Cool. I wonder who is the market for this service?
This is WeWork. This is literally just WeWork. We all remember how well WeWork’s been going don’t we?
It’s more that both this and WeWork are coworking-space companies. They aren’t the only two, and weren’t the first. WeWork is a coworking space founded and run by oddball jerks. Its troubles have nothing to do with the fact that it’s a coworking space.
I clicked through and learned that Industrious has three sites in my town. I’m curious what they charge, but got weary of clicking and scrolling through the pitch before I figured it out. If anybody knows, please post it here.
Sort of. Its troubled come from its stupid factor: it doesn’t own the buildings outright. It’s essentially subleasing office space and paying dearly for every office not filled. I don’t imagine that Industrious has outright bought a bunch of office buildings across the country.
The problem is, this is literally just a human centipede of middlemen who provide no actual value while expecting to get paid.
It’s essentially money laundering but with credit.
How is it a problem that they lease rather than buying? If they bought the space, they wouldn’t have rent to cover; instead they’d have a mortgage. How is that better?
It wouldn’t be; ideally they’d own the building outright. But at least if they mortgaged it they’d be able to sell the building off at a profit if they decide to bail out of a city.
If they had enough cash to buy 100 buildings – which would make them quite an atypical startup – committing it to that purpose would still carry the opportunity cost of not doing something else with the money. And there’s no guarantee that an owner can sell their building for more than they paid, or indeed at all.
You keep looking for the sure thing. There’s no sure thing.
No, but if they didn’t think property values were going to be going up in that city they wouldn’t have started a real estate scheme
This and WeWork both very clearly fit into the popular mold for startups now: absolutely hemorrhage money with no viable plan to profitability or even any plan at all because you can make it up in volume by getting people to invest in your hot new startup that’s burning through billions in the hopes of eventually getting acquired so that you’re somebody else’s problem.
They buy a large chunk of office space, and divide it, in space and time, among people who sometimes need a small amount of office space. And they perform some support tasks, like making coffee. They’re providing a service in exchange for money; that’s business.
I’m not here to defend coworking-space operators, and especially not WeWork, who are notorious creeps. But it’s just nonsense to say that these entities don’t provide a service. You can say their prices are too high for what they do (though, again, I came here only to ask “what do they charge?” and so far nobody seems to know). You can say you don’t need the service they provide. But they do provide one, and it’s been demonstrated for some time now that people are willing to pay for it. The only question is whether it will consistently cost them less than they bring in.
I feel like the professor at Five Minute University here, explaining to people that “business is, you buy something and you sell it for more”.
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