WeWork’s fall from grace started with a failed IPO, which led to an ousted CEO, a collapsed valuation and a $9.5 billion bailout package from SoftBank. The company was once seen as the golden child of the flexible office industry, but now operators are finding ways to distinguish themselves from their disgraced sibling.
Knotel’s CEO Amol Sarva said that a slow growth strategy is necessary after WeWork’s massive expansion that occurred just before it imploded.
“Implosions are scary whenever they happen,” said Sarva. “I think the entire economy for a second back in September was nervous, and certainly the entire world of venture and technology and growth and real estate spent the next few months being quite uncertain. Because I think the WeWork implosion wasn’t just a real-estate mistake, it was a venture-growth mistake that sent a big message to everybody.”
Knotel’s biggest differentiator is that it is not a coworking company. Instead, it caters to clients from major companies like Microsoft and Starbucks rather than sometimes risky startups.
Additionally, Knotel’s business model offers a mix of direct leases and revenue-sharing deals with landlords. WeWork mostly leases spaces from landlords, then subleases them on shorter terms to tenants. Moving forward, Sarva said his company will continue to focus on the revenue-sharing agreements.
However, Knotel has shared a few issues of its own. For example, just last week the company laid off several of its New York staff and lost its head of corporate finance.