EGM On A Mission: Let’s Build Better Companies
Think back to 2019.
It’s boom time in Silicon Valley.
The world’s most valuable start-ups are about to make it big – Uber, Lyft and Pinterest - all going public.
Next in line: WeWork.
Valued at £47 billion – advisors are sure the price tag will go higher when the shares go on sale –the most valuable start- up in the US - with company founder, Adam Neumann, worth $10 billion on paper. The former children’s clothes salesman has revolutionized the leasing of office space.
Pictured on the cover of magazines, interviewed on prime time television, socializing with the elite - Neumann boasts his company is making billions in revenue, doubling in size every year and changing the lives of thousands of people by giving them better, beautiful and inspiring offices – revolutionizing the way they work.
If the public offering goes to plan, Neumann, his staff and investors will become very rich. It’s a dream come true.
And then, within one-month, everything changed.
‘Intense scrutiny leading up to the public offering turned the company into a laughing stock. When the financial records were opened up for all to see, a sad story unfolded - overhyped, massive losses, conflict of interest ridden. A typical stereotype of tech start-ups.’ (1)
Suddenly, (overnight) few investors were willing to go near the shares.
The public offering was cancelled – the Board knew they could sell less than one-third of the shares. The WeWork valuation plummeted to $2 billion - backers pulled out and, with the company running out of cash, a last minute bailout was arranged to pay wages – hundreds of staff were let go.
Neumann was forced out – leaving the question:
How can a company with a valuation of $47 billion be near to bankruptcy six-weeks later?
But it’s not the financial disaster that interests us about WeWork – enough is on the record about that. (2)
It’s what the story says about work – and the way people want to work that’s also revealing.
In the early days, WeWork had a pretty straightforward business model – signing long-term leases on offices, subdividing space into smaller work areas and renting them out to entrepreneurs, freelancers and small businesses on a short-term basis.
2016 – WeWork was growing super-fast. They couldn’t keep up. Buildings were opening without doors, bathrooms and with the paint still drying. There was a huge rise in self-employment and remote work. WeWork working spaces were snapped up.
Everything aimed at the millennial market – college graduates, freelancers and entrepreneurs.
WeWork staff would tour coffee shops, selling the concept to young people working on their laptops – their sales line: ‘it’s a Fortune 500 experience when you’re not yet a Fortune 500 company.’
‘It began as a community. Spending your days at a WeWork site was somehow like being a member of a club beyond just where your office is – where individuals could go and find ‘purpose’ and ‘dream.’ (3)
Entrepreneurship was at its peak – Facebook and LinkedIn had gone public - Instagram had been bought by Facebook for $1 billion. There was a buzz in the air.
Young people were quitting their jobs and joining the WeWork revolution.
Rented desks, month by month – no commitment. Members came and went as they wished.
Meeting rooms on demand and on site IT support. Free alcohol, coffee and fruit water (jugs of water with chopped up fruit), communal meeting areas – all decked out in a bright, clean, modern design.
‘It felt more like a hip coffee shop than a sterile corporate cubicle farm. Members felt a sense of connection and camaraderie. Neighbors up and down the halls would chat and introduce themselves. Neumann believed engagement between members was key – and led happy hours where members stood in a circle and talked about themselves.’ (4)
Most of all – members had joined a community.
‘I wanted to be around like minded people. I wanted to be around people who are going through the same challenges – but were also there to celebrate my successes. My parents came to visit my work space. Overlooking New York’s financial district. Breathtaking views. They thought I was doing something right and had stepped up in life.’ (5)
Members sold their professional services to each other.
One corporate lawyer put a notice on the photocopier saying he provided legal services to small companies. He quickly changed the focus of his business as demand from the WeWork members took off. (6)
When potential investors came, pizzas and drinks were ordered. The visitors stood behind glass and watched what was going on. Members gathered in the communal meeting space. Neumann created a party atmosphere. There was a buzz around the place that investors loved.
Millennials walking round in shorts, working on Macs, sitting in groups debating their ideas.
If your experience of the office had been suits, cubicles and formality – the buzz was light years away.
There was much more to WeWork than the desks. They weren’t selling a product, they were selling a way of working – of fun, collaboration and interaction – that validated what the members were working on.
Every new site was filled with eager members – with waiting lists running into the hundreds on popular locations.
Neumann summed it up:
‘It’s the community, being surrounded by like-minded people, being part of something bigger than yourself, having fun – it inspires people to work harder and spend more time at work.’ (7)
Fast track to the world of work in 2021:
According to Microsoft, more than 40% of the global workforce are considering leaving their jobs this year. (8)
People have had time and space to think about what really matters - there are plenty of options - it’s no surprise resignation rates are through the roof
There’s a realization that life is too short to put up with a dreary job, bad boss and non-inclusive workplace
Workers won’t give up flexibility – what their company is offering in terms of office/remote/hybrid working has increased in importance
Generational expectations about what makes a good job are changing
People are no longer willing to compromise on finding an employer that aligns with their lifestyles. (9)
By 2025, millennials will make up 75% of the global workforce (10)
WeWork may have been a financial disaster.
But perhaps, just perhaps, Neumann and WeWork gave us a sneak preview into the future of work - the way people want to work and how work will be done?
The story of WeWork, Bloomberg
See, for example, the story of WeWork, Bloomberg
The story of WeWork, Vox 31 May 2021
The cult of WeWork, Eliott Brown and Maureen Farrell
Quote from a WeWork member 2015, the story of WeWork, Bloomberg
The cult of WeWork, Eliott Brown and Maureen Farrell
The cult of WeWork, Eliott Brown and Maureen Farrell
The great resignation, EGM blog
The great resignation, EGM blog
What’s your workplace language? How millennials are reshaping office culture, Forbes, 3 August 2021