Commentary: 'WeWork is so unicorn, it hurts.'
, its Russian-nesting-doll corporate structure, the string of WeWork’s eyebrow-raising financial arrangements with its chief executive, the company’s outlandish mission statements and its history of questionable spending and investments.Advertisement
Historically, brand-new tech companies tended to follow an established pattern. They created something or found ways to make a niche product accessible to the masses. The pioneers of Silicon Valley created computer chips first for government or military purposes and then for more widely useful equipment such as radios and smartphones. Bill Gates and others made computers useful and cheap enough for everyone. Google made software that organized the sprawling digital world.
Uber Technologies Inc., Lyft Inc. and others took the idea of matching people with drivers for hire and added the twist of letting just about anyone become an ersatz professional driver. A boatload of companies are creating brands of sneakers, mattresses and luggage and trying to cut out the retail store middlemen. Young companies are buying houses for resale as a replacement for the inefficient home-buying process.
It rents office space under long-term contracts, gussies it up and charges a markup for flexible, shorter-term rentals. It’s not a new idea, but WeWork does this to the max, to the point where its revenue barely exceeds its basic expenses to serve tenants. At the same time, it is lavishing cash on buying buildings and expanding into every country it can.
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