Stories
WeWork – The Story Of The Real Estate Unicorn Startup
The concept of coworking spaces took off throughout the world as a business model. However, this concept was pioneered by WeWork. Coworking spaces offer plug and play ready to move office spaces to companies and startups which need an office infrastructure. Startups can directly move into a furnished office space which has all the amenities needed to run their operations.
The beginning of WeWork
WeWork was founded by Adam Neumann and Miguel McKelvey. Prior to the founding of WeWork, Adam Neumann and Miguel McKelvey established an eco friendly coworking space company called GreenDesk in 2008. Upon selling the business, they began WeWork in 2010. The United States Of America was going through an economic crisis at the time, which saw companies and businesses shutting down due to poor economic landscape. The founders realised empty office buildings could be offered as working spaces for freelancers and startups and created a business model to connect them. This led to the opening of the first WeWork lab in SoHo, Manhattan.
Growth of WeWork
WeWork aims to be a startup incubator with the goal of encouraging collaboration amongst members whose business ideas are not fully developed. After the success of their first offices in SoHo, they opened up at four more locations in two years. They focused on creating a community rather than sustainability and this attracted more members. Customers are often referred to as members of WeWork. This led to the Company attracting an investment of $ 17 million from Benchmark, which pushed Wework to grow more. More funding was attracted from the likes of J.P. Morgan Chase and Co., the Goldman Sachs Group and the Wellington Group. WeWork opened their first international office in 2014 in London, U.K. They diversified their revenue stream by offering furnished micro apartments with every utility.
Controversies
The Company has been plagued with multiple controversies, mainly due to Adam Nuemann’s extravagant lifestyle and indulgences. Neumann courted controversy for smoking marijuana during the entire journey from the United States of America to Israel, prompting the jet provider to cancel his return flight, stranding him in Israel. There were multiple allegations of sexual harassment and lawsuits filed against former executives. WeWork was supposed to file for an IPO but pulled back out, because of the major investor Softbank’s loss of confidence in Adam Neumann. Softbank paid Neumann one billion dollars for him to resign as CEO because they lost confidence in his leadership abilities.
The Company is currently under management restructuring by bringing in people to guide the course towards better governing policies. WeWork paved the way for startups or growing companies to be a part of a community to develop their ideas and grow their businesses. It is also important to note that while the concept itself was revolutionary with many startups adopting the same model, this unicorn failed to capitalize on its success due to poor decisions, bad management and lavish unchecked spending.
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