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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

#61
post #29

Earlier quoted context omitted.

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.

So you're saying you've built a business 50% dependent on someone else's business. That's fragile.

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

#62
post #29

Earlier 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).

I have started several companies from my home (for the first two, "home" was an apartment) and had no problem with employees working from the "office" nor with customer meetings (customers included Sun, NASA, Cisco).

These have all been in Palo Alto, so perhaps its acceptability is location-specific. Each year I have some MBA students from Switzerland visit and last year it was in my home -- apparently some of them were weirded out by that. (By this year's visit we'd grown and so they came to a boring office).

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

#63

What are people looking for in a coworking space? What does your space provide you beyond a desk, Wi-Fi, and coffee? Whenever I've researched spaces nearby, I've treated proximity, price, and hours as the three biggest selling points for a small business, work-from-home type like myself. But I guess that's only a small segment of the overall market. I guess if you're a bigger business maybe you'd get comfortable with…

Another thing is lease flexibility as well as multiple locations. Our company has different teams at multiple WeWork locations. We have to travel to different locations sometime, and be able to just walk 24/7 into WeWork space which mostly located in the city with good public transport is very convenient. Conference room, mail handling, coffee, beer and other things help too.

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

#64

Earlier quoted context omitted.

Half my business comes from other companies in the wework network. I also regularly contract out work to people in the network.

So you're saying you've built a business 50% dependent on someone else's business. That's fragile.

That's some piss poor logic. Half my current business comes from a network I belong to. That doesn't mean that it's DEPENDENT on that network. If I go to the same restaurant everyday but that restaurant goes out of business, do I starve? I just go to the place next door.

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

#65
post #38
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…

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.

The WeWork claim is that some of their startups will become huge and they'll already have their foot in the door, so to speak, for selling those huge companies more real estate and services. Having a 5 person startup as a renter is not a big win, but if that startup becomes Twitter size...

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

#66
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 up your neighbors and meet some interesting people. Chance encounters like that are rare at a traditional office. People also throw events on the upper floors all the time, which gets you free lunch at a minimum.

The above experience costs $2,200/mo to get you an office with plenty of room for four people.

I don't know. I hope they never go out of business. It's the best environment I've ever been in.

Did I mention you're surrounded by empty rooms with doors that close? I mean hello, you get a door! It closes!

When you have the option to go work someplace with a door that shuts, it removes all the stress of not having it, even if you never actually use it.

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

#67

What are people looking for in a coworking space? What does your space provide you beyond a desk, Wi-Fi, and coffee? Whenever I've researched spaces nearby, I've treated proximity, price, and hours as the three biggest selling points for a small business, work-from-home type like myself. But I guess that's only a small segment of the overall market. I guess if you're a bigger business maybe you'd get comfortable with…

Networking? Social interaction with other entrepreneurs? A separation of home/work?

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

#68
post #29

Earlier quoted context omitted.

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.

Perhaps you are assuming your particular experience is normative. I think it is not. To attribute the demand to nothing more than “I feel special” needs more justification than what you've provided.

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

#69
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…

It's not free beer and free coffee, it's X% of $2,200 a month beer and Y% of $2,200 a month coffee.

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

#70
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…

This business model has existed before WeWork, and I've used it. Here's an example: https://www.regus.com

Similar idea: free coffee, shared printer, power/internet access/etc.

It made sense for two people in one room. When it got to three or four in a bigger space, it made more sense to lease a dedicated two room office and setup our own internet connection, etc.

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