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I think the very fact that we’re talking about it proves they are innovative, but I’d argue the innovation isn’t quite what they’d like to think it is. This market is a tough one, with much competition. The fact we’re discussing this at all shows that they’ve managed to grow to become a recognisable name. Even if that’s just because of tons of VC cash, at least the VCs thought them worthy of investment. Why? I think it’s a cultural change. Existing players market to companies, WeWork markets essentially to employees, it markets to the person who actually goes into the office and sits there every day, rather than to the balance sheet. With their flexibility on leases, they pass the bar of cheap enough for the business considerations and do well enough for people’s minds, but with the trendy design, nice kitchens, beer on tap, plants, and effortless meeting room AV they appeal to people’s hearts. No one else does this. Is it worth it? Maybe, maybe not, we’ll find out in the long term. This is innovative, and this creates meaningful hype. I believe they’ve got more right than you may be giving them credit for. Is it a long term business? Probably not this alone, there are loads of issues with WeWork as a business. I wouldn’t touch the stock. |