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.
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 .
But Starbucks doesn't succeed in every region it enters - certainly not ours , 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.
> 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.
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...
> 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.
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.
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.
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.
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.
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.
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.