Telework killed it since they were left with empty buildings.
Man, just terrible timing overall. If not for COVID, they could have pivoted into something a little more long lasting. But COVID just blindsided them, as it did many others.
If they had some more time they could have pivoted to supporting hybrid work for companies that have a geographically distributed work force. As much as I love working from home, there are some times when it’s better to be in person, and WeWork could let people work hybrid without having to move across the country.
Yeah, and dynamically rent out spaces for single meetings and stuff if you want to go overseas to meet a client or something. This is what I initially thought it was for back when I first heard about it.
Imagine a team in some satellite office in India is having trouble with something, they ship out a specialist there to fix it, and they can rent out spaces from wework for meeting up and stuff.
It sure did. Interesting model, but just not quite right.
There were other factors like investors treating it like a tech stock rather than real estate and wasteful spending, but companies moving to telework really killed it.
Weren’t they fumbling a sure thing, even before that? I thought they were slightly on fire by mid-2019.
Lol, no. It was alllllllllll fake the entire time. It’s just that once the IPO had happened and the founder ran off with his billions, they really had to try to make this completely unworkable business model work
“In retrospect, Neumann’s knack for amassing billions of dollars in venture capital with no viable business model was one of the greatest scams of the twenty-first century.”
He had WeWork renting the buildings from him, the founder of WeWork. That’s some A+ grifting right there.
I had access to a WeWork office for a while. It was fine for solo work or getting a couple of colleagues together for quiet conversations, but their meetings rooms sucked. There was no way to discuss or whiteboard anything confidential in one since the walls were all clear glass and the soundproofing was nonexistent. The whole setup felt like it was created by someone who was going for a ”cool startup office” aesthetic but hadn’t ever actually worked in one.
Why is Softbank involved in so many business investments that go sour? I’ve lost track of the number of articles I’ve read that go something like, “Softbank invests in X. X’s value is tumbling.”
I think a lot of the issue is that softbank had the idea of if they can invest a bit and get a good amount of growth, how about they invest a ton more from the outset and “guarentee” insane growth. They did that with a few startups and it worked, then they did it with WeWork and it spectacularly backfired. The basic premise of WeWork was pretty sound until the real estate market started going up in price, which kind of blew up the margins that WeWork lived in. That and a frankly financially crazy CEO kind of ruined it.
Y’know, there was this documentary with Zero Mostel and Gene Wilder…
Thanks to Elon I misread your comment for a bit
This is the company that the press unanimously decided everyone needed to hear about in 2019, and you couldn’t avoid mentions of it. Good riddance.
Haven’t read the article yet, but I highly recommend watching WeCrashed, a mini series about wework and it’s fall
It’s a good one!
sourcing an article from foxbusiness is insane, so many other places for the same story. fuck fox. really.
A combination of people moving to remote work, office property values taking, and general mismanagement.
Never heard of them but I’m a little skeptical a company like that could even have had a valuation that high.
If you were a tech worker 20 miles from a wework building, you got a LOT of swag and invites to events. It was weekly for me.
In the era of low interest rates, a lot of stupidly-high valuations happened in tech. Many of those idiotic valuations were predicated on the idea that companies could afford to lose money for a long time in pursuit of “market share”, and then pivot to profitability when they wanted that. Never mind that if your business model is fundamentally about being the cheaper alternative while losing money — waving at Uber — the only path to being profitable goes through gaining monopoly powers and hiking prices to much higher levels that consumers will hate — waving at Uber again.
The truly dumb thing about WeWork’s valuation was that it was being valued as if it were a tech stock. It was a renter of office space, period. All of its “secret tech sauce” was a combination of lies and aspirational bullshit from its bullshit-artist CEO.
Oh yeah, that’s completely stupid. Getting really sick of these ‘undercut-everyone-monopolize’ companies. Good to see them burn in that case. Wonder if we’ll look back on this era as a bubble.
If you’re interested in some of the gory WeWork details, I can recommend either reading The Cult of We: WeWork, Adam Neumann, and the Great Startup Delusion, or (if you have an Apple+ subscription) watching We Crashed.
I frankly don’t understand how so many people didn’t quickly peg Adam Neumann as a charlatan. I guess everyone was more worried about Fear Of Missing Out than Fear Of Losing All My Money, and it drove some really dumb investments in WeWork.
The evaluation was nothing short of a fraudulent scheme.
