Hacker News new | past | comments | ask | show | jobs | submit login
WeWork IPO Shows It's the Most Magical Unicorn (bloomberg.com)
212 points by jpm_sd 5 days ago | hide | past | web | favorite | 166 comments

I have a bit of knowledge of the co-working industry.

I’m good friends with the founder of the first and long-dominant tech/creative co-working space in my Australian city, and I served on its advisory board in the past couple years, through what turned out to be a distressed sale of the business to its landlord, after it became insolvent and unsalvageable.

There are several fundamental flaws with the concept that make it very hard for this kind of business to work:

1) Difficult/unpredictable/uncontrollable customer retention

Most of your customers are individual freelancers and early-stage companies up to about 20 people. If they become successful, they outgrow the space and leave (possibly after a period of tenancy on negotiated discounted rates because “hey it would really hurt you guys if we left”). If they are unsuccessful, they go out of business and leave, possibly after a couple of months of non-payment (“oh man we’re just waiting for a big payment/financing, we’ll be able to pay next month for sure”), which is hard/impossible to recover once they’ve left. And even where people remain eligible customers, the transient nature of the customer-supplier relationship means it's easy to jump ship if a cooler space opens around the corner.

So you’re running this revolving-door business, where retention is only partially within your control, and having to invest heavily on new customer acquisition (often involving free trial periods and other incentives) to keep up with churn.

Your most reliable customers in terms of tenancy and payment are remote workers/teams for bigger interstate/international companies, but too many of them and the culture can become too corporate-feeling and less appealing for everyone - them included.

2) High setup costs and fixed running costs

Rent, fit-out, furniture, facilities, utilities, cleaning/maintenance, staff, etc. Most of these costs are largely independent of occupancy levels/revenues.

3) Difficulty finding/keeping good staff

The “community management” job in these places is highly specialised and demanding. All day you’re dealing with human problems that are exacerbated by people’s stresses about their business or job, as well as all the minutiae of things like the toilets/kitchens being clean/stocked, meeting room booking windows being adhered to, ensuring that the people in the space are all people who are meant to be there.

Emergency calls from people who e.g. left their wallet in the space that day and “just need someone to let me in to grab it” (at 9.30pm) become routine occurrences once you reach a certain scale.

Beyond these practicalities, the people in these roles set the mood for the whole space, and can make all the difference between it being a welcoming and happy place or a dull/miserable one.

Finding people who can not only do this kind of work all day every day, but do it with an enthusiastic and friendly demeanour, is very difficult, and burnout/turnover is common.

In general, the kinds of people who can do this job really well can get a less-stressful/better paid job elsewhere (quite possibly for one of your resident companies).

4) Competition/substitution

The market in many cities has become saturated (partly thanks to WeWork itself). This pushes market rates down, acquisition/retention costs up, expectations up (“the other place has FOUR types of kombucha on tap”), and dilutes the pool of potential residents and staff.

And after all, what you’re offering is not essential for freelancers/small companies anyway. They can easily work from home, cafes, borrowed/subleased space with other companies.

It seems the only way to make these businesses financially viable is by partnering with something like a startup accelerator/investment company or an R&D body backed by industry and/or academia.

But this requires deep links with local community/industry, and is a huge amount of work to establish and manage.

For a player like WeWork, this kind of work is hard to do as it can’t be done with a cookie-cutter approach, and local collaborators for these kinds of partnerships often prefer to work with locally-owned businesses rather than big outsiders.

So, we’ll wait and see. Maybe WeWork has something up their sleeve that will allow them to build a model that works.

I’ll be interested to watch it play out.

I don't think WeWork is a co-working business anymore and I think they silently pivoted over the last few years based on exactly the business reasons you've laid out in your comment. This is my working theory after having spent the last 2-3 years working out of a lot of different WeWorks and having a lot of friends do the same and having friends who were in the coworking business too.

WeWork and AMEX are currently offer a deal when if you get an Amex Business Platinum card, they give you unlimited hot desk access to any WeWork in the world for a year. You can work for an entire year for free (even in super high cost places like NYC, SF, London, etc.), even if you are already a paying WeWork member. All my friends and I cancelled our WeWork memberships and moved to AMEX. It's saving me >$6k this year and I get a better product than I had as a paying user.

This has led me to visit a lot of WeWork locations:

- In my experience, most of the WeWorks in the world don't have that many "coworkers". Most of the people in the buildings are at traditional companies renting office space. The companies renting space are frequently giant corps like Netflix or Facebook getting spill-over space when their main office is full. (There are exceptions like the WeWorks in downtown SF where there are lots of coworkers, but it is not the norm.)

- WeWork places so little value on the income from shared desk "coworkers" that they will give away the product completely for free as a loss leader to grow the brand and entice more people to try out the product and rent a larger space.

- Entire WeWork locations will just "shut down" to the public if WeWork manages to lease all the space to a company like Facebook. See 125 Shaftesbury Avenue in London. Obviously they care more about leasing to a big company than running shared office space.

My take is that they are trying to be Starbucks for renting office space. This product is very convenient and it has a lot of value, but I don't think it is a "tech company" and I don't think it justifies the current valuation level because the margins aren't there. But who knows what the market will think.

But two things are crystal clear to me:

1. I would get out of the coworking business if I was trying to compete with WeWork. I couldn't possibly offer the quality of product (pretty good) at their price point (as low as $0) unless I had unlimited piles of VC money to burn.

2. If you are doing independent consulting or remote dev and don't need traditional fixed office space, you might as well help them spend their VC money by using their space.

I've been involved in real estate and the coworking scene in Shanghai for the last 3 years and you've hit the nail on the head.

Customer retention is even worse here, as so many spaces keep opening up and offering huge discounts to move in.

At first WeWork kept their price the same at an average of 3,000RMB desk/month (600AUD per month), then local competition came in at under 2,000RMB, then WeWork did 3-6 months free rent incentives, 25% broker commissions etc, opened around 30 (?) spaces in 2 years.

Now the average price of a desk is around 2,000RMB at WeWork, local competiton is under that, and brokers still get 15%. The Tenants know how much power they have in the negotiation as it's all a big competition between coworking operators.

Who's winning in this? Landlords, Tenants and Brokers.

I don't think Landlords are winning from this. In fact I think it's interesting that this dynamic is actually going to hose landlords the worst.

Right now we have a situation where companies like WeWork are creating huge amounts of demand by offering extremely low rents to tenants on short leases and renting spaces from landlords on long term leases at high prices. This is stimulating the creation of more office space.

If this continues for a long time, great landlords are rolling in it! But if we're right about how this is going to go - these companies are going to run out of money, and when they do run out of money, they're just going to fail to pay those long term leases. The landlords are the ones left holding the bag - they'll have a load of office space with broken contracts, that there's no demand for, because all the demand was stimulated by renting it out at a loss.

At that point the bottom will fall out of the market. Landlords will be stuck with a load of broken contracts, tenants will have unrealistic expectations and demand will collapse as people go back to working in cafes etc.

I really like your analysis here and it made me think.

Ultimately, for control of many of these issues, a localist approach is superior..understand the local culture, etc.

Maybe a coworkery in La Jolla would have surfboard racks and a tacit understanding that surfing comes first...so allowance for wet gears (and showers) might be needed. Maybe a location in Boulder has community climbing gear and/or a bouldering wall.

So, does scale lend _any_ benefit? Certainly the "network" of locations might help...but what % of tenants are really and truely jet-setters off to many major cities, versus those that stay close to home and just need a regular space out of the house. I don't think scale is that vital in this view.

Next, deals...I suppose scale can lend itself to leasing deals with major brokers that have multi-city inventory. But that benefit is only on the supply side, and unless the _same_ landlord is involved, they won't come down in price just because.

At the end of the day, more, 'localist' coworking spaces probably wins and is a more dynamic market (and thus resilient) than some attempt at "winner-take-all" scale. Also, to reinforce that...I suspect many times a good coworking location is probably an individuals labor of love...they like their town, had access to the commercial space, and they wanted it first-and-foremost for themselves. Any subscribers are just helping to pay the bills and making new friends.

> So, does scale lend _any_ benefit? Certainly the "network" of locations might help...but what % of tenants are really and truely jet-setters off to many major cities, versus those that stay close to home and just need a regular space out of the house. I don't think scale is that vital in this view.

Spot on here. They are building for a world in which everyone is location-and-asset-independent. Don't need a car because we have Uber/Lyft. Don't need a home as we have Airbnb. Don't need an office as we have WeWork. Etc.

But the market of people who live that way is still small, and I think it will always be somewhat small, or at least limited. (It becomes much harder to live that way once you have a family, for example.)

And can they really end up opening spaces in all the places where location-independent, digital nomads want to go - e.g., all those beach resort towns in Thailand and exotic villages in Central/South America?

But even if they do, independent digital nomads are not the people who will sustain the business anyway, as independent freelancers are more costly to acquire and service, and harder to retain. Their bread-and-butter is mid-sized teams (5-20) and satellite staff for interstate/international companies.

They're often described as the Starbucks of office space [1].

But Starbucks doesn't succeed in every region it enters - certainly not ours [2], as we have our own many-decades-old coffee/cafe culture in which people much prefer independent cafes over large chains.

I'm sure this mentality will apply to co-working spaces just as much as cafes, in many places.

[1] https://www.inc.com/sonya-mann/wework-company-year-2017.html

[2] https://www.cnbc.com/2018/07/20/starbucks-australia-coffee-f...

> Don't need a home as we have Airbnb. Don't need an office as we have WeWork. Etc.

> But the market of people who live that way is [A] still small, and [B] will always be somewhat small

I agree with A, but not B. To me this is a classic disruptive tech scenario. Right now living in hotels and working in coffee shops is strictly worse than having a home and an office for almost everyone.

A few people who have very special needs are well served by coworking.

However, all of the different metered rental propositions (metered office rental, metered car rental, etc) offerings are getting better and better. They are all pretty bad but you can imagine what it would take for them to be great.

Will those experiences eventually catch up to long term home/office leases? Maybe. If enough services like that get good you open up interesting possibilities like a company that only exists for a week but can do everything a fixed company can do.

I find it difficult to predict what can and can’t happen here, so I think your “people will never want this” assessment is too hasty. If there are enough early adopters who will hold on and provide feedback and a small amount of revenue, that could produce something quite compelling over the next decade.

> Right now living in hotels and working in coffee shops is strictly worse than having a home and an office for almost everyone

Maybe it's just the WeWork I've been it, but it was every bit as loud and distracting as a Starbucks. The glass fishbowl offices constantly remind you other people are walking around you. You see them, they see you. In addition, the one I was in had the bright idea of installing hardwood floors everywhere. Men and women in dress shoes and high heels would "clop clop clop" all day long.

You also never want to mix sales people with engineers. Or any job title that requires a good percent of the day socializing. Sales people are on the phone nonstop, usually running a script quite loudly. That's not even something you could get away with at most Starbucks. But WeWork on the other hand...

It surprises me that they don't offer quiet cubicles or areas of office space for quiet workers. I see noise of coworkers as a major complaint among office workers and the source of hatred for open concept offices. Do these WeWork offices not have separated work spaces?

>> Don't need a home as we have Airbnb. Don't need an office as we have WeWork. Etc. >> But the market of people who live that way is [A] still small, and [B] will always be somewhat small

> I agree with A, but not B

Being a digital nomad is fun for a few years and then you want to settle to have relationships. Humans are social animals. This is unavoidable. Also, people want possesions, most people want to have their own touch on their own places because it makes them feel better. Home, sweet home is not just a place where you store your off season clothing.

While I could imagine a world where it is equal cost/quality to live a nomadic lifestyle or a fixed lifestyle - I'm dubious of the claim that most would prefer it as the risk profile is inherently higher than a fixed location and all else being equal people will prefer a lower risk living situation.

> I agree with A, but not B.

Yep, fair enough, and that's (part of) the bet WeWork is making and is what we'll watch play out over the coming years/decades. I don't feel strongly either way, I'm happy to wait and see.

> Don't need a car because we have Uber/Lyft. Don't need a home as we have Airbnb. Don't need an office as we have WeWork. Etc.

This is the "Stand on Zanzibar" / "Future Shock" world, and it looks alarmingly plausible. Alarming because all those things are so fragile to cashflow issues and the general insecurity problems of being a renter rather than an owner. And plausible because of what's currently happening with AirBnB: because it enables arbitrage between the "residential" and "hotel" prices, it has the potential to force all residential prices up to hotel levels.

WeWork is planning for the future, when we'll have instant teleportation between cities (obviously).

Wouldn't you just go home at the end of the day then?

>They are building for a world in which everyone is location-and-asset-independent. Don't need a car because we have Uber/Lyft. Don't need a home as we have Airbnb. Don't need an office as we have WeWork. Etc.

It’s easy to look at current trends and extrapolate from there but when I think of Wework, I am reminded of the time when selling ones home and moving to a shared boarding house was commonplace. Trends reverse, often quite quickly.

Smaller-scale co-working is also more affordable. You don't usually have a community manager for one thing. You don't impress people with fit-out or free beer or whatever. You just provide a likeable, reasonable space for people to share.

I co-own a 15-18 desk space and while we have churn, our setup costs were not especially high, we don't have staff (we are tenants ourselves) and we largely ignore the competition. We would be one of the more expensive spaces but uncompetitive on facilities/services - I think we have attracted people because we're simpler and quieter.

This. Fancy offices everywhere are an utterly unsustainable bubble. Remote work is growing strong and coworking places will become increasingly popular, but in the end people want a reasonably good place to work that is cheap, not a fancy socializing place. Wework would make sense if they provided this at large scale, instead they cater to a lifestyle crowd.

Like any big, multi city real estate broker, the benefit of scale is diversification over local real estate markets, and less risk.

A single WeWork in one city is risky due to fluctuations in real estate, economics, labor supply, competition, etc. a thousand locations are less risky, since the company can still exist even if a local market tanks for a year.

OTOH setting up a coworking space is not risky for real estate owners. Couple of desks and a coffee machine. Wework may be setting itself up to be airbnb'd by everyone who has available space in the future.

But doesn't that mean that WeWork could become the AirBnB by making itself the app/website where all of these independent landlords list their office spaces and where workers go to rent them?

Many sites , e.g. Coworker.co already exist . Running such a website seems to be easier than running an airbnb - the leases are daily passes and they dont seem to worry about cleaning fees & damages etc. The main takeaway for wework is that they are in the real estate space, this is an uber-competitive and regulated space which has been "disrupted" for millenia

Global real estate markets are increasingly correlated so that geographic diversification no longer benefits a portfolio very much.

> Maybe a location in Boulder has community climbing gear and/or a bouldering wall.

I mean, yeah there is a lot of climbing in Boulder, but a MUCH better resource would be a daycare. You'd have line out the door if you had a daycare in Boulder. Childcare costs in CO are crazy high, like ~$40k/year for 2 kids.

I realize I'm probably a bit of a unicorn, but I've coworked in the same co-working office for over 8 years. The businesses in the office have changed and there has been some turn over in those years but 50% of us have stayed! Those of us who have stayed the past 8 years have cycled between self employed, and employed full-time, often years at a time for one company.

We live in a small town in Colorado that has never provided work opportunities in our field, but we've always been successful working remotely.

Small town co-working has provided a huge value for us: no commute, we're out of the house, camaraderie, friendship and support. Maybe this is an example of a profitable co-working.

I know that in these past 8 years the owner has done very little recruiting and the desks are nearly always full.

> co-working has provided a huge value for us: no commute, we're out of the house, camaraderie, friendship and support. Maybe this is an example of a profitable co-working

Yep, sounds very familiar.

Our space was like that when it was the only one in town, and it was the go-to place for self-selecting people who wanted to connect with other like-minded folk.

But our city has four million people, and startups/freelancing became super-popular and demand for co-working shot up (our space actually had to turn many people away at its peak), but then the whole industry became fragmented, and our space (indeed, any space), stopped being the go-to place for "people like us".

I've done the same thing for the last 18 months in my small New Zealand town (~10,000 residents). My company is big enough to need two closed-door offices now; we're still happy to stay here, it's got a nice vibe and sharing costs keeps things reasonably cheap.

I worked at an early non-profit coworking space in nyc back in 2005 and we also experienced every single one of the problems you mentioned in endless supply. How to make enough money to cover program costs coupled with high turnover and lots of people either succeeding out early or failing out after months of not paying rent both happened regularly. We had institutional support so could weather the costs, but the idea of it being self-sustaining given the economics was a big lift. we were always approaching something like success but never quite reaching it for the reasons you listed.

I’m wondering if all those problems aren’t WeWork’s moats.

They might not be able to do that well, but at scale, they can have most of that into effective processes. They are the only one who will have international comparison and dozens of addresses inside a city, so they can tell what to do near the historical center vs. the up-coming industrial run-down.

Having a great place to work is increasingly important and as you say, it’s hard to do. But it’s the one thing that you can do to attract workers that isn’t paying 5% more than competition — so unless WeWork isn’t 5% of salary more expensive than having your own office.

On a more cynical note, companies have been trying to treat support staff and strategic-decision-making executives differently: the cleaning staff, cooks at many tech companies are external contractors seemingly for that reason. That separation is being disputed when there’s a close tie between support and the main company. Having a brand like WeWork would severe that tie.

>1) Difficult/unpredictable/uncontrollable customer retention

I don't think this is the case in a lot of WeWorks anymore, i work in a WeWork and the majority of companies are now bigger corporates.

Goldman Sachs just took 2 floors in the WeWork next to us.

It's actually quite hard to find a largeish Co-Working space in London as it moves so quickly and so much space is being taken by corporates buying entire floors.

One WeWork in London (125 Shaftesbury Avenue) even "closed" to the public as Facebook leased out the entire facility.

As far as I can tell, WeWork is not really a coworking business. It's a large-scale office space leasing business that uses coworking as advertising.

When I consider my options to not sit in a company office, the cost points of what is out there very quickly indicate the buried cost of a desk, and good snacks. They are way way north of what people "think" would be reasonable.

A friend in ICT who will remain nameless has found a bookshop in a disused chapel near his home (and mine!) which holds great promise, but as a space its limited to maybe 2-5 people and would never be economically viable. But still, towers of books outside, and a congenial bookshop keeper to bum coffee off..

What do you think about WeWork's recent attempts at gaining traction with big corporations[0]?

[0] - https://www.curbed.com/2019/3/26/18280774/wework-real-estate... for instance

It's what they have to do.

It's the only way to get tenants that will stick around long-term, thus solving the retention problem.

With this in mind, I can see their approach being to offer a Google/Facebook-like full-service campus-style workplace, but for companies that are way too small to provide this themselves.

We'll see if it works!

Thanks for the great summary. I’ve been renting an office from them for most of the year and all of what you’ve said rings true.

This is really interesting. What are the profit margins like? Can't imagine it would be easy to substantially undercut any traditional office space.

It's almost a different business like AWS vs. colocation of your own servers.

Traditional office space is long term leases.

Coworking spaces give you month-to-month.

With traditional office space, you're responsible for maintenance, like cleaning. You have to hire people and manage them.

Coworking spaces do cleaning for you.

Coworking spaces also try to do more things for their customers, like hosting events.

Yes, you probably pay more (although there are economies of scale) but the product you get is different enough that direct price comparisons are not applicable.

WeWork is like Starbucks and McDonalds business wise. Their IP is all their manuals, their suppliers and financial backers. Strong brand. Lots of adjacent markets. Amazing business!

I think I've read on HN beofre that they literally do the McDonalds thing where they actually buy office space privately or through other corps and then rent it to WeWork for money. Not sure if this was debunked. Don't follow closely.

Personally, when I entered a WeWork for a meetup I felt it's interesting design etc, but it feels like it sucks out your soul. It's like comfy and cold at the same time. Premium Mediocre maybe is the right term for that, not sure.

Control/ownership/structure aside, the interesting line here is:

"The financial disclosures make it clear that WeWork — which, it should be said, is a commerce office leasing company and not truly a tech company"

Lots of tech companies (eg uber) take VC funded losses to grow at tech startup rates. This can create unsustainable business models and mask sustainability issues. But...

..But, in tech, the potential payoff driving all this investment flow is getting to a monopoly (in the Thiel sense). Out of this world business models like Google's or FB's that generate massive revenue with near-zero marginal costs. Software economics, basically. The winners win incredibly big. This makes the massive-multiple investment case rational.

Tesla, WeWork and such have much more normal, non-software-like economics. WeWork will never lease office space for that much above market rates. No matter how good Tesla's cars and/or manufacturing tech gets, they are never going to sell cars at a 40% margin^. That's why Elon had to sell all the Tesla share and take loans. It takes a lot of resources to build factories and cars. Office space can be leased, so WeWork hasn't needed as much financing, but it comes out of operating margins instead.

You basically cannot achieve software startup money-machine goals with atoms and marginal costs.

^Self-driving aside.

The City of London is having a skyscraper boom at the moment - two major 100+ floor buildings are going up and you can hardly turn a corner without some crane or building work going on.

I personally (and without any empirical evidence) think that there is no way London needs this much more office space, partly because "Brexit China Tariffs", but mostly because remote working and "just not in the office five days a week" is becoming a thing.

Turning that sterile office space onto more live/work/mix-it-up space, perhaps floors 1-20 as office and 20-40 as apartments or something, will almaot certainly be a feature of the next twenty years.

And all that office space and living space and mixed something or other we don't quite get, all that will need to be sold and packaged and marketed.

And so, long story long, whilst WeWork may look like a joke, may be a "lose money on each sale but make it up in volume", something like WeWork may just be the Hoover or the Pullman coach of mixed live work office buildings. Because mixed live work office buildings will be the Pullman coaches of tomorrow's cities - cities have a new brighter car free future, where Barcelona's mega-blocks will meets the density of skyscrapers. But it needs ... looking after.

Putting a millions tons of glass and steel pointing straight up is an awesome technical achievement

Making that tower somewhere that families can live, love, shop and work is a different skill set entirely.

It won't look like building service companies do today. It might just look like WeWork

(Thank you, normal cynical and cutting remarks will resume shortly)

>two major 100+ floor buildings are going up

Which buildings? According to this [1] there isn't a single building in London (completed, under construction, or even proposed) that is 100+ floors. The tallest building in London (The Shard) only has 80 floors and there are currently no buildings planned that would be taller.

1: https://en.wikipedia.org/wiki/List_of_tallest_buildings_and_...

Sorry to disappoint you but I'm not sure I agree here. It doesn't feel much different to 2006/07 - ie peak of the cycle in real estate for the City (not to say that I think the bust will be like 2008/09 but that I think there really is a clearly cyclical element to it).

The City is not a place families typically want to live because it has very little green space - and it's largely not a place marketed to families. High-end residential space in the City is essentially marketed at two groups: single people in their 20s/early 30s working nearby, and people for whom it's a second home near work. In my opinion, those markets are enough to sustain it for many years to come - they're likely to grow and what's more they have disposable income which will support the retail/etc element in a way homes for families these days don't.

The commercial real estate boom in the City is the latest in a long, long list of such. Unlike Canary Wharf, which has been very careful to manage space so that almost every square foot is always occupied except in the deepest points of recessions, real estate in the City has had a large speculative element to it for at least the time I've been observing the market (since the 90s), and I don't see anything different here.

There's a long-term growth story and a cyclical element. Long-term growth is about a move eastwards as the West End gets filled up/businesses get priced out. The cyclical part this time to me seems to combine an element of that with it being a "signalling" location for certain types of business about who/what they are.

Plus I believe the City of London has a policy of avoiding owner occupied apartments blocks. Once a building is owned by 600 people, there is no way you can buy it, demolish it to build something more adapted to the new demand.

I'm not sure that's true, and in any case they can't really enforce that - if a building owner wants to sell individual units, they can sell them.

The obvious counterexample to your point is the Barbican. Much of the Barbican is owner occupied and the vast majority of the flats there are privately owned (ie not local authority/housing association). I'm not sure but I think the Barbican still houses the majority of residents of the City proper.

It is possible that this policy didn’t exist in the 70s. To be honest I read that 10 years ago when I was looking into commercial real estate finance. They may also have evolved since.

Interesting, since I knew someone who lived in a City of London owned tower block (not actually in the City proper) as an owner-occupier. It was a 60s building with flimsy single-glazed windows and unreliable lifts, which made it affordably bad in the first place.

I wonder what happened to the concept of the garage startup that Silicon Valley's foundation is famous for? Too much money from profits and not enough people or ideas to invest in?

Paying for an office space is an extremely inefficient use of resources, especially when plenty of cafe space - or just, you know, your living room, kitchen - or garage - are useful even for teams of 20+ because will be rare to need everyone in a single space at once, and then you can just rent something larger for that event.

I kind of have a challenge with myself to work towards launching the fastest growing projects/platforms using as few resources as possible. whether I'll reach that goal is moot, though - it's more or less a mantra for me to pay attention to whether I am rushing or not.

>I wonder what happened to the concept of the garage startup that Silicon Valley's foundation is famous for?

Killed by housing costs and a mature industry.

Who can rent most of a house right out of school (HP), or bang around in their childhood home (Apple) in SV? Not only are the costs prohibitive, but most residents are from somewhere else, so no childhood home in existence anyway. Moving to SV is done to parachute in to the success that previous generations had to create for themselves.

Oversimplifying a bit, but the point is that both the economics and the demographics have swung way far away from "scrappy young geniuses" to "Ivy League careerists." It's almost a different universe, and would be completely distinct by now had Starbucks not been invented.

Maybe it could work for founders, but as an employee I would absolutely not sign on to a company whose space is a garage. First of all, it signals precariousness and non-seriousness. Second, I can get a job at any number of companies in more comfortable settings, so why shouldn’t I?

Maybe part of the difference is related to supply and demand: potential employees have other opportunities, so why should they make sacrifices for companies they don’t own more than 0.5% of?

> I would absolutely not sign on to a company whose space is a garage. First of all, it signals precariousness and non-seriousness

So you would have avoided Apple and Amazon then?

They would also have avoided a million companies you never heard of.

Right, so following the leading metric for your decision basing it on off of if they mostly run out of a "garage" is a terrible idea; adding the two Apple founders into the equation, assuming you have the opportunity to get to know them and their ideas and plans well enough, would be an important part to the equation of deciding where to work.

Only if you believe that you can distinguish lucky founders from normal founders with sufficient precision to beat the odds. Personally I wouldn't trust myself to do that.

If they were in a literal garage and I could have gotten another job paying 300k or more in a real office with free food then yes, I definitely would have avoided them.

My feeling is it's an aspirational good, like a BMW. Many of the people starting these companies are not really serious and are just waiting for another ship to eventually come in. It's the new unpaid internship of the upper middle class.

> [...] perhaps floors 1-20 as office and 20-40 as apartments or something, will almaot certainly be a feature of the next twenty years.

Please be wrong, please, please, please...

If I just can telecommute I don't want my workspace being my live space and my neighbours being my coworkers.

That can may be a thing if you are living by your own, living in a foreign city and without family. I can't see it other way.

Skyscrapers are only getting bigger. And while "walkability" and "going outside" are really important so too is density and density can breed innovation.

It's why weird companies with funny CEOs might try things that a serviced office corporation might not and might build an environment that's better for us all.

It would be rare I admit.

Ever read or watched High Rise by JG Ballard? Afterwards you might not be so keen on living in the same skyscraper as you work.

One thing the City as an area is short of is hotel space. Hotels or part-time occupancy residential (serviced apartments and second homes) feels much more realistic for that space than "true" residential space.

The reason for the boom is that building skyscrapers got a lot cheaper in the last 10 years as the techniques and approaches have been worked out in the Middle East and China. It's not really anything to do with the economy - just the chance to create a lot of office space cheap. I think that the other factor is the Queen Elizabeth line which will bring a lot of commuters from the west of london and outlying areas into city of london range. I expect docklands to be the big loser.

I had a previous job where the owner bought a building in NYC and made the top floors apartments, one of which I was offered at a low rate. I am very glad I said no, because imagine the golden handcuff scenario of having a below-market place to live ONLY if you keep working for a person/company who, at least in that case, turned out to be pretty creepy.

Doesn't FB own nearby housing that it rents to its employees

> cities have a new brighter car free future, where Barcelona's mega-blocks will meets the density of skyscrapers. But it needs ... looking after.

Without detracting at all from a really interesting speculation, this does sound like the opening crawl of a hopepunk Judge Dredd film.

Zoom is also up 50% since it went public in April, and Crowdstrike is up 70%.

I don't really get the sense in comparing a bunch of companies with disparate financials and very different industries. The We Company is a real estate company trying to convince people it's a tech company. This list mixes B2C and B2B companies, SaaS platforms with monthly recurring revenue with companies with advertising-based business models. Almost none of these organizations are reasonably comparable.

I would expect something described as a real estate company to be long, well, real estate. As I understand it We is short real estate.

I forgot about the shell company bit on their long-term leases. In any case, they are in the business of managing and reselling real estate, whatever the time horizon.

But if they all feed from the same pool of money who are looking to invest in "tech", then they are related.

WeWork's business model makes more sense when you realize it's probably just a scheme for transferring VC money directly into Adam Neumann's pocket. He owns a number of the buildings that WeWork is leasing: https://www.bizjournals.com/sanjose/news/2019/01/16/wework-c...

No longer true; he transferred them to a fund owned by the company:


That link says he transferred them at cost, which means he still made a profit off of them beside the company. The fact that he even did that in the first place is very questionable.

I don't mean to be facetious but how does that make it better? Doesn't he still control the company that owns the fund?

Is it suppose to be better because it "looks" better because with my minimal understanding there isn't a difference.

His personal ownership was a problem as it created a conflict of interest between his personal property assets the the company, so you have scenarios where he is engaging in related party transactions [1], i.e., potentially entering into lease agreements at above-market rates, to benefit himself personally, and (as the sibling commenter pointed out), having highly valuable property assets, funded by company loans, that remain in his personal ownership even if WeWork goes out of businesses.

When the company owns the properties, that ceases to be the case, as there is no conflict of interest between property owner and occupier as they are one and the same.

He is (and was) still always legally obliged to act bona-fide in the interest of the company (i.e., act as much for the benefit of minority shareholders as his own).

It was just harder to scrutinise when he was both the majority shareholder of the company, and landlord for some of its properties. That is no longer the case.

[1] https://en.wikipedia.org/wiki/Related_party_transaction

I mean, it is different / better.

Now, if WeWork goes belly up, Neumann doesn't get to keep the buildings.

But he gets to keep the money that they paid him for the buildings.

Magical indeed. From the chart in the article it looks like for the most recent half-year they were paid $1.35B in rent and spent $1.23B to operate their properties, which works out to just $120MM in operating income for the year, let's say $250MM for the year. Per the S1 they already have around $4B of debt which looks like it costs them about $80MM per year in interest. That leaves about $170MM in plausible "earnings" if you assume they didn't have any other costs (they do, massive ones, but for sake of argument). The suggested IPO valuations are about 400x that amount, or about 20x higher than the average P/E of the S&P 500.

Digging into those other costs is informative as well, the numbers for 2018:

    Pre-opening location expenses $350MM
    Growth and new market development expenses $475MM
    Sales and marketing expenses  $370MM
One could make some sort of argument that the first two categories are long-term investments, but the last one really stands out to me: they spent $37 on sales and marketing for every $25 they "earned".

Their sales and marketing was $370m/$1350m or 27% of revenue. Is that in line with industry norms?

I think it makes little sense to express Sales & Marketing expense as a percentage of Net Income...

You could express it in terms of New Revenue Growth, to get a feel for customer acquisition cost, and then look at churn to get a feel for lifetime value and payback periods... if you wanted to analyze them like a "SaaS" type business.

What industry are we talking about? Most commercial real estate used for offices spends almost nothing on marketing (they put a sign in the window perhaps).

I don't think SaaS is at all relevant. Typical SaaS gross margins are upwards of 60%. WeWork's gross margins are under 10%.

Edit: found a source[1] that states "5% of broker’s cut is standard" for commercial real estate marketing expenses, with a broker getting about half of the commission which is around 2.5%. Even if you went with 10% of a 10% commission rate that would only be 1% of the total.

[1] https://www.calicomarketing.com/commercial-real-estate-budge...

Maybe that 'sales and marketing' figure includes discounts on rent to gain new tenants?

But I am sure they have great parties.

One thing I never see mentioned in any analysis of WeWork is Regus, which does more or less the same thing but with less fanfare. They’ve been running coworking spaces and short term office rentals around the world for a long time. Do the two companies have similar business models? Can we look to Regus’s long history to better analyze WeWork’s prospects? It’s not like WeWork invested co-working spaces, so I don’t understand why everyone acts like they did something novel.

On a personal note, I’ve been a happy user of Regus for nearly a decade and I can’t imagine switching to WeWork. The WeWork offices I’ve been to are large open offices or glass-walled. They have better kitchenettes but not astronomically better. And the whole vibe feels very unprofessional, one step up from a coffee shop. And they cost a lot more. I don’t get it.

I was genuinely surprised to read your impression of Regus. I worked at their offices twice and both times, I was surprised they were still in business.

The first time I’ve heard about WeWork, I was excited precisely because I thought Regus was hogging a necessary service.

I've worked at a lot of different WeWork locations in different cities and countries. They are essentially Starbucks for working - you get the exact same product in every location and it is "good enough". The overall product is definitely designed for a younger generation, but it is very easy and fast to use.

I've also used Regis occasionally when a WeWork wasn't nearby. It was like stepping back 30 years into the past. Instead of getting my corporate-allocated portion of predictable factory-generated open office space, I got what was equivalent to a random left-over desk at your weird uncle's small town real estate agent office 25 years ago.

The whole Regis experience felt like something from the mid-90s. It was a whole different thing than WeWork. The crowd skewed 30 years older and heavily into non-tech industries, the architecture was very "90s small office", etc. I honestly felt like I would turn a corner and see someone using a Packard Bell 486 with a giant CRT. That's how much it reminded me of working in offices in the 90s.

I'm not saying one is good and the other is bad depending on what you need. WeWork often comes off as a parody of itself and can be a ridiculous place to work. But WeWork is also something that most people in their 20s think is a "fun place" where you just "hang out with your friends" where as the Regis offices would probably feel like an old school work prison to them.

I think WeWork is probably a ridiculous business in the long run and I'm not convinced they are even a "coworking" business at all, but I'm happy to spend their VC money to get free office space as long as they want to give it out. Likewise, I can also totally understand why Regis would never excite any investor.

I feel like what you and the other replies are saying is WeWork is super trendy and hip whereas Regus feels old-fashioned and stuffy. This feels surprisingly superficial to me.

1. The old fashioned office feel at Regus is not necessarily a bad thing. I’m able to focus much better in a Regus office. And I feel like I’m actually getting what I’m paying for (if I want beer, I’ll go to a supermarket). I’ve never had client meetings in either place, but from what I’ve seen Regus is much more the kind of place I’d want to bring clients to if I wanted to give a good impression. This kind of feels like a parallel to the open office versus cubicle debate. Open offices are undoubtedly trendier and more community driven and just feel cool, but if you want to actually be productive and get work done then open offices are kind of a step backwards.

2. Regardless of what’s better in our differing opinions, the business models are more or less the same, so it feels like Regus could be a useful case study when thinking about WeWork. I still find it confusing how most articles about WeWork imply it’s the first company to do what it’s doing at scale and therefore it’s in uncharted tech startup growth mode territory.

WeWork has a lot of brand differentiators from Regus (free beer and networking vs quiet efficient blandness for getting stuff done. Different strokes for different folks). But yes, there's nothing remotely new about the model (Workspace Group has also been doing it for three decades in the UK) and whilst these companies are certainly profitable, their valuations are somewhat closer to the real world.

I had a look at working in a Regus when I was on a long trip to a foreign country. The whole feeling was super stuffy.

I first had to have a sales call with someone who didn't really seem to know what they were talking about, then he wanted me to come and visit, then it became apparent that he was talking about the wrong location. The space was a very boring environment with a cheap fit-out. The price wasn't great.

I ended up working in a local co-working space. I walked in off the street and the owner showed me around. I said I was only there for a short period and he suggested some custom pricing. He was friendly and knew what he was talking about, the office manager was friendly and again had answers to everything I wanted to know and more. The space was interesting and felt nice to be in, while still providing a good working environment to put my head down and work in.

I've never worked in a WeWork, but I've visited a bunch, and they always strike me as much closer to the latter than the former.

Regus is the 1990s business services company that has never heard of the internet...

What I don't get is how small some of these numbers are. Weren't some of the figures being tossed around valuing it at $40bn? And their revenues are in the low single digit billions. It's one thing to get sucked in by a company like Uber who does $50b+ in rides, and think how valuable they could be if they figured out how to earn a meaningful chunk of that pie, but WeWork earns virtually no money, and exists in one of the oldest and most competitive businesses known to man. What is the upside that investors are envisioning?

The optimistic case for WeWork is that they have a shot to become an extremely powerful player in the office real estate market. The idea is that they could get to a place where most big companies looking for office space would prefer to do it from WeWork because it's better than leasing directly from a building owner. And most building owners would prefer to lease their space to WeWork because it's better than trying to lease directly - after all, at this point everyone looking for office space is going to WeWork so it's tough to find companies who want to lease directly. Once they're in this position they'll be able to bully building owners into leasing to them at very favorable rates - who else are the owners going to lease to?

The idea is that WeWork can do in real estate what cloud infrastructure-as-a-service providers like AWS and Azure are doing in computing. Most companies find it easier to build on AWS instead of running a data center directly. And data center hardware providers find they kind of have to accept the big cloud providers' terms because they don't have a lot of other people to sell to these days.

In order to believe this optimistic case for WeWork you have to believe that they are providing a useful abstraction on top of leasing office space the traditional way, and you have to believe that they won't face any deadly competition. Personally, I'm skeptical of both of those, but I think the best case for WeWork providing a really useful abstraction hinges on two things: 1) a secular shift in the way people work leading to highly flexible office arrangements (e.g. instantly spin up an office in Berlin, run it for two months, then shut it down) becoming much more attractive; 2) WeWork being able to structure lease terms in ways that are better for corporate accounting somehow (i.e. it's not a better product at the end of the day, but it looks better on the books). The best case for them winning out over competition comes down to them getting such a big lead in the amount of space they offer and brand recognition that nobody can challenge them - hence the rationale for burning a ton of money quickly to open as many locations as possible as soon as possible.

I'm skeptical and I'd argue WeWork is more likely to end up like MoviePass than AWS. (MoviePass had pretty much the same idea and playbook - burn money to get to scale and market power quickly then dictate terms to the suppliers who have been eating into your margins - and it didn't exactly turn out well.) But anything is possible.

tl;dr Long-term investors hope that if WeWork can achieve a dominant position in the global office market then they can increase their margins by both lowering their cost to acquire space and increasing the rents they charge. If they pull that off then they can rake in hundreds of billions of dollars and be worth trillions.

Thanks for this thoughtful comment, it’s the most insightful one to me so far.

Great analysis and comment. A question though - was MoviePass's flameout ("dictate terms to suppliers ... didn't exactly turn out well") because Hollywood/the movie industry is far more consolidated and cartel-like than expected/imagined? And more consolidated than for instance, distributed commercial building owners?

I agree network effects will come into play - the more WeWork can capture the demand side, and abstract it away from the supply side ("who else are the owners going to lease to"), the more powerful they'll become over the supply side. But are commercial owners organized enough to resist?

“In the short run, the market is a voting machine but in the long run, it is a weighing machine" -Benjamin Graham

Isn't the new WeWork in the Brooklyn Navy Yard empty? They have been trying to fill it for months. But double-check me on that.

1/2 billion to build that baby.

Unless there's another one, the Dock 72 location is still "Opening Soon" https://www.wework.com/buildings/dock-72-at-the-brooklyn-nav...

A bubble company, pure and true. What's new? This one is riding the wave of both the commercial real estate and tech bubbles. Brilliant.

I never knew pinterest was that big, never used it in my life not even once. How many other startups and market tangents have I been ignorant to I am beginning to wonder.

Pretty certain that paying for wework is a vanity project.

You get biscuits and beer and a nice location but you don’t need any of it

As much as I love reading all the commenets here that try to use rational and great thoughts about WeWork, they forget one thing - this company for a very long time is a classic pump and dump. Even the founder sold stocks just a while ago. There is no business reason, unique technology or anything else that will even try get close to the numbers of this company. I just hope that when it collapses it will be contained and not affect the entire technology sector.

Market will teach these companies a lesson

Yea, I'm sure all the people who built up a multi-billion dollar valuation with a chat application are really going to be hurting when it... wait, since all these companies have already cashed out will it just like shame them or something? Maybe the invisible hand of the market will wag its finger in a condescending manner.

A bunch of these valuations seem pretty BS, but it's not going to hit companies, it'll hit investors that think they're going to make 1000% RoI on the next WhatsApp clone... granted the market is still rewarding them so until it comes down I don't know if we can really consider it to be too foolish.

Right after their sleezeball CEO and all their VCs cash out, leaving small time investors holding the garbage at the end.

I’ve never understood this point of view. Shouldn’t every investor, regardless of scale, bear responsibility for their investments? If by small investors you mean regular employee 401Ks, controlled by the wealth management division of a bank, with a heavily diversified portfolio, that is still a risk the “investor” may be fine accepting. I don’t really feel bad for anyone losing money when they actively put it into a system of massive speculation.

The thing is that most people don’t know what they are doing.

The 401(k) is the only retirement program we have. At the end of the day when companies go public and then go bust the money is often coming from the collective public in some way.

You are right, it’s a very small detail. But it’s one of those cogs that turn while making the rich richer by extracting value from the public.

The founder of this company is a billionaire. A man that runs a company which makes no money is a billionaire. Where did the money ultimately come from? Who pays the bill? He’s added no value to society by any objective measure, he’s just taken.

In most 401(k) plans the default funds don't invest in IPOs. Most workers and retail investors have no exposure here.

During the last crash, most 401k investors didn't think they had much exposure to mortgage-backed securities. Turned out they had lots of exposure to companies that held those securities. I don't know how much that's also true with these IPO stocks.

Most don’t. Not directly. But you don’t need most, just enough.

These companies will teach the Market a lesson, more like.

Companies don't possess a capacity to learn, being just a legal fiction and not actual people.

institutions are just as capable of learning than anything else as long as they consist of bodies that are capable of reform and memory (my home country Germany can tell a lesson about it), and anyhow the idea of an 'actual person' as somehow continuous entity is a fiction too.

Individuals pass through just as many disruptive phases as any other entity. A person at the age of 5 and at the age of 50 is only 'the same' in a legal sense.

Iso9001 being a prominent example of RL on an organizational level.

It's also a fiction that these companies learn and is just as real as the legal fiction.

When the recession hits (more controversially the bubble pops), I’m not sure what will happen to WeWork.

I would guess it will collapse, as tenants leave and it can’t pay for its rental costs.

But on the flip side, in a recession landlords become much more open to renegotiating terms, and more people freelance or start their own business when they lose their jobs. So it’s possible WeWork could somehow claw their way out of it.

There's an interview to Neumann by BI where he talks about that exact same thing. Makes one wonder if they're betting it all on a recession for things to "work" (heh)

The interview, soft paywall: https://www.businessinsider.com/wework-ceo-adam-neumann-busi...

I don't like this pattern, more than VC funded startups they are more like QE funded startups, regurgitating your own devalued money as a favour. Uber comes to mind, too.

Magical = Most incredible potential for failure

I'm sorry, who the frack is this CEO?

How are these anti-savvy CEOs getting this much money in the first place? What investor looked at this kind of model and went...oh hell ya, Imma dump money into that.

Massive real estate speculation you say? Shrinking capital gains you say? No downside risk of massive customer fallout or systemic risk of market downturns you say?

Oh...you're saying all those things are totally possible and very likely! Well in that case just take 75% of all my money for your little scheme.

I feel like something must be seriously wrong with capitalism if it can keep creating these startups and funnelling endless hundreds of milions into them so they can accumulate debt, lose money, and achieve absolutely nothing of value.

I loved working at WeWork in Singapore for my remote ex-employer, and will definitely do it again with my own cash if I need to work by myself. All the other Coworking spaces (a dime a dozen in this town, I tried them all) had issues with something or the other.

I think they do create something of value, and so do ridesharing companies (I love using them and hate the experience of hunting for taxis).

Maybe it’s incorrect to look at just short term revenue/profit figures when deciding if these companies are creating wealth for their users...

Even if that’s true, why should it bother you that money is being extracted from rich VCs and distributed to other rich people in the worst case, and working- and middle-class employees and customers in the best case?

Aren’t the rich VCs cashing in on the IPOs and letting the markets take the losses? Classic bubble behaviour - pay plenty so long as someone else will pay more.

Sort of like a ponzi scheme requiring a constant inflow of cash, where those who get out earlier are fine and the rest lose?

Don't forget that the rich VCs are often not putting up their own money but often pension funds from your local municipality .

It isn't necessarily like that. Uber has tried to “disrupt” fair conditions for transportation workers out of existence.

Tangent: the article includes a chart titled "Unicorns Gored" with the caption, "Many of the highly valued young technology companies have not done well as public companies". It features 9 relatively recent tech IPOs, including Lyft, Dropbox, Spotify, and Snapchat. All of the companies have a negative delta in terms of initial stock price, from -47% to -2%, except for Pinterest, which is +77%. I actually had forgotten Pinterest IPOed, and I guess that's a reflection of how much I get my tech news from HN. Pinterest seems very underdiscussed on HN [0] relative to its market cap – $17.5B vs Lyft's $15.8B and Dropbox's $7.3B. I guess that's a function of how relatively few HNers may be Pinterest users?

[0] https://hn.algolia.com/?query=pinterest&sort=byPopularity&pr...

Another way in which Pinterest is an outlier in this list is that its user base skews heavily female (>80% according to one source: https://www.omnicoreagency.com/pinterest-statistics/). I wonder whether some "Moneyball Factor" could be at work, in that this led to it being underpriced for its potential.

Snapchat users also skew somewhat female, but they are also quite young compared to other sites, and "youth" may lead to it being highly priced.

[Being an old dude, I never use either of these]

Don’t want to overgeneralize, but women seem to be more likely consumers (of things) & regular users of social media. [I’m sure niche exceptions abound]

I don’t know if anyone has run the numbers, but I’d expect ladies to more valuable on all kinds of KPIs of a good customer.

My feel is that men gravitate towards large purchases around a hobby or two (bikes, outdoors, cars, computers, video games). While women are more likely to spend in smaller amounts across a wide variety of categories.

I also may just be full of shit.

I think I tend to agree with you. I think a lot of stock traders are generally men, which I think explains why the IPO was undervalued compared to the other stocks.

My own observations of women around me seems to indicate as much. Many smaller purchases while I empty our accounts :)

The stats do back you up on this point. Women make about 80% of purchasing decisions in the US [0].

[0] https://health.oliverwyman.com/2019/01/women-in-healthcare-m...

That article is specifically about healthcare, where women are 65% of the workforce (according to the same link).

Young women are paying dividends apparently, check out the Becky / Basic index - performance year on year is spectacular.

A rare case where r/investing and r/wallstreetbets are in alignment:



Mugatu off of finance twitter calls this "white chick beta":


I went to Pintrest once on mobile, a long while back. It was an ungodly awful experience. Probably the worst mobile web experience i've ever had. And it kept trying to log me in, plus all kinds of loading and display problems and ads everywhere. i guess some people like that sort of thing.

Maybe it could be attributed to the fact that the majority of HN users are male while the majority of Pinterest users are female. Interesting observation

also follows "meme stocks"

there aren't a lot of good traders here, but its an engineering blog

> I guess that's a function of how relatively few HNers may be Pinterest users?

I actually use Pinterest. It's just how often does the opportunity to mention Pinterest comes up?

My pins are fashion (boots, athletic wares, etc..) and haircuts.

Pinterest probably has an amazing tech stack. I am surprised that it doesn't get more love around here.

Personally, I hate Pinterest with a passion, mainly because of how it pollutes image searches with useless, context-less results.

I have to do -site searches for certain types of image searches. OTOH that does fix this issue pretty easily.

Pinterest founders are business+design. Therefore the company is not engineering first, it's product and design first.

This is why it's not particularly loved on HN, and this is also why the tech stack is nothing special (it's not bad, it's just not special).

What is special is the unbelievable product market fit. Engaged Pinterest users 1) spend a shitton of time on the app (hours a day) and 2) interact very positively with ads (this is VERY purposeful and part of the product first company style).

I think their recipe makes for a great company, but it's not the most fun for engineers to work on (those things don't always if ever correlate).

They were very early adopters of Elixir!

They do? They should actually talk about it on their tech blog (https://medium.com/@Pinterest_Engineering). I couldn't find it other then third party post talking about them using it (https://prograils.com/posts/why-discord-pinterest-moz-bleach...).

Even their github https://github.com/pinterest, elixir isn't even in their top programming languages.

It could be the secret sauce language kind of deal. Or they've moved away from it.

It is a pleasure to see you outside of elixirforum.

Thanks! I'm glad I could get the same handle.

AFAIK, Pinterest rewrote the logic of their notification system into Elixir and also used it to rebuild their rate limiter.

This is the main piece I've seen open sourced: https://github.com/pinterest/elixir-thrift

I think there's an irritation at Pinterest clogging up search engine results, which may lead to some antipathy towards it on HN.

Ouch, HN showing off its gender bias I guess. Pinterest is also supposed to be popular with dads, so we must be showing off our age bias as well.

Not this dad. My wife kept trying to get my 14-year old daughter interested, but so far she's not. I think, based on these three data points in my family, that I have pretty conclusive proof it's a not-quite-young-but-of-course-not-old-female demographic.

Pinterest has cornered the market for women who (1) are planning a wedding or (2) have a child under five in their family.

And I don't just mean brides and mothers, but everyone involved with the wedding/baby shower/birthday party planning process: bridesmaids, mothers of the bride, future mother-in-laws, aunts, grandmothers, and godmothers. And of course everyone who's paid to be involved with those events uses pinterest as well: photographers, venues, florists, event planners, designers, etc.

My gripe with pinterest (that none of my friends seem to be bothered by) is how difficult it is to source the information that's posted. Not only does it create an environment for misinformation to spread but it makes it really hard to determine whether you're purchasing from the person responsible for the beautiful photo or if you're being led to some sort of alibaba drop-shipping site.

Your gripe is what kills Pinterest for me. If you want an iota of information not in the recomposssed 6 times jpg you’re SOL. It drives me nuts every time I use it.

And crafters. My wife is on there all the time for crafting ideas.

Maybe. Or, Pinterest is just a narrowly scoped and realistic product while this audience is more interested in pie in the sky ideas.

Is Pinterest really that much different in scope, or at least less "pie in the sky", than Twitter, which regularly makes the HN front page for not just tech/design posts, but even for being down? I won't argue that Pinterest is a more "important" company than Twitter (though I'm extremely biased since I use the latter and not the former). But I'd expect to see more HN submission/discussion from its engineering blog [0], given Pinterest's success at scale.

[0] https://hn.algolia.com/?query=https:%2F%2Fmedium.com%2F@Pint...

Blockchain Pintrest for uploaded brains. Putting together a series A if you want in.

Like cabs, room rental, and online catalog shopping?

I'm inclined to agree with you but I realize I get a lot of my tech news on Twitter too. I follow many tech and business reporters, and a lot of tech people in general, and doing a search for "pinterest" from people I follow turns up very little. Though I'm not sure if that's inherent to the network – e.g. it's not a general usecase to share pins across Twitter. Still, I see more on my Twitter timeline about Etsy when it comes to people I follow tweeting about something cool they bought or saw.

I treat Pinterest with the same established suspicion as the Ikea catalogue - a reliable signal to predict unnecessary family expanses.

Popular with dads? Really? I'd love to see some evidence. I actually though Pinterest died off because I haven't heard anything about it in a long time. There were times long ago where I'd search for some project inspiration, but Pinterest image results felt like a cancer that needed to be removed from existence.

Pinterest was only discussed on HN as a dominant search leech. Now that google finally deplatformed that viral disease, there's no reason to talk about it.

Huh didn't even know Pinterest is still a thing. Is it like Instagram?

Every time I've interacted with it I've found it extremely obnoxious, it is very strongly oriented to capture users within it's network and actively tries to avoid letting users do anything while logged out or to get a raw image.

My most frequent interaction with Pinterest is excluding it from Google Image Search results.

Pinterest is really big in the DIY space. It's success is more easily explained hand in hand with Etsy rather than any social media.


There's a recommendation system that I think is pretty good and people can collect other people pictures/pins in their own collections.

I don't think there is any emphasis on influencers or at least from my casual usage I don't see any. I think this is in part because people can collect other people's pins/pictures into their own collection.

It is generally good for 'mood boards' and other designer type stuff where you want to collect a bunch of images to fit a theme or inspire an idea. In my experience it's been more popular with women and crafty/DIY types.

Pinterest is huge in the Architecture and Design community as a place to organize project inspiration and ideas.

I realize I'm probably a bit of a unicorn, but I've coworked in the same co-working office for over 8 years. The businesses in the office have changed and there has been some turn over in those years but 50% of us have stayed! Those of us who have stayed the past 8 years have cycled between self employed, and employed full-time, often years at a time for one company.

We live in a small town in Colorado that has never provided work opportunities in our field, but we've always been successful working remotely.

Small town co-working has provided a huge value for us: no commute, we're out of the house, camaraderie, friendship and support. Maybe this is an example of a profitable co-working.

I know that in these past 8 years the owner has done very little recruiting and the desks are always full.

Guidelines | FAQ | Support | API | Security | Lists | Bookmarklet | Legal | Apply to YC | Contact