WeWork wasn’t wrong. They lost their mojo. And, the world is filled with companies who have done the same thing, then bounced back. From Microsoft to Sears, we have story after story of original and innovative companies that lost their way. And, for every Sears that vanishes to memory, there’s a Microsoft that bounces back.
I read WeWork’s S-1 and viewed it less through the lens of an IPO investor and more as someone who has visited close to 100 shared workspaces, incubators and accelerators around the country. The truth is that WeWork changed dramatically in the past five years. Their spaces changed with the formula change fueled by enterprise management, and most seriously, their approach to community changed too.
WeWork’s financial struggles, and the profiles streaming out painting Adam Neumann as the bad boy, don’t change a few fundamental facts that WeWork was right about. First, there is a segment of the workforce that continues to grow that wants to work as a part of a connected community. Not everyone, but enough people that there is an inherent need for coworking. Second, the commercial real estate market still needs disruption. Growing companies want flexibility and many are less interested in managing their own real estate.
We’s business and financial practices, or the pressures of explosive growth, are straightforwardly out of whack with the brand and the ethos. They lost their way — ditching the idea of community building in exchange for enormity.
Now that WeWork has taken most of oxygen out of the room over the past few months, it’s time that we start to look beyond them. From a dollars and cents perspective, there’s a demand for flexible workspace, for coworking, and even for co-living. Like in other industries, we have to figure out what right-sized approach is though in markets across the country. There’s a way to develop, stand up, and operate spaces that make money. This is where the traditional commercial real estate model needs the closest examination and disruption. Because at the end of the day, a flexible space and coworking model are going to have returns per square foot higher than market averages. Most importantly though, is community building. Spaces like ours will rise and fall on how well we cultivate community, and integrate our community with the regional entrepreneurial ecosystem. Any pundits seeking to analyze whether a new venture will succeed needs to pay attention to the success of the community building. If it looks and smells like a reclassified office space with colorful palettes, that’s probably all it is. It’s just an old Sears store with a new paint job.
There is life after WeWork. There are a lot of takeaways from the past five years, bold innovations and missteps alike, that will help the emerging companies that are building new communities in cities large and small.
About Aurelius Coworks: Aurelius Coworks is a socially responsible company that develops, owns, and operates coworking communities and startup ecosystems in middle markets and downtowns undergoing revitalization. Aurelius Coworks connects its members to the surrounding ecosystem and contributes to the regional economy where its properties are located. The company’s spaces are meticulously built, the communities carefully cultivated, and a focus is placed on infusing the right mix of business and social programming in each community. Current properties include Troy Innovation Garage in Troy, NY, and Bull Moose Club in Albany, NY.