Within the last few years, one company has become the largest private occupier of office space in London, New York and Washington, DC. In central London, it has more branches than McDonald’s. But the more than half a million people who turn up to WeWork’s offices every day do not work for the company itself. They’re employed by other companies, or by themselves. WeWork has become the biggest and fastest-moving force in what many see as the future of work: a future of start-ups, remote working, portfolio careers, bright ideas discussed over flat whites, and deals agreed over complimentary kombucha.
WeWork could be described simply as a leasing company that rents desks and offices to small companies and freelancers. But the Initial Public Offering (IPO) filing for the We Company (WeWork’s parent organisation) describes it as “a community company” and “a worldwide platform that supports growth, shared experiences and true success”. This sounds like self-important jargon, it describes what the company really sells: not just space, but time.
WeWork is not the first company to present work as a lifestyle choice. In 1998, Apple launched the iMac, a bold, brightly coloured design by Jonathan Ive. The computer industry had previously sold its products as necessary for work, so PCs were housed in boxes as beige, rectilinear and serious as any office block. Apple created a work-ready computer people wanted in their homes. A million iMacs sold in less than six months, and a world began to emerge in which work and lifestyle combined, the home and the office merged, and the working hours never ended.
Around the time the iMac was introduced, freelance computer programmers began to form groups that worked together in shared “hackerspaces” – places to learn and invent, but also to make friends, listen to music, and drink. As the huge commercial opportunity of the internet was realised, the workers of the new digital economy moved into “start-up incubators”, often sponsored by large, acquisition-hungry tech firms such as Google and Microsoft. They dispensed with coding’s anarchic roots and concentrated on scaling online businesses, but they kept the exposed brickwork, the never-ending hours, the pizza and beer.
The free beer is almost always the first thing mentioned by people who use a WeWork office. By offering free drinks in an office that looks like a living room, WeWork removes the distinction between work and leisure and encourages workers to spend more time networking, marketing, and building their products and brands. WeWork’s real product is the introduction of start-up culture to an “addressable market” of 255 million jobs.
In the WeWork future, there is no hour of the day that cannot and should not be monetised. Through WeGrow (a primary school), Rise by We (a gym) and WeLive (“co-living” spaces for young professionals), it promises to bring “growth” to every area of life. Just as Uber and Airbnb sell the time that cars and houses are unoccupied, WeWork, too, sells a future of permanent occupation.
For businesses, a culture in which people never really stop working is a powerful advantage; WeWork says companies using its US offices are 13 per cent more likely to stay in business after the first three years. This is WeWork’s real pitch, and it’s why the investment giant Softbank last year valued the company at $47bn.
But as WeWork announced its intention to launch on the stock market last month, others argued that it is not the beginning of a new era but the end of the party for “unicorn” technology companies, which have secured huge sums in investment without, in some cases, turning a profit.
The FAANG (Facebook, Apple, Amazon, Netflix, Google) stocks have offered huge rewards for investors in recent years, especially in the long term. A £1,000 bet on Netflix in 2002 when the company went public at $15 a share and held until July this year would have turned into more than £350,000. But these spiralling prices have been based on unsustainable rates of growth. Uber, once considered the biggest and fastest unicorn of all, lost $5.2bn in the second quarter of this year. Uber’s growth has been spectacular, but there is something unreal about a company that loses $40,000 dollars a second.
WeWork promised the same explosive growth. By raising billions through share sales and contingent loans at IPO, a valuation of $60bn seemed within reach. Its founder, Adam Neumann, was on the brink of becoming a decabillionaire. But with a recession forecast, Wall Street declined to gamble on a company that has amassed almost $50bn in lease obligations without ever making a profit. The predicted valuation dropped to $20bn, then $10bn, before the IPO was shelved earlier this week.
Those who content themselves that WeWork is finished should remember Michael Dell’s judgement on Apple in 1997: “shut it down and give the money back to the shareholders”. The world of work is being radically reorganised by technology – ask the “self-employed” delivery drivers, warehouse workers and plumbers of the gig economy – and there is no reason to think this won’t apply to white-collar jobs. It remains to be seen if WeWork can make a lasting empire of this opportunity, but somebody will.
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This article appears in the 06 Jan 2021 issue of the New Statesman, Out of control