When we look back into it, WeWork had everything it needed to drive itself to success. But because of mismanagement and aggressive expansion, the company eventually failed. In this article, we’ll look into what made WeWork succeed and failed and how you can apply these learnings in your businesses.
Where WeWork Failed
Management
WeWork had one of the most charismatic CEOs in the last decade: Adam Neumann. It was reported that Neumann did most of the fundraising campaign for the organization, gaining billions of dollars from investors. This is something that most CEOs can’t do. However, Neumann failed in the other spectrum of management, and that is in finance.
It’s been reported that WeWork has never profited since its startup. Not a single cent was gained, but millions of dollars were lost. The majority of these financing troubles came from Neumann’s lavish lifestyle. Insiders from the company reported that he partied a lot and utilized the company’s jet for personal reasons. This costs the company over a billion dollars. At some point, Neumann was replaced, but not before he got his billion-dollar settlement.
Being a Tech Company
Tech companies got all the attention during WeWork’s time, and it was only right for the company to try its hand in the industry. So they did everything to improve their website and app, which made the company look appealing to investors. But they were not a tech company.
They weren’t earning a single cent from their websites, and the more the company pursued becoming a tech company, the more they lost money. Experts believe that if they had concentrated more on the things that they made profits from, the more they would have succeeded.
Where WeWork Succeeded
Leasing
The majority of the company’s earnings relied on office space rental. This is the reason why the company was made in the first place. It offered something that was already offered before, but they did it more astoundingly.
The moment you rent expensive but inclusive office space from WeWork, you’ll notice directly where the money is going. Everything is technically prepared for you, from utilities to high-class office furniture. You also have WeWork staff who’s at your beck and call. You never have to do any administrative task ever, because everything you need is right there in the office.
Marketing
Another area that WeWork succeeded in was marketing. Ever since its startup, up to its first IPO, WeWork was in the news. You’ll see them in every advertisement both on the internet and on TV. If you visit their website, you’ll see every single thing that attracts the workforce today. WeWork knew its target audience, and it knew how to get them on board. Too bad they didn’t work on that as much.
Despite having these successes, WeWork is on its way to failure. It’s still losing billions of dollars every year, and more investors are pulling their shares. But, thankfully, you can learn from these things and apply the good things to your business.
Application to Your Business
The All-inclusive Demand
Clients don’t like the hassle of setting up utilities and refurbishing office or residential spaces. But, once they rent something, they want to use it the moment they move in. So WeWork gives its clients everything they need and more. This made them a formidable company in the real estate industry.
As we have stated earlier, WeWork’s spaces work on a bundle, which means that their clients have everything they need once they’ve rent an office. If we put this in a residential setting, renting all-inclusive apartments is the best way to go. Much like WeWork, you give your clients the utilities and furniture they need in return for higher rates.
It can certainly work because some people, especially college students, don’t want to purchase and set up the utilities themselves. By offering all-inclusive apartments, you are also making your bills more transparent to clients, which is highly encouraged in the current market.
Investing on Marketing
Marketing is the main foundation of many startups. Today, WeWork has clearly shown that. If you want your startup to succeed, you have to let people know that you exist. Investing heavily in marketing will eventually lead to good financial returns, especially if you do it digitally. Know your target audience, captivate them, and then offer them your services and products.
WeWork had everything going for it, and if only the company took its time on expanding and finding someone else to manage the company, it would have succeeded. Implementing the strengths and avoiding where they failed can do wonders in your startup, especially if you’re planning to start it in the real estate industry.
