As We Co, the parent of flexible office provider WeWork, prepares to now IPO later this year after postponing its September launch, many in the property industry are still struggling to define WeWork: is it a competitor, a client or just a hype?
Let’s first address the postponement for which there appear to be two main reasons. Firstly, the disappointing performance of other tech IPOs (think Uber/Lyft) which have adversely affected We Co’s pricing prospects. The second reason is the conflict of interest between We Co needing the IPO proceeds to keep growing and We Co’s largest investor Vision Fund avoiding taking a loss on its investment, just as it is raising its second fund. Nevertheless, let’s assume they find a route out of this and can relaunch later this year.
Here are five points to help you working out WeWork.
(I) if you are old enough to remember Netscape and Lotus 123, you will know that inventions can outlive their inventors, i.e. even if WeWork fails, its business model could survive.
(II) like what McDonald’s did to burger joints, what WeWork has done is not new, but it also has standardised processes, scaled globally at a relentless pace and created a slick modern branding.