Is WeWork WeWTF? I Beg to Differ...
Product & Engineering @Microsoft |
Creator of End 2 End (https://anchor.fm/end-2-end )
There's a reason some companies choose to stay private and never go public.
Being a private company has its challenges but, at the same time, it comes with certain operational freedom that public companies cannot easily navigate.
Epic Systems, arguably the largest player in healthcare software in North America is almost unknown and operates at its terms and receives zero media coverage. The flexibility of being obscure comes from being a private company.
Becoming a public company, with all its perks, comes with a vast amount of scrutiny.
With WeWork recently filing its much-anticipated S-1, there has been a barrage of negative headlines.
The scrutiny is of course expected, and well-deserved, considering the hefty private valuation it currently boasts.
Earlier this year, Goldman Sachs bankers were saying that the office-sharing firm could soon become a US$65 billion company. (source
As an intentional counter-narrative to the headlines, here is a brief positive angle on the WeWork story.
[Full Disclosure: I have no stake in WeWork nor do I intend to have any vested interest in the company in the future.]
In simple terms, WeWork offers working space for a monthly subscription rate. There are other variations on this but on average the model is just that simple.
Is there a product need for this? Yes.
With growing flexible work culture and a growing number of freelancing sovereign careers across all industries, the need for a WeWork like service is inevitable and obvious.
Their revenue of surpassing a billion dollars is a clear sign of the product-market fit.
The actual working space and experience of working at a WeWork are great.
They have thought through each space. Designed it meticulously for a great experience.
Miguel McKelvey the lesser-known co-founder of we work, has a degree in architecture, and the effect of this is pretty obvious when you see any of their spaces.
Future potential for WeWork is huge. They can extend their model of renting workspaces for more careers that would need much more than a laptop and desk.
Possible expansions could be —
- Create a podcasting studio that they can rent in their existing real estate.
- Create cloud kitchens which could be rented out for cooks to create their restaurants. This alone could be the next billion-dollar business.
- Create modeling studios, music mixing studios and all kinds of other creative studios which are otherwise hard for individuals to get access to. These opportunities are in line with the future of employment which is more looking towards remote work and freelancing.
These are just few of the many possible new expansions.
Combined with the above mentioned expansion of product offerings and the secular downward trend of American malls, there is an opportunity to repurpose a lot of cheap real estate across America for new productive sovereign careers.
It is hard to quantify a brand and its effect but WeWork has carved out a brand for itself as a “cool space” to work at.
Their brand is now recognized among the most entrepreneurial generation across Sao Paulo(Brazil) to Bangalore(India).
There is a great benefit for companies to use we-work than building their own office space from the ground up.
Using WeWork enables companies to outsource their real estate and workplace needs in the following ways.
- Reduce contractual and legal overhead
- Reduce operational overhead of the facilities in workplaces
- Outsource workplace design
The abstraction WeWork brings as an efficient real estate outsourcer to the different businesses across the world using technology & design is its greatest strength. Driving operational efficiency for enterprise users is a possibility for WeWork’s future that is most exciting.
There are some obvious risks with We Work; and the following posts do a great job of pointing them out:
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