[puranjay]

The people that matter - the investors - valued WeWork like a high margin software company. Then WeWork itself tried to value itself like a high margin software company in its S-1.

Because WeWork's margins and revenue are similar to another very similar company - Regus - yet their valuation is more than 10x

[pembrook]

WeWork and its investors did not try to value it like a high margin software company. WeWork was valued like a standard, overly optimistic growth company. This is another narrative invented by tech journalists who don’t understand how valuation works.

Regus is a mature company with no plans for massive growth. Of course their Value (p/e of under 20 I believe) is going to reflect that.

Meanwhile, look at any non-tech company in growth stage. Take Shake Shack for example. Their P/E ratio is 170. Chipotle had a p/e of 400 a few years ago.

Nobody thinks Shake Shack and Chipotle are tech companies. These valuations reflect the prospects of growth—-not misplaced beliefs about restaurants being tech companies.

[throwaway3563]

The latest Wework TV ads sell it as an “operating system” for workspaces, among much other showy language filled with business-transforming technology buzzwords. It definitely sounds like they’re marketing as some unique proprietary tech, and I wouldn’t be surprised at all if the aim was to justify their absurd valuation figures.

[pembrook]

Except, every company in 2019 is marketing themselves as if they have some unique proprietary tech. I just saw an ad for Holiday inn that did this.

None of these things mean smart investors (or even customers) are being hoodwinked by this marketing nonsense however.

[jjeaff]

Adam Nuemann was certainly trying to push the "tech company" narrative. I heard a few old interviews with him and he was always sure to mention their "technology platform" and how they spent a very long time developing it.

So he must have thought someone was swallowing that.