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Abadesi

POLL: Will WeWork's decline negatively impact the entire co-working space?

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The decline of WeWork following the failed IPO attempt is making many of us makers and remote workers doubt the future of co-working. I'm personally still bullish about the future of co-working because I see the way we work changing a lot over the coming decades. Specifically I see employers embracing flexible working and doing what it takes to hire and recruit the best talent -- regardless of their location or personal circumstances. What do you think?

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Will Smith
The demand for co-working won't go away. As others have said, it will only grow. Co-working is appealing in so many ways. But I worry prices will go up. If WeWork shrinks or outright collapses, then the co-working supply goes down, even as demand rises. So prices will go up until and unless there is a replacement of the co-working inventory that WeWork shuttered. But even if WeWork doesn't go away, one big question is whether WeWork offices are subsidized by all its investment capital, or whether the fees it charges tenants are actually sustainable for the company. (Same question exists for Uber. We consumers don't pay full cost of Uber rides.) If the office costs were in fact subsidized, well then, there's another reason prices will rise. Because no co-working company with WeWork's amount of capital will appear again for a generation or ever, so co-working spaces are going to have to make their numbers work.
Lanre Akinyemi
Spoke to one of the co-founders of one of the local co-working spaces and he mentioned that WeWork helped "legitimize" co-working similar to how Naruto & Bleach made anime mainstream - now business is booming! If anything, if users do move away from WeWork, these local independent co-working spaces might benefit.
Abadesi
@lanre_akinyemi definitely an opportunity for other brands to blossom and take up more market share in the WeWork decline!
Rishi Gaurav Bhatnagar
So WeWork situation has been an interesting one. I was talking about this with a friend the other day. If there is an experiment that is being executed by someone and the execution fails, do you start wondering if the experiment is wrong? No. It's the execution. There is a huge thriving community of remote workers, freelancers, small businesses that need space to work out across the world. I believe co-working is here to stay, as long as people are willing to work out of coffee shops and want to be a part of a community they feel they belong. Since a lot of the other business valuations were based off of WeWork, it is definitely going to impact that, but the core business I assume will definitely stay. Hopefully, people would want to go more towards sustainable business models and growth though.
Abadesi
@rishigb Nice! yes execution is everything... hence why so many companies try to solve the same problem but only a few succeed.
Taylor Majewski
I don't think so. From what I've read (and heard over the years) about WeWork's decline, it has a lot to do with internal mismanagement. To WeWork's credit, they really brought coworking into the mainstream, so I do think other companies will start to emerge as alternative leaders within the space. I'm a member of The Wing and can't imagine not having a coworking space to use as a remote worker. With the rise of the remote work, the need for more coworking space is just going to continue to increase.
Rishi Gaurav Bhatnagar
@taylormajewski I 100% agree with you. Biggest contribution is to bring co-working into mainstream. I know of a few people who 'WFH' from a co-working space because they like the community there, and the bosses don't mind either, because these folks are helping the parent company create this cool brand outside, for Free! Win-win. I found this very interesting. This wouldn't have happened even 3 years ago.
Abadesi
@taylormajewski they did make co working a word everyone understands which is incredible, excited to see hybrids of co working spaces evolve in future
Aaron O'Leary
I think there will be a little bit of a trust / scepticism issue for a while, but as the attention on weworks shortcomings dissipate I think overall it could benefit the industry, especially for local independent spaces as Lanre mentioned
Charlie Ward
From the funding perspective: Short-term, it may damage investment in co-working spaces, but long-term it'll be a a net positive, driving better business practices throughout the industry, creating more successful co-working spaces/brands and eventually drive more investment again. Just not at silly valuations like WeWork was.
Charlie Ward
It was said elsewhere here, but due to WeWork, far more people know what co-working spaces even are. General awareness can only be a good thing long-term.
Abadesi
@yungrollneck definitely !! Like the analysis of it being a net positive
Edison Espinosa
Libraries are the best co-working spaces. True community events going (not some event disguised as a sales pitch for some company) from arts to concerts, they're free, and they're not a fad and will live out any recession :D
Abadesi
@edisonjoao6871 haha my local library turns into chaos after school and I have to fight kids for desk space 😂
tela
It just puts the focus on creating sustainable co-working businesses, and great unique environments. WeWork was kinda cool, but there was also an uncanny valley aspect to the consistency across their locations. I'm hoping that remote workers will put more value on great, unique spaces and environments since WeWork's "Starbucks of Co-Working" approach isn't sucking the air out of the room.
Muhammad Harfoush ✨
It is not that co-working as a business model is not legitimate, it is that WeWork is an edge case of how eccentric startups (and their founders) are. What its decline did affect negatively is growth-based startups, though.
Arron Watson
I wouldn't see why it would. If one company or business has an issue, consumers always move to an alternative. The co-working space is fine.
Lydia Sugarman
I think you have to define "impact the space" first. Next, does this startup failure go beyond this vertical?
Abadesi
@lksugarman it's a broad question asking if it will have a negative impact on the co working market, I've loved reading everyone contributions so far
Lydia Sugarman
@abadesi I think we're already hearing how the WeWork failure will go beyond this vertical. VCs and many others are talking about the need for re-evaluating the value of startups. Maybe actually basing it on revenue, debt, real growth! Borrowing money against a promise and then, valuing that company positively valuing that company against what is essentially debt is...crazy. It makes no sense, at least not in the real world where most businesses function. In the early days of WeWork when I learned what their model was, I questioned the potential for longevity. The original idea of long-term leases of under-utilized office space sounds good. It's nothing new. What transpired after was nothing short of stupid and greedy and...no one provided any check and balances. Competitors, like Regus, will continue long after WeWork is no more, putting thousands out of work.