from past headlines, wework seemed puzzling. $20B valuation from some of the sharpest investors for a startup that rents office space to other startups? most notably, won't the leases become lethal financial anchors once a downturn hits and customers dry up? look at the dot-com era and the corpses of companies reliant on VC-funded startups!
here are the key passages from the article:
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Over the past couple years, WeWork has signed up companies like GM, GE, Samsung, Salesforce, Bank of America and Bacardi. Earlier this year, WeWork allotted an entire building in Greenwich Village to IBM, and now big companies generate 30% of monthly sales.
For growing companies WeWork offers a way to enter new cities without the hassle of scouting locations, negotiating contracts, designing the space and hiring vendors. "There is no reason to rent office space," says Josh Kushner, the founder of the VC firm Thrive Capital and cofounder of Oscar Health, which launched its Los Angeles market from a WeWork site. "It's a one-stop shop. Business is hard enough, and these guys take out all the friction."
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by no means does the article provide enough data to conclude wework is a sustainable business, let alone an attractive one worth $20B.
however, these passages outline the bull case: managing real estate and office operations for all companies with knowledge workers. not only startups.
commercial real estate for knowledge workers is a colossal market.
obviously a ton of risk remains, but at least now the $20B valuation -- and the bet investors are making -- make a lot more sense.
here are the key passages from the article:
===
Over the past couple years, WeWork has signed up companies like GM, GE, Samsung, Salesforce, Bank of America and Bacardi. Earlier this year, WeWork allotted an entire building in Greenwich Village to IBM, and now big companies generate 30% of monthly sales.
For growing companies WeWork offers a way to enter new cities without the hassle of scouting locations, negotiating contracts, designing the space and hiring vendors. "There is no reason to rent office space," says Josh Kushner, the founder of the VC firm Thrive Capital and cofounder of Oscar Health, which launched its Los Angeles market from a WeWork site. "It's a one-stop shop. Business is hard enough, and these guys take out all the friction."
===
by no means does the article provide enough data to conclude wework is a sustainable business, let alone an attractive one worth $20B.
however, these passages outline the bull case: managing real estate and office operations for all companies with knowledge workers. not only startups.
commercial real estate for knowledge workers is a colossal market.
obviously a ton of risk remains, but at least now the $20B valuation -- and the bet investors are making -- make a lot more sense.