Yes, it’s possible to bring WeWork, a company Scott Galloway called “a shitty business” with no defensible IP and no technology, back from the brink of death. We got a brief glimpse into how it might do so from Softbank’s Masa Son, but understandably, many pairs of eyes rolled at any suggestion that the venture fund that enabled WeWork’s bad capital-burning habits might have a magic fix.
He was right though — the solutions are simple. They’re also extremely painful, brutal decisions that can’t be done in half-measures, and can’t be done slowly. In my time as the Director of Business Operations at Zynga, I took part in the painful sort of decision making to which WeWork must commit itself.
WeWork has many, many tough choices ahead, and many of them center around whether the company will die by a thousand cuts, or will take several big, nasty, hits at once, and try to survive the aftermath. They’ve given us an idea of what they’re thinking in their supposed 90-day plan, but in my mind, there are very direct, nasty decisions that WeWork has to make in an even shorter timeframe.
Here’s what they are.
Focus on WeWork’s core mission and kill off everything else
Marc Benioff once said “out of clutter, find simplicity.” It’s about time that WeWork did so.
WeWork’s core business — the one that it’s actually known for — is shared/flexible office spaces. What WeWork isn’t known for is office sign creation, marketing sales software, SEO marketing, or the competencies of many of the other companies it acquired in a few short years. I agree with Masa Son that the world is undergoing a massive transformation in the way that people work, but that doesn’t mean that WeWork should be entering into living spaces, education, and especially not gaming.
I want to be clear that this doesn’t just mean selling MeetUp and the rest of their expensive acquisitions — it means a complete bloodletting for anything not directly related to its office space product. This means any and all pieces of WeWork that aren’t part of that immediate mission have to be either sold off or shut down. This cannot be done slowly or cautiously — it has to be done with such firmness and speed as to stop the bleeding. A cauterization, of sorts.
This also may mean a completely shifted focus on the kind of customer WeWork actually wants. Under WeWork’s plan, it wants to be a solution for companies of all sizes. But focusing on everyone also means focusing on no one. Does it even want to cater to startups over a certain size, or under a certain size? Is its hotdesk product — where you don’t actually have an office — profitable or loss? Does it make sense to offer offices to people under a certain size? These are the questions to come to terms with, and quickly.
Raise the prices
WeWork has something that 99 percent of startups fail to achieve — their customers actually really really love their products. However, WeWork has to lose business to gain business, and that means raising prices to even approach what it’s costing to run the company.
The values of WeWork are — convenience, flexibility, and community. When a customer decides to use WeWork instead of getting her own office, she should pay for the convenience and values. Indeed, the whole point of a lease is that you should spend more money to avoid the very same long-term commitments that WeWork is making.
Imagine you’re leasing a car — when you do so, you acknowledge you will be spendin
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