HUNTING THE DECACORN
October 9, 2015 7:41 PM Subscribe
Fear and sadness in Silicon Valley
posted by the man of twists and turns at 7:48 PM on October 9, 2015 [1 favorite]
posted by the man of twists and turns at 7:48 PM on October 9, 2015 [1 favorite]
This is where much of the creative and worldbuilding energy of the young (at least the young who have any kind of resources and or choice in their life) is being siphoned to.
"Doing good by doing well". My ass. $10B for a fucking real-estate middleman?
Instead of transforming the world to a resilient state in preparation for the upcoming (likely society-and-law-wrecking) environmental and migration shocks that anyone who expects to live for the next 25 years is almost guaranteed to face,........we are shuffling bullshit profit projections to fleece 0.1% aspirants of their already ill-gotten gains, and continue the mad chase of growth on paper at any cost - the costs preferably externalisable to some other sucker.
We're fucked.
posted by lalochezia at 7:59 PM on October 9, 2015 [53 favorites]
"Doing good by doing well". My ass. $10B for a fucking real-estate middleman?
Instead of transforming the world to a resilient state in preparation for the upcoming (likely society-and-law-wrecking) environmental and migration shocks that anyone who expects to live for the next 25 years is almost guaranteed to face,........we are shuffling bullshit profit projections to fleece 0.1% aspirants of their already ill-gotten gains, and continue the mad chase of growth on paper at any cost - the costs preferably externalisable to some other sucker.
We're fucked.
posted by lalochezia at 7:59 PM on October 9, 2015 [53 favorites]
15 year leases? Compare the real estate market in San Francisco in 2000 and now. Why would a company bet it's future on the value of a commodity it doesn't own 15 years in the future? The obvious answer is that they don't care about 2030.
The other thing is there's no great advantage to renting a desk in downtown San Francisco over renting a desk in podunk. There's this thing called the internet. You can mumble stuff about hip entrepreneurial communities but most people are average and who in the world wants to pay to be surrounded by the same type of people that inhabit your nine to five?
WeLive? Is that a zombie slogan?
Props for getting the money while they can though.
posted by rdr at 8:17 PM on October 9, 2015 [2 favorites]
The other thing is there's no great advantage to renting a desk in downtown San Francisco over renting a desk in podunk. There's this thing called the internet. You can mumble stuff about hip entrepreneurial communities but most people are average and who in the world wants to pay to be surrounded by the same type of people that inhabit your nine to five?
WeLive? Is that a zombie slogan?
Props for getting the money while they can though.
posted by rdr at 8:17 PM on October 9, 2015 [2 favorites]
WeLive? Is that a zombie slogan?
Put on the glasses.
posted by leotrotsky at 8:46 PM on October 9, 2015 [34 favorites]
Put on the glasses.
posted by leotrotsky at 8:46 PM on October 9, 2015 [34 favorites]
THIS IS YOUR GOD
posted by leotrotsky at 8:49 PM on October 9, 2015 [15 favorites]
posted by leotrotsky at 8:49 PM on October 9, 2015 [15 favorites]
"To worry about your difficulties after the sun is set and you have done all you can for the day is useless – and an act of distrust."
-Conrad Hilton.
posted by clavdivs at 10:42 PM on October 9, 2015
-Conrad Hilton.
posted by clavdivs at 10:42 PM on October 9, 2015
Why am I not surprised Goldman Sachs is involved?
posted by boilermonster at 10:46 PM on October 9, 2015 [2 favorites]
posted by boilermonster at 10:46 PM on October 9, 2015 [2 favorites]
On the opposite end of the spectrum, Twitter to do a round of layoffs. They also won't be doing their planned 100,000 square ft office expansion.
Taking that as the harbinger of things to come, the age of the decacorn may be short lived.
posted by fragmede at 11:51 PM on October 9, 2015 [3 favorites]
Taking that as the harbinger of things to come, the age of the decacorn may be short lived.
posted by fragmede at 11:51 PM on October 9, 2015 [3 favorites]
This, along with the mere existence of Peepl (which I believe will one day be looked upon as the Pets.com of the "social" tech drain-circling), are surely signs that the bubble's about to pop.
posted by armoir from antproof case at 11:55 PM on October 9, 2015 [1 favorite]
posted by armoir from antproof case at 11:55 PM on October 9, 2015 [1 favorite]
We're fucked.
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Pre-register and get a free unicorn semifreddo (byopsyllium powder&dyes)!
posted by progosk at 12:54 AM on October 10, 2015 [3 favorites]
Share your woes & connect your demise with We'rFcked, the next-gen post-crash network app.
Pre-register and get a free unicorn semifreddo (byopsyllium powder&dyes)!
posted by progosk at 12:54 AM on October 10, 2015 [3 favorites]
Madness. Sheer utter madness.
posted by lupus_yonderboy at 5:05 AM on October 10, 2015 [5 favorites]
Those numbers are huge but so is the capital that needs to be invested behind it to get there. If you give me an infinite pool of money I can pretty much grow as fast as I want in capital intense businesses like this. The real controversy is the multiple people are willing to pay for that future growth given what the returns look like for similar although not quite as good businesses. And the fact that returns decline during big growth stages.
Also. I think this whole thing is dumb, but the 30 year lease thing isn't that crazy.
posted by JPD at 5:42 AM on October 10, 2015
Also. I think this whole thing is dumb, but the 30 year lease thing isn't that crazy.
posted by JPD at 5:42 AM on October 10, 2015
The revenue numbers don't matter to the investors; neither does the valuation. They have preferences written into the contract so that if the company winds up selling for $355 million, the investors get their money back. Anything more than that is profit for the investors. It's the founders that get screwed when the company turns out not to be worth $10 billion.
posted by fuzz at 6:01 AM on October 10, 2015 [6 favorites]
posted by fuzz at 6:01 AM on October 10, 2015 [6 favorites]
Revenue of 2.86 billion would mean that 10% of the work forces of the United States, the United Kingdom, France and Germany had decided to purchase $100 worth of services in a year. Or we can be a bit more generous and say that 1% of the work forces in those countries decided to buy $1000 worth of co-working space because they are "creatives" and need a space to run their new businesses. We also have to presume that every one of these hip creatives decided to buy those services from WeWork despite the fact there is office space available in every city in the world that WeWork doesn't control. Does that seem likely?
posted by rdr at 6:06 AM on October 10, 2015 [10 favorites]
posted by rdr at 6:06 AM on October 10, 2015 [10 favorites]
It's mostly a function of how much square footage they control.
Yes. Understand the liquidation preferences means figuring out the implied valuation isn't as simple as total shares * most recent price of capital raise
posted by JPD at 6:31 AM on October 10, 2015
Yes. Understand the liquidation preferences means figuring out the implied valuation isn't as simple as total shares * most recent price of capital raise
posted by JPD at 6:31 AM on October 10, 2015
I try to avoid the part of the technology press that cares more about capital, valuation, and exits than it does about, y'know, actual products or services. So this is the first time I've encountered the term "decacorn." I think a 10X unicorn is just as bullshitty and useless as a 10X engineer. Can't wait until this crashes and burns.
posted by fedward at 7:34 AM on October 10, 2015
posted by fedward at 7:34 AM on October 10, 2015
> I think a 10X unicorn is just as bullshitty and useless as a 10X engineer.
Having a lot of experience with 10x engineers, and also with 0.8x engineers, I think you're utterly wrong.
I'd rather have two 10x engineers than 25 1x engineers any day. You'll make somewhat slower progress with the two engineers, but the code will be solid and mostly free of hard bugs and easier to modify in the future - and there will be a lot less of it to accomplish the same thing.
posted by lupus_yonderboy at 7:47 AM on October 10, 2015 [3 favorites]
Having a lot of experience with 10x engineers, and also with 0.8x engineers, I think you're utterly wrong.
I'd rather have two 10x engineers than 25 1x engineers any day. You'll make somewhat slower progress with the two engineers, but the code will be solid and mostly free of hard bugs and easier to modify in the future - and there will be a lot less of it to accomplish the same thing.
posted by lupus_yonderboy at 7:47 AM on October 10, 2015 [3 favorites]
I don't really get the business model here.
I mean, this doesn't seem to be a "winner takes all" model.
Ultimately, Uber, AirBnB and all the other hot tech companies win by outsizing the competition. People use AirBnB because they have the most apartments on offer, or Uber because they have the most cars on the ground. Also Amazon, Google, Facebook and most other big internet companies are successful for this reason.
But with renting office space...? That's a business that's been around for decades and doing it over the internet isn't particularly new either. And whether the real estate agent is big or small matters much less than the bottom line (what's it gonna cost me per month?). Also, putting up a couple foosballs isn't going to make much of a difference.
And even if sharing office space with other freelancers is the way to work in the future, what's going to keep the competition from marketing to the same target group? This is not so easy in a "winner takes all" market like social media, where you can corner the market by sheer size, but renting out office space seems to be an entirely different business.
I don't get it.
posted by sour cream at 7:50 AM on October 10, 2015 [3 favorites]
I mean, this doesn't seem to be a "winner takes all" model.
Ultimately, Uber, AirBnB and all the other hot tech companies win by outsizing the competition. People use AirBnB because they have the most apartments on offer, or Uber because they have the most cars on the ground. Also Amazon, Google, Facebook and most other big internet companies are successful for this reason.
But with renting office space...? That's a business that's been around for decades and doing it over the internet isn't particularly new either. And whether the real estate agent is big or small matters much less than the bottom line (what's it gonna cost me per month?). Also, putting up a couple foosballs isn't going to make much of a difference.
And even if sharing office space with other freelancers is the way to work in the future, what's going to keep the competition from marketing to the same target group? This is not so easy in a "winner takes all" market like social media, where you can corner the market by sheer size, but renting out office space seems to be an entirely different business.
I don't get it.
posted by sour cream at 7:50 AM on October 10, 2015 [3 favorites]
The other thing is there's no great advantage to renting a desk in downtown San Francisco over renting a desk in podunk. There's this thing called the internet.
Thanks for pointing that out. That explains why no one is bothering to move too or set up offices in the bay area these days.
The revenue numbers don't matter to the investors; neither does the valuation. They have preferences written into the contract so that if the company winds up selling for $355 million, the investors get their money back. Anything more than that is profit for the investors. It's the founders that get screwed when the company turns out not to be worth $10 billion.
Yes and no. It's true that liquidation preferences offer some protection for investors in a downside scenario, meaning that investors have, at least a chance of getting their original investment back if the company is sold for a firesale price somewhere down the line. But that chance is actually pretty small. In the case of a fire sale liquidation, all creditors will get paid before the preferred shares can receive anything. Creditors likely include employees (payroll debt, labor law/severance obligations), attorneys (legal fees), government (dissolution costs, tax debts), etc. Only if there is money leftover after all of those other parties have been paid out would VCs be paid as well, which explains why actually calling liquidation preferences tends to be a pretty rare event in reality. There are many, many more cases where VCs lost their entire investment.
Moreover, VCs care *very much* about valuations. Yes, implied valuation isn't as simple as total shares * most recent price. But you can only make real money as a VC if a company has a series of up-rounds where a stream of investors value the company at higher and higher prices. Generally speaking, a VC is not going to invest in a company if they don't genuinely think a company's valuation is going to rise over time.
posted by dyslexictraveler at 7:52 AM on October 10, 2015 [2 favorites]
Thanks for pointing that out. That explains why no one is bothering to move too or set up offices in the bay area these days.
The revenue numbers don't matter to the investors; neither does the valuation. They have preferences written into the contract so that if the company winds up selling for $355 million, the investors get their money back. Anything more than that is profit for the investors. It's the founders that get screwed when the company turns out not to be worth $10 billion.
Yes and no. It's true that liquidation preferences offer some protection for investors in a downside scenario, meaning that investors have, at least a chance of getting their original investment back if the company is sold for a firesale price somewhere down the line. But that chance is actually pretty small. In the case of a fire sale liquidation, all creditors will get paid before the preferred shares can receive anything. Creditors likely include employees (payroll debt, labor law/severance obligations), attorneys (legal fees), government (dissolution costs, tax debts), etc. Only if there is money leftover after all of those other parties have been paid out would VCs be paid as well, which explains why actually calling liquidation preferences tends to be a pretty rare event in reality. There are many, many more cases where VCs lost their entire investment.
Moreover, VCs care *very much* about valuations. Yes, implied valuation isn't as simple as total shares * most recent price. But you can only make real money as a VC if a company has a series of up-rounds where a stream of investors value the company at higher and higher prices. Generally speaking, a VC is not going to invest in a company if they don't genuinely think a company's valuation is going to rise over time.
posted by dyslexictraveler at 7:52 AM on October 10, 2015 [2 favorites]
I'd rather have two 10x engineers than 25 1x engineers any day. You'll make somewhat slower progress with the two engineers, but the code will be solid and mostly free of hard bugs and easier to modify in the future - and there will be a lot less of it to accomplish the same thing.
That's not a 10X engineer and an 0.8X engineer, that's an actual engineer and a punter. I would rather work with people who have lives outside work, who remember to leave the office at 5 or 6 or whatever actual office hours are, and who don't push themselves so hard that they burn out. The implication of the popular term "10X engineer" is that there is a superhuman level of productivity available from a very small number people. My experience working in software (for over fifteen years now) is that yes, there are people who write better, more solid, more maintainable code, but in order to keep those people happy and healthy you need to be expecting that they will go home and do something else and not just live for work. I'd rather work with (and hire) those sorts of people than the ones who only seem to exist in code.
Not only is that sort of existence unhealthy, in my experience those sorts of coders tend to lack the sort of empathy necessary to write software for humans to use (e.g. "this interface/workflow/function is logical" vs "this interface etc. is useful"). I mean maybe if your org is so large and well organized that you have product managers and interface designers and everything else providing requirements that are so clean, so perfect, that you can have a pure code monkey doing nothing but converting requirements into functions, then you can have a stereotypical "somewhere on the spectrum" person who lives, breathes, and shits code creating bug-free, super-maintainable software for you, deep in the trenches, but in my experience the better programmers are the ones who, y'know, aren't just robots.
Also if you have people who can't do a tenth the work of your best programmers, it's not that your best people are 10X, it's that your worst people shouldn't be working for you.
posted by fedward at 8:14 AM on October 10, 2015 [22 favorites]
That's not a 10X engineer and an 0.8X engineer, that's an actual engineer and a punter. I would rather work with people who have lives outside work, who remember to leave the office at 5 or 6 or whatever actual office hours are, and who don't push themselves so hard that they burn out. The implication of the popular term "10X engineer" is that there is a superhuman level of productivity available from a very small number people. My experience working in software (for over fifteen years now) is that yes, there are people who write better, more solid, more maintainable code, but in order to keep those people happy and healthy you need to be expecting that they will go home and do something else and not just live for work. I'd rather work with (and hire) those sorts of people than the ones who only seem to exist in code.
Not only is that sort of existence unhealthy, in my experience those sorts of coders tend to lack the sort of empathy necessary to write software for humans to use (e.g. "this interface/workflow/function is logical" vs "this interface etc. is useful"). I mean maybe if your org is so large and well organized that you have product managers and interface designers and everything else providing requirements that are so clean, so perfect, that you can have a pure code monkey doing nothing but converting requirements into functions, then you can have a stereotypical "somewhere on the spectrum" person who lives, breathes, and shits code creating bug-free, super-maintainable software for you, deep in the trenches, but in my experience the better programmers are the ones who, y'know, aren't just robots.
Also if you have people who can't do a tenth the work of your best programmers, it's not that your best people are 10X, it's that your worst people shouldn't be working for you.
posted by fedward at 8:14 AM on October 10, 2015 [22 favorites]
"... there are people who write better, more solid, more maintainable code, but in order to keep those people happy and healthy you need to be expecting that they will go home and do something else..."
Amen, brother. Can I hear an amen?
Testify.
If you are somebody who's good at this job, it's past time to look for a place that's going to last through the imminent crash. It's not too hard -- just look at the places that survived the last two or three.
posted by panglos at 8:40 AM on October 10, 2015 [1 favorite]
Amen, brother. Can I hear an amen?
Testify.
If you are somebody who's good at this job, it's past time to look for a place that's going to last through the imminent crash. It's not too hard -- just look at the places that survived the last two or three.
posted by panglos at 8:40 AM on October 10, 2015 [1 favorite]
> That's not a 10X engineer and an 0.8X engineer, that's an actual engineer and a punter.
There are plenty of tolerable 0.8x engineers out there - I'm not even talking about incompetents. Some people just do OK work, but rather slowly.
(To UK-born me a "punter" is a low-level gambler, or someone who likes to hang out with them, and I can't find another meaning here, so I'm somewhat confused...)
> I would rather work with people who have lives outside work, who remember to leave the office at 5 or 6 or whatever actual office hours are, and who don't push themselves so hard that they burn out.
I guess I'm completely misunderstanding you.
To me, a 10x engineer is someone who generates 10 times as much usable work as a regular engineer. It has nothing to do with the work hours you put in and many of the best engineers I've worked with get in, do their work, and leave after an eight hour day.
Heck, there are engineers that are significantly greater than 10x who work like that. I've read a great deal of code by Sanjay Ghemawat and Jeff Dean and it's astonishing plain and un-ornate - though heavily commented. But their output is prodigious.
They might have worked pretty hard in the first few years of Google, but when I was there a few years later I got the impression of just what I said above - getting in, doing the work, and going home on time.
It's a dirty secret, but lots of engineers WAY overcomplexify what they do. If they stopped trying to be so clever and worked on trying to hit the mark and nothing else, they'd easily improve their output by 50% overnight.
posted by lupus_yonderboy at 9:17 AM on October 10, 2015 [2 favorites]
There are plenty of tolerable 0.8x engineers out there - I'm not even talking about incompetents. Some people just do OK work, but rather slowly.
(To UK-born me a "punter" is a low-level gambler, or someone who likes to hang out with them, and I can't find another meaning here, so I'm somewhat confused...)
> I would rather work with people who have lives outside work, who remember to leave the office at 5 or 6 or whatever actual office hours are, and who don't push themselves so hard that they burn out.
I guess I'm completely misunderstanding you.
To me, a 10x engineer is someone who generates 10 times as much usable work as a regular engineer. It has nothing to do with the work hours you put in and many of the best engineers I've worked with get in, do their work, and leave after an eight hour day.
Heck, there are engineers that are significantly greater than 10x who work like that. I've read a great deal of code by Sanjay Ghemawat and Jeff Dean and it's astonishing plain and un-ornate - though heavily commented. But their output is prodigious.
They might have worked pretty hard in the first few years of Google, but when I was there a few years later I got the impression of just what I said above - getting in, doing the work, and going home on time.
It's a dirty secret, but lots of engineers WAY overcomplexify what they do. If they stopped trying to be so clever and worked on trying to hit the mark and nothing else, they'd easily improve their output by 50% overnight.
posted by lupus_yonderboy at 9:17 AM on October 10, 2015 [2 favorites]
I rent a desk at a WeWork in NYC. It costs around the same amount as other dedicated desk offerings in Brooklyn and Manhattan and doesn't come with any of the pretentious "Are you a good cultural fit for our carefully curated band of creatives?" bullshit. The internet is blazing fast and they handle mail. There is also a ping pong table and beer as well as multiple events featuring free food and booze per week.
Because they are in so many cities I have been able to work out of other locations when traveling for music gigs, allowing me to lose less money. Traveling to and from the office affords me 10x the daily exercise of working out of my kitchen, which I did for years and left me feeling anxious and moody.
The overall culture is very "wooha brogrammer" but that is, at least for me, easy to ignore since interaction with others is not compulsory.
I wouldn't want to work in podunk.
Their rate of growth does seem unsustainable and mangement has engaged in some shifty practices regarding the cleaning crew, but they do provide a very valuable service at a competitive price with more amenities than their competitors. And, for startups that are more likely than not to fail, renting office space on a month to month contract is a godsend.
There is also a strong networking culture there, if that's your thing.
posted by grumpybear69 at 9:22 AM on October 10, 2015 [10 favorites]
Because they are in so many cities I have been able to work out of other locations when traveling for music gigs, allowing me to lose less money. Traveling to and from the office affords me 10x the daily exercise of working out of my kitchen, which I did for years and left me feeling anxious and moody.
The overall culture is very "wooha brogrammer" but that is, at least for me, easy to ignore since interaction with others is not compulsory.
I wouldn't want to work in podunk.
Their rate of growth does seem unsustainable and mangement has engaged in some shifty practices regarding the cleaning crew, but they do provide a very valuable service at a competitive price with more amenities than their competitors. And, for startups that are more likely than not to fail, renting office space on a month to month contract is a godsend.
There is also a strong networking culture there, if that's your thing.
posted by grumpybear69 at 9:22 AM on October 10, 2015 [10 favorites]
I work from home and am actually considering spending some cash on shared office space but to hear them talking about becoming middlemen in shared accommodations makes me wonder what other nooks are left to exploit in this broken economy,...blood donations? Prison visitation?
It's just people with working capital digging ever deeper into the sofa cushions of the broken economy.
posted by bonobothegreat at 9:37 AM on October 10, 2015 [5 favorites]
It's just people with working capital digging ever deeper into the sofa cushions of the broken economy.
posted by bonobothegreat at 9:37 AM on October 10, 2015 [5 favorites]
The other thing is there's no great advantage to renting a desk in downtown San Francisco over renting a desk in podunk.
This is the thing that puzzles me about this company, except that the way I'd put it is, there's no great advantage to renting a desk in downtown NYC/San Francisco/LA/London/Toronto over renting a desk in anywhere but that kind of city, be it podunk or not.
Now, there is definitely a subset of the presumed target market which has the "I will never consider living anywhere but NYC" or whatever approach to life, and in fact that viewpoint is already represented in this thread. (I suspect it is also heavily represented among the VC sorts who read these pitches.) But I just don't see how this business plan makes sense in a place where rent is a lot cheaper, and (a) there are a _lot_ of people who would prefer to live in such places, and (b) this is where this company would need to expand to. For one thing, I bet the Manhatten/etc market works partly because practically no one can afford an apartment big enough to have an office, so they just have to work elsewhere for the sake of their sanity. But there's so many places one could want live that this just doesn't apply -- I have a fantastic work-at-home setup in my pretty giant apartment in Baltimore that I would never be able to afford in one of these big cities. I could imagine the appeal of renting some kind of office space (if I didn't also have a real office to go to) just to have more of a partition in life, or maybe if I needed to have fancy meetings, but for the most part this would be a big luxury if I were self-employed in my current living situation, nothing like a necessity. And whoever would be renting it to me wouldn't be able to charge a Manhatten-style markup in Baltimore, I hope.
posted by advil at 10:51 AM on October 10, 2015
This is the thing that puzzles me about this company, except that the way I'd put it is, there's no great advantage to renting a desk in downtown NYC/San Francisco/LA/London/Toronto over renting a desk in anywhere but that kind of city, be it podunk or not.
Now, there is definitely a subset of the presumed target market which has the "I will never consider living anywhere but NYC" or whatever approach to life, and in fact that viewpoint is already represented in this thread. (I suspect it is also heavily represented among the VC sorts who read these pitches.) But I just don't see how this business plan makes sense in a place where rent is a lot cheaper, and (a) there are a _lot_ of people who would prefer to live in such places, and (b) this is where this company would need to expand to. For one thing, I bet the Manhatten/etc market works partly because practically no one can afford an apartment big enough to have an office, so they just have to work elsewhere for the sake of their sanity. But there's so many places one could want live that this just doesn't apply -- I have a fantastic work-at-home setup in my pretty giant apartment in Baltimore that I would never be able to afford in one of these big cities. I could imagine the appeal of renting some kind of office space (if I didn't also have a real office to go to) just to have more of a partition in life, or maybe if I needed to have fancy meetings, but for the most part this would be a big luxury if I were self-employed in my current living situation, nothing like a necessity. And whoever would be renting it to me wouldn't be able to charge a Manhatten-style markup in Baltimore, I hope.
posted by advil at 10:51 AM on October 10, 2015
Couldn't they scale back their capital requirements by using old shopping malls for this? Good parking, plenty of power in each unit, separate security for every tenant, and even a food court! And centralized trash disposal!
posted by wenestvedt at 11:02 AM on October 10, 2015
posted by wenestvedt at 11:02 AM on October 10, 2015
But I just don't see how this business plan makes sense in a place where rent is a lot cheaper, and (a) there are a _lot_ of people who would prefer to live in such places, and (b) this is where this company would need to expand to.
I agree that the business plan is suspect and wildly optimistic, but it's not like there's no precedent of tech companies moving into non-SF/NY/LA metros and pushing up rents/home values. Here in Pittsburgh, the presence of Carnegie Mellon (my employer) is a huge incentive for companies to open up offices in the area. Google's office here has almost single-handedly gentrified the neighborhoods around it, and other tech companies, including some CMU spinoffs, are doing the same to other areas. I don't know that this business model would work here right now, but in 5-10 years as more and more companies continue to do this and push up the rents in town, I can imagine this being attractive for some companies.
All that said, I hate the trend toward these open collaborative offices, and hope this company dies in a fire.
posted by tonycpsu at 11:20 AM on October 10, 2015
I agree that the business plan is suspect and wildly optimistic, but it's not like there's no precedent of tech companies moving into non-SF/NY/LA metros and pushing up rents/home values. Here in Pittsburgh, the presence of Carnegie Mellon (my employer) is a huge incentive for companies to open up offices in the area. Google's office here has almost single-handedly gentrified the neighborhoods around it, and other tech companies, including some CMU spinoffs, are doing the same to other areas. I don't know that this business model would work here right now, but in 5-10 years as more and more companies continue to do this and push up the rents in town, I can imagine this being attractive for some companies.
All that said, I hate the trend toward these open collaborative offices, and hope this company dies in a fire.
posted by tonycpsu at 11:20 AM on October 10, 2015
What is wrong with people wanting to work around other people rather than at home in isolation? Nobody is forcing you to rent a desk.
posted by grumpybear69 at 11:37 AM on October 10, 2015 [1 favorite]
posted by grumpybear69 at 11:37 AM on October 10, 2015 [1 favorite]
I actually believe that coworking spaces have value because I know a lot of people who are self-employed or work remotely who struggle with productivity issues (or just feelings of isolation) related to not "going to work". But that doesn't mean this one coworking business is worth billions of dollars. WeWork might have established that coworking as a concept is a thing that you can build a business out of, but if that's true, I don't see how in the long run we can believe that people will choose WeWork-managed spaces over competitors. It doesn't just need places to gentrify, it needs to be better at gentrification than anybody else. That's the part that seems insane, to me. Let's assume that I want to live and work in what is basically a dorm because I'm not capable of adulting after finishing my degree... that very impermanence suggests that I could pick up and move on a dime if somebody three blocks away starts serving better coffee.
posted by Sequence at 11:56 AM on October 10, 2015 [2 favorites]
posted by Sequence at 11:56 AM on October 10, 2015 [2 favorites]
Oh, yeah, don't get me wrong, if my choices were work from home full time or a mix of work from home with the option to work in one of these spaces, I'd choose the latter. I believe there are positive benefits to being physically in the same space as coworkers, but I believe the way modern offices are trending toward hotdesking and open floor plans undermines those advantages. People should be able to work in whatever environment is more productive for them, but studies show that these trends don't actually increase productivity over a conventional office. Are people going to be more productive in these environments than they are working exclusively at home? That's a different question, and one that I'd like to see more data on before accepting that this model is something that should be more widely adopted. Certainly, people should be given the choice, though.
posted by tonycpsu at 12:04 PM on October 10, 2015
posted by tonycpsu at 12:04 PM on October 10, 2015
Like grumpybear69 above, I rent from WeWork in NYC. To dismiss them as just a real estate middle man sells them short. It is much more than that, and what they do, they do very well. There are many competitors in this area, and I've tried a few of them. None that I've seen in person come anywhere close to matching what WeWork has to offer.
That said, there are definitely some management issues and growing pains involved. I suppose that's expected for any organization that's growing rapidly. I can say that they do seem to listen to members and are generally responsive to feedback, whether positive or negative.
So is co-working right for everybody? Of course not. But it is a good thing for a lot of people, and most people I know who rent at WeWork would agree that their business has grown by more than enough to cover the cost simply by being part of the community. YMMV, obviously.
Is WeWork worth $10 billion? I find that figure to be kind of laughable, especially since they don't even own the buildings. No assets, and many long-term liabilities - that doesn't seem like a good recipe to me. But I think that giant valuation number is more of an indictment of start-up culture overall than it is of this particular company. The WeWork folks are trying to get what they can get out of gullible VC's, just like anybody else who chooses to play that game. Will it pay off for anybody in the long run? Who knows.
At the end of the day, here's the reality on the ground from my perspective: Before I knew co-working was a thing, I rented my own office space. It was expensive. I had to pay for furniture, office equipment, utilities, repairs, insurance, paint, lightbulbs, toner, cleaning, snacks... and I also had to sign a long-term lease. Now that I know there's a different way, I would never even consider going back to the old way. Does that mean I'll always be loyal to WeWork specifically? Of course not. But it does mean that what they have to offer is substantially different than what came before them, and very valuable to me as a small business owner. But yeah -- at the end of the day, if something better and cheaper came along, I'd jump in a heartbeat.
And that, to me, is the real risk in investing in this particular company. Every bit of their revenue comes from month-to-month members. Those members could all disappear real fast if there was a reason for them to do so, and then all you're left with is a giant company that's saddled with a lot of really expensive lease obligations in a lot of really expensive cities. That doesn't seem like a good thing to me, but hey... I'm not a go-go 21st century venture capitalist. What do I know?
posted by spilon at 12:46 PM on October 10, 2015 [1 favorite]
That said, there are definitely some management issues and growing pains involved. I suppose that's expected for any organization that's growing rapidly. I can say that they do seem to listen to members and are generally responsive to feedback, whether positive or negative.
So is co-working right for everybody? Of course not. But it is a good thing for a lot of people, and most people I know who rent at WeWork would agree that their business has grown by more than enough to cover the cost simply by being part of the community. YMMV, obviously.
Is WeWork worth $10 billion? I find that figure to be kind of laughable, especially since they don't even own the buildings. No assets, and many long-term liabilities - that doesn't seem like a good recipe to me. But I think that giant valuation number is more of an indictment of start-up culture overall than it is of this particular company. The WeWork folks are trying to get what they can get out of gullible VC's, just like anybody else who chooses to play that game. Will it pay off for anybody in the long run? Who knows.
At the end of the day, here's the reality on the ground from my perspective: Before I knew co-working was a thing, I rented my own office space. It was expensive. I had to pay for furniture, office equipment, utilities, repairs, insurance, paint, lightbulbs, toner, cleaning, snacks... and I also had to sign a long-term lease. Now that I know there's a different way, I would never even consider going back to the old way. Does that mean I'll always be loyal to WeWork specifically? Of course not. But it does mean that what they have to offer is substantially different than what came before them, and very valuable to me as a small business owner. But yeah -- at the end of the day, if something better and cheaper came along, I'd jump in a heartbeat.
And that, to me, is the real risk in investing in this particular company. Every bit of their revenue comes from month-to-month members. Those members could all disappear real fast if there was a reason for them to do so, and then all you're left with is a giant company that's saddled with a lot of really expensive lease obligations in a lot of really expensive cities. That doesn't seem like a good thing to me, but hey... I'm not a go-go 21st century venture capitalist. What do I know?
posted by spilon at 12:46 PM on October 10, 2015 [1 favorite]
tonycpsu: Yeah, hotdesking sucks. I've never had that at a full time job but dealt with it at a few coworking spaces. The sense of being disposable is pretty stronh with that configuration.
posted by grumpybear69 at 2:52 PM on October 10, 2015
posted by grumpybear69 at 2:52 PM on October 10, 2015
I'd rather have two 10x engineers than 25 1x engineers
If they're working on separate problems, sure. 10x engineers are incredibly territorial, and depending on their sexes and orientations, they'll either mate or eat each other. I would go for 1 10x engineer and 10 1x engineers, personally.
posted by Jon Mitchell at 4:41 PM on October 10, 2015 [1 favorite]
If they're working on separate problems, sure. 10x engineers are incredibly territorial, and depending on their sexes and orientations, they'll either mate or eat each other. I would go for 1 10x engineer and 10 1x engineers, personally.
posted by Jon Mitchell at 4:41 PM on October 10, 2015 [1 favorite]
It's easy to herd one horse-sized engineer than twenty-five duck-sized engineers.
posted by five fresh fish at 4:50 PM on October 10, 2015 [5 favorites]
posted by five fresh fish at 4:50 PM on October 10, 2015 [5 favorites]
That's why you leash 10 duck sized engineers to a large-dog sized engineer.
posted by Jon Mitchell at 4:59 PM on October 10, 2015 [5 favorites]
posted by Jon Mitchell at 4:59 PM on October 10, 2015 [5 favorites]
WeParty Like It's 1999 - "WeWork hopes to collapse any remaining distinction young startup workers make between their work and their life. It’s time to party!"
posted by the man of twists and turns at 11:39 PM on October 10, 2015
posted by the man of twists and turns at 11:39 PM on October 10, 2015
As a successful independent contractor, fuck that for a donut. Work already interferes way TF too much with life. Collapse this [gesticulates].
posted by five fresh fish at 11:48 PM on October 10, 2015 [1 favorite]
posted by five fresh fish at 11:48 PM on October 10, 2015 [1 favorite]
(and then he considers that that may be a career-limiting attitude when displayed in public.)
posted by five fresh fish at 11:50 PM on October 10, 2015
posted by five fresh fish at 11:50 PM on October 10, 2015
WeParty Like It's 1999 - "WeWork hopes to collapse any remaining distinction young startup workers make between their work and their life. It’s time to party!"
excerpted without comment: "“I travel all over the world. This is the center of the world. The people, the beer, the energy. It all comes from here. It’s the Brooklynization of the world.” The crowd cheered. Adam ordered that more shots be handed out. The crowd cheered again. “Whatever you want to do, the world will help you do it. You will raise investors. Whatever you want to do, whatever God wants you to do, whatever the world needs you to do, you will do it, because each and every one of you,” (here, he pointed to his shirt) “is a creator.”"
posted by advil at 6:55 AM on October 11, 2015
excerpted without comment: "“I travel all over the world. This is the center of the world. The people, the beer, the energy. It all comes from here. It’s the Brooklynization of the world.” The crowd cheered. Adam ordered that more shots be handed out. The crowd cheered again. “Whatever you want to do, the world will help you do it. You will raise investors. Whatever you want to do, whatever God wants you to do, whatever the world needs you to do, you will do it, because each and every one of you,” (here, he pointed to his shirt) “is a creator.”"
posted by advil at 6:55 AM on October 11, 2015
Yeah, all of the big events like Summer Camp and that warehouse party have a Jim Jones kind of vibe to them.
posted by grumpybear69 at 9:12 AM on October 11, 2015
posted by grumpybear69 at 9:12 AM on October 11, 2015
Unicorns. [halfway down] - "We've made fun of the unicorn terminology around here a few times, but here is Adrian Chen making fun of it some more, with historical context:"
posted by kliuless at 10:04 AM on October 11, 2015 [1 favorite]
The lucrative trade in alicorns, which rested on this widespread belief in the unicorn’s power, reached its peak in the Renaissance amid a widespread fear among nobility of being poisoned by their rivals. They lined their cups with pieces of alicorn and placed whole horns on the table, believing that they would sweat in the presence of poison. (Think of the alicorn as Uber, for not dying of poison.)also btw...
posted by kliuless at 10:04 AM on October 11, 2015 [1 favorite]
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posted by oneswellfoop at 7:45 PM on October 9, 2015 [1 favorite]