Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Critics say WeWork is an overvalued real-estate play

wsj.com

Post reply on HN
Print view View original

141–150 of 183 posts

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

#141

Post by bobx11 »

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,…

Something I often see overlooked in critiques of the wework buildings:

Their offices are vastly different in renter demographics, I have found after working from different offices on an ongoing basis. Even within the same city you will find a vastly different feel from building to building. Boston, New York, and San Francisco have multiple buildings that are quieter and noisier, some with mostly mature companies and some with all single person co-working renters.

It's not perfect, but as a company with up to 10 people or a need to have distributed office space... I'm a huge fan over the last couple years.

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

#142

Post by lloyd-christmas »

BillinghamJ wrote: post #121
linkregister wrote: post #86

Earlier quoted context omitted.

You think the entire B2B business model is fragile? Only consumer-facing companies are resilient enough for you?

Relying on a single client/company for 50% of your revenue puts you in an extremely fragile position. Very common reason for failure in B2B companies - relying on a single big fish which will make or break the company.

But that isn't what I said. I said I get 50% of my clients from the network, not that I need the network to get 50% of my clients. They are drastically different things. It's client acquisition cost. Why pay to go apple picking when I have an orchard in my back yard?

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

#143

Post by iamben »

mv4 wrote: post #128
iamben wrote: post #82

Earlier quoted context omitted.

Annecdotaly many of the people I meet in WeWork aren't running startups. Just small businesses that don't want to work from home, or are a few people in size and don't want to have the hassle of renting office space, renting broadband, cleaning, fridges, coffee machines, etc. Yeah, of course there is table tennis and coffee and whatever else. But it's a bit like buying a mattress. If you have to spend half your life…

Softbank has an office there.

Indeed. Plenty of architects, solicitors, whatever else. It just makes life easy.

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

#144

Post by Alex3917 »

cotterphinney wrote: post #122
Alex3917 wrote: post #117

Earlier quoted context omitted.

Beer aside, every WeWork I've ever been in seems to have dozens of fridges stocked to the brim with rancid milk. It's weird that they have custom furniture but can't even get their shit together on the most basic issues.

THANK YOU. At first I was very confused as to why there were so many half-full milk jars in the fridge but it soon made sense. I don't think this is WeWork's "fault" in that Ronnybrook milk only seems to last about two hours after opening, but they should really buy another brand.

It's not just the opened ones. Every time I go into a WeWork I usually end up opening several things of milk to see if there are any that haven't gone bad, and there almost never are. It's like they're turning off the refrigerators at night or something.

It's literally been a problem for several years. The company even acknowledged the problem on Twitter at one point, but didn't bother fixing it.[1] It shouldn't be that complicated to provide non-rancid milk for the coffee. Even in my home fridge milk lasts two weeks after being opened, and that's several degrees warmer than it would be if milk were the only thing being stored in it.

[1] https://twitter.com/i/web/status/840264145467518978

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

#145

Post by Invictus0 »

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…

> custom-designed

So are the plastic chairs you get at Walmart. This is a fixed cost. Custom design them once, order a million of them and leverage economies of scale.

> Free beer

Beer by the pallet is $2.30 a can, rent is around $2200. Even if you drink 2 cans a day, its still only about $350 a month in costs. Even if it's a loss, it's a good loss leader and the economies of scale will eventually work out. Their potential for profit is when people start saying, WeWork, feed us! and they charge such and such to manage the whole food delivery and make a nice premium on that, and whatever other services you guys would want.

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

#146

Post by eldavido »

pcsanwald wrote: post #78
incomplete wrote: post #39

Earlier quoted context omitted.

actually, i beg to differ. my wife has a 90% remote job and has a desk @ wework in berkeley. i've met a ton of her weworkmates and while a large percentage are entrepreneurs, many are remote workers or self-employed. even the small amount of infrastructure that wework provides to it's members is incredibly useful: wifi that always works, coffee, lounge area, meeting/phone rooms and generally a quiet place to focus an…

I agree. I wonder if most people in this thread saying that renting your own space is cheaper has ever really done this. I have, a bunch, and keeping the lights on is not free in terms of time/money. At a small company, this means either you hire someone to handle all this stuff, or make the employees do it. Either way, running an office yourself ends up being expensive.

I pay $400/month for an office for four. Probably another 100-200/month for random services like Internet access via an ISP, general commercial liability insurance I'm required to carry by my landlord, and other random stuff like, idk, paper.

You absolutely can get a much cheaper office than WeWork. Maybe not if you focus is MEGA GROWTH and you're going to hire 100 people in the 5 days it takes to get a basic network setup going (calendar time, not wall clock - ISPs take time). But that's not the game I'm playing, been there done that, and the place I worked just got bought for about 1/5th of the capital it raised, so I'm kinda over it.

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

#147

Post by techsupporter »

nodamage wrote: post #100
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…

> Did I mention you're surrounded by empty rooms with doors that close? I mean hello, you get a door! It closes! Not sure if this is the case for all of their locations, but the doors (and walls) were made of glass at the WeWork we rented from in Seattle, which meant there was zero soundproofing and I was constantly hearing conversations from the people in adjacent offices. It was incredibly distracting and we only l…

This seems to be the case at all of the "rent a small workspace"-type places I've tried in Seattle, with or without regular doors. Ballard Studioworks has virtually no insulation and has a lot of noisy businesses or just people who like to blast music at concert levels. Activspace in Lake City was a little better but the floors shook every time someone moved a piece of furniture. Wework Holyoke was like working in a fishbowl with really nice furniture.

I dunno, maybe I'm just too picky. I don't want a community or all of that. I just want a place that isn't where I live that's quiet, has Internet access and bathrooms, and the rent doesn't have a comma in the dollar amount.

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

#148

Post by tptacek »

Invictus0 wrote: post #145
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…

> custom-designed So are the plastic chairs you get at Walmart. This is a fixed cost. Custom design them once, order a million of them and leverage economies of scale. > Free beer Beer by the pallet is $2.30 a can, rent is around $2200. Even if you drink 2 cans a day, its still only about $350 a month in costs. Even if it's a loss, it's a good loss leader and the economies of scale will eventually work out. Their pot…

We priced out comparables from similar vendors (I really liked those couches) and suffice it to say the unit costs you were getting were not competitive with Wayfair. They're high-end leather modular sectionals. It's not cheap.

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

#149

Post by DonHopkins »

nwah1 wrote: post #113
pram wrote: post #112

Earlier quoted context omitted.

WeWork actually has this, believe it or not. https://www.welive.com/

For some reason, this strikes me as creepy. Like joining some sort of corporate cult, where you get to live inside an office 24/7.

It's alive!!!

https://www.youtube.com/watch?v=QuoKNZjr8_U

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

#150

Post by jordanb »

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…

> It wants to own the app store for enterprise services.

For this to work the way an app store works they would have to be able to control access by service providers to their tenants. Like, if you're a lawyer and you want to meet with a WeWork tenant you have to pay them 30%. I highly doubt that they could pull that off without getting stopped either by the market or by the law.

Post reply on HN