Earlier quoted context omitted.
Here is a link: http://archive.is/Fb1D4
Proxy services blocked by corporate firewall. Oh well.
Critics say WeWork is an overvalued real-estate play
31–40 of 183 posts
Re: Critics say WeWork is an overvalued real-estate play
#32Earlier quoted context omitted.
It's called working from home, and it's a lot more than 20% less.
Not if you regularly have clients come around for meetings or colleagues for a chat. WeWork provides a good enough atmosphere to work and socialise with work related people (it's not just the desk you're paying for).
Half my business comes from other companies in the wework network. I also regularly contract out work to people in the network.
Re: Critics say WeWork is an overvalued real-estate play
#33Earlier quoted context omitted.
Indeed, they go there for the foosball, table tennis, coffee and self-congratulation. Sure, sure, physical proximity to other startups, mentorship, etc. - but frankly the impression I've got from each wework location I've been to has been of people wanting the "startup lifestyle" rather than wanting to build a business. The actual startup lifestyle is sweating in a cheap grotty office, rice, and sleeping under your d…
People want to feel trendy. They are not running "Startups" because they want to build stuff that scales. They are running mostly failed businesses that look trendy/cool, so that they can "fit in". Selling emotions is a big business. Lots of brands are relying on it.
Yep - hell, most businesses sell on emotion - it's a much more secure attachment than ration, and even when it comes to b2b, more often than not the decision comes down to who they like more/who gives a better vibe. That said when things go south, they really go south, as an emotional buy allows for betrayal and an emotional fall-out.
Which is why I think wework is grossly overvalued and likely to follow a parabolic trajectory.
Re: Critics say WeWork is an overvalued real-estate play
#34"Boston Properties Inc., the country’s largest publicly traded office landlord, owns five times the square footage that WeWork manages and has a market capitalization of $19 billion." This seems to me to be a pretty big warning sign that the company is overvalued.
Are their growth rates comparable?
Re: Critics say WeWork is an overvalued real-estate play
#35Earlier quoted context omitted.
It's called working from home, and it's a lot more than 20% less.
Not if you regularly have clients come around for meetings or colleagues for a chat. WeWork provides a good enough atmosphere to work and socialise with work related people (it's not just the desk you're paying for).
No, it's the "I feel special" you're paying for.
Meetings, you can go to the client, you can rent a meeting space by the hour. Hell, I've made a multi million pound deal in a train station waiting room.
Colleagues, one can communicate without meatspace.
Socialising - that's not work. That's for the pub.
Re: Critics say WeWork is an overvalued real-estate play
#36The main difference is not amenities or marketing but the fact that a large percentage of WeWork's customers (my company included) are paying rent with VC money. Up to 90% of their customers will go out of business. Not a super stable customer base.
The companies will keep coming and going. As long as there is a steady stream of startups being funded in SV, WeWork should do fine. In fact, they make it much easier for the startups to bootstrap and focus on their business problem, rather than worrying about the logistics.
Re: Critics say WeWork is an overvalued real-estate play
#37WeWork needs to go prove itself by surviving the next downturn. I believe most of WeWork's customers are other startups who valuations are fueled by large rounds of VC investment. This capital tends to dry out during a downturn, however WeWork will still be saddled with long term leases during this period. I wonder what their strategy is to ride out a period of low capital raise for startups.
Re: Critics say WeWork is an overvalued real-estate play
#38Many 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…
Honestly, as someone dealing with small businesses, selling insurance and HR services to tiny startups is not a $20B business. Selling those to large companies is, but that market is already saturated.
Re: Critics say WeWork is an overvalued real-estate play
#39"Boston Properties Inc., the country’s largest publicly traded office landlord, owns five times the square footage that WeWork manages and has a market capitalization of $19 billion." This seems to me to be a pretty big warning sign that the company is overvalued.
Comparing WeWork to traditional office landlord is like comparing Starbucks to Dunkin' Donut. Please don't go to Starbucks because its coffee is better or cheaper (it's neither), but as a lifestyle choice. Similarly, people don't go to WeWork because they need a desk.
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 and get work done.
Re: Critics say WeWork is an overvalued real-estate play
#40The main difference is not amenities or marketing but the fact that a large percentage of WeWork's customers (my company included) are paying rent with VC money. Up to 90% of their customers will go out of business. Not a super stable customer base.
The companies will keep coming and going. As long as there is a steady stream of startups being funded in SV, WeWork should do fine. In fact, they make it much easier for the startups to bootstrap and focus on their business problem, rather than worrying about the logistics.
Ready to have your mind blown? SV is not the only place where businesses exist. WeWork has 14 locations in the SF area and 44 locations in NYC. I work in one in NYC, and I bet only a handful of the businesses in the building are VC funded. They'll do just fine because tech isn't their only source of income.