Fri. Dec 6th, 2019

The Balfour Institute of Esoteric Culture

The Internet is a dark and terrible place

WeWork is today’s silly startup failure

2 min read

So, for those who wonder what WeWork is, it’s someone who did a “I’m going to disrupt some old silly business practice and try something new!” business plan, not a bad idea out of the box mind you, if done properly and with a fair amount of luck.

Now, WeWork target was Office Renting, aiming to create fluid short-term rental agreement with smaller businesses and startups, meaning that small companies wouldn’t have to sign long-term rental contracts tieing them down to specific locations and spaces.

WeWork would essentially be a Serviced Office with Millennial nonsense* and short term agreements bolted onto it.

*By this I mean public “shared” spaces were the renters can easily network and what have you not, Google-style, with Pinball machines and ball-pits and dumb shit like that.

This does ignore the single most valuable reason to own real estate: “Long-term fixed rental income”, which is one of the reasons why renting is such good business, solid income for long terms, with nice deposits in case something goes bad.

WeWork also rents out meeting spaces and all that nonsense, but if you just need a meeting space, there are almost certainly a church, a local clubhouse, a school or some such operations that can offer you the same deal, probably at lovely low prices, sure, it doesn’t look fancy and there’s no Pinball machines, but still, frugality is a good thing.

The real issue here, is the fact that WeWork signs long-term renting agreements on their properties and then rents them out short-term, essentially assuming the brunt of the risk themselves.

Combine that with a whole bunch of rental shenanigans, where the now ex-founder and CEO Adam Neumann would buy buildings and then rent them to his own company, have a bunch of his family on the Board, change the companies name and then pay a company he owned for the rights to use the new name.

Also, massive overvaluation of the company have basically caused the whole company to be owned by Softbank of Japan and the founder and his ilk thrown out of the company.

The problem? Greed basically, hell, Neumann sold his stake just before he announced an IPO, so he almost certainly got his payoff, except to see him in a few years with some other “disruption”.

Oh yeah, and the usual sexual harassment accusations, made even more damning when the company changed it’s policy from “Unlimited Beer” to “Four Beers per day Max”, apparently nobody have told them to just not fucking harass people about their tits and/or lack thereof.

Softbank will either keep the company alive in a massively restructured way or liquidated the shit out of it.

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