WeWork was once a darling of the tech industry, valued at $47 billion at its peak. But in 2019, the company’s IPO failed and its valuation plummeted. In August 2023, WeWork filed for bankruptcy.
There were a number of reasons why WeWork failed, but the most fundamental reason is that its business model was unsustainable. WeWork subleased office space to businesses at a higher rate than it paid for the space itself. This meant that WeWork needed to constantly grow in order to turn a profit.
At the Beehive, we’ve had people ask us to take over their spaces to add locations for Beehive clients. We would LOVE to do this, but first, we need to make the Tyngsboro location profitable. That’s good business. In addition, we’ve negotiated a lease with a graduated rent that allows us to grow with lower overhead in the beginning.
WeWork’s growth was driven by hype and investor dollars, not by real demand. The company was burning through cash at an alarming rate, and it was never able to find a way to become profitable. Beehive is currently a single-investor S-corp that relies on delivering an excellent customer experience to attract members and not investment dollars at inflated valuations.
In addition to its unsustainable business model, WeWork was also plagued by a number of other problems, including:
WeWork’s co-founder and former CEO, Adam Neumann, was known for his erratic behavior and extravagant lifestyle. This led to concerns about his ability to run the company effectively. Here a the Beehive, we’re pretty mellow. No private jets for us.
Neumann had a number of conflicts of interest, such as renting office space from his own wife and selling WeWork stock to SoftBank at a higher price than other investors. This is just underhanded business practice. Beehive wouldn’t participate in these types of scams.
WeWork’s culture was described as being toxic and abusive. Employees were reportedly overworked and underpaid, and there were allegations of sexual harassment and discrimination. At Beehive, we are all about inclusion and respect. Check out our DEI policy here.
Things that WeWork Did Right
When we were doing research for the Beehive, we visited some WeWork locations. Some things we loved were the openness of the spaces, the beautiful natural wood and light, and lots of options for coffee and snacks. We also visited WorkBar and Regus – two popular shared office concepts – and other options like Starbucks, Panera, and Barnes & Noble. We tried to take the best of them and improve upon the rest by enhancing the community aspect and making our membership price all-inclusive.
In the end, WeWork was a cautionary tale about the dangers of hype and the importance of good management. The company’s failure is a reminder that even the most successful startups can fail if they don’t have a sustainable business model and a strong team in place. If you have a suggestion of something that we could do better at Beehive Community, shout it out. We want to hear your thoughts and we want you to love and look forward to working here.