Wework loses $5200/customer, lost $1.3B in H1/2019

Originally published at: https://boingboing.net/2019/08/15/more-than-uber.html

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WeWork filed its IPO homework. So we had a look at its small print and… yowser. What has El Reg got itself into?


Is this, what? is this, just a normal way to run a business? COULD turn off investors? Is this a new business model to just…not make any money? I’ve heard about restaurants taking a year to start getting into the black, but tha’s a notoriously brutal business. What’s…happening? Is financial hijinks just the only business model left?



Lots of incompetence in this executive suite:


Isn’t this like insider trading info? Oh wait…no it’s not like that at all. :wink:

I don’t even know what Wework even is, a small description in the BB post would be appreciated. Just saying :slight_smile: I did click through one of the links and figure out what it was, but i would figure that adding some color to what the company is about would be expected.


Yet another piece of evidence that Wall Street has more money than it can find productive uses for. Which in turn is evidence that we should raise thetaxes on capital gains


This mother truckin’ company is currently ‘remodeling’ our entire work place while we consolidate from like 11 buildings into 5. They are taking away table space so we can all cram into these buildings and sit at huge tables or share spots. They’ve already done one building and everyone hates it. Literally not a single person I’ve talked to has said anything good about it (I have not talked to the execs, who love it). But we get fake telephone booths where we can go in and do private calls that have uncomfortable chairs and no way to use your laptop comfortably. Oh, and we get good coffee, so it’s all fine I guess. F this


In its own words from the S-1: “Adam [Neumann] has been key to setting our vision, strategic direction and execution priorities. We have no employment agreement in place with Adam, and there can be no assurance that Adam will continue to work for us or serve our interests in any capacity. If Adam does not continue to serve as our Chief Executive Officer, it could have a material adverse effect on our business.”

Lol, wut?

Cause for concern? No, it’s fine, they’re only renting an undisclosed amount of the company’s business-critical buildings from the same CEO they don’t employ as well as his boardroom mates: “We have entered into several transactions with our Co-Founder and Chief Executive Officer, Adam Neumann, including leases with landlord entities in which Adam has or had a significant ownership interest. We have similarly entered into leases with landlord entities in which other members of our board of directors have a significant ownership interest.”

So, why not just cut out the middleman and give your money straight to Mr Neumann and his mates.


We have a history of losses and, especially if we continue to grow at an accelerated rate, we may be unable to achieve profitability at a company level (as determined in accordance with GAAP) for the foreseeable future.

You see, it’s fine to take money from people for a business that you know will almost certainly never make money for the investor as long as you tell them that first.

But how could BB adequately describe:

We are a community company committed to maximum global impact. Our mission is to elevate the world’s consciousness. We have built a worldwide platform that supports growth, shared experiences and true success. We provide our members with flexible access to beautiful spaces, a culture of inclusivity and the energy of an inspired community, all connected by our extensive technology infrastructure. We believe our company has the power to elevate how people work, live and grow.

I mean, that’s clearly not a mere office space rental company…


I read something similar yesterday in regard to the inverted bond yield situation and the trend toward zero or negative interest rates:

“It’s an absurdly odd world and it signals two things,” said investment banker Daniel Alpert, managing partner at Westwood Capital. “There’s an obvious, persistent and continuous glut of underutilized capital and there’s no place in the advanced world for that capital to be invested without excess risk.”


I don’t know if higher capital gains taxes are the answer, but something needs to get liquidity flowing. A Green New Deal seems tailor-made for alleviating this problem, but apparently that’s too Bolshie for the Randian geniuses lining up to invest in WeWork.


I picture someone who buys all their stuff from Amazon and regularly uses Uber to get to their job in a WeWork office. That person looks like a comfortable middle-class citizen, and that’s how they see themselves; but in fact, they’re a poor person (perhaps destitute, when you consider their debt), and their supposed status is being propped up by blank checks from entities on the financial plane.

Question one is, why are investors paying for this? It only makes sense if you assume (or have no other choice but to hope) that these people will be able to afford the unsubsidized versions of these things in the future. Or to put it another way, investors depend on a world of materialistic Reaganite consumers, and they are paying to keep that world alive even though people increasingly don’t want, and can’t afford, to live like that.

It’s a kind of wealth redistribution, but a very selective kind. You’ll notice that while investors are happy to subsidize aspirational stuff like slick offices, taking cabs everywhere, and conspicuous consumption, they’re not subsidizing co-housing projects or credit unions. This isn’t about protecting the 99%; it’s about giving an economic edge to the hardcore Consumers among them, in the hope that when mass extinction arrives, the survivors will be disproportionately plutocrat-friendly.

ETA: that’s the “malice” interpretation, but of course there is also much to be said for the “incompetence” theory which summarises the whole situation with an image of Wile E. Coyote pedalling his legs in thin air over the middle of a canyon.


In light of that, it’s also worth noting that WeWork in particular spins its marketing to younger people with college credentials, the ones who’ll be living their prime years as the privileged 20%ers in that future world. The other 80%, if they have jobs at all, won’t have workplaces as pleasant and fun as the ones that WeWork (or the tech companies WeWork takes its design and amenities cues from) provide.

That will be the bargain: if you’re lucky enough to be born into the 20%, or luckier still to break into it, we’ll give you a technologically-enhanced version of something close to a 1980s Boomer lifestyle as long as you stay in line and maintain a large credit card balance. Otherwise, the best you can hope for is a neoliberal UBI that keeps you constantly poor but never broke.

I think this exists somewhere in between.


I’ve come to the conclusion that we are just gonna do Web 1.0/DotCom crash every 20 years because people are stupid.


I think people are interpreting this to mean each customer is costing them $5200 which I doubt is the case. I think $5200 is just their total costs divided by the number of customers meaning if they were able to double the number of customers without doubling costs that number would drop.

Not that that absolves them of operating with a failing business plan.

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This. I tried looking at how one pay for decarbonisation and found the world is just flush with cash. Just stupid gigantic piles of cash that definitely can’t be spent on something nice.


Well, heck. If they are willing to send me $2,000 I won’t become a customer, saving them $3,200. It’s a great bargain, really, They would be fools to not take me up on it. (I know I would never be their customer. Shhhhh.)


I don’t think so. They lost $1.6 billion on a few hundred thousand members in 2018. I’m not sure exactly how they are calculating the number (average subscribers for the year or some such), but just the 2018 raw numbers have them losing over $3,000 for every member.

I am pretty sure this isn’t conflating expenses per customer vs. losses per customer.

Warnings that they may never be profitable, promises to have compliant payment processing… eventually, and hand waving away numerous instances of potential litigation over branding?

Shut up and take my money?