The company has 0 tech brand among employees (how many ex-FB or ex-Google engineers work there?) and outside of Benchmark’s early round none of the VCs are SV-based.
Point is the media is making this out to be an indictment on some SV tech bubble but people in SV are looking at this from the outside like everyone else.
Its not the media, I think its just true. Had WeWork IPO'ed under the same conditions a year ago, I think it would have been 'fine'. but the glut of SV unicorns losing money, hating investors, and slowing growth has got people highly concerned.
This list of companies (slack, lyft, Uber, Pinterest, beyond meat, crowdstrike, tesla, spotify, Pinduoduo, Dropbox, Snap, Domo, Blue Apron, Box, Shopify, Zillow) has 310 billion in market cap and -18.67 billion $ in revenue (back of the envelope calculation).
If I missed anyone or made a typeo/mistake, let me know
how I came up with the numbers:
EDIT: I am not saying all these companies are bad; I am invested in some of them! Just that the sheer size of these companies and their total losses are unnerving lots of people to such a point that the market had no appetite for WeWork.
You’re confusing revenue and earnings/net income. Revenue is the sum of the sales. Net income, or earnings, is how much money is left after accounting for expenses. Uber alone has tens of billions of dollars in revenue.
Does uber count it's fees as revenue or does it count fees and the fares (which get passed back to the drivers) as revenue?
My opinionated take is that if uber wants to pretend that drivers are not employees and it's just a marketplace then they shouldn't be booking the fare as revenue, just their cut but I'm not an accountant and I don't make the rules.
Good point, but Uber literally takes the money through its app, so I don't suppose that would be possible.
Contrast that with a high margin business like consulting services or a proprietary technology/product and there's a huge difference in net profit between the two at $10m annual revenue.
I don't use Uber so I don't know if the payments are always to the same 'Uber Ltd' or not, but you're right that would seem to be a good option.
Edit: wow I didn't realize Slack had such a large market cap. That is a LOT of growth priced in, probably more than is justified.
Microsoft Teams especially seems like a deliberate attempt to dethrone Slack, and while it is slightly more annoying to use, it just makes sense for companies to bundle their services and subsciptions.
I do not really see a bright future for slack.
- Message history
- Files that have been shared
- Integrations / bots / ...
- Plus you would need to setup everyone again, create channels, ...
Slack goal is to be cheap enough that it does not represent a major cost for the company and integrated enough that moving would be a pain.
The integration story is more interesting, but to _be_ a competitive product many of these must already exist.
The job of competing with Slack is harder than it once was (just look at MS Teams) but not impossible (just look at Slack...) - there’s lots of room for improvement.
I think we moved from Slack to Mattermost because our infosec people weren't happy about Slack's handling of our data; there's a line in an email about "discussions with Slack over the past year regarding their data security and AI initiatives". But then Slack sorted that out to infosec's satisfaction, so we moved back, because running your own Mattermost installation is more of a hassle than paying Slack to do the equivalent.
That's easy to say and hard to do, especially when u have to justify a very public valuation
Exactly. Cut their S&M budgets overnight and you'll see a ton of very profitable companies. Just look at their Gross Margins.
How is that even possible?
By definition revenue can’t be negative.
They don't hate investors, just the likes of you or I, and who can blame them? Softbank gives them money on a $47bn valuation, don't have to deal with reporting requirements, don't have short sellers (which SV types seem to be really annoyed by?!).
(Disclosure: I work at Twilio.)
Like how on my Tinder profile i'm a non-GAAP 10.
Yes, Silicon Valley's smartest minds may see through it all. But in routine media coverage, the company's own version of its story (OVOIS) gets much of the ink. It takes a while for more investigative reporters to call BS and defy the company's OVOIS.
Actually, my feeling here is that institutional investors have realized that We isn't a tech company. That's why the IPO would probably only have fetched them at most a $20B valuation, rather than the higher valuation they've been awarded from the private markets as a supposed tech company.
So this may not be an indictment of "Silicon Valley IPOs" in particular, just investors saying "no" to a clearly overvalued non-tech company, and that company then deciding that it won't accept a likely more-reasonable valuation.
(Not saying there aren't plenty of overvalued tech companies! But this might not really have anything to do with that.)
Now you may accuse me of the "No true 'No True Scotsman fallacy' fallacy".
It is (too some degree) an indictment on the Softbank and/or blitzscaling strategy that a lot of SV startups follow.
My wife just started a contract at a new WeWork office in London. The lobby features a giant but non-functional as skateboard ramp, and two DJ booths, both manned (at 9am on a Monday). The bathrooms feature the very latest in digital toilets, but they aren't flushing, and nobody can figure out how to reboot them.
At an aesthetic level, this couldn't be more Silicon Valley if Mike Judge were in charge of the service design.
In this context, the media pile-on may be annoying -- but it's inevitable, and basically deserved.
After the third such class, I decided to get the hell out of my lease.
It's like their entire corporate culture is built around finding creative ways to not work. It's awful environment to build a startup in.
I am imagining a bunch of microdosing firangi sitting in their gravity pods, asking each other what Indians do to be, like, all cool and stuff. "Build a successful business" is, like, way too square an answer, daddy-o. Anybody can be a dull old business man. Our customers want to be cooool. So what's cool and Indian?
Sure, man, but everyone does yoga. They probably do Yoga in Kansas these days, so how's that gonna build our brand? Yoga goes without saying. We need something way cooler than that. What is it?
(Long awkward silence.)
Ah, I've got it! Bollywood dancing! Yeah, they eat that shit up over there. Let's do that.
Keep in mind, this is an office that aims to keep individual workers paying it, not the other way around, so the environment is going to be different than a lot of employer-owned offices.
I guess some people don't mind that, but to me, it got too nauseating too quickly.
At my location, it also seems that outside of the dedicated desk area (which is where I sit), a lot of people are there just to get laid. Nothing wrong with that, but that's something I've only found at WeWork of all the coworking places I've been to.
The graffiti in the Broad St. NYC location is cringe inducing.
On more than one occasion I've witnessed people omit that their office is based out of a we work location. Just too embarrassing to be associated with them.
>If you’re looking for workspace that revels in uptown funk but gets business done with downtown panache, choose WeWork Harlem.
>Our open and airy shared office at WeWork Harlem embodies the future of workspace while embracing Harlem’s rich cultural history. Inspired by the Harlem Renaissance and how Harlem culture continues to express itself today, we looked to jazz legends like Louis Armstrong, Dizzy Gillespie, and Duke Ellington, and teams like the Harlem Globetrotters for design inspiration. “The Stoop,” for example, a wooden elevated seating area with attached nooks, feels as much like a stage or basketball court as it does a common space—it’s an arena for connection. That’s not to mention the generous natural light, warm wood finishes, and vintage art and furniture. Book a tour today to see what WeWork Harlem can do to help your business sing while staying true to its roots.
Ours just has bathrooms & coffee machines that are offline for weeks at a time.
We work does sound like the place The registers Steve Bong! would be hanging out
I can't believe I've never seen it.
Question: How do you think this company got a $40B+ valuation?
Answer: By renting office space to "Silicon Valley" companies with equally silly ideas and terrible financials. It epitomizes SV.
Here's a news headline: "Tech company" brand value damaged by WeWork; WeWork not in the club key investors say
What we see now is the second stage of this: companies which have a marginal involvement of technology in their core business (which is true for basically all companies today) try to paint themselves as "tech companies", with the goal being that investors put them in the same box as Amazon, Microsoft, Netflix, Salesforce et cetera.
And since investors are just as stupid as anyone else and just as susceptible to fall for herd-like behavior as anybody, this strategy works to a certain degree.
I reckon I should play this like Soros would: first add fuel to the fire, and then short the shit out of the dumpster fire once it becomes clear that it really is a dumpster. And the end is nigh, so keep within reach shortlists of things to short.
Too bad our salaries will suffer too. Nothing one can do about that.
It's hard for a qualified specialist to diversify his income revenue, though.
Also, with all the bubble-busts it's never total destruction. We may get a haircut to the salary, but I doubt jobs will outright disappear, or even slide into average salary levels.
Well, you're commenting in a thread about how they didn't. This is one of those instances where I read something and instantly invert it in my mind and think "that makes a lot more sense".
WeWork is even taking it one level further. They still have close to thousands software engineers to build... Things though.
Well it is based in New York, so it really isn't a Silicon Valley company. It's a NYC one.
This sounds like an awful metric.
Or if you could take sabbaticals at will?
The customers are almost always happy with what we produce, and while it is certainly not fast growing, the company is steadily progressing in a good direction.
This environment is worth a lot of money to me.
I'd actually dispute that. The tech world is really, really big. There are a great many extremely talented engineers that have never worked at FB or Google, but they're also the kind of engineers that don't write blog posts or attend conferences, so they're less visible.
If she'd stayed in Chicago (Northwestern grad), that's unlikely. Of course those companies have outposts there, but fewer tech roles by an order of magnitude or two.
I know quite a few of them (and would like to believe I'm talented, too).
What percentage of developers that is I haven't the faintest clue. But definitely significantly more than 10% of my friends have worked for at least one of FAAMNG. And I have a lot of non-nerd friends too.
The propinquity is insane. When my GF decided to leave MS she walked from her MS building on her lunch break to her interviews at Google and LinkedIn (LI has subsequently moved). Of course the inverse is true too: there aren't many startups in that area, except in the Landings complex (where Cygnus used to be!).
CloudFlare... Now there's a proper tech company.
Why do you think valuations varied so wildly? You get the same thing with Tesla, it's valued more as a tech company than as car company.
According to that Tesla is somewhere inbetween a tech company and car company. Also it's the only car company that used software to substantially improve the performance of the car using software after selling it.
Have you got figures because I just googled for Telsa, Ford and Facebook at that doesn't seem to be the case, albeit with older figures.
Anyway at this stage Tesla are selling luxury cars to the converted, its unclear to me that they can keep doing that. Eventually they'll have to start selling to Joe Bloggs.
There Is of course the fabled Ford FBI chip that was used on FBI pursuit vehicles, knackered the engine life of course. I was told this buy a guy who worked at a Ford dealership.
You can't put a horn on a dog and call it a unicorn.
At least in NYC, if someone is a member at WeWork its a strong signal you don’t want them at a party.
Maybe it’s some sort of AI they’ve built in house?
I remember when folks were telling me not having a WeWork space was a sign you didn't want to network with other like-minded folks.
Personally I have no experience with WeWork, but I've never really found the urge to make much of an effort to know people from other companies in shared office environments. Sometimes it happens, sometimes it doesn't. But don't try to make me socialise with them, thanks ...
5 stock splits and 3 CEOs later, day one investors will receive roughly 2 pennies back for every dollar invested just 2 years ago.
Only people who won were those who dumped free shares on the market (insiders), and maybe consumers for getting subsidized food of questionable quality.
Once valued at 2 billion USD, a paltry 150 million will get the job done now.
The idea is that it not only measures growth, but measures new customers in relation to churn, with the idea that it's a lot easier to have a long term successful business if you have, say, 1000 new customers and 50 that leave in a month (net 950 new customers) vs. 5000 new customers and 4050 that leave in a month (though also 950 net new customers).
Blue Apron was legendary for its huge churn rate and commensurate high customer acquisition costs. Curious what its quick ratio was, and whether it was just basically ignored.
My main point is that basically the only thing Blue Apron had going for it was topline growth, but by pretty much every other metric it looked horrible and unsustainable. SaaS quick ratio alone should have clearly highlighted how unsustainable that topline growth was given their through-the-roof churn rates.
But to JohnJamesRambo's credit, there are a lot of people who don't 'invest' in the US government either.
Of course, I'm not sure I'd want to invest in Brexit, so maybe it still holds.
Seems as if the stick was handed over to a suitcase company whose "smart" suitcases cannot be checked in to flights due to batteries, that already-mentioned annoying prefab website company and underwear manufacturers offering to put decorative metals around my testicles.
I'm surprised Youtube made the "tap here to move forward 30 seconds" feature because it always takes me right to the end of the "native ad"
VCs are focused on whatever metric reels in the next layer of suckers. GAAP exists for a reason.
I don't get it, but then I don't have any trouble cooking for myself and my family. I didn't grow up learning how to cook. I spent a little bit of time figuring it out and then it became easy and didn't require a subscription to some sketchy company.
There's also no way that you're coming close to the prices at a supermarket when you're buying individual meal's worth ingredients instead of bulk, a bag of potatoes, or a bottle of seasoning instead of one potato and one pinch of whatever inside some single serving plastic wrapping.
Not to mention the impact of the packaging materials and shipping. I can't speak to Blue Apron but my daughter used Freshly for a bit and I was shocked to the point of laughter at what was showing up at our house once a week: a big cardboard box with this thick, plastic-wrapped insulating material fitted to all six faces, and inside were nestled six individual meals, also packaged in cardboard with some plastic. My daughter told me they claim some level of recyclability for the insulating material, and of course the box can probably be shredded and re-boxified, but I bet 90+ percent goes right in the can and out to the curb.
Just about everything in the grocery store comes in a big cardboard box.
blue apron's fault is trying to enter a space too easily replicated by others including the very grocery stores who have everything mostly in place except for the recipes.
it wasn't long after services like Blue Apron came about and were newsworthy before many grocery stores started having prepackaged fresh items you could mix and match for a quick meal.
Also note that the delta is a big big percentage of the base packaging, and I am willing to bet it's over 100%, if not 500%, just cause there are so many packages made from few large boxes.
Source? Or are you just speculating based on nothing?
Recyclable materials that end up in a landfill are no better than non-recyclables in that same landfill, as even organic materials don't really decompose in a landfill.
The comment absolutely does not accuse them of lying. They claim the material is recyclable, not that it is actually being recycled. I don't contest their claim that it can be recycled, and I simply speculate that most of it isn't.
In the same vein, Blue Apron and Hello Fresh, I'd imagine, are there to expand your horizons in terms of culinary options. If it's just me going to the grocery store, then I'll just get for any old recipe I know.
They both remind me of a Danish company, Aarstiderne, which has been around since 1999, where the sales pitch is fresh organic vegetables with curated recipes by chefs every week. Particularly in 1999, when organic vegetables were harder to come by - even in Denmark, it made a lot of sense. Now they have so many different subscription choices (that offer different kinds of culinary experiences), that it's akin to picking the channel on television, but letting the programmers pick the programmes.
That's the appealing thing to me, it's actually less the convenience.
It's 100% about convenience. They offer nothing more than you picking up your own food. Plus they ship as much packaging as food so it's probably far from being the most ecological solution.
But yes, the packaging is insanely wasteful, not to mention the ecological cost of shipping itself.
I definitely cooked more often when I had a HelloFresh subscription. And when I do cook now, the variety of things I make is much smaller.
This is more of a problem with how fucked American supermarkets are and how much food wasted is generated not just by too much being packaged.
I go out of my way to shop at Asian supermarkets because at least I can buy alot of produce individually and not massive bags of shit that'll spoil before I can eat it like American supermarkets push.
But as someone who is reasonable acceptable at cooking, I do like the idea of something where I can get outside my comfort zone.
People are paying for convenience. Think of it like a house cleaning service. You don't NEED to hire someone to clean your house, but it makes your life a little easier and for some, that's worth it.
The utility here is very marginal, and there are alternatives that make your life even easier.
They haven't missed a day in a few years. I only realized the importance of Blue Apron in his life when he told me he does about 8-10 hours at work and 2-8 hours at home most days.
Blue Apron affords them the time to get to even be a family.
Or order take out and save even more time and share dinner together.
And yeah I dont want to do that! :)
I’m glad Blue Apron and other services are like “hey thats a valid perspective and is underserved” instead of being dismissive
You can criticise a company without being in a Dropbox<>rsync situation. Especially when that company is not doing so well.
I use an equivalent in my country and it's worth any premium I'm paying.
For me I eat a very peculiar diet so I usually just pick up yogurt and fresh bread from the grocery store on my way home from work, and when I'm feeling particularly lazy I will order steamed chicken and steamed broccoli from the local Chinese shop who really have this amazing technique of steaming that I seem unable to grasp!!
Or is it that the price point allowed for marginal profits and they thought that by scaling up it would cover the fixed operational costs and thus lead to profits.
Where do you think it went wrong?
It was that what gave them the market penetration in new countries, out spending and out performing competition until competition faulted or was bought out. So, the lesson I took, was that a lot of the latest b2c e-commerce start-ups are to a very large extent marketing driven.
Want to browse Pinterest? Open the app.
Want to get Pinterest? Go to the App Store.
Heard someone say 'pinterest' but don't know what it means? Search google.
Your link is only showing that last one.
I believe this is just a broader result set that includes searches for anything that Google deems to be related to 'Pinterest the social network'.
Google doesn't have access to internal Pinterest metrics.
Google is very much a panopticon, I doubt any other single entity has as much knowledge of the internet as a whole. Now whether this reflects in Google analytics I don't know, as I've never really used their analytics for anything serious.
Google Trends can't reliably tell you anything useful about a site's growth or activity. I'm not denying it correlates with your specific app, but that doesn't mean it will work for everything, and it clearly works very poorly for popular services.
Remember when everyone was sharing youtube videos. Or when you would sit and endless watch. I feel like that faded about 45%.
Google dropping makes sense. I visit less sites and the search results are not that great for discovery. Most sites I visit by typing a letter in the browser and auto completing.
Facebooks earnings raising 20% makes sense as more people are advertising on it. I notice 71% less people less original activity.. photos/status updates more groups/ads filling the gap. I spent 71% less time on and reduced my daily visits.
We're always chasing yesterday's tail. I bet twitter's numbers are down.
To be clear, I dont trade stocks and couldn't care less which way this moves. Just seems like the Google trends data is a bit of information asymmetry that the market hasn't caught on to, yet.
"Disclosure: I am/we are long PINS. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha)"
The lockup period does not expire till mid-october.
I read their 10-Q and found this gem about "user re-authentication":
MAUs at quarter-end were 300 million, representing growth of 30% year-over-year. This represents an acceleration in user growth, in part due to one-time changes to SEO algorithms and user re-authentication that impacted Q218. International growth drove the majority of global MAU expansion."
They're counting MAUs as number of logins and not number of active users?
I was researching this because I asked myself a general question: "Why is the stock price of non dividend paying companies correlated to the performance at all?"
Amazon is a good case study for you. Didn't pay dividends for a decade or more. Reinvested everything. Pissed off analysts. And killed it.
In that world as long as you can keep delivering growth, you're good. Miss once and you're toast.
Amazon has never paid a dividend.
and WhatsApp. I would argue that the market is a bit more rational there.
That’s a parody from 2017. It’s probably more true now than ever. We actually cancelled our BlueApron last year in favor of another meal kit service - and might end up canceling them overall for grocery pickup from our local grocery chain.
I go to the grocery store and re-make a good number of the recipes. I'm appreciative of the expanded palate BA has given me as well.
Being tech companies means that they’re viewed as part of a group of companies who have pulled of billion dollars IPO, so they’re wrongly focus on “no less than the one billion”. Mentally the jump from 1 billion to 2 billion is also a lot less that the jump from 150 million to 1 billion, so why not go for 2 billion.
"We're going to really fuck anyone willing to do business with us" is not a compelling story for a company trying to grow, but it's great for investors. Also, I'm not just talking about the landlords and customers, you better believe the plan is for the lenders to get pennies back on the dollar too.
A monopoly on real estate?
Doesn't change the fact WeWork is an overvalued real estate company that believes it is a tech company.
If they could figure out how to do printing without PCClient, now that would be a business worth 47B all on it's own...
Can I have some billions now?
Rpicup.com, the global leader in non augmented reality solutions, leveraging modern technologies to anticipate trends in the digital/reality interface. Rpicup brings printing, or as we like to say rpinting(tm) in to the 21st century.
Rpicups: Print your way to world peace.
Edit: I am of course available for consulting work, and to ensure my neutrality in such matters will only take my very modest fee as cash, no options.
To be fair, you could say that about many 'tech' companies. Weworks 'innovation' may well be getting to over the hill tech company in record time!
> Were the New York-based company to fail to meet this target by the end of the year, it would need to secure alternative funding.
Does this mean, its now a ticking time bomb?
When you read this and that Softbank has committed to buy 1/3 of the shares sold at IPO it does sound like it's going to pop sooner than later (that may include the vision fund if WeWork crashes)