A

s one of the largest players in the coworking industry, We-

Work has established itself as a unique phenomenon among
its competitors in just the past few years. Smaller coworking
concepts have been hard put to compete with WeWork’s generous
amount of funding, aggressive acquisition strategy and shrewd PR
capabilities. This comprehensive look at WeWork’s impact and busi-
ness strategies can serve as a useful guide to coworking owners,
managers and enthusiasts who seek a better understanding of this
coworking giant. With this detailed guide, we’ve cut away the fat
and condensed all the information you want to know about WeWork,
giving you deep insights that can help you maximize your own co-
working business strategy.

Learn, adapt, and compete in the coworking space, starting with our
guide to your biggest competitor.

02 Coworking Resources: An Insider’s Guide to WeWork

 WeWork at a Glance

Coworking + WeWork

S
ince the conception of coworking in the early years of 2005, independent
property owners and lease-holders have latched on to the idea all over
the world. Just a few years later, in 2009, the Global Coworking Uncon-
ference Conference (GCUC) was established, and is still an authority in the
coworking industry today. By 2012, there were over 2,000 spaces in the world,
cementing its power as a global trend.

Founded in New York, 2010, WeWork, in the midst of this hype, saw an oppor-
tunity with the “Space as A Service” model, capitalizing on the secular shift
towards more flexible, entrepreneurial and collaborative work styles. Having
first-mover advantage and the scalable use of proprietary software for design,
development, and management of their services, they quickly became the
world’s leading provider of coworking spaces. (See more in WeWork’s first
pitch deck)

The Mission WeWork’s Profile

“WeWork’s mission is to create a world 562 locations in 2018,
where people work to make a life, not 103 cities, 34 countries.
just a living”. Their values encourage
challenging convention, teamwork, Headquarters in New York.
tenacity and doing what you love to Founded by: Alex Neumann,
inspire something greater. Miguel McKelvey
About 6500 employees

Funding 12 Acquisitions by 02/07/19

Almost $13 billion in funding , valued Education, technology, and other orga-
at $47 billion, post-money. nizations that manage coworking spaces
(crunchbase)

03 Coworking Resources: An Insider’s Guide to WeWork

 Bigger Than WeWork –
The We Company

A
nnounced in January 2019,
WeWork rebranded to The We
Company to encompass its
larger ambitions. WeWork is now one
of many departments in a larger cor-
poration. It starts off with 3 business
units: WeWork, WeLive, and WeGrow.

WeWork You know it: coworking

The We Company spaces

WeLive A co-living business listing

The We Company residential spaces.

WeGrow Education-focused. Working

The We Company with elementary school and
coding academy acquisition
– The Flatiron School.

WeWork Labs Provides accelerator-type

early-stage startup programs
with access to mentorship
and tools.

WeWork Space A real estate brokerage

Services firm that finds you a work-
space inside or outside of
WeWork.

Rise by We Provides health and

wellness services.

Made by We An on-demand workspace

with no membership
required. They combine
retail and coworking
ventures into one.

04 Coworking Resources: An Insider’s Guide to WeWork

06 12
The History of WeWork The WeWork Business
and its Rapid Growth Model
Why do people flock to WeWork, How does WeWork make money?
despite its high prices?

18 24
Enterprises That Use The Secret to WeWork’s
WeWork and its Big Success
Appetite for Expansion 24 Why does WeWork stand out
against the rest?
WeWork continues to gain traction and
prestige as big name companies choose
26 What we can learn from WeWork
their corporate coworking facilities.

33
The Real Juice on
WeWork
Behind its success, WeWork’s tenure had
a lot of what we would, if you’ll allow,
impolitely call: Drama.
 The History of
WeWork and Its
Rapid Growth

W
eWork’s meteoric rise over
the past nine years has at-
tracted hundreds of thou-
sands of members and investors. As
the company prepares to open even
more coworking spaces in places like
Brazil and Columbia, it is worth con-
sidering just what makes WeWork so
appealing. Why do people flock to
WeWork, despite its high prices? Be-
low, we demystify some of WeWork’s
core strategies and why investors are
so willing to pump billions into the
company.

06 Coworking Resources: An Insider’s Guide to WeWork

01 The History of WeWork and Its Rapid Growth

What Customers Want,

WeWork Gives:
Amenities

P
art of the reason why WeWork
is so appealing to its members
is because it provides all of the
basic amenities they want and need.
The benefits far outweigh the fea-
tures of a typical office; no cramped
cubicles here!

Instead, WeWork emphasizes a unique

aesthetic that makes its spaces com-
fortable and inviting. The amenities
in WeWork offices are included in the
price of a membership, so there’s no
hidden fees or extra add-ons. These
amenities create a unique, modern
atmosphere in WeWork spaces that
keeps members coming back for
more. Some of the many features of-
fered in WeWork offices include:

Bright, spacious outdoor and

indoor offices filled with plants

Complementary fruit-infused water

Popular local snacks

Business-class printers
Bicycle storage
Micro-roasted coffee and tea
Private phone booths
The option to bring your dog (in
some locations)
Outdoor basketball courts (in some
locations)

07 Coworking Resources: An Insider’s Guide to WeWork

 01 The History of WeWork and Its Rapid Growth

11
3 Seattle Boston

Portland 9
New York City
2 59
Baltimore

4 1
Minneapolis
SF Bay Area Salt Lake City
Boulder
9 2 1
Baltimore
Pittsburgh
3 1 Detroit
13
23 8
Chicago
Washington D.C.
1 1
Las Vegas Charlotte 2
Denver Kansas City 2 Raleigh
3
5
Orange County Nashville
19 1 5
2
Phoenix
9 Atlanta
Los Angeles
San Diego Dallas
Austin
5
2
1
San Antonio Houston
6
Miami

Location Growth

W
eWork has grown astonish-
ingly quickly for a company
that hasn’t even hit its ten-
year mark yet. The company, head-
quartered in Manhattan, launched its
first shared workspace in SoHo, New
All of WeWork’s current and York, in 2010. Now, it owns more real
planned locations in the United
estate in Manhattan than any other
States as of 01/18/209.
company and features hundreds of
locations worldwide.
Existing WeWork Spaces
Currently, WeWork’s website lists 617 co-
working spaces that are either already open
or coming soon. These locations can be
Planned WeWork Spaces
found in 102 cities in 34 countries around
the world. With WeWork’s appetite for
growth and no signs of it slowing anytime
Source: WeWork
soon, it’s safe to say that the company plans
to continue to expand in the near future.

08 Coworking Resources: An Insider’s Guide to WeWork Credits: CB Insights

 01 The History of WeWork and Its Rapid Growth

Funding “To date, WeWork

O has raised a
ne of the keys to WeWork’s success
is the massive amount of money it
has raised so far. To date, WeWork
has raised a total of $8.1 billion through 12
total of $8.1 billion
rounds of funding.
through 12 rounds
Some of these funding rounds are known
as “mega-rounds” because of the mas- of funding.”
sive amount of money WeWork has raised
through them. Generally, in a mega-round,
a company raises $100 million or more at Valuation

A
once. Increasingly, other startups similar
to WeWork have also begun using “me- ll of that funding has dramatically
ga-rounds” as a chief way of gathering increased WeWork’s valuation in re-
funding. cent years. After Softbank’s recent
investments, WeWork’s valuation rose to its
Over half of WeWork’s funding has come current $47 billion. So far, WeWork’s valua-
from Softbank, a Japanese telecommuni- tion has only soared upwards — but all of
cations company based in Tokyo. This has that may be changing soon. As of January
caused skepticism among some observ- 2019, Softbank lowered the amount it was
ers with concerns about Softbank’s colos- initially willing to invest by a few million dol-
sal stake in the company. So far, they have lars. This may affect WeWork’s valuation in
raised mega-rounds of $4.4 billion in Au- the future, which has already been called
gust 2017 and $3 billion in November 2018. grossly inflated by some. Q3’17
$1.260B
Q1’17 raised
$300M
raised

1
Q1’16 Q4’16
1 $20B
Evaluation
Q2’15
1

1
$433M
raised $16.9B
$16B Evaluation
Q1’14 Q4’14 Evaluation
$157M 1
Q4’11 Q1’12 Q2’13 raised 1
$1M $17M $40M
raised raised raised 1 $11.3B
$5.44B Evaluation $

1 1 $1.58B
Evaluation
1

Evaluation
$

$ $
$

$ $ $
$

$ $ $
$ $ $

09 Coworking
$ Resources: An Insider’s
$
Guide to WeWork
$
$
$ Credits: CB Insights $

$ $ $ $ $ $
01 The History of WeWork and Its Rapid Growth

Acquisitions

S
urprisingly, WeWork has already
acquired 12 smaller companies
throughout its short history. Most
recently, it absorbed the company Euclid
on February 7, 2019. These 12 companies
range in their focus but all share some gen-
eral purpose with WeWork. They include:

Other organizations that manage

coworking spaces:
Spacemob
Teem
Naked Hub
Managed by Q

Education-centered companies:
The Flatiron School
MissionU

Technology companies:
Conductor
Meetup
Unomy
Fieldlens
Euclid

Which organizations they will target next

remains to be seen.
10 Coworking Resources: An Insider’s Guide to WeWork
01 The History of WeWork and Its Rapid Growth
$

1 $

1
1
$

Investors

S
oftbank, while a major investor in We- Since WeWork has already managed to at-
Work, isn’t the only corporation that’s tract such an impressive number of inves-
heavily invested in the brand. Anoth- tors and raise a colossal amount of money,
er strength of WeWork is finding a variety of the demand for more coworking spaces in
investors from a variety of sectors. Some of the U.S. is likely to increase.
the more prominent investors over the past
few years have been: Colliers’ 2019 U.S. Flexible Workspace
Outlook Report highlights:
Hony Capital
1

Legend Holdings The number of coworking spaces in the

1

Glade Brook Capital Partners U.S. has soared from less than 300 in
1

1
Goldman Sachs 2010 to more than 4,000 at the end of
T. Rowe Price 2017, for a compound annual growth
1

Wellington Management rate of almost 50%.

1

As the company continues to grow, it will be Growth outside the U.S. has been even
interesting to see how WeWork’s funding faster, climbing from less than 200 to
and expansion strategies play out. Since it’s more than 10,000 during the same
business model hinges on space as a com- time period, for an annual growth rate
modity, and the real estate market always exceeding 80%.
comes with a measure of risk, the question
of whether WeWork can survive an econom-
ic downturn will be a major indicator for the
future of the coworking industry.

11 Coworking Resources: An Insider’s Guide to WeWork

 The WeWork
Business Model

How Does WeWork

Make Money?

A
its core, WeWork is an office
leasing company. First, We-
Work establishes long-term
leases for commercial space in build-
ings. Then, that space is subleased to
tenants for a higher price, thus earn-
ing revenue for WeWork. The easiest
way to make the most revenue from
this is to put a lot of people in one
place. Rather than create a cramped
environment, WeWork strives to make
the office space a collaborative com-
munity for its coworkers. That way,
people won’t complain about any
close quarters.

12 Coworking Resources: An Insider’s Guide to WeWork

02 The WeWork Business Model

A
s of September 2018, WeWork demands a large amount of furniture,
made $1.1 billion in revenue technology, and other materials for
for leases and services. Tra- renovation, making it hard to make a
ditionally, WeWork leases a building profit. Despite its large price tag, the
or a few floors, redesigns the interi- company is not yet profitable. Howev-
or, and sells individual desks or small er, it has automated and streamlined
offices to eager clients. Nowadays, many of its operations to cut down on
the company still does this, but has opening costs for each location.
also expanded to accommodate larg-
er quantities of employees from the
same business in a single building.
This focus on enterprise office space
has thrown WeWork into a bigger in-
dustry than just office management
— a large portion of its business is
now commercial real estate. In 2018,
commercial real estate generated
$325.9 billion in salaries and wages
according to Commercial Real Estate
Development Association’s (NAIOP)
1
2019 report.

“As of September

1
2018, WeWork made
$1.1 billion in reve-
nue for leases and
$
services.”
1

Like all commercial real estate com-

panies, WeWork is fighting against
what is known as ‘economies of $
scale.’ While the company has gar-
nered a massive amount of demand
for flexible office space, the cost of
rent and operating never goes down
as a business expands. The compa-
ny’s extensive real estate portfolio 1

13 Coworking Resources: An Insider’s Guide to WeWork

02 The WeWork Business Model

Service Charges

I
t makes sense that the more ser-
vices requested, the more a client
or business should pay. WeWork
takes advantage of this by charging
for luxury, privacy, or higher tier ser-
vices on top of rent. Below are We-
Works membership fees:

Basic Membership Plan $45/mo

with access to hundreds of
worldwide offices

Rent a desk $50/day Hot Desk with guaranteed $220/mo

workspace in a common lo-
cation on a first come, first
served basis

Dedicated Desk with chair, $350/mo Private Office with fully $400/mo
desk, and filing cabinet in furnished, lockable
the same spot each day office space

14 Coworking Resources: An Insider’s Guide to WeWork

02 The WeWork Business Model

Financial Risks

O
f all the property WeWork
manages, the business hard-
ly owns any of it. This means
compared to other coworking chains,
WeWork has a limited amount of fixed
assets. They rely on revenue and VC
funding to pay for renovation costs
and the huge amounts of money owed
to landlords.

“Some of the Shedding Risk

leases signed
W
eWork recognizes its lease

with land- risk and has developed

strategies to reduce the

lords can overhead risk as much as possible:

last 10 to 15 Targeting more enterprise cli-

ents for its office space and

years. ” expanding into management

through the Powered by
We initiative
Currently, nearly 30 percent of
The model WeWork uses is risky. WeWork’s clients are enterprises.
Some of the leases signed with land-
lords can last 10 to 15 years. This Shifting leases to
means WeWork must pay hundreds of co-management deals
millions of dollars in future rent, re- WeWork partners with landlords
gardless of what the real estate mar- to reduce renovation and build
ket looks like. costs and in exchange, splits
membership profits.
The company continues to spend
large amounts of money on both cos- Purchasing properties
metic updates and expansion in the Recently, the new headquarters
hope that it will be worth it in the long building in New York City was
run. The danger of WeWork’s strategy purchased as well as buildings in
is that it may lose clients at times if London.
competitors find a way to offer simi-
lar services for a cheaper price. Even Moving toward longer lease
though the culture of WeWork serves terms
as a selling point, it could also be the Incentives are offered to place
reason that businesses consider it too members for a year or more,
expensive. rather than month-to-month.

15 Coworking Resources: An Insider’s Guide to WeWork

02 The WeWork Business Model

Landlords of WeWork

L
andlords make WeWork’s busi-
ness plan possible. All of the
office space leases and inside
improvements are enabled by the
landlords of each property. WeWork
views its relationship to these land-
lords as a partnership. By WeWork
renovating the interior of spaces and
attracting complementary businesses
to the area, landlords experience in-
creased property values and rents.

Although landlords feel the direct

impact of WeWork, most aren’t too
threatened. Currently, the majority
of landlords are benefitting from We-
Work’s expansion. It’s much easier for
them to make a contract with a big
company like WeWork for a certain
time period than to find multiple in-
dividual tenants for shorter periods.
Tenants of WeWork

C
Until they have reason to be con-
cerned, it’s expected that landlords’ atering to a population of en-
support will continue. trepreneurs means that many
of WeWork’s tenants could
suddenly leave the space due to their
own failed start-up or need to ex-
pand. At the same time, serving this
demographic means a huge poten-
tial member list. Bigger companies
use WeWork too, with the incentive
of low starting costs with an option
for monthly leases. If these compa-
nies were to lease their own place,
it would need remodeling and likely
require a several-year commitment.

According to CB Insights, a U.S. rule

requires companies to record real es-
tate leases as a liability. Companies
try to reduce their liabilities by re-
ducing whatever square footage they
can. Thus, WeWork becomes a great
alternative.

16 Coworking Resources: An Insider’s Guide to WeWork

02 The WeWork Business Model

Why WeWork is Scalable

Typically, to scale a business, certain
criteria must be met:

Establish a solid foundation

Focus on business solutions:

Think about what will serve
the business best in the future

Think about strategic planning:

Know your priorities and steps
to success

Utilize core strengths, recog-

nize weaknesses as well

Have patience

W
eWork believes in more than
leases and pretty office
space. There’s energy be-
hind the brand. WeWork’s enterprise
business combined with accommoda-
tions for anyone — from freelancers
to well-known corporations — plays
into its long-term strategy. By ex-
panding its reach into more areas, the
business can negotiate more complex
deals and longer leases.

17 Coworking Resources: An Insider’s Guide to WeWork

 Enterprises That
Use WeWork and its
Big Appetite for
Expansion

W
eWork continues to gain
traction and prestige as big
name companies choose to
use their corporate coworking facil-
ities. Many large businesses want to
expand their reach and open offices
in cities beyond their headquarters.
WeWork serves as an attractive way
for companies to implement these
satellite offices.

18 Coworking Resources: An Insider’s Guide to WeWork

03 Enterprises That Use WeWork and its Big Appetite for Expansion

Notable Companies
Using WeWork

N
PD Group, a market research
company based out of Port
Washington, New York, uses
WeWork for its office space in Los
Angeles, California. Facebook is the
sole occupant in a 450,000 square
foot building in Mountain View, Cal-
ifornia. According to Backchannel,
WeWork manages an entire building
for IBM in Greenwich Village, runs
Airbnb’s Berlin office, and runs Ama- What are Employees
zon’s Boston office. Other companies
that use WeWork: Looking For in a Work-
space?
Microsoft Collaborative and inspiring
atmosphere
Mobility and flexibility
Up-to-date technology

W
Samsung eWork fills the basic re-
quirements employees wish
for, with the high number
of locations across the globe making
it one of the most accessible spaces
available.
Salesforce
Currently, 150 of the Fortune 500
companies are members of the We-
Work community. Small and medi-
um-sized companies in WeWork have
Pinterest experienced annual growth rates that
are nearly seven times the global av-
erage. In fact, companies with 1,000
employees or more make up the fast-
est growing segment of WeWork’s
customer base. Many enterprise mem-
Spotify bers say growth in new markets has
been possible because of the free-
dom and flexibility WeWork provides.

19 Coworking Resources: An Insider’s Guide to WeWork

03 Enterprises That Use WeWork and its Big Appetite for Expansion

Data Collection

S
ince the start, WeWork has col-
lected data on employee inter-
action, productivity, and office
space needs. Using this information,
the idea is to offer the most valuable
insight about how jobs get done.
Data about modern work lets WeWork
shape its spaces to any need and ex-
perience growth.

WeWork jumps on the fact that busi-

nesses look to reduce any fixed as-
set costs, which include real estate.
By handling all aspects of office life,
the company works to expand while
naturally retaining its customers who
enjoy their experience.
Expansion

W
eWork’s launch of the initia-
tive called “Global Access”
allows members of the We-
Work network to work at any WeWork
space they like. This was one of We-
Work’s first steps in entering the busi-
ness service market and extending its
reach past coworking spaces.

WeWork’s expansion tactic capitaliz-

es on offering a service that organiz-
es an office around its workers. The
company provides an exciting space
for entrepreneurs and businesses
where employees interact with other
workers. Making friends in the office
from different startups, small estab-
lished businesses, or corporate gi-
ants allows people to learn from one
another. Entrepreneurs might even
invest in each other’s start-ups. Even
if a company has a small team, We-
Works makes those people feel like
they’re a part of a bigger community.

20 Coworking Resources: An Insider’s Guide to WeWork

03 Enterprises That Use WeWork and its Big Appetite for Expansion

New Branches and New

Deals

P
ositioning themselves as an The variety of project ideas suggests
expert on community, WeWork that WeWork focuses on constantly
doesn’t limit itself to office diversifying their services, along with
spaces. The company launched We- the mission to foster community and
Live, upscale apartment buildings in encourage collaboration and comfort.
New York City, Washington D.C., and
soon Seattle. These apartments follow Considering that the “new economy
the WeWork aesthetic and are rented itself has changed” over the past
out on a short term basis. Ever since few years, according to the Real Es-
the creation of WeWork, the company tate Journal by the National REIA,
has dreamed of tackling more. Anoth- diversifying seems to be the way to
er one of its ambitious launches, We- cushion any real estate falls.
Grow, will be a kindergarten focused
on elevating happiness and positive
thoughts. With the introduction of new services,
WeWork hopes to create more profit-
WeWork never stops brainstorming. able, long-term deals with business-
The business has several creative es. Examples of expansion include a
projects, all in various stages of im- variety of areas:
plementation:
Consultation
Rise by We - spa and gym Architecture
Construction
WeWork Labs - program to help Office management
small companies with space,
community, and programming

WeSail - Caribbean charter

yacht

WeBank - provides financing

and lending services to mem-
bers of the community

WeGive - raises money for hu-

man rights and disaster relief
efforts

21 Coworking Resources: An Insider’s Guide to WeWork

03 Enterprises That Use WeWork and its Big Appetite for Expansion

Effectivity

W
hen the company renovates
its properties before renting
them out, they significantly
increase the appeal. More so than in
“Employees care
the past, employees care about com-
pany culture and the space they work
about company
in. Businesses notice this, so the need
for spaces like the ones WeWork of-
culture and the
fers increases by the day. If WeWork
continues to remain innovative and
space they work in.”
take notice of business trends and
consumer preferences, the company
will keep booming and expansion will
succeed.

22 Coworking Resources: An Insider’s Guide to WeWork

03 Enterprises That Use WeWork and its Big Appetite for Expansion

Moving Internationally

W
eWork is characterized by
its aggressive expansion.
WeWork expanded into
London in 2014 and Berlin in 2016.
London currently holds the second
most WeWork locations after New
York City. Over the last year, demand
for coworking spaces has grown in
Asian markets. Seeing an opportu-
nity, WeWork purchased an existing
coworking company in China before
expanding into all of Southeast Asia.
With a growing economy and ample
supply of entrepreneurs and startup
companies, WeWork entered at a per-
fect time. WeWork has also noticed
the flourishing technology scene in
certain countries and is expanding in
markets like India.

Moving Throughout the

U.S.

I
n Manhattan, WeWork has re-
sponded to demand and expand-
ed property holdings to become
the largest real estate holder in the
borough. Last year, WeWork bought a
building on Fifth Avenue, previously
Lord & Taylor, with the goal of trans-
forming it into the company’s new
headquarters. WeWork plans to open
Learn more
a second headquarters in San Fran-
about
cisco. In Denver, Colorado, WeWork
China’s answer to
hopes to take advantage of the city’s
WeWork: Ucom-
investment in the technology sector
mune
and open a campus for coding
academics.

23 Coworking Resources: An Insider’s Guide to WeWork

 The Secret To
WeWork’s Success:
Why Does WeWork
Stand Out Against
the Rest?

WeWorks’s Biggest
Competitors

I
n just the past few years WeWork
has proven itself to be a domi-
nant leader in the space with the
agility and creativity to adapt to a
fast-changing market. With its aggres-
sive acquisition strategy and seeming-
ly constant development of new sub-
brands (i.e. WeLive and WeGrow), it’s
hard to imagine the coworking giant
having any viable competitors. But
in fact, there are two major interna-
tional coworking chains that demon-
strate the same agility and marketing
efforts as WeWork: Regus and Knotel.

24 Coworking Resources: An Insider’s Guide to WeWork

04 The Secret to WeWork’s Success: Why does WeWork Stand Out Against the Rest?

WeWork vs. Regus WeWork vs. Knotel

M K
eet Regus. Founded in Brus- notel, though much young-
sels, Belgium in 1989 and er and smaller than both We-
headquartered in Luxem- Work and Regus, has made its
bourg, Regus is a major player in the own waves in the market in different
industry. With over 3,000 locations ways.
spanning nearly 900 cities, Regus is
one of the biggest coworking chains,
with about 2.5 million members Business model: Knotel allows and even
worldwide. Even though Regus and encourages businesses to brand their rent-
WeWork have similar business models ed spaces with their individual art. When a
there are a few key differences that company signs a contract with Knotel, they
will highlight how Regus has become buy into a custom office build (furniture and
one of the oldest and largest cowork- all) to fit the needs of the business. This
ing businesses in the world. contrasts greatly with WeWork’s more strict
policies concerning their heavily branded
spaces.
Business model: At Regus, clients can
rent workspaces by the day, rather than Pricing: Knotel comes at a high price tag
the month-long contracts that WeWork re- compared to WeWork’s more universal pric-
quires. ing model. The chain compensates for this
by tailoring the office spaces specifically to
Pricing: Prices vary depending on the loca- each individual business.
tions, cities, current demand and plans, so
prospective clients must submit a contact Office culture: Knotel cultivates a young,
form to get a quote for each space. We- tech-focused audience with its heavy in-
Work’s universal pricing model lessens the volvement in partnerships with emerging
barriers to entry for prospective startups.
customers.

Office culture: Regus is slightly more cor-

porate and professional whereas WeWork
has cultivated a younger, tech-focused and
universal atmosphere.

25 Coworking Resources: An Insider’s Guide to WeWork

 What We Can Learn
From WeWork

W
eWork’s phenomenal suc-
cess story begs the ques-
tion: How do they do it?
Below, we outline everything that
makes WeWork what it is today — the
good, the bad, and the ugly — so you
can apply the same strategies to your
own business.

26 Coworking Resources: An Insider’s Guide to WeWork

04 The Secret to WeWork’s Success: What We Can Learn From WeWork

Design Principles

M
ost of the early design decisions were made by Devin
Vermeulen, WeWork’s creative director of physical prod-
uct, and Miguel McKelvey, WeWork’s chief creative offi-
cer. Their goal was to find the potential in each WeWork building
and transform it into an inviting workspace. Now, the company
employs a team of designers to plan each new office from scratch.

One feature that appears in nearly every WeWork building is a

bright, spacious lobby. This feels welcoming and encourages
members to continue upstairs to their workspaces. Also, WeWork
rooms are smaller than the average conference room. Smaller
rooms encourage collaboration and connection between team
members, one of WeWork’s core design goals.

Other little things matter, too:

Individual office spaces have

glass walls to make them ap-
pear bigger
Staircases are filled with plants,
creating a vertical garden
Lounges are centered around
windows, which allows access
to natural light

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04 The Secret to WeWork’s Success: What We Can Learn From WeWork

Base It On Customer
Observation

W
eWork designers make
these choices by observing
how people interact with
spaces in their buildings. Then, they
use those observations to make new
design choices that encourage more
communication between members.
For example, there are “amenity bas-
es,” which are small areas that con-
tain many of the amenities an office
may have, such as food and printers.
People who want access to the ame-
nities must all use the same corner of
the space, prompting more opportu-
nities for conversation.

Incorporating Culture:
A Personalization
Technique

W
eWork also incorporates the
culture of the surrounding
city into its spaces. 90 per-
cent of the company’s design guide-
lines are used across all WeWork
offices, while the other 10% is left
undecided to adapt to local markets.
For example, in Los Angeles, We-
Work buildings have terraces because
working outside is a large part of Cal-
ifornian culture. Offices may also fea-
ture artwork created by local artists
as a way to engage the community.

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04 The Secret to WeWork’s Success: What We Can Learn From WeWork

Tools and Technology

W
eWork recognizes the inher-
ent value in collecting data.
The company has developed
three main types of data collection:

Catalog to ensure consistency

A catalog of every design decision,
including minute details like the ex-
act heights of whiteboards. This da-
tabase is sent to all WeWork teams.

Surveys for feedback

At the end of a session, members can
rate their experiences in conference
rooms. If a room scores a low rating,
the design team visits the room, looks
at what isn’t working, and builds a

T
solution to fix it. If a room scores
a high rating, what members enjoy hese forms of technology help
about it is replicated in other rooms. WeWork connect to the activity
that occurs on the ground lev-
Algorithms for planning el of its business. Turns out the for-
WeWork uses an algorithm to plan mula for success is fairly literal, once
where desks will be placed in an of- the company gathers the right kind
fice to optimize the number of seats of data.
and avoid wasting space.

Environmental sensors track interi-

or temperature, humidity, baromet-
ric pressure, air quality, and ambient
light levels.
Wall-mounted beacons in common
spaces that can triangulate the posi-
tion of WeWork members.
Overhead sensors that use an inno-
vative type of computer vision to ob-
serve member occupancy in rooms.
WeWork app for members, which
helps users book conference rooms
and network.

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04 The Secret to WeWork’s Success: What We Can Learn From WeWork

Let the Word Out

During Launches

S
preading awareness about new
offices is another way WeWork
attracts members. One strategy
the company uses is sending emails
to potential new members. While a
simple marketing tactic, it gets the
word out quickly. The company also
partners with local businesses; for ex-
ample, they may offer free pizza from
a local pizzeria in exchange for your
email address.

When the time comes for an office

to officially open, WeWork throws
massive launch parties to celebrate.
These events feel exclusive and up-
scale, another way WeWork snags new
members. At the event, WeWork may
also offer discounts for new mem-
bers. These strategies keep old and
new members returning month after
month.

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04 The Secret to WeWork’s Success: What We Can Learn From WeWork

Growing Pains ! Poor work-life balance

Several former employees have

D
filed suits against WeWork for
espite its meteoric rise and lost overtime wages, citing ex-
generally positive outlook, ploitative work hours and office
the company has experienced culture.
its fair share of stumbling blocks.
Over the past several years WeWork
has received complaints for question-
! Sexual harassment in the
workplace
able management practices and un- A 2017 case is still being re-
happy employees. Some of the most solved after an employee
public conflicts surrounding WeWork claimed she was sexually ha-
include a poor work-life balance, sex- rassed at company events.
ual harassment, operational failures,
conflicts of interest and lax security.
! Operational failures
Failures to get permits and
Despite the global success of the co- alcohol licenses for building
working chain, these claims are proof openings has delayed opera-
that not even a multi-billion dollar tions and irked customers at a
company is immune to the average few locations.
risks of inconsistent management and
leadership. The growing list of con-
troversies facing WeWork can serve
! Conflicts of interest
CEO and co-founder Adam
as a lesson to younger, smaller co- Neumann is under public scru-
working businesses following in their tiny for his large personal stake
footsteps. in properties where WeWork is
both the tenant and landlord.

! Lax security
In the early years of WeWork’s
success, former employees say
that building security was ne-
glected, with homeless people
easily gaining access to 24/7
locations.

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04 The Secret to WeWork’s Success: What We Can Learn From WeWork

Key Takeaways
So, as the owner of a coworking
space, what major lessons can be
learned from WeWork’s strengths and
current weaknesses?

04
Ask for and internalize Think ahead and be
client feedback innovative
Data is your friend! What can you provide your
Once you discover what works clients that other coworking
and what doesn’t, adjust spaces in the area can’t?
accordingly Why should clients come to you
instead?

People are your most Connect

important asset
To your employees, to your
Employees and clients are both customers, to the surrounding
crucial to your success. community.
Value quality over quantity Be transparent and encourage
communication

32 Coworking Resources: An Insider’s Guide to WeWork

 The Real Juice on
WeWork

A
fter learning almost every-
thing about WeWork, we pres-
ent to you a section dedicated
to a more personal view of WeWork.
Behind its success, WeWork’s tenure
had a lot of what we would, if you’ll
allow, impolitely call: Drama.

Here’s what WeWork failed to deliver

and where they messed up, put side
by side with what they actually did re-
ally well so the rest of us can learn
from their mistakes and do better.

33 Coworking Resources: An Insider’s Guide to WeWork

05 The Real Juice on WeWork

Where WeWork What WeWork

Excels Lacks
Defining the Industry Community building
Intelligently and WeWork isn’t very
successfully creating a new community-attractive
market for micro-office anymore compared to newer,
spaces that incumbents have niche coworking spaces.
been ignoring
A strong trademark
Global Reach Getting sued by Regus
Extending their reach Management Group, the
worldwide – 34 countries in Complaint charges that
under 10 years “HQ” by WeWork “infringes
RGN’s trademark, ‘HQ,’” for
Vertikal Integration which it has owned a
Escaping the coworking federally registered
label. Although they are still trademark for many years.
not making revenue, they
have been exploring various Conflicts with brokers
ways to (coliving, incubator WeWork’s expansion into
etc.). enterprise solutions has
disrupted the relationship of
Leveraging Data tenants to landlords, tenants
As modern-day real estate to brokers and brokers to
operators, they use data to landlords
create value by optimizing
how their facilities suit their Profitability
members, detecting patterns In 2018, its net loss was
to improve member $723 million in the first half
experience and decreasing of the year on about $764
expenses. Design guidelines million of revenue. That’s a
are motivated by data, larger loss than the same
optimizing seats using period a year ago, when it
algorithms. lost $154 million on $362
million of revenue.

34 Coworking Resources: An Insider’s Guide to WeWork Source: Recode

05 The Real Juice on WeWork

Conclusion

W
eWork has distinguished itself among its competitors
as a hard-hitting adversary in the coworking space.
With its generous amount of VC funding, aggressive
acquisition strategy and considerable appeal to millennials, this
coworking giant shows no signs of slowing down in the years to
come. While it may not be ready for an IPO like other unicorn
tech companies (i.e. Lyft, Uber, Slack, etc..), or as profitable,
WeWork’s steady upward trajectory has spread its mission to
revolutionize commercial real estate throughout the world.

“The demand for flexible leases and

professional community is not just a
trend, but a necessity in this age .”

It is still unknown whether WeWork, or the coworking industry

in general, can outrun the volatility of the real estate market
or survive an economic downturn. But what we do know is that
coworking is here to stay.
Considering that commercial real estate contributes $1.0 tril
lion to the U.S. GDP, according to the NAIOP 2019 report,
the demand for flexible leases and professional community
is not just a trend, but a necessity in this age.
In light of this, WeWork’s agile business strategy and steady fo-
cus on vertical integration has solidified its place at the top of
the coworking pyramid.

35 Coworking Resources: An Insider’s Guide to WeWork

We would love to
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hear from you! than eliminate keys—it builds a vibrant

office culture. Our simple web dashboard
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