The Rise and Fall of WeWork: What can we Learn?

This week, I recently started watching the newly released Apple TV+ series: ‘WeCrashed’.

This series talks about the rise and fall of WeWork, the famous coworking space startup.

I haven’t watched it all yet, but it’s very fascinating for those interested in entrepreneurship.

‘WeCrashed’ is not a fictional story, it is actually based on the true story of WeWork.

It talks how the company started, its founders, its cult following, and everything in between.

However, what is more interesting is its valuation, in particular before and after filing for an IPO.

Before, it was valued at $47 billion, an unprecedented achievement for a non-tech startup.

After, it fell to around 1/3 of that, also an unprecedented achievement to fall by that much.

It’s a very interesting yet unfortunate story, and I am excited to watch the rest of the series.

However, there are things we can learn from this company, that I want to share in this blog.

In today’s blog, we’ll focus on how we can rise quickly, but more importantly, avoid falling!

Do What you Love

You may think that WeWork was Adam Neumann’s (cofounder) very first company; it wasn’t.

WeWork followed after a suite of unsuccessful companies that Adam had initially started.

From baby clothing to collapsible high heels, Adam’s previous companies had little success.

The reason that these companies failed is because Adam could not relate to them as a user.

Its only when he started thinking of problems to solve in his own life that things took a turn.

I’m sure you can think of a problem that Adam had: having a space where he could work!

And the rest is history. He found a co-founder who could help him with the architecture plans.

He pitched the idea to investors where he was able to validate their idea firstly in Brooklyn.

Once it worked, he knew he could raise capital and apply the same throughout New York.

I think that this is a great learning for all of us: think of the main pain points in your own life.

When solving a problem for yourself, it’s easier to convince others, especially investors.

You Don’t Have to be a Tech Startup

WeWork’s story is very inspiring in many aspects.

However, what is most refreshing for me, is the fact that is it not a traditional ‘tech’ startup.

Nevertheless, it was able to exceed the value of unicorns such as Airbnb, Stripe, and SpaceX.

There is a myth in the startup world that unless you are a tech company, you’ll never be big.

To be honest, for the longest time, I believed this myself.

When I look at investors, they’re only interested in tech startups because of their high growth.

However, after reading WeWork’s story, it completely disproved my thinking around startups.

WeWork, at its core, is a property company; it leases desks and office space to entrepreneurs.

There is nothing ‘tech’ about it; it doesn’t sell any tech products/services, apps, software, etc.

This goes to show that you don’t need to have a tech idea to have a successful company.

As long as you provide a product people truly want, you can be valued as highly as anyone.

Don’t Grow too Fast

WeWork grew at any incredibly fast rate.

From the early days they were able to get funding and open branches around New York.

Funding started pouring in from international investors and they started expanding globally.

When they were at the top of their game, they thought what better time to file for an IPO.

When people started reading into their financials, they started seeing a lot of red flags.

When valuation dropped to around $10 billion, WeWork decided to hold off on the IPO.

It became clear that WeWork was not being run correctly, that there was no good leadership.

WeWork was even spending its money on buying other companies, that made no sense.

This reckless behaviour eventually resulted in Adam stepping down as CEO of his company.

I think the key take away here is to make sure that your operations/financials are in order.

People will eventually figure out the truth and realise when a company is profitable or not.

Final Thoughts

What an incredible story. I pass a WeWork all the time but had no idea about their history.

I would have never guessed that this commercial property startup was once worth £47 billion.

However, what about the most important metric: how many entrepreneurs has it helped?

In society, we focus too much on how much a company is worth as opposed to its customers.

All the articles you read on this story will talk about all the money that it has made and lost.

However, what inspires me most about WeWork is how many people it has helped globally.

When I start a company and look back on its performance, I won’t measure it by its valuation.

Instead I will measure it by how many people it has helped and how many lives it has changed.

For me that is a much more rewarding and fulling metric; one that would’ve made it worth it.

I hope you have enjoyed reading the blog: The Rise and Fall of WeWork: What can we Learn?

What are your takeaways from the story of WeWork? Please share in the comments below!

If you enjoyed reading, check out my blog: How to Calculate the Value of your Business.