Adam Neumann seeks to buy WeWork back 5 years after being ousted as CEO(theguardian.com)
theguardian.com
Adam Neumann seeks to buy WeWork back 5 years after being ousted as CEO
https://www.theguardian.com/business/2024/feb/06/adam-neumann-buy-wework
20 comments
“Fundamentally redesigned the office experience.” That’s hilarious.
The only thing WeWork did to change the office experience was to make co-working spaces resemble the modern tech office rather than the old Regis boomer cube farm. The concept already existed, you just had to copy and paste it from your choice of trendy tech company.
To be frank, the only lasting difference is the choice in furniture.
The only thing WeWork did to change the office experience was to make co-working spaces resemble the modern tech office rather than the old Regis boomer cube farm. The concept already existed, you just had to copy and paste it from your choice of trendy tech company.
To be frank, the only lasting difference is the choice in furniture.
Adam is the type of guy that will never understand that WeWork succeeded as much as it did despite him, not because of him.
(Former WeWork employee and current shareholder)
(Former WeWork employee and current shareholder)
WeWork succeeded ? What ?
Yeah. At one point the company had over 700k paying members, almost half of which were from companies with over 500 employees. At the peak the company was the largest holder of Manhattan commercial office space.
The part the "documentaries" left out is that there was actually a really good business at the core. Giving companies of any size the ability to hire in any market globally and giving their employees the flexibility to live almost anywhere, while maintaining the amenities that tech workers have come to expect. We just had a chain of completely incompetent leaders who refused to see the company for what it was.
Adam used the company to launch his own montessori school for his children because that was more exciting and "visionary" than building a managed service provider model and leasing laptops to member companies and providing unified helpdesk/IT at every location (which would have absolutely printed money). He bought a literal glass factory (to make cool windows) instead of leveraging our network of small business owners to have almost zero customer acquisition cost for high margin businesses like managed book keeping or HR/payroll.
The part the "documentaries" left out is that there was actually a really good business at the core. Giving companies of any size the ability to hire in any market globally and giving their employees the flexibility to live almost anywhere, while maintaining the amenities that tech workers have come to expect. We just had a chain of completely incompetent leaders who refused to see the company for what it was.
Adam used the company to launch his own montessori school for his children because that was more exciting and "visionary" than building a managed service provider model and leasing laptops to member companies and providing unified helpdesk/IT at every location (which would have absolutely printed money). He bought a literal glass factory (to make cool windows) instead of leveraging our network of small business owners to have almost zero customer acquisition cost for high margin businesses like managed book keeping or HR/payroll.
> The part the "documentaries" left out is that there was actually a really good business at the core.
This is a good point. Not enough time is spent on what WeWork could have been if it had been managed very differently by a completely different set of people
This is a good point. Not enough time is spent on what WeWork could have been if it had been managed very differently by a completely different set of people
That assumes that investors would have given the same amount of money to someone who didn't do the barefoot leather jacket Jesus act.
So the issue was in the leadership handoff? It seems like Uber executed tremendously well where WeWork fell short.
Eh the damage was already done at that point. I don't know how much detail I can go into, but if A16Z wants to avoid some write-downs I am available for a reasonable consulting fee.
> maintaining the amenities that tech workers have come to expect.
Such as what? Beer, and coffee table books?
Such as what? Beer, and coffee table books?
To be fair, it sounds like you are saying WeWork would have succeeded if only it had done things it didn't and not done things it did.
That is different than saying that WeWork was successful.
That is different than saying that WeWork was successful.
If extracting billions from SoftBank isn’t a success then I want to be the biggest failure there is.
>> "“In a hybrid work world where demand for WeWork’s product should be greater than ever, my clients believe that the synergies and management expertise offered by an acquisition could significantly exceed the value of the debtors on a stand-alone basis,” the lawyers wrote. “WeWork should at least educate itself about that potential and not preclude itself from maximizing value.”
> hybrid work
> demand
> greater than ever
WAT
> hybrid work
> demand
> greater than ever
WAT
If I were to start another company, I would be less inclined than ever to lease fixed office space vs. look for options for people to grab co-working spaces on an as-needed basis or short term office space for specific projects.
It might well be there's lots of room for growth for something well executed (but I'm not convinced that means WeWork) in that space as a way for companies to scale down their fixed office footprint.
It might well be there's lots of room for growth for something well executed (but I'm not convinced that means WeWork) in that space as a way for companies to scale down their fixed office footprint.
I would agree with you that overall demand is likely to shift towards short-term flexible office space and away from long term leases, I just don't understand why large real estate holders will leave that piece of the pie there for third parties to arbitrage, unless they're genuinely desperate, and I don't think they'll become that genuinely desperate because the government will act to shore them up because of how critical central business district real estate values are in general to so many things.
I see large real estate holders spinning up WW-like departments and following the WW model but I don't see a company that doesn't itself _own_ the real estate being able to prosper. WW managed to cultivate a very trendy atmosphere and all the associated types piled in accordingly but that only lasts for a while; sooner or later you run out of cash to burn.
I have no idea why SoftBank threw money at WW like they thought they had to spend it all before the world ended, I'm not sure that they really know either.
I see large real estate holders spinning up WW-like departments and following the WW model but I don't see a company that doesn't itself _own_ the real estate being able to prosper. WW managed to cultivate a very trendy atmosphere and all the associated types piled in accordingly but that only lasts for a while; sooner or later you run out of cash to burn.
I have no idea why SoftBank threw money at WW like they thought they had to spend it all before the world ended, I'm not sure that they really know either.
They've had many opportunities to do that over the years, and instead left the space to stodgy providers like Regus.
Some might try to address it now, others will just unload their assets or look to partner with someone to do it for them. It's not a given they'll want to be the ones taking the risk - ironically with WeWork likely to be one of the things making some of them wary of starting their own. Better to let someone else burn other shareholders money if it doesn't work.
But ultimately, irrespective of political clout, there's only so long you can shore up a glut in supply before there will be a push towards e.g. residential conversions and the like.
I agree with your skepticism with respect to WW's ability to be the one to profit, though.
Some might try to address it now, others will just unload their assets or look to partner with someone to do it for them. It's not a given they'll want to be the ones taking the risk - ironically with WeWork likely to be one of the things making some of them wary of starting their own. Better to let someone else burn other shareholders money if it doesn't work.
But ultimately, irrespective of political clout, there's only so long you can shore up a glut in supply before there will be a push towards e.g. residential conversions and the like.
I agree with your skepticism with respect to WW's ability to be the one to profit, though.
It's not _completely_ wrong necessarily. As having a giant office for every worker, every day stops being necessary, more flexible work spaces could make sense.
I can see the demand for on-demand office space increasing, but CBD real estate is going to be such a choppy market that timing it is going to be horrifically hard so as not to end up on the wrong side of the trade.
Also the real estate holders know that every bit of space they rent to WeWork is going to be re-entering the market to compete so they're not going to be inclined to give generous terms.
Unless WW has a very good grip on the market direction and timing it's going to be very easy for them to take huge losses (again)
Also the real estate holders know that every bit of space they rent to WeWork is going to be re-entering the market to compete so they're not going to be inclined to give generous terms.
Unless WW has a very good grip on the market direction and timing it's going to be very easy for them to take huge losses (again)
[deleted]
Oh, The Places You'll Go! (With A Stadium's Worth of Venture Capital On Fire)
Gotta love people who have lots of money continuing to give it to people who should never again be allowed to handle money because they can hype and flip it.
There's some meta real estate witty remark to be made but I can't find it.