WeWork is the leading co-working company in the world, and sixth-most-valuable start-up, according VentureSource. However, Adam Neumann, a co-founder of WeWork and its CEO, described his company as overvalued if you’re looking merely at solid infrastructure and incoming rent.
“No one is investing in a co-working company worth $20 billion. That doesn’t exist,” he said in Forbes in 2017. “Our valuation and size today are much more based on our energy and spirituality than it is on a multiple of revenue.”Given that bold statement, what does that energy look like?
There’s free craft beer and cucumber water on tap. Millennials milling in jeans, clacking away on laptops. Small glass conference rooms, and a general design intended to communicate that this is a place for creativity, with good snacks and cool people, according to writers for the Atlantic, who moved into a WeWork space in March of last year. WeWork wants to revolutionize white collar work. It plays office to 175,000 people in 207 locations spread out over 20 countries, and it wants to double its size. Neumann describes it as a “community company,” not a real estate venture.
Established Tech Companies Interested in WeWork-Style Concepts
One tangible way to understand the “energy” value Neumann describes is this: major corporations are sending their people to shared office spaces. It’s not just Millennials, whose workplace requirements have been the subject of many headlines. The side by side, creative nature of workplaces like these seems to be attracting big companies that want to find new talent and rediscover the scrappy energy of a startup mentality in order to innovate, according to Entrepreneur. Tech giants like Verizon, IBM and Microsoft have sent people to shared office spaces. In fact, this is built into the WeWork culture, which Neumann also described as a “capitalist kibbutz,” which encourages people to mingle, get to know each other, learn, and kick around problems and solutions.
Have We Seen WeWork Before?
Some investors are skeptical because WeWork looks like another network of flexible offices spaces called IWG, which boomed in the 1990s. It went by Regus at the time, and after a surge of excitement, it went bankrupt after the dot-com bust. One industry veteran was reported as describing WeWork as nothing but “Regus with a paint job,” in the Wall Street Journal.
For now, the company continues to grow and envisions expansion for in the future 2018.