WeWork is now worth a cool $5 billion. The alternative workspace organization has recently raised an additional $35 million of funding to help them expand and grow. That is a serious infusion of cash that has left some business center industry experts skeptical. The pages of OT have covered WeWork before and now that they have gotten a new injection of funding, it warrants a second look. The WeWork mission, as you may recall from our last article, is to become the de facto standard of the open format coworking model, carving out a super-niche akin to those established by uber-successful Uber and AirBnB.
The difference in the model between WeWork and Uber or AirBnb, however, has some industry folks expressing doubt as to the viability of it. There are those who feel that WeWork may be painting an unrealistic picture of its own potential return. Issie Lapowsky of Wired recently wrote: “For example, people are likely to always be in need of an affordable ride to or from somewhere in Uber’s case. And they will always need a temporary place to stay in the case of AirBnB.” But, Lapowsky goes on to note, in the Wired article, that the market for high-end office space for tech startups may not always be in demand. WeWork has invested a huge amount of money in ‘physical’ real estate, on the odds that it will. So it remains to be seen, according to Lapowsky and some others, how sustainable the WeWork model will prove to be.
But is this a fair assessment? Is WeWork simply giving tech start-up communities the kind of collaborative, open environment that they need to launch their companies? Are some of the skeptics being shortsighted? What happens in the long term will answer that question, either proving or disproving the viability of the WeWork model. In the meantime, however, business center and coworking space owners and operators should sit up and take notice. Organizations such as WeWork, are exhibiting the creativity and tenacity to spearhead and put forth a new co-working model and have demonstrated the marketing acumen to promote it intelligently enough to gain recognition and, as we know, significant funding.
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Kudos to WeWork as well as best wishes for their success. Innovation is good for our industry and for the future of alternative officing all over the world.Share this article