| Your assumption is that the narrative is that WeWork is an office rental company when perhaps you can take the leap of faith and believe We was being truthful in their intentions of "elevating humanity" or whatever. Therefore their valuation is based on that. The tell is amongst these post mortems being drummed up by the media they remark how Adam Neumann is unreasonable when he demands the tech team to "think bigger". I've heard that before when working for CEOs like Adam. He managed upwards, sold that to Softbank Vision Fund, and fails in managing downwards. So on one hand it's an indictment on Masayoshi Son's tunnel vision when spending his fund's cash. On the other hand, that's in the past. It's already happened. So to your first assertion: WeWork isn't an office rental company, it's a real estate financial engineering holdings company with the intention of investing its funding into software research and development to further make their real estate financial engineering efficient. In simpler words, WeWork is in the occupancy game. Like McDonald's using burgers to pay its mortgages, WeWork uses monthly rent and a splash of crossfit gym membership to pay its lease. Therefore to your second point, it is indeed clear how these things would be a significant competitive advantage. If you think of a building as a living, breathing being, WeWork is the means in which it monitors all that goes in and out of that building. WeWork knows when someone shows up, wanders about, sips coffee, takes a poop, and leaves. WeWork knows when you are occupying a space. There were some stuff tossed in to help you create and grow a business so that they can hedge against you running out of money and leaving. Next step they want to help you be occupational, so they bought up stuff to make it so that you can go from idiot to trained. They also wanted to help you occupy your home. Then he gave away the other silly stuff like raising children to his wife and brother in law. Now for your third point, is this a good strategy? Yes. Masayoshi agreed. Will it work? Won't know till you try. Except two things may have gotten in the way: a. WeWork over-extended and needs more cash, Masayoshi Son was painted in the corner to not being to give more cash, they found themselves in a situation where they had to IPO in order to get more cash. This is inevitable for the sake of chasing ambitious hypergrowth. b. Adam Neumann is inherently greedy and shady, bad at operating a business, and bad at technology integration. Will anyone else available now be able to manage the 12-18 mo process of integrating all that they've bought? Maybe. But it doesn't sound like they tried or figured it out. When Microsoft swallows up businesses they work fast to rebrand, clean up the insides, then toss it to their sales force to recover costs. When Google swallows up businesses they leave it alone but then shut it down later. When Facebook swallows up businesses they leave it alone and their businesses grow. So one might say Adam Neumann just isn't in the same leagues. And Masayoshi Son is now seen as bad at picking which handful of people out of 8 billion on this world is going to be the next big thing. Oh well, the world spins on. |