EDITOR’S COMMENT So it finally happened. The WeWork IPO prospectus landed and, my oh my, isn’t it an interesting read? So many things that jump of the 220-page document are either cause for concern or at least cause for a raised eyebrow and a WTF?
So much is easy to mock, not least the opening page: “We dedicate this to the energy of We – greater than any one of us, but inside all of us.” I know it is juvenile, but I couldn’t help but snigger. Don’t pretend you didn’t too.
But I wondered if we are WTFing because WeWork is approaching business in an entirely different way.
On the one hand we are pushing the real estate sector to embrace change, do business differently, think about service not just profit, to become more tech-enabled. Then, when a company emerges that does those things, we all take a sharp intake of breath and mutter: “That’s not the way it’s done.”
Now, I’m not saying that I think it makes good business sense to not have any kind of employment contract with your founder and chief executive, or to hand over power on succession planning to friends and family of that founder, or to lend your founder huge amounts of money on preferable – really, really preferable – rates. But perhaps some of the other WTF moments need to be celebrated.
Let’s take the big one. The massive and mounting losses. Sound the alarm bells. How can a business be valuable when it makes no money? Well, perhaps it sees value elsewhere.
Love it or loath it, WeWork has fundamentally changed the way that office space is being used.
More established players like IWG have been providing serviced offices for years but have failed to have a transformational effect on the sector. WeWork, in a relatively short time, has spawned a catalogue of copycats and has inspired landlords to develop their own space with the customer and service provision more in focus. Would British Land have launched Storey without WeWork? Would Landsec be having a second go at flex with Myo if WeWork hadn’t been on such an aggressive expansion push? Probably not.
What if WeWork’s razor thin margin on real estate, with revenue from tenants only just surpassing operating costs, is a good thing? What if this means the business is focused on delivery of service to customers, not on lining its pockets?
And so what if WeWork identifies as a tech company? We’re all tech companies now, aren’t we? If that’s how it wants to identify, so be it.
I’m torn on what the answers are, but they are worthwhile questions to consider. Different doesn’t always mean something is right, but it doesn’t necessarily mean it’s wrong either.
Talking of different, it is 10 weeks until the EG Awards and I am getting very excited. Not only because it will be my first time getting up on the big stage (must not accidentally swear or say something stupid), but because this year’s event is not going to be your usual awards. It has real purpose.
We are celebrating the transformation real estate is going through. Gathering those who want to make a difference, want to change the story and the perception of the industry.
Keep your eyes peeled in upcoming issues of EG (next week’s is digital-only, so don’t forget to download the app), for exactly what makes this the EG Awards event you absolutely have to be at. If you’ve already got your ticket, let me know, and if you haven’t, what are you waiting for? I personally invite you to head to www.egi.co.uk/egawards19 to book your place. See you there.
