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WeWork parent pulls IPO following pushback: sources

reuters.com

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Re: WeWork parent pulls IPO following pushback: sources

#211

Post by hef19898 »

jsloss wrote: post #93
ackbar03 wrote: post #56

Earlier quoted context omitted.

This gets me thinking. They validated or at least thought they validated their idea because they gained traction at the start correct? But clearly they didn't validate the business because the price point wasn't at a profitable level? Was this the mistake? Or is it that the price point allowed for marginal profits and they thought that by scaling up it would cover the fixed operational costs and thus lead to profits.…

The cost of acquiring new customers once they reached scale was the issue. The cost went up significantly making their unity economics unfavourable.

Back the day I had a short stint at Flixbus in Germany. Being an ops / logistics guy I wasn't that impressed by their operations at the team I was at (their line business seemed different but grew out of one of Flixbus earlier acquisitions, mein fernbus). Also the tech didn't look revolutionary. What was top notch, and backed by serious money, was advertising and marketing. They had all the metrics, the strategy, the budget, knew the processes, everything.

It was that what gave them the market penetration in new countries, out spending and out performing competition until competition faulted or was bought out. So, the lesson I took, was that a lot of the latest b2c e-commerce start-ups are to a very large extent marketing driven.

Re: WeWork parent pulls IPO following pushback: sources

#212

Post by sweeneyrod »

TheOtherHobbes wrote: post #184
Tepix wrote: post #173

Earlier quoted context omitted.

Why would a coworking space real estate company need to achieve dominance?

Because for Wall St capitalism, dominance is the product. Which is why steady-but-slow niche businesses don't get this kind of attention, even if they have better long-term prospects. The product being sold at IPO is the promise of dominance of a market - because that implies a whole set of predictable relationships with investors, employees, and customers. The product as sold to customers - whatever that is - is alm…

That's only true for tech companies, and companies like WeWork that brand themselves as tech companies in order to get investors to value them as such. Aramco aren't IPOing with a promise to someday sell all the oil in the world, they're content with merely a lot.

Re: WeWork parent pulls IPO following pushback: sources

#213

Post by swish_bob »

GhettoMaestro wrote: post #103
ada1981 wrote: post #55

Earlier quoted context omitted.

WeWork has created an incredible sort of social filter though. At least in NYC, if someone is a member at WeWork its a strong signal you don’t want them at a party. Maybe it’s some sort of AI they’ve built in house?

Lol how full circle -- WeWork-membership being a negative selector. I remember when folks were telling me not having a WeWork space was a sign you didn't want to network with other like-minded folks.

Well, those aren't incompatible statements. It just pre-supposes that GP doesn't like the sort of people that WeWork attracts, but that they like each other.

Personally I have no experience with WeWork, but I've never really found the urge to make much of an effort to know people from other companies in shared office environments. Sometimes it happens, sometimes it doesn't. But don't try to make me socialise with them, thanks ...

Re: WeWork parent pulls IPO following pushback: sources

#214

Post by kelnos »

autokad wrote: post #30
tempsy wrote: post #23

As someone living in SF, I don’t think anyone in SF or SV would ever consider WeWork to be a “Silicon Valley” company in the same way that Uber or Twitter or Slack is. The company has 0 tech brand among employees (how many ex-FB or ex-Google engineers work there?) and outside of Benchmark’s early round none of the VCs are SV-based. Point is the media is making this out to be an indictment on some SV tech bubble but p…

> "Point is the media is making this out to be an indictment on some SV tech bubble" Its not the media, I think its just true. Had WeWork IPO'ed under the same conditions a year ago, I think it would have been 'fine'. but the glut of SV unicorns losing money, hating investors, and slowing growth has got people highly concerned. This list of companies (slack, lyft, Uber, Pinterest, beyond meat, crowdstrike, tesla, spo…

Twilio has been non-GAAP profitable for a year now with a positive EPS for the last four quarters (possibly five, but my brain is failing me and Yahoo Finance only lists the last four), but you list it as negative. So that leads me to wonder if many of the other figures you cite have similar issues.

(Disclosure: I work at Twilio.)

Re: WeWork parent pulls IPO following pushback: sources

#215

Post by kelnos »

jsf01 wrote: post #126
autokad wrote: post #30

Earlier quoted context omitted.

> "Point is the media is making this out to be an indictment on some SV tech bubble" Its not the media, I think its just true. Had WeWork IPO'ed under the same conditions a year ago, I think it would have been 'fine'. but the glut of SV unicorns losing money, hating investors, and slowing growth has got people highly concerned. This list of companies (slack, lyft, Uber, Pinterest, beyond meat, crowdstrike, tesla, spo…

>negative revenue How is that even possible?

Obviously that happens when your product is so bad that you have to pay people to use it.

Re: WeWork parent pulls IPO following pushback: sources

#216

Post by kelnos »

GCA10 wrote: post #62
tempsy wrote: post #23

As someone living in SF, I don’t think anyone in SF or SV would ever consider WeWork to be a “Silicon Valley” company in the same way that Uber or Twitter or Slack is. The company has 0 tech brand among employees (how many ex-FB or ex-Google engineers work there?) and outside of Benchmark’s early round none of the VCs are SV-based. Point is the media is making this out to be an indictment on some SV tech bubble but p…

On the merits, yes, We is not a tech company. But bear in mind that the company has gone to extraordinary lengths to cloak itself in the unicorn-tech narrative. It masquerades as a platform for other services; it ascribes its losses to a work-setting variant of the Uber fast-growth strategy; it draws parallels to Airbnb's disruption of the hotel business, etc. Yes, Silicon Valley's smartest minds may see through it a…

The general public's impression of WeWork isn't really relevant here, though. It's mainly the opinion of institutional investors that matters. And if they've had the wool pulled over their eyes and believe We to be a tech company, then... well, I'm even more worried than I thought for our financial system.

Actually, my feeling here is that institutional investors have realized that We isn't a tech company. That's why the IPO would probably only have fetched them at most a $20B valuation, rather than the higher valuation they've been awarded from the private markets as a supposed tech company.

So this may not be an indictment of "Silicon Valley IPOs" in particular, just investors saying "no" to a clearly overvalued non-tech company, and that company then deciding that it won't accept a likely more-reasonable valuation.

(Not saying there aren't plenty of overvalued tech companies! But this might not really have anything to do with that.)

Re: WeWork parent pulls IPO following pushback: sources

#217

Post by formercoder »

xiphias2 wrote: post #176
benj111 wrote: post #152

Earlier quoted context omitted.

Ah, but it has/had a tech company valuation. Why do you think valuations varied so wildly? You get the same thing with Tesla, it's valued more as a tech company than as car company.

The biggest difference between car companies and tech companies is return on invested capital. According to that Tesla is somewhere inbetween a tech company and car company. Also it's the only car company that used software to substantially improve the performance of the car using software after selling it.

ROIC is effectively useless for tech companies because they do not capitalize nearly enough R&D.

Re: WeWork parent pulls IPO following pushback: sources

#218

Post by kelnos »

gumby wrote: post #86
untog wrote: post #70

Earlier quoted context omitted.

> large fraction of talented engineers have worked at FB or Google I'd actually dispute that. The tech world is really, really big. There are a great many extremely talented engineers that have never worked at FB or Google, but they're also the kind of engineers that don't write blog posts or attend conferences, so they're less visible.

Your point is quite reasonable in general but the discussion was for Silicon Valley and San Francisco. My GF has worked for Microsoft, Amazon, FB and now Google (and some startups over the years). How? Well they all have big tech offices close to Palo Alto. When she worked for various startups she was an ex-MS, ex-FB etc person. If she'd stayed in Chicago (Northwestern grad), that's unlikely. Of course those companie…

I would still maintain that the parent is correct and there is a large quantity of talented developers in SV who have never worked at FB/Google/MS/etc.

I know quite a few of them (and would like to believe I'm talented, too).

Re: WeWork parent pulls IPO following pushback: sources

#219

Post by gadders »

Sholmesy wrote: post #204
nkoren wrote: post #182

Earlier quoted context omitted.

It's not "Silicon Valley", it's Silicon Valley . As in the show. My wife just started a contract at a new WeWork office in London. The lobby features a giant but non-functional as skateboard ramp, and two DJ booths, both manned (at 9am on a Monday). The bathrooms feature the very latest in digital toilets, but they aren't flushing, and nobody can figure out how to reboot them. At an aesthetic level, this couldn't be…

I work at a WeWork in London, which one is your wife going to, that sounds insane... Ours just has bathrooms & coffee machines that are offline for weeks at a time.

I think that one is London Bridge area...

Re: WeWork parent pulls IPO following pushback: sources

#220

Post by kelnos »

0x28469 wrote: post #193
Svip wrote: post #119

Earlier quoted context omitted.

It's the same reason, I sometimes still like to watch classic television; rather than choosing specific programmes to watch, I want them curated for me. And while television channels offer a mediocre experience on average, watching something I wouldn't have picked myself is a way to expand my horizons. In the same vein, Blue Apron and Hello Fresh, I'd imagine, are there to expand your horizons in terms of culinary op…

Download their online recipes and do a rand on them. It's 100% about convenience. They offer nothing more than you picking up your own food. Plus they ship as much packaging as food so it's probably far from being the most ecological solution.

The problem with that approach is that often they include ingredients in very small quantities that most people won't have, and buying the ingredient yourself requires getting a container with 1000x the amount you need. Even if it's cheap, people balk at that.

But yes, the packaging is insanely wasteful, not to mention the ecological cost of shipping itself.

I definitely cooked more often when I had a HelloFresh subscription. And when I do cook now, the variety of things I make is much smaller.

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