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Critics say WeWork is an overvalued real-estate play

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Re: Critics say WeWork is an overvalued real-estate play

#131

Post by jeirje88382hj »

sillysaurus3 wrote: post #66
j4p3 wrote: post #17

Many people, including the author, skip the more interesting point in favor of the lazy critique: WeWork is not being valued by its investors as an office rental company. It's made the case that it is a business services marketplace, selling vendors' insurance and HR and legal and servers to as large as swath of the small business sector as it can grab with its fancy offices. It wants to own the app store for enterpr…

Not sure why people are negative about the core idea of WeWork. You get free beer, free coffee, bathrooms, an office, meeting rooms, phone booths with doors that close that you can also go work in whenever you want to be isolated, you can be there 24 hours a day, you have a keycard that works at all hours, and best of all, you're surrounded by startups and companies doing the same things as you. Meaning you can chat…

The meeting rooms are not all you can eat for your monthly spend. They give credits based upon spend. Once you burn them up (and you will cause it's a pittance in credits) you gouged after that.

Re: Critics say WeWork is an overvalued real-estate play

#133

Post by kafkaesq »

baxtr wrote: post #91

I worked in a wework Office for about a year. At first I thought the environment was great, I loved the free beer and the community. However, once we moved out, I realized how much more productive we were in our own office. We had - more space - less noise, in terms of sound and visually (you see everybody passing by through the glass and have to force yourself not to look at them. For a while we had some posters up,…

Of course self-leased speace is generally (way) better - if you can find it (at the capacity you need right now) and hire people to run it for you. WeWork's entire model relies on the fact that, while not it's not the swankest, most productivity-enhancing working spaces you've ever been in (far from it) -- it is available pretty much on tap, in at least some capacity, in key cities.

Remember all those outright shitholes many companies used to work in (in their bootstrap phases) at least? Or this whole "borrowing office space from a friend, until..." thing? Or, until not too long ago, literally using coffeeshops or restaurants as meeting rooms? WeWork seems to have succeeded in making that culture pretty much go away, at least.

Re: Critics say WeWork is an overvalued real-estate play

#134

Post by jeirje88382hj »

j4p3 wrote: post #17

Many people, including the author, skip the more interesting point in favor of the lazy critique: WeWork is not being valued by its investors as an office rental company. It's made the case that it is a business services marketplace, selling vendors' insurance and HR and legal and servers to as large as swath of the small business sector as it can grab with its fancy offices. It wants to own the app store for enterpr…

I don't think the specific services you can find are as valuable as the networking itself.

In 3 months in a WeWork I connected with a number of people. Some of them have moved on as the services they were offering didn't work out financially for them.

But we're still connected and most of the folks that moved on are onto more interesting endeavors. One knew I was in machine learning for healthcare and dinged me on a gig. I have one I love, but it would have been a nice option if I was looking.

Re: Critics say WeWork is an overvalued real-estate play

#135

Post by NN88 »

>A decade ago, Mr. Neumann was a small-time entrepreneur in his 20s living with his sister, a model, in her Tribeca apartment. Mr. Neumann, who was raised on a kibbutz in Israel, was struggling with his first startup idea—women’s shoes with collapsible heels—which failed to take off. His next venture was baby clothes with knee pads called Krawlers.

Who didn't see this coming?

Re: Critics say WeWork is an overvalued real-estate play

#136

Post by xapata »

tptacek wrote: post #79
sillysaurus3 wrote: post #66

Earlier quoted context omitted.

Not sure why people are negative about the core idea of WeWork. You get free beer, free coffee, bathrooms, an office, meeting rooms, phone booths with doors that close that you can also go work in whenever you want to be isolated, you can be there 24 hours a day, you have a keycard that works at all hours, and best of all, you're surrounded by startups and companies doing the same things as you. Meaning you can chat…

In a lot of markets, WeWork is a great deal. We just moved from Chicago West Loop WeWork to our first real office; we got what I think is a pretty amazing deal on our new office and it is still very difficult to beat the package WeWork puts together. But that's not the critique being leveled at WeWork here; the critique is, WeWork can't in the long run be profitable at these rates. In a lot of their spaces --- maybe…

Just as with many highly valued startups, you can think of WeWork as valued for the possible future business model rather than it's current one. If WeWork is able to transition to a business services company with essentially a captive market (its tenants), it'll be a very profitable company. Other such companies have a high customer acquisition cost. WeWork is betting it's more efficient to rent office space and have a mailing list than to pay Google for those same eyeballs.

Re: Critics say WeWork is an overvalued real-estate play

#137

Post by pcsanwald »

kafkaesq wrote: post #133
baxtr wrote: post #91

I worked in a wework Office for about a year. At first I thought the environment was great, I loved the free beer and the community. However, once we moved out, I realized how much more productive we were in our own office. We had - more space - less noise, in terms of sound and visually (you see everybody passing by through the glass and have to force yourself not to look at them. For a while we had some posters up,…

Of course self-leased speace is generally (way) better - if you can find it (at the capacity you need right now ) and hire people to run it for you. WeWork's entire model relies on the fact that, while not it's not the swankest, most productivity-enhancing working spaces you've ever been in (far from it) -- it is available pretty much on tap , in at least some capacity, in key cities. Remember all those outright shit…

exactly. Finding less than a 5 year lease in Manhattan is extremely challenging in my experience.

Re: Critics say WeWork is an overvalued real-estate play

#138

Post by jakemoshenko »

pcsanwald wrote: post #137
kafkaesq wrote: post #133

Earlier quoted context omitted.

Of course self-leased speace is generally (way) better - if you can find it (at the capacity you need right now ) and hire people to run it for you. WeWork's entire model relies on the fact that, while not it's not the swankest, most productivity-enhancing working spaces you've ever been in (far from it) -- it is available pretty much on tap , in at least some capacity, in key cities. Remember all those outright shit…

exactly. Finding less than a 5 year lease in Manhattan is extremely challenging in my experience.

They will almost always allow you to sublease though, which is its own horrible time sink to find a replacement tenant.

Re: Critics say WeWork is an overvalued real-estate play

#139

Post by arcticbull »

baxtr wrote: post #91

I worked in a wework Office for about a year. At first I thought the environment was great, I loved the free beer and the community. However, once we moved out, I realized how much more productive we were in our own office. We had - more space - less noise, in terms of sound and visually (you see everybody passing by through the glass and have to force yourself not to look at them. For a while we had some posters up,…

Same experience here in SF.

Re: Critics say WeWork is an overvalued real-estate play

#140

Post by tptacek »

xapata wrote: post #136
tptacek wrote: post #79

Earlier quoted context omitted.

In a lot of markets, WeWork is a great deal. We just moved from Chicago West Loop WeWork to our first real office; we got what I think is a pretty amazing deal on our new office and it is still very difficult to beat the package WeWork puts together. But that's not the critique being leveled at WeWork here; the critique is, WeWork can't in the long run be profitable at these rates. In a lot of their spaces --- maybe…

Just as with many highly valued startups, you can think of WeWork as valued for the possible future business model rather than it's current one. If WeWork is able to transition to a business services company with essentially a captive market (its tenants), it'll be a very profitable company. Other such companies have a high customer acquisition cost. WeWork is betting it's more efficient to rent office space and have…

That makes sense but if people are trying to level set it's worth knowing that WeWork is 0% of the way towards monetizing its subsidized tenant base this way. There's a "WeWork Services Store", sure, but there's nothing remotely interesting in it.
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