cost of renting desks so I don't see how moving to work from home will solve the problem, cutting 20% from everybody's salaries will give you better results.

Re: Some WeWork Board Members Seek to Remove Adam Neumann as CEO

#168

Post by cylinder »

crb002 wrote: post #160
soniman wrote: post #130

This has all happened before. The proto-WeWork was called HQGlobal and the firm behind it was Frontline Capital. The whole thing unraveled in the 2000 bust as the tenants all went out of business and canceled their leases at the same time. WeWork is not going to be pretty when the economy turns. Bill Ackman backed Frontline Capital and it pretty much sunk his first hedge fund, Gotham Capital.

It can work, but they need more anchors. Stripe, Gitlab, ... companies that are remote but have workers prefer to cowork. Economic downturn might actually help them if they can gobble long term low leases. More unemployed also means more consumer base outside big corporate America. Their biggest threat is small mom and pop coworking spaces like Gravitate in DSM. Geoff wouldn't sell for less than a massive premium, an…

Why on earth would stripe pay a middle man like WeWork to manage their office and lease?! Stripe is looking at buying an entire building. I'm pretty sure they can handle a 15 yr lease just fine. And don't need WeWork staff to decide what their office kitchens need.

Re: Some WeWork Board Members Seek to Remove Adam Neumann as CEO

#170

Post by CognitiveLens »

wpietri wrote: post #80
thedogeye wrote: post #53

WeWork is a useful product. Office real estate is broken for startups. Landlords make us take 5-10 year leases when startup planning horizons are almost never longer than 18 months. WeWork earning 30-40% margins by allowing us to take shorter terms that better fit our needs. Should be a good business.

Right, that's the theory, which is how they got this far. But that's not a new thing; companies have been in the same business for years. WeWork's valuation is wildly out of proportion to its competitors. WeWork probably does have an advantage specifically for tech startups. But startups are definitionally not a large market, nor are they generally a good one. When we're small, we're cheapskates. And then we pretty q…

This take makes a very clear argument, but I think it's important to question that, as a company grows, it is generally "willing and able to deal with building owners directly" - a similar argument could have been made for the early days of AWS, when it seemed like a great way for startups to avoid managing low-traffic, scalable infrastructure, but redundant for companies that had the resources to manage their own servers. AWS has shown how successful a 'platform middleman' can be, even for very large companies.

WeWork is betting on taking a similar track - sure, companies _could_ decide they want to build out expertise in leasing and managing real estate space, but it can actually help them focus on their core business more by leaving it to another company that provides the 'platform'. The growth of WeWork's enterprise offerings and general awareness of how to pitch to mid- and large-size tenants indicates that growth projections are not pinned to a startup-driven economy.

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