111–120 of 126 posts
As I was reading and reached: > To be clear, I’m not a journalist, nor a forensic accountant. Forensic accountant?? That reminds me of Snow Crash: > When she says, "Do you have any relatives in Afghanistan?" that's like a code phrase, it tells all of her spook gear to get ready, shake itself down, check itself out, prick up its electronic ears.
The biggest non-financial red flag for me was the glass office walls. None of WeWork’s non-corporate customers are doing anything remotely sensitive or important. During a downturn, these people will decide to go back to free Starbucks to hang out.
I hate graphs like the first one in this post. What is the graphical representation of value? The area of the box or the width?
What makes WeWork so unique and powerful that it managed to paint itself as a unicorn? AirBnB has network effect for the huge market of "a place to sleep at while travelling". This requires matching customers with providers frequently, and the same customer will use the same platform and a different provider. Uber has the same for "a car to take me somewhere". Again, repeat customers, different provider every time. W…
Earlier quoted context omitted.
I know they are known for hot desks and all, but that actually accounts for very little of their square footage. For a solo freelancer it is a nice to have. But have 6 people and growing, then it’s a different world. Hard to find places that aren’t WeWork. Get to 14 and growing still, and you are doing leases for expected size (say 65) and a long term lease. So you are getting much more than needed. Then you grow fas…
Who the hell is signing 10 year leases? 5 is standard. And why don't you have a good relationship with the landlord? I've always been able to upgrade to a larger space without needing to hold onto the previous lease long-term (just until another tenant is found). Granted, if you need truly flexible amount of space on a sub-yearly basis (both up and down), WeWork or other co-los are a better model despite the huge pri…
Why _do I_ have to sign a 5 year lease?
What makes WeWork so unique and powerful that it managed to paint itself as a unicorn? AirBnB has network effect for the huge market of "a place to sleep at while travelling". This requires matching customers with providers frequently, and the same customer will use the same platform and a different provider. Uber has the same for "a car to take me somewhere". Again, repeat customers, different provider every time. W…
Companies like Google and Facebook got investors thinking that a tech thing that a lot of people used must be worth a lot of money.
Uber came along and legitimately made something that a lot of people loved, and if you didn't look too hard, it looked like a tech thing. Plus it spent years getting bigger and bigger rounds of investment, so it looked like a rock star. Everybody wanted to be "Uber for X", never mind that Uber was losing money hand over fist, still does, and may never stop.
WeWork went with the same formula, hoping to cash in similarly: Uber for office space! Shiny thing that people like in a market that is a pain in the ass! Amazing growth! Sure, the technology gloss was a little thinner, a little hazier. But the CEO was even more arrogant, more of a performative visionary than Kalanick, so that compensated for a while.
Unfortunately for WeWork, Lyft and Uber IPOd and didn't do so well. Tesla's not looking so healthy either, and let's not forget Theranos. So investors are starting to get wise to the fact that even if a "tech visionary" has gotten investment, grown quickly, and gotten a lot of good press, it doesn't mean it's a good stock to buy.
So yes, from an analytical perspective, it makes no sense. An oversupply of investment money and tech hype meant a lack of discipline, meaning a dreamer or a scammer (if in the end there's a difference) could try to build an empire, and investors would either fall for it or believe that they had a good chance of cashing out in an IPO before the house of cards collapsed. (For a parallel example, consider Groupon, which is now trading at 10% of its IPO price.)
Earlier quoted context omitted.
My previous employer would send an employee with a handtruck each Friday to a local liquor store to bring back beer and wine for that evening. Hard to imagine doing it more economically than that.
My claim is not that WeWork has some economic advantage in how they distribute alcohol to workers, merely that they have a product that is appealing to 20-30 year olds, and companies want to (presumably) piggy back off it to hire top young talent. It’s the entire package, things like interior decoration, tech, locations, name brand, etc. What’s that worth is debatable but I think it’s worth more than zero.
It comes up on HN frequently that what “talent” really wants is an office with a closing door so that they (we) can concentrate. WeWork offers the polar opposite of this experience by design. A company that chooses to base itself in a WeWork is cutting itself off from talent.
I think it’s worth more than zero.
It’s also possible that it’s worth less than zero.
When my company started building an office overseas, they looked first at a new development built by a pension fund. Long story short our company would have had to have a facilities person locally for months on end to coordinate this. Lots of things lost in translation - the construction and real-estate industry have many local norms and cultures. For example, the US facilities people assumed to have many flexibilities how the office would be built out while the local landlord had more of a “take it as it us or go away” attitude - which is how real-estate deals are done in this city. Negotiations dragged on for months. Project got delayed. It was a nightmare, we didn’t know where people would be working as our team was growing.
Meanwhile I figured WeWork would open their first offices in the city. I connected them to facilities. Turns out we already rent a space in NYC - so connect them to the rep, moved in within two months. Problem solved, and the product we get (AC everywhere, office design) is a few notches better than what we would have gotten elsewhere.
WeWork also said once the office size gets stable they could build one out for us - with our brand and separate entrance. So, I see it more as an outsourcing shop for facilities departments, whose moat is the experience of doing this at scale - internationally and for many customers. If they get their act together this could be just as viable of a strategy as it was for KPMG, Deloitte et al. in accounting.
Earlier quoted context omitted.
Forensic Accounting is A Thing: https://www.acfe.com/career-path-forensic-accountant.aspx
Apparently my meaning got lost (as also visible from the downvotes). I meant those two words made me immediately think of the dire conclusion drawn up later: SEC investigation, crimes committed and so on.