WeWork Isn't Selling Exactly What You Think They Are

June 10, 2019

We lost the hockey game badly, 8-1 was the final score and there was simply no chance we could've competed. I was lugging out my equipment to the car and saw her leaning against my car with one leg crossed over the other. Of course I know who this person was; she was the girlfriend of the guy who I lambasted for renting out a WeWork co-op space. She looked at me, "Let's go out for food, I know you're hungry." She was so bold and had no trouble telling me I was the worst goalie she had ever seen. I smiled, "There's a good restaurant here near McCormick Arena, we can talk there."

 

We sat down at the restaurant and she proceeded to order for me as if she knew what I liked. She told me, "You're being too hard on WeWork and my boyfriend. All he did is take you on a tour and you decided to write unfavorable articles about the company and himself." I was little flabbergasted when she told me that all the guys find her attractive. The food arrived and I told her, "I guess all the guys find you attractive rather than the men." Her face got contorted, "Are you joking? Are you criticizing me?"

 

I backed off and asked, "What the hell do you want to talk about?" She reiterated, "You're being too hard on WeWork and my boyfriend still wants to play on your hockey team. All I'm waiting for is your apology." She went on to proclaim that co-working spaces are foundational, creative, and energetic spaces where freelancers, entrepreneurs, and small firms, that are normally tired of isolation and coffee shops, can co-create through interaction and sharing ideas. Entrepreneurship requires a supportive and productive business environment coupled with a physical climate that's supported by strong, well-developed business and social networks. She looked at me, "I can introduce you to a lot of people, a lot of girls, I know I'm married but my network is vast." I finished my dinner and gave her a lift home to her boyfriend. Not a single word was said during the whole car ride.

 

Now to the research side. A recent literature report indicated that co-workers reported the most attractive features of being based in co-working spaces were "social interaction" at 84%, "random interaction and opportunities" at 82%, and "sharing information and knowledge" at 77%. WeWork may believe that knowledge sharing, both formal and informal, is one of the assets received by members upon signing up to rent their frivolous leasing space. However in reality, most activities in business tend to happen natural upon the innovation fostered by individuals not in social settings, but in stimulating interactions with someone who is knowledgeable in the field that they want to progress.

WeWork does not stimulate entrepreneurial activity. Published qualitative research findings reveal that WeWork's social gathering is based on recruitment and collaboration with fellow workers to lease their space. WeWork incubates open offices, coffee corners, and bars for pseudo-entrepreneurs to overcome their loneliness that becomes a self-reflection in the development of particular skills that are based on video game simulations.

 

Perhaps the most concerning aspect of the company is its business model. WeWork rents buildings for 5 to 10 years and then proceeds to sublet the spaces to secondary tenants, ultimately leaving the company with empty spaces. WeWork's CEO stated, "Anyone who says that just doesn't understand how this works, we aren't giving an answer to this. It's one of our professional secrets. You have to understand how the contracts are built."

 

I told the flirtatious woman who has a boyfriend, "If the CEO can not give us the exact numbers of how many members are leaving and how many are staying then the company is useless." The entire episode of WeWork reminds me of an S&L demise where they borrow short and lend long and take the interest rate risk head-on. CRB, a certified rental building program, is promoting WeWork voraciously because it's all they have when the market turns against them.

 

At the restaurant she told me, "I can make things work for you if you choose to collaborate with WeWork, the possibilities would be endless." I simply told her, "I am married and I love my wife." She told me that the world is constantly changing, to which I replied, "Not with me."

 

It's time for competitors like Regus, Servcorp, and Knotel to go into battle with this fledgling and immaterial company that wants to sell sex to perpetuate their own growth. If Regus changes their business model to gradually attract professors in the biotech, mining, and banking sectors, then the company will attract the crowds looking to gain real knowledge rather than a social club that simply wants to inter-mingle with each other. Mozart, Van Gogh, and Einstein did not need the public to sustain their knowledge, their knowledge became an impetus for others to follow even if they did not have the harmony and the professional skills that they lived in.

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