I worked from a few locations in Philly and they were always totally empty. There was like a staff of 12+ well-meaning but extremely bored WeWork employees there attending to my needs, and the shitty YC startup I was at a few years back got some insane discount for a luxe plan there. Even in like, 2019 before their failed IPO it was clearly a dog company.
Really a marker that we are at an end of an era of excess — glad that I got to enjoy the ride of other people’s money, even if only in a slight way.
I was at a WeWork in Philly two weeks ago and I was sitting on a couch when a rep met with a prospective tenant and was told that they were totally booked up at that location for offices. Later that day I was at another WeWork in Philly that was packed in all common areas.
There are some that are always a little sparse to be sure, like the Navy Yard in Brooklyn, but I’ve been to 75+ in the past year or so in 5 different countries and for the most part they are well used and the permanent office parts are really full.
Not saying it’s financially sound but the core product is real.
If I had to guess I would assume the issue is spending from boom times and debt. Theres an actual business there too.
Same here in Hamburg, Germany. Most offices are rented, it was hard to an office of the size we wanted, there was exactly one available in four locations.
Even their EBITDA is negative, so debt is not the (only) issue. Perhaps they have locked themselves into long-term overpriced rental agreements?
I’m curious how hard this is going to hit commercial real estate, which already seems to be on the brink of collapse. What are the cascading effects like the subprime mortgage crisis?
Afaict, the reason they announced that they most definitely may be going into bankruptcy next week is to play hardball with their commercial land lords and try to get a deal which will keep them alive.
The idea being that the landlords (and everybody) knows that the commercial real estate market is super depressed, so if WeWork disappears the landlords may be stuck with an empty building for years.
How does Softbank still keep standing? They keep losing on the vast majority investment they've made, and yet they haven't come up against any financial issues? I feel like Softbank going bankrupt is going to be the Black Swan that affects Silicon Valley the most.
They got a couple wins recently with the ARM IPO, Coupang IPO, and ByteDance (aka TikTok). WeWork (and Uber) has been a massive hole, but SoftBank is diversified enough that they can withstand it.
They have historically been one of the biggest movers in Chinese and Indian Growth VC, and have a significant presence in American Growth VC too.
They made oodles of money off Slack and DoorDash for example, and their 2010s investment phase was thanks to them being flush with profits from Alibaba and Tencent.
At the end of the day, compared to most other Growth Funds, they tend to hire some solid investors who know how to find capable operators.
Though, lapses of judgement do happen a la Neumann, but that's like saying anyone who invested in Pivotal or Joyent is dumb. This is VC. It's not guaranteed returns. There's a reason why it's called VENTURE capital.
Alibaba, ARM, Bytedance, Coupang, Oyo, Xiaomi, Didi, Slack, Doordash...Softbank has plenty of hits to make up for its losses. That's how the VC industry works.
They aren't afraid of risk and they've been around long enough that they appear to be at least an averagely competent investment firm which just takes way more risk than most would consider reasonable. Softbank was also founded in pretty much the perfect time in history for a firm like themselves to succeed, a highly speculative low interest rate environment.
Their hits have more than made up for their misses.
This is really good news for actual real players in the coworking space. Being disruptive with venture money conceivably helps new offerings along, but in this case it was never anything but a massive fraud that distorted the entire market.
No it’s not. The only other real player is Regus and they are absolutely f’cking horrible with bad poorly run spaces and predatory billing. They’re a scourge.
The WeWork product is fantastic and I’ve tried all alternatives. I’m in a different city basically every week and if they go under or stop being basically the same I’ll seriously mourn the loss.
There are no real players in the coworking space, and any interest for startups in the field was destroyed by WeWork. So no, this is not good news, just a nail in the coffin for the industry.
I personally don't visit coworking spaces as I prefer to work from a local coffee shop or go to the library. But why does there need to be a big national chain of coworking spaces? WeWork doesn't care about my mid-size town, but there's an independent co-working space here. You get access to some coffee, a good desk and chair, and Internet. I think they have some spaces for calls or little meetings, too. What does WeWork offer besides, I guess, locations in multiple areas?
Yikes. Sitting at a WeWork right now... Love it, I often have an entire floor jus to myself. Many locations are ghost towns, some have entire floors shut down.
I have a personal WeWork subscription and love every bit of it. I travel a lot and can use any of the WeWork locations to get my work done. Far better than any cafe I would ever be able to find (obviously)
As a private, non corporate costumer, I’m sad to see them go.
“Ghost town” probably depends on your location and country. The ones here are sometimes so full that if you don’t book in advance, you can’t get a seat for on-demand
I can echo the sentiment of "ghost town" in several WeWork locations from the outside, and many corporate spaces too.
I think the fundamental problem is they over-expanded too quickly and charge too much, leading to an oversupply of locations and a huge pile of leases in the debt column. They're glorified Regus and drank their own KoolAid that they were a unicorn rather than a business.
Corporations are conduits for the founding shareholders and other beneficiaries of the money conduit
Success of the corporation has nothing to do with the success of the founding shareholders, if being used as a conduit: something to draw a salary from, something to sell related property to, something to sell your shared of. Authorize more shares to be created to replenish holdings. Vest at whatever speed you want (30 days? Why not)
Neumann understood that, his employees and sycophants should have understood that but did not. I’m currently with a company where all the employees have never been in a “tech startup” and think we are one, when we’re not. I’m the only one that seems to have experience with a tech VC backed tech startups to tell the difference.
I think its weirder that there aren’t more of him. Like, people either get too risk averse or comfortable at sort of outdated amounts of money. Or they create companies with this wide ensemble cast of characters for clout, which is also very outdated and unnecessary for what these companies do, which also prevents them from having flexibility on how to direct the conduit to their pockets. But its all so outdated, given the expansion of the money supply there should be way more Neumans, way more Bill Hwangs a version that didnt get margin called and liquidated everything successfully.
To be honest, I thought this had already happened. Maybe I'm just an idiot, considering I'd thought that had happened, and yet worked from a WeWork a couple months ago.
Readit News
Really a marker that we are at an end of an era of excess — glad that I got to enjoy the ride of other people’s money, even if only in a slight way.
There are some that are always a little sparse to be sure, like the Navy Yard in Brooklyn, but I’ve been to 75+ in the past year or so in 5 different countries and for the most part they are well used and the permanent office parts are really full.
Not saying it’s financially sound but the core product is real.
If I had to guess I would assume the issue is spending from boom times and debt. Theres an actual business there too.
Even their EBITDA is negative, so debt is not the (only) issue. Perhaps they have locked themselves into long-term overpriced rental agreements?
The Portland location I go to has been packed as a result.
The idea being that the landlords (and everybody) knows that the commercial real estate market is super depressed, so if WeWork disappears the landlords may be stuck with an empty building for years.
They have historically been one of the biggest movers in Chinese and Indian Growth VC, and have a significant presence in American Growth VC too.
They made oodles of money off Slack and DoorDash for example, and their 2010s investment phase was thanks to them being flush with profits from Alibaba and Tencent.
At the end of the day, compared to most other Growth Funds, they tend to hire some solid investors who know how to find capable operators.
Though, lapses of judgement do happen a la Neumann, but that's like saying anyone who invested in Pivotal or Joyent is dumb. This is VC. It's not guaranteed returns. There's a reason why it's called VENTURE capital.
Their hits have more than made up for their misses.
[0] - https://pitchbook.com/news/articles/softbank-earnings-vision...
The WeWork product is fantastic and I’ve tried all alternatives. I’m in a different city basically every week and if they go under or stop being basically the same I’ll seriously mourn the loss.
https://www.regus.com/en-us/united-states
There is also codi and several others
As a private, non corporate costumer, I’m sad to see them go.
“Ghost town” probably depends on your location and country. The ones here are sometimes so full that if you don’t book in advance, you can’t get a seat for on-demand
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I think the fundamental problem is they over-expanded too quickly and charge too much, leading to an oversupply of locations and a huge pile of leases in the debt column. They're glorified Regus and drank their own KoolAid that they were a unicorn rather than a business.
Technology is not going to improve where people are and aren't willing to commute.
Success of the corporation has nothing to do with the success of the founding shareholders, if being used as a conduit: something to draw a salary from, something to sell related property to, something to sell your shared of. Authorize more shares to be created to replenish holdings. Vest at whatever speed you want (30 days? Why not)
Neumann understood that, his employees and sycophants should have understood that but did not. I’m currently with a company where all the employees have never been in a “tech startup” and think we are one, when we’re not. I’m the only one that seems to have experience with a tech VC backed tech startups to tell the difference.
I think its weirder that there aren’t more of him. Like, people either get too risk averse or comfortable at sort of outdated amounts of money. Or they create companies with this wide ensemble cast of characters for clout, which is also very outdated and unnecessary for what these companies do, which also prevents them from having flexibility on how to direct the conduit to their pockets. But its all so outdated, given the expansion of the money supply there should be way more Neumans, way more Bill Hwangs a version that didnt get margin called and liquidated everything successfully.
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