What Makes WeWork Such a Valuable Company

WeWork's innovative business model is a key factor in its value. They've disrupted the traditional office space industry by offering flexible, shared workspaces that cater to the needs of freelancers, startups, and established companies alike.

WeWork's ability to scale quickly is a testament to its business model. According to the article, WeWork has expanded to over 800 locations in more than 120 cities worldwide in just a decade.

By providing a range of amenities, such as high-speed internet, printing services, and community events, WeWork creates a productive and collaborative environment for its members. This is especially appealing to remote workers and freelancers who value flexibility and community.

WeWork's focus on community and collaboration has led to the creation of a global network of like-minded professionals.

Check this out: Wework Value

WeWork's business model is all about providing a flexible and amenity-rich office experience. They lease space, make it pretty, and then rent it back to users.

Think of it like a middleman, connecting people with the space they need. WeWork leases floors of buildings, entire structures, and prime real estate.

Their goal is to create a modern office experience without the hassle of building a product or having employees. They offer Wi-Fi, desks, conference rooms, and more.

WeWork membership costs $45/month, and renting a desk for a day is $50 plus the membership fee. A dedicated desk can cost anywhere from $275 to $600/month, depending on the location.

Large companies like American Express and Merck use WeWork too, renting private office space for up to 100 employees. They pay a premium for the convenience of not having to sign a long lease or do maintenance.

WeWork's approach allows companies to give their employees the feel of a fully-stocked office environment without the commitment. And for individuals, it's a great option for those who need a professional space to work from.

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WeWork's downfall was a result of poor corporate governance, which ultimately led to its demise.

The company's co-founder and CEO, Adam Neumann, had too much power and control, which led to a culture of authoritarianism and a lack of accountability.

This was evident in the company's governance structure, where Neumann had a significant amount of voting power and was able to make decisions without proper oversight.

Neumann's leadership style was also marked by a lack of transparency and a focus on growth at all costs, which led to a series of questionable business decisions.

One of the most notable examples of this was the company's decision to go public, which was rushed and poorly executed, resulting in a significant loss for investors.

In the end, WeWork's governance issues led to a loss of trust and a collapse of the company's business model.

For another approach, see: Adam Neumann Bid for Wework

WeWork's business model is built around community and flexibility.

The company offers a range of services, including office space, networking events, and educational programs, designed to foster collaboration and innovation among its members.

WeWork's pricing model is based on a membership fee, which grants access to a network of shared workspaces.

Members pay a flat monthly fee, regardless of the amount of space they use, making it an attractive option for freelancers and small businesses.

With over 800 locations in more than 100 cities worldwide, WeWork has established itself as a global leader in the shared workspace industry.

WeWork's valuation is based on two main factors: revenue and potential revenue. Boston Properties, a company with 47 million square feet of office space, has a market cap of $18B, while WeWork, which rents 80 offices, is valued at $16B.

Tech companies like WeWork are valued higher than traditional businesses because their products are scalable and easily measured. This thinking is reflected in the way companies like Facebook buy other companies, like Instagram, before they make money.

WeWork's revenue multiple was 66.7x when they raised $400m in 2015 at a $10B valuation, which is much higher than companies like Airbnb and Dropbox. This has led some to point to a "bubble bursting" and runaway valuations.

Additional reading: Wework Revenue

WeWork is providing an incredible service for freelancers and companies that don't want to commit to their own lease.

Paying $400/month for a shared workspace seems like a good deal to get out of the house and meet interesting people.

Boston Properties, the largest publicly-traded office real estate company, owns 47 million square feet of office space and has a market cap of $18B.

WeWork is being valued as a tech company, not a real estate company, which might not be a good thing.

Tech companies are valued higher than similar-revenue companies in other industries because tech products are scalable, easily measured, and (mostly) easy to monetize.

Boston Properties has real, tangible, assets, and is valued only slightly more than WeWork, which is renting a total of 80 offices.

The formula for determining a company's value is based on two factors: how much money they make (revenue) and how much money they can make (multiple).

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Overexpansion and market saturation can be a recipe for disaster, as WeWork's experience shows. They embarked on a relentless expansion spree, trying to conquer markets around the world.

This approach overlooked the importance of understanding local dynamics and cultural nuances. WeWork failed to recognize that success in one location didn't guarantee triumph everywhere.

A one-size-fits-all approach was fundamentally flawed in an industry where location is pivotal. This is evident in WeWork's experience of oversaturated markets and unoccupied spaces.

Strained resources were a direct result of WeWork's overexpansion. This highlights the importance of careful planning and market analysis before expanding into new territories.

The target audience for WeWork is entrepreneurs, freelancers, and small business owners who are looking for a community-driven workspace that fosters productivity and collaboration.

They're often young professionals who value flexibility and want to be part of a vibrant ecosystem that can help them grow their businesses.

WeWork's membership model offers a range of plans to suit different needs, from hot desking to private offices, making it an attractive option for solo entrepreneurs and startups.

These individuals are looking for more than just a physical space to work; they want to be part of a community that can provide them with valuable connections, networking opportunities, and access to resources and expertise.

By joining WeWork, they can tap into a global network of like-minded individuals and access a range of services, including high-speed internet, printing and copying facilities, and event spaces.

This demographic is also highly mobile, with many working remotely or frequently traveling for business.

WeWork's founders, Adam Neumann and Miguel McKelvey, have a unique background that shaped their vision for the company. They met in New York City, far from their rural roots in Israel and Oregon.

Adam Neumann grew up on a collectively-owned and run community known as a kibbutz in Israel. This upbringing likely influenced his views on community and shared ownership.

Miguel McKelvey, on the other hand, lived on a sort-of commune started by five women and their children in Oregon. This experience may have also shaped his perspective on community and shared living spaces.

Additional reading: Ceo of Wework after Adam Neumann

Their first iteration of WeWork was a startup called Green Desk, which provided affordable and eco-friendly office space. They began the company in 2008 and quickly sold it in 2009.

Adam Neumann's wife, Rebekah, is also a founding partner and CEO of The We Company's school. Her viewpoint had a significant impact on WeWork's vision, as Adam Neumann often reflects on her words about success.

According to Adam Neumann, Rebekah defined success as being surrounded by loved ones, creating a positive impact, and connecting to something greater than oneself. This definition of success is vastly different from the traditional view of success tied to monetary wealth.

Adam Neumann has stated that revenue was not the sole point of interest for investors, and that WeWork's valuation and size were more based on its energy and spirituality than on revenue.