Inside The Phenomenal Rise Of WeWork

Fascinating - and eye popping - numbers on WeWork in the Forbes article Inside the Phenomenal Rise of WeWork

Hey Steve! Yeah, WeWork is suddenly all over the place.

I am curious as to what this list thinks as far as positives and negatives of their model/approach?

···

On Monday, November 17, 2014 2:16:07 PM UTC-6, Steve King wrote:

Fascinating - and eye popping - numbers on WeWork in the Forbes article Inside the Phenomenal Rise of WeWork

Tim:

I did a blog post on this today. Our view is overall this is very good news for the entire coworking industry. WeWork is showing coworking is rapidly becoming a mainstream workplace alternative for startups, independent workers and firms of all sizes. The more broadly this is recognized and reported on in the press, the better it is for the overall industry.

We also think there’s plenty of room for other players. Even with their aggressive growth plans, WeWork is “only” aiming for 46,000 members in 2015. This is a tiny share of the potential coworking market. There are many millions of potential coworking space members and most are looking for spaces offering something different than WeWork is.

But - and this is a big but - just as big box retail fundamentally changed that sector, we think “Big Coworking” (spaces with many hundreds of members) will also have a major impact on coworking and broader office-as-a-service industry. Smaller spaces and firms will have to learn to adjust to Big Coworking competition.

What do you think?

I wrote this in 2011, but my thoughts haven’t changed much:

http://dangerouslyawesome.com/2011/11/sex-coworking-and-rock-n-roll/

WeWork is tiny compared to Regus (who employs nearly 1/4 of the headcount that WeWork is aiming for as membership in 2015). And yet we laugh at considering Regus a coworking competitor.

Further, viewing communities as “competitive" only makes sense in a vacuum. In reality, people choose what suits them. Using the analogy in that post, music artists don’t “compete” directly with each other. And to use the restaurant analogy from previous posts, a chinese food restaurant doesn’t “compete" directly with a steakhouse, even though they technically serve some of the same ingredients.

Point being: catch yourselves when huge numbers and eye-popping statistics become a distraction from what YOU need to do best, which is support and lead YOUR communities.

-Alex

···

The #1 mistake in community building is doing it by yourself.

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Tim:

I did a blog post on this today. Our view is overall this is very good news for the entire coworking industry. WeWork is showing coworking is rapidly becoming a mainstream workplace alternative for startups, independent workers and firms of all sizes. The more broadly this is recognized and reported on in the press, the better it is for the overall industry.

We also think there’s plenty of room for other players. Even with their aggressive growth plans, WeWork is “only” aiming for 46,000 members in 2015. This is a tiny share of the potential coworking market. There are many millions of potential coworking space members and most are looking for spaces offering something different than WeWork is.

But - and this is a big but - just as big box retail fundamentally changed that sector, we think “Big Coworking” (spaces with many hundreds of members) will also have a major impact on coworking and broader office-as-a-service industry. Smaller spaces and firms will have to learn to adjust to Big Coworking competition.

What do you think?


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On Tuesday, Nov 18, 2014 at 2:11 PM, Steve King [email protected], wrote:

This is awesome. And Alex, I love the restaurant analogy. Reminds me of how I and many friends wrung our hands when Whole Foods moved into Minneapolis about 15 years ago, just a couple miles from our beloved Wedge food coop. As it turned out, rather than taking business away from the food coops, Whole Foods mostly served as a gateway drug for suburbanites to try organics, bringing lots of newbies into a rapidly growing market. Today, the Wedge is one of the largest food coops in the country by both membership and sales.

···

On Tue, Nov 18, 2014 at 11:28 AM, Alex Hillman [email protected] wrote:

I wrote this in 2011, but my thoughts haven’t changed much:

http://dangerouslyawesome.com/2011/11/sex-coworking-and-rock-n-roll/

WeWork is tiny compared to Regus (who employs nearly 1/4 of the headcount that WeWork is aiming for as membership in 2015). And yet we laugh at considering Regus a coworking competitor.

Further, viewing communities as “competitive" only makes sense in a vacuum. In reality, people choose what suits them. Using the analogy in that post, music artists don’t “compete” directly with each other. And to use the restaurant analogy from previous posts, a chinese food restaurant doesn’t “compete" directly with a steakhouse, even though they technically serve some of the same ingredients.

Point being: catch yourselves when huge numbers and eye-popping statistics become a distraction from what YOU need to do best, which is support and lead YOUR communities.

-Alex


The #1 mistake in community building is doing it by yourself.

Join the list: http://coworkingweekly.com

Listen to the podcast: http://listen.coworkingweekly.com

On Tuesday, Nov 18, 2014 at 2:11 PM, Steve King [email protected], wrote:

Tim:

I did a blog post on this today. Our view is overall this is very good news for the entire coworking industry. WeWork is showing coworking is rapidly becoming a mainstream workplace alternative for startups, independent workers and firms of all sizes. The more broadly this is recognized and reported on in the press, the better it is for the overall industry.

We also think there’s plenty of room for other players. Even with their aggressive growth plans, WeWork is “only” aiming for 46,000 members in 2015. This is a tiny share of the potential coworking market. There are many millions of potential coworking space members and most are looking for spaces offering something different than WeWork is.

But - and this is a big but - just as big box retail fundamentally changed that sector, we think “Big Coworking” (spaces with many hundreds of members) will also have a major impact on coworking and broader office-as-a-service industry. Smaller spaces and firms will have to learn to adjust to Big Coworking competition.

What do you think?


Visit this forum on the web at http://discuss.coworking.com

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I think that once you put 6 zeros after anything, everybody goes crazy.

I am glad for the attention, high tide raises all ships and, as Alex points out, Regus has been more co-opted than it has been dominant in relation to coworking. Before you know it, WeWork will also be applying to get on the Wiki and so on, just like Regus. :-). Though not yet, they are still in the own sandbox model and who knows, they may stay there.

A number of sectors are shifting in the face of the ideas around the sharing economy and office space is one of them. And as with the others there are policy issues to be worked out and so on. The dark sides of the sharing economy include of course exploitation and the black market. This is also not different with coworking. As Big Coworking develops I expect to see these kinds of problems addressed faster than they would have without it, so that is helpful.

One of the things I would like to see is a real cradle to grave approach for coworking; at this moment most people think of it as a nice place to start until you get to be a real business when you get your own space. And I expect that Big Coworking will change that.

···

On Monday, November 17, 2014 9:16:07 PM UTC+1, Steve King wrote:

Fascinating - and eye popping - numbers on WeWork in the Forbes article Inside the Phenomenal Rise of WeWork

There are two big-box hardware stores near me - Lowes and Home Depot - but I still go to the local hardware store because they frequently have, order, or can make, some obscure thing that the big boxes don’t, and the people working there are very knowledgeable about all things hardware and home-maintenance related.

I think that smaller, independent coworking communities can offer a more personalized experience than big coworking can. Independent communities are better able to adapt their communities to the character of the particular community than spaces that are part of a larger organization.

···

On Wed, Nov 19, 2014 at 4:44 AM, Jeannine [email protected] wrote:

I think that once you put 6 zeros after anything, everybody goes crazy.

I am glad for the attention, high tide raises all ships and, as Alex points out, Regus has been more co-opted than it has been dominant in relation to coworking. Before you know it, WeWork will also be applying to get on the Wiki and so on, just like Regus. :-). Though not yet, they are still in the own sandbox model and who knows, they may stay there.

A number of sectors are shifting in the face of the ideas around the sharing economy and office space is one of them. And as with the others there are policy issues to be worked out and so on. The dark sides of the sharing economy include of course exploitation and the black market. This is also not different with coworking. As Big Coworking develops I expect to see these kinds of problems addressed faster than they would have without it, so that is helpful.

One of the things I would like to see is a real cradle to grave approach for coworking; at this moment most people think of it as a nice place to start until you get to be a real business when you get your own space. And I expect that Big Coworking will change that.

On Monday, November 17, 2014 9:16:07 PM UTC+1, Steve King wrote:

Fascinating - and eye popping - numbers on WeWork in the Forbes article Inside the Phenomenal Rise of WeWork

Visit this forum on the web at http://discuss.coworking.com


You received this message because you are subscribed to the Google Groups “Coworking” group.

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twb
member, Workantile
@twbrandt

WeWork moving to Seattle has been a good thing. They spend more money/energy throwing the word coworking around then we ever have and provide services we don’t care to offer. They work better for bigger teams (4+) or individuals requiring private offices. Also, they fully participate in the Seattle Collaborative Space Alliance. I think they are good people. If anything Regus should be worried, not us.

···

Thank you for the back story. It’s great to see how everyone gets started.

Jacob

On Wed, Nov 19, 2014 at 5:23 AM, Tom Brandt [email protected] wrote:

There are two big-box hardware stores near me - Lowes and Home Depot - but I still go to the local hardware store because they frequently have, order, or can make, some obscure thing that the big boxes don’t, and the people working there are very knowledgeable about all things hardware and home-maintenance related.

I think that smaller, independent coworking communities can offer a more personalized experience than big coworking can. Independent communities are better able to adapt their communities to the character of the particular community than spaces that are part of a larger organization.

Visit this forum on the web at http://discuss.coworking.com


You received this message because you are subscribed to the Google Groups “Coworking” group.

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On Wed, Nov 19, 2014 at 4:44 AM, Jeannine [email protected] wrote:

I think that once you put 6 zeros after anything, everybody goes crazy.

I am glad for the attention, high tide raises all ships and, as Alex points out, Regus has been more co-opted than it has been dominant in relation to coworking. Before you know it, WeWork will also be applying to get on the Wiki and so on, just like Regus. :-). Though not yet, they are still in the own sandbox model and who knows, they may stay there.

A number of sectors are shifting in the face of the ideas around the sharing economy and office space is one of them. And as with the others there are policy issues to be worked out and so on. The dark sides of the sharing economy include of course exploitation and the black market. This is also not different with coworking. As Big Coworking develops I expect to see these kinds of problems addressed faster than they would have without it, so that is helpful.

One of the things I would like to see is a real cradle to grave approach for coworking; at this moment most people think of it as a nice place to start until you get to be a real business when you get your own space. And I expect that Big Coworking will change that.

On Monday, November 17, 2014 9:16:07 PM UTC+1, Steve King wrote:

Fascinating - and eye popping - numbers on WeWork in the Forbes article Inside the Phenomenal Rise of WeWork

Visit this forum on the web at http://discuss.coworking.com


You received this message because you are subscribed to the Google Groups “Coworking” group.

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twb
member, Workantile
@twbrandt

I agree that WeWork is more of a competitor for Regus and other exec suites/office business centers. I also agree there’s plenty of room for independent coworking spaces.

But WeWork’s success is going to impact the coworking and office as a service industry beyond simply being a competitor. Their business and financial success will drive increased interest in coworking and new entrants to the industry.

We’ll see more Big Coworking spaces being started, mimicking WeWork’s success (Industrious is already an example) . We’ll see more investor interest in coworking due to A list VC firm Benchmark’s involvement in WeWork and their financial success. The real estate industry, which has been sniffing around coworking for years, will likely start to move much more aggressively into the industry.

We’ll also see more interest in coworking from local governments as more of them see it as an economic development tool.

And, of course, we’ll see more potential member interest in coworking. This will include greater interest from larger firms who (rightly or wrongly) often equate financial success with stability.

All of this means new opportunities for existing coworking spaces. But it also likely means some new risks, especially from new entrants.

This was an amazing story!

As someone who is starting a space it’s helpful to hear the backstory, behind wework. This particular quote stood for me.

  • "WeWork prefers to work with new developments or in gentrifying or distressed neighborhoods, where WeWork can get space at a standard anchor-tenant discount of about 10%.
    How important is it to look for buildings in communities which fit the criteria above?
···

On Monday, November 17, 2014 12:16:07 PM UTC-8, Steve King wrote:

Fascinating - and eye popping - numbers on WeWork in the Forbes article Inside the Phenomenal Rise of WeWork

Wall Street Journal reports WeWork just raised $355 million and is now valued at $5+ billion.

Funny enough, the article URL is more telling about what’s really going on here:

/wework-now-a-5-billion-real-estate-sartup-1418690163

···

The #1 mistake in community building is doing it by yourself.

Join the list: http://coworkingweekly.com

Listen to the podcast: http://listen.coworkingweekly.com

On Tue, Dec 16, 2014 at 10:59 AM, Steve King [email protected] wrote:

Wall Street Journal reports WeWork just raised $355 million and is now valued at $5+ billion.

Visit this forum on the web at http://discuss.coworking.com


You received this message because you are subscribed to the Google Groups “Coworking” group.

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Alex,

Do you consider WeWork to be coworking or something else - closer to Regus?

  • Aaron
···

On Tue, Dec 16, 2014 at 8:05 AM, Alex Hillman [email protected] wrote:

Funny enough, the article URL is more telling about what’s really going on here:

/wework-now-a-5-billion-real-estate-sartup-1418690163


The #1 mistake in community building is doing it by yourself.

Join the list: http://coworkingweekly.com

Listen to the podcast: http://listen.coworkingweekly.com

On Tue, Dec 16, 2014 at 10:59 AM, Steve King [email protected] wrote:

Wall Street Journal reports WeWork just raised $355 million and is now valued at $5+ billion.

Visit this forum on the web at http://discuss.coworking.com


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Aaron Cruikshank
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Yeah, definitely. They’re a real estate company. They’ve gotten better at their version of “community” than Regus has, for sure, but if you get closer to what they do instead of reading the press and their marketing material, you’ll find that it’s a high volume, high turnover real estate business (which is a big part of what makes their financials appear different from their more conservative cousins).

Among the many things that are interesting to me is that early on, they actively rejected the coworking language along with the broader coworking community…until coworking really started to mainstream and it became advantageous for them to use the word. Now they’re rejecting the idea of being a real estate company because they don’t like being compared to it.

I don’t think their model is bad, by the way. And they’re definitely smart. Overvalued? Definitely, but that’s what happens when you align yourself with an already overvalued startup market (which is the vast majority of their audience). But also like the startup market, this kind of growth isn’t sustainable…which is a whole lot more evident when you look beyond what the press tells you is true :slight_smile:

-Alex

···

On Tue, Dec 16, 2014 at 8:05 AM, Alex Hillman [email protected] wrote:

Funny enough, the article URL is more telling about what’s really going on here:

/wework-now-a-5-billion-real-estate-sartup-1418690163


The #1 mistake in community building is doing it by yourself.

Join the list: http://coworkingweekly.com

Listen to the podcast: http://listen.coworkingweekly.com

On Tue, Dec 16, 2014 at 10:59 AM, Steve King [email protected] wrote:

Wall Street Journal reports WeWork just raised $355 million and is now valued at $5+ billion.

Visit this forum on the web at http://discuss.coworking.com


You received this message because you are subscribed to the Google Groups “Coworking” group.

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Aaron Cruikshank
Principal, CRUIKSHANK

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e-mail: [email protected]

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I generally agree w/ Alex - valuation is sky high, and sustainability is questionable. In general, be careful of the hype.

My 2 cents: WeWork is closer to a hotel operation. They’ve recently been exploring more and more the lounge/conference rooms side of the business, and in my opinion, explore next the retail side (coffee, etc.).

So then the question is, “Is a hotel business a real estate company?”

My opinion is no - it’s a business operation.

Does a hotel or WeWork foster “community”?

My opinion is maybe, in that certain demographics will gravitate to that brand and therefore appreciate meeting fellow like-minded folks.

In the end, does it matter?

My opinion is no. They’re focusing on what they do, and if they have any interest to collaborate with the rest of us coworking folks, then great. In the meantime, they’ll just continue to claim they’re coworking, as will many others who are coworking or not, or who collaborate w/ fellow coworking folks or not.

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···

On Tue, Dec 16, 2014 at 8:05 AM, Alex Hillman [email protected] wrote:

Funny enough, the article URL is more telling about what’s really going on here:

/wework-now-a-5-billion-real-estate-sartup-1418690163


The #1 mistake in community building is doing it by yourself.

Join the list: http://coworkingweekly.com

Listen to the podcast: http://listen.coworkingweekly.com

On Tue, Dec 16, 2014 at 10:59 AM, Steve King [email protected] wrote:

Wall Street Journal reports WeWork just raised $355 million and is now valued at $5+ billion.

Visit this forum on the web at http://discuss.coworking.com


You received this message because you are subscribed to the Google Groups “Coworking” group.

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Aaron Cruikshank
Principal, CRUIKSHANK

phone: 778.908.4560

e-mail: [email protected]

web: cruikshank.me

twitter: @cruikshank

book a meeting: doodle.com/cruikshank

linkedin: in/cruikshank

Commercial real estate is a huge industry and its business practices and models are substantially the same as they were decades ago. From the point of view of venture investors, it’s an industry ripe for disruptive change. WeWork has shown it has a business model that’s disruptive and, at least so far, highly scalable. This, coupled with WeWork also being a play on the future of work,is why investors are so excited about them.

We’ve interviewed a number of WeWork members and they consistently talk about the networking opportunities and community provided by WeWork spaces. Because of this, we consider them coworking facilities. But WeWork communities are pretty different from those of traditional coworking spaces. They’ve targeted startups - including larger startups with 5-10 or more employees - as their primary market. This is a different segment than most traditional coworking facilities serve. And while they do have independent worker members, these folks tell us they are in a WeWork space primarily because of the access it provides to startups.

So are they coworking? We think yes. But the broader workspace as a service industry contains multiple market segments and its size, structure and diversity make it unlikely to be a “winner take all or most” industry like many digital business are.

In other words, we think there’s plenty of room for different kinds of coworking spaces to be successful.

WeWork may be expanding into residential co-living according to the Wall Street Journal. I

I theorized a coworking/co-op incubator environment where members actually lived in the space as part of a intensive startup incubator group so I wouldn’t be surprised if Wework took that on…

I once heard from someone at wework (who shall remain nameless) that their goal was (and he said this with a straight face) to open a new coworking space every 7 days,

scary.

···

On Monday, November 17, 2014 at 3:16:07 PM UTC-5, Steve King wrote:

Fascinating - and eye popping - numbers on WeWork in the Forbes article Inside the Phenomenal Rise of WeWork