"Business"
The We Company and Remote Work, a $47 Billion Love Story
June 26, 2019

In this article I will describe how the growth and optimization of remote work will help prove that the latest $47 billion valuation of The We Company is accurate and just. There is much to be told in that elaboration.  

Table of Contents

  1. Introduction
  2. Growing, growing, grown
  3. I have no idea how to use this remote
  4. The bad, the ugly, and the horrible
  5. Happily ever after
  6. Conclusion

Introduction

Shortly before last Christmas, WeWork (now known as The We Company) was given an updated valuation of $47 billion. A lofty number for a real estate company who owns practically zero properties. The CEO, Adam Neumann, owns more of WeWork’s properties than the company does.

At the same time, “remote” has become an ever growing buzzword in the business world. Millennials dream of it, businesses contemplate it, and grandparents click it.

WeWork and remote work have two (and more) things in common. They are both growing in public knowledge at flash flood rates and people have trouble understanding how they successfully operate. As for WeWork, there are countless online articles discussing how their $47 billion valuation is a farce, another notch in the belt of the startup bubble, a future victim of the imminent economic downturn (isn’t that almost every business in the world?), or even a ponzi scheme. In regards to remote work, nearly every company is struggling to figure out how to optimize their workforce to be efficient in remote roles or convince their employees and candidates that coming into an office every day is worthwhile and the best option. Surprise--the attempts to convince workforces that everyday office attendance is mandatory is a known dying effort. It will literally age out in the near future. With all of this being said, I would like to make a #HotTake: The We Company will help foster remote work’s golden age and remote work will help prove The We Company’s value. Let’s dig into why.

Growing, growing, grown

In 2015, WeWork was valued at a mere $10 billion. So, if you remember the sentence that this article started with ($47 billion valuation in 2019), The We Company’s valuation has grown by $37 billion in about four years (370% increase). Clearly, SoftBank and other investors are seeing real value in the expanding future of this company.

Remote work has come a long way, too. The statistics for remote work don’t really need much confirmation in this article. We can all see the increase in remote related blog articles, YouTube videos, Instagram hashtags, job posting keywords and search filters, interview questions, Slack communities, watercooler talk, and in the daydreams of those who commute every single day to work. It is known that a large part of the workforce wants to work at least remote SOMETIMES, and a decent many of people want to work fully remote.

As property and rental prices in big tech hub cities such as New York, San Francisco, and London continue to rise to impractical levels; large, small, old, and new companies will do one of three things.

  1. Bite the bullet and stay within these big cities.
  2. Move headquarters to another growing tech hub city such as Atlanta, Austin, or the many others
  3. Incorporate a partial or fully remote workforce.

The first, second, and part of the third option all require spending significant amounts of money to operate. The other part of the third option literally requires NO money whatsoever, except for whatever that company decides to stipend in helping their employees have a good remote experience (money to help with desk, internet, co-working spaces, etc.). In a business sense, if you told a board or CEO that they could save thousands, tens of thousands, hundreds of thousands, or maybe even millions of dollars per month by having a fully remote team, what is holding them back from doing it? Companies make drastic changes to cut costs. Drastic changes like firing large amounts of people, ending product offerings, selling the company off to new ownership, acting unethically in an unending range of ways--the list goes on and on. Companies are pretty much willing to do anything to cut costs. So, why are more companies not cutting costs and laughing to the bank with their new found money? Let’s talk more about remote work.

I have no idea how to use this remote

A lot of companies and especially the individuals within those companies have no idea how to make the best of their time with remote work. Like my grandma who just bought a new TV and now has a different remote for the first time in nearly a decade, “I have no idea how to use this remote. I don’t like it, I need help!”. Likewise, a lot of companies don’t want to go through the strain of figuring out how to optimize while wasting time with their employees abusing the possibilities of remote work because they don’t understand how to set them up for success. They do not know how to setup the guidelines and best practices for their workforce, so they don’t. On the other hand, some companies do allow their employees to work remotely, without proper guidelines, and the employees have deep struggles with the adjustment. In between these two sentiments, are two more niches. One, some companies preach that in-person engagement is necessary and how their company needs it to work. I agree, yes, for some companies this is true and appropriate--and just wait, The We Company helps companies with that. For the second niche, some companies DO have amazing remote work guidelines and protocols implemented. Though, I don’t think I could count on more than one hand the companies that have this operating at a high level. Some that come to mind through my research are Buffer, Zapier, and GitLab. Please let me know if there are any other stand-out companies that have  great remote guidelines and processes for their employees, I would love to hear about them.

The bad, the ugly, and the horrible

We are getting closer to talking about why The We Company is worth $47 billion, I promise. Before we get there, I would like to detail some of the negatives of remote work. As I started saying above, the employee and the employer both have roles to play in successful remote work. There is plenty to say about how companies handle this in wrong and negative ways, but I don’t think it will help much in proving that The We Company is an accurately valued behemoth. Instead, I will focus on the negatives of remote work for the employees and individuals who are dealing with this in their very personal life. Because, companies listen to their employees--right???

The bad: Remote work requires self-motivation and regiment. When someone is used to waking up at 6 AM to exercise, eat breakfast, shower, dress, pack lunch, and then get in the car for a thirty minute drive because they need to be in the office by 9 AM sharp for a eight hour work day and then you take that requirement away from them, there is a big gap left open. This someone is now opening their eyes at 6 AM with a sigh of relief that they don’t need to spend an hour and a half of rushing just to be in the office and look professional. There is a good chance this someone goes back to bed after their sigh of relief. This moment can accumulate in many different ways and alternate universes--but, I am sure all of you can use your imagination to discover what I’m getting at. It is a simple fact, some (if not many) people that work remote are not going to be good at getting into healthy daily routines. This causes a negative effect on both the personal and professional life. This is especially true for remote workers who spend their workdays inside the walls of their own house *hint hint*.

The ugly: In relation to individuals spending a large amount of time within the walls of their house (and it is a large majority of the remote workforce, see the below graph), even a good routine can bring about the ugly. This ugliness is loneliness and isolation. No matter how much of an introvert you may be, you need to be around people every once in awhile. Some people who live alone may find themselves not leaving their living arrangement for a number of days. As this weekly, bi-weekly, or even monthly occurrence compounds over the working schedule of a year, it has had a significant effect on your life. These lonely and isolated feelings creep into the corners of communication with fellow teammates, the defending walls of happiness, and ability to relate to others.

The horrible: When you mix the bad and the ugly, you get the horrible. A lack of routine, lack of motivation, isolation, and loneliness is a delicious recipe for a depressed and disconnected from reality milkshake. With mental health being such a big talking point right now, this future trend needs to be realized as another potential trigger. Of course, what I mentioned above is not to say that everyone who works remotely will have those problems. Yes, of course, some people will handle all of the potential pitfalls with style and grace. But, even if the weight of the good and bad experiences from remote work is balanced--that still means a significant amount of people will be dealing with the bad. Finally, this is not to take away from any of the many positives of remote work. The positives are truly amazing and renaissance-like things. But, we must speak about the bad so that we can work on making it better.

Happily ever after

How the heck is being depressed any bit related to The We Company being worth $47 billion? It’s directly related. As remote work progresses into the future, realizations will be made about its to-do’s and to-don’ts. Online tests will probably even be calculated by individual’s personality traits to show what kind of remote setup they should have (free idea plug). And people will realize and finally come to embrace the necessity of co-working spaces in the remote work lifecycle.

Co-working

I think it is best to continue first with co-working spaces in general and then move onto the best of those in WeWork. There is a pretty simple solution to all of the individual’s problems that I mentioned in this article: Go to a co-working space.

In reference to what I mentioned in “the bad”, some people struggle with getting themselves up and in a good routine when working remotely. This is easily solvable by going to a co-working space. People need to be online and working at some point or another during the morning, so starting your day at a co-working space, requires a morning routine. Just like commuting to the office, people will need to commute to a co-working space. Some people will think this is counter intuitive and disregards the benefit of remote work, but I don’t believe that’s true. People don’t need to go to a co-working space every single day, but getting in at least some form of a routine to go to a co-working space a few days a week can really benefit someone. Also, it’s not the same as going to an office. In your office, you need to make sure you look the part (in some cases), you may need to avoid your boss or annoying co-worker, or you may be dreading an in-person meeting, or you may despise who you sit around. At a co-working space, you don’t NEED to know anyone who is in the same building as you, there are no meetings to go to, there is no annoying boss or co-worker, and you can usually change your seat as you wish. Another response to co-working spaces being redundant for remote workers, is that coffee shops are free versions of this (or at least as cheap as a coffee). I heavily disagree with this statement. Coffee shops are great for a change of scenery or a quick pitstop to get some busy or weekend work done, but I don’t think it is best for continuous routine or best practice. If you have a meeting or a phone call to take for work and you are in a coffee shop--good luck. And you better apologize to the people you are meeting with and mute your phone because the background noise is an absolute nightmare for everyone involved. The internet in these places can fluctuate and simply turn off for no reason and without any warning. Finally, coffee shops can be extremely distracting. Throughout my travels, I have overheard so many other workers make a comment about how, “I cannot focus AT ALL IN HERE!”, myself included. There is simply too much going on (depending on how the coffee shop is structured): Mothers bringing their crying babies into the cafe so that they can buy an iced latte to survive the morning, teens laughing and yelling about a video their classmate posted on Instagram, or the other four people who are trying to work from the cafe and yelling over each other and the sound of the espresso machine on their separate phones. Co-working spaces usually provide free coffee, co-working spaces provide reliable high-speed internet, co-working spaces provide plenty of outlets for your laptop, co-working spaces provide you with quiet areas for you to take phone calls, and co-working spaces provide you with a professional atmosphere.

The ugly and horrible are also solved by co-working spaces. Loneliness, isolation, and potential depression can truly be aided by going to a co-working location. What truly differentiates co-working locations from coffee shops is the fact that you are surrounded by people who are all working. Everyone that is at a co-working location is looking to get work done. It is extremely empowering and focusing to be surrounded by people like that. You don’t know what they are working on, but you know they are working on something and you want to look like you are cool and smart and working on something too! I have never gotten more work done than I have when I was a member of co-working locations.

Lots of people know about co-working locations but the spaces really have not come close to their full potential. Part of this lies in the fact that people have not come to evolve to realizing the full benefits of what they provide, and the other part lies in the fact that the different companies have not taken complete advantage of their business plans and the untapped niches that exist.

The We Company

At last, we have arrived, WeWork. The golden child that has been hidden away from this essay’s length article for so long. My belief in The We Company’s valuation all lies strongly with WeWork--that is where the company evolved from, after all.

WeWork has established itself as THE co-working space. There is no question about it, the WeWork name reigns supreme in all things co-working. My mom even knows about WeWork--it’s that big. There are few things more valuable in emerging markets than having a diamond tier of brand reputation. If someone is contemplating the idea of getting a co-working membership, I can almost guarantee you they are going to at least research the nearest WeWork. WeWork is the biggest office renter in New York, London, Washington D.C., and is on the top five list in many other cities. Yes, the biggest office renter, that means they rent more office space than IBM, Amazon, Google, Facebook, and any other company in those cities. Can you think of any other co-working company that comes close to those statistics?

WeWork builds the best office environments. Another thing that other co-working spaces can’t compete with is how well WeWork builds and manages their spaces. When you walk into a WeWork, you are in awe. You take in the cool floor layouts, the flashing light signs, and the never ending flow of beer on draft. The hosts of these different locations are also extremely welcoming and thoughtful. If you don’t believe my lightly detailed comments, that’s ok. Just take Facebook for example, who is paying WeWork to manage office space for them. If you thought companies like Facebook had the coolest offices to work in, well, I guess it is WeWork you should be putting at #1 now.

To expand on what makes WeWork’s locations so special, for me, it is community. WeWork does an exceptional job at bringing people together. It is a true competitive advantage, it is what every company desires for its team. They do this in a number of ways, from as rudimentary to rearranging hot-desk areas for events so that people need to realize they are happening and adjust, to their community app that acts as a sort of in-house LinkedIn meets Facebook Events kind of deal. Every WeWork location in the world expels effort to bring in local businesses, entrepreneurs, schools, and even chefs to add value to their customers’ experience. Every WeWork location is connected to every other WeWork location in the world. Customers have the ability to view events, network, and even request desk space at any WeWork location on Earth. And every WeWork employee that I have met (I have been to about six locations in the U.S. and South America) is sociable and willing to help with whatever you need. This includes security and the front desk, the community manager and the maintenance staff. Are you starting to see why companies like Google and Facebook may be making use of this company’s offerings?

Data, data, data. The word is everywhere, all the time. This company is unethically selling data, that company had their data breached, and another company just had an amazing discovery that is now a buzzing blog article with their data. Data is great in areas that are growing and a little unknown, right? You can’t make informed decisions on future plans without data and you can’t have a lot of data if you haven’t been doing something for very long. The We Company has a lot of data on an area that is still being figured out but simultaneously having a ton of venture capital flow in. The possibilities for competitive advantages from this data are endless. It be an exponentially large benefit for The We Company as the years go on.

That brings me to my next case for The We Company’s future outlook. WeWork renamed itself to The We Company because they have plans to expand. It is not just going to be WeWork and profit. It is going to be The We Company and WeWork will just be part of it. These plans are big and if they can taste any bit of the success that WeWork did--fireworks. Firstly, you can take a look at We Live, which wants to overhaul the isolating norm of house and apartment living. I think you will find it to be very interesting and appealing if you browse their website for a minute or two. Secondly, you can take a look at We Grow, which wants to overhaul the dated and often criticized education system. Once again, I think we all know the potential impact that an effective and widely adopted educational idea could have on the world. It is easy to assume that there will be even more We company divisions in the coming years, too.

Finally, a lot of naysayers talk about how WeWork’s profit margins and revenue reports are poor and inadequate of a company valued so highly. I figured that this sort of talk would be over by the year of 2019, after all we have seen in the technology world, but I guess that is what the growth of venture capital and their requirement of instant and quick returns instills in the tech and financial community. In 2017, WeWork had a revenue of $886 million and a net loss of $933 million. In 2018, that number more than doubled in both revenue and net loss. The 2018 numbers were $1.82 billion in revenue and $1.9 billion in loss. One of the main factors of the new investment and valuation from SoftBank, is that WeWork continues to grow and expand revenue. In order to grow and expand, you must invest and build (or in WeWork's case, rent). Amazon didn’t turn a profit for nearly ten years. This statement is twofold, one because it was building up revenue streams for its costly investments and two, because it was continually investing in growing and expanding its business. The same could be said about The We Company, and considering it is privately held (for now), we do not have much insight to their choices. But, we can compare it to Amazon in the way that Jeff Bezos went from selling books to selling everything. WeWork is evolving from a co-working space into a conglomerate, and only the future truly knows how that will turn out--but the similarities of success are glowing.

Conclusion

Wow, you either took the time to read this entire article or you at least took the time to scroll to the bottom of the page and read this conclusion. No matter how you got here, I want to thank you for spending your time with me.

I want to give a true, straight-shooter, and basic conclusion. I think The We Company is worth at least $47 billion. I have drawn facts and opinions from my experience and research on remote work which I think heavily influences the future of The We Company. Remote work and the general evolution that is patiently waiting to occur in the world’s workforce will have a strong say in what is really next for The We Company--I think it will be extremely positive.

Please let me know what you think about this article and if you are interested in checking out a WeWork for yourself, use this link!


Salud y ciao!

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John Lasak

Looking for salsa verde in a world full of guac.

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