"They will go completely horizontal beyond office spaces to manufacturing furniture for themselves... becoming a leader in real estate as an industry. The key is to own the customer. They own their customer, and that is extremely valuable."

businessinsider.com/wework-wants-t…
Good read on WeWork.

Beyond the co-working aspect, they are automating the process of designing/constructing new spaces. Construction is a multi-trillion dollar industry ripe for tech disruption, and WeWork is positioning itself in an interesting spot.

Automating WeWork's co-working model is important when thinking about how real estate works:

High fixed costs (take on debt, pay admin costs, insurance, etc), charge rent, make ~6-12% cash flow margin.

A decent amount of rent increase is incremental cash flow though.
WeWork's model already generates more rent/SF than trad'l landlords (at higher risk). Can boost cash flow by squeezing more rent from existing leases.

The game changes as WW really ramps up BUYING vs leasing - Will be hard for incumbents to compete w/ WW's data-driven pricing.
How will WeWork's data-driven approach price out incumbents?

Competitor: "My model shows a $100k annual NOI. At a 10% cap rate, I offer $1mil".

WW: "Oh, ours shows $200k annual NOI. So at a 10% cap rate, we offer $2mil".

Extreme example. But WW is going to have huge advantage.
I could see a world where WeWork disrupts Amazon's dominance in logistics by doing to industrial warehouses what it did to commercial real estate. What if anyone could rent space in 200 warehouses around the world and guarantee free, same-day shipping?

“SoftBank is in discussions to take a majority stake in WeWork, an investment that could total between $15 billion and $20 billion”

wsj.com/articles/softb…
WeWork’s Creator Awards are the next steps in building its accelerator program. WeWork will have a massive pipeline of early stage companies as it rides the remote working trend and improves its value-add (the network, free rent, food, and training, etc)

creatorawards.wework.com
WeWork’s investment program also fits right into SoftBank’s wheelhouse. WeWork’s actual cash flow is second fiddle to SoftBank getting early access to the best WeWork tenants. SoftBank acquiring a majority share of WeWork makes a lot of sense through this lens.
Scary headline, but:

-$10B of the planned $16B was the Vision Fund simply buying out every other investor
-$4B of remaining $6B were commitments for '20 and '21
-The "lower" $2B is what was originally planned for '19
-WeWork still has $6B in cash on hand

ft.com/content/282bd0…
In other words, SoftBank (or ultimately the Saudi's and Abu Dhabi) is reducing risk by 1) not buying out every single non-founder/employee on the cap table and 2) not making any forward commitments. WeWork will still have the same $8B of cash to work with

ft.com/content/282bd0…
WeWork's (now The We Company) valuation is now at $47B.

"Rather than just renting desks, the company aims to encompass all aspects of people’s lives, in both physical and digital worlds."

When do we start seeing We Company subs compared to Amazon Prime?

fastcompany.com/90289512/exclu…
$110M of WeWork's ~$18B future lease obligations (or 0.6%) are owed on properties its CEO has at least a partial ownership stake. Looks like he's trying to increase that too.

I figured WeWork would start actually buying real estate soon, but not Neumann.

wsj.com/articles/wewor…
Aside from obvious conflict of interest issues everyone else will tweet about, I wonder if this is a bridge strategy pre-WeWork purchasing properties?

Keeps risk off WeWork's balance sheet and explains why he sold "over $100 million worth" of shares.

wsj.com/articles/wewor…
Here's a thread detailing how WeWork could be valued @ $16B. I think it may underestimate:

-Impact of switch to remote work/smaller offices
-WeWork only getting 5% of global mkt share
-Doesn't really incorporate the "data advantage" WeWork claims to have

Re-posting this, but short blog post on WeWork's laser scanning tech. Most important line in my opinion:

"The precision of laser scanning speeds up the process of opening new WeWork locations"

wework.com/blog/posts/usi…
WeWork continues moving into real estate analytics:

“We’re making sure rooms are used the right way. A company may do happy hours on Thursdays, but more people show up to afternoon tea times or other types of session. Companies can A/B test their space.”

techcrunch.com/2019/02/07/wew…
"Another sign of just how large WeWork’s ecosystem has become: It employs 1,300 people in architecture, interior design, engineering and related activities - an employee roster that would make it one of the biggest architecture firms in the world."

nytimes.com/2018/11/13/bus…
"Critics have derided WeWork as overvalued and vulnerable to the next downturn. But the company holds so many leases in so many cities, it might hold more power than its landlords."

nytimes.com/2018/11/13/bus…
WeWork 2018 earnings out below. Best quote:

"When asked about the impact of slowed economic growth, Gross said: 'We've lived through some level of economic pullback in regions like Latin America and China, but have only seen our growth accelerate'"

axios.com/wework-doubled…
Other key items are that WeWork essentially has access to $6.6 billion in cash, and also believes 1 of every 8 first-time entrepreneurs are WeWork members (great access for SoftBank?)

axios.com/wework-doubled…
Good info in here:

-WeWork's Seattle footprint is 1.7M sq ft, up from 900k last summer
-Claims its 4th largest Seattle office occupier, projects 19 offices end of 2019
-Medium-sized and enterprise companies are 80% of total Pacific Northwest membership

geekwire.com/2019/wework-fo…
More WeWork numbers:

- Now has over 10,000 employees, plans to hire 6,000 more this year (cut about 300 recently)
- 425 locations across 100 cities in 27 countries
- 400k members; 30% of Fortune 500 companies are WeWork members

geekwire.com/2019/wework-fo…

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More from @TurnerNovak

Feb 3
Quick @BananaCap_ Q4 update (unaudited)

- Fund 1 at 1.83x MOIC (gross), 1.54x TVPI (net of fess, carry)
- All 🍌🧢 at 1.57x and 1.41x
- Gross (Net) IRR on Fund 1 at 276% (205%)
- Fund 1 was 73% deployed
- $26.2m AUM ($16.2m in SPVs), ~81% in follow-ons (some my prev investments)
66% of Fund 1 capital is invested at Pre-Seed/Seed, and 54% with US HQs (JOKR + Umba skew this, US HQs but operate mostly in LatAm + entirely in Africa)

In Q4 we deployed more capital at Pre-Seed/Seed than Series A and beyond, and increased ecom + fintech exposure (mostly ex-US)
Outside of North America, our two most active markets were France and Pakistan with three new investments in each country. I'm blaming @2lr and @aatif_awan for this, but do think both are good things 😂
Read 15 tweets
Sep 23, 2021
Very excited to invest in VINN and support @calebbernabe_ and team!

They have built an incredible product and the foundations of capital efficient business in a trillion dollar market.

Quick thread on my largest publicly announced investment to-date:

forbes.com/sites/ninawolp…
VINN has a crazy business model: they help consumers buy cars online but hold zero of their own inventory.

It’s an online marketplace with a very simple and effective product connecting consumers and cars at local dealerships.
There's a few other companies that sell cars online; however their models are very similar to traditional dealers. Dealerships can be great businesses, yet can’t have high market share.
Read 15 tweets
Sep 12, 2021
Here’s the story of how I almost sold my company to Time Warner in 2000 for hundreds of billions of dollars - but instead walked away with nothing.

🧵 🧵 👇 👇
It was Nov 19th, 1999. I had spent the last 34 hours (maybe 35 hours) coding.

But that wasn’t the full story - I‘d been building non-stop the first 34 years of my life.

I learned to code in the hospital the night I was born and have been inseparable from a PC ever since.
Same with my co-founder.

We met that first night in the newborn ward.

He moved in with us at age six and my parents legally adopted him at 11.

We had grown up building together.

But we were burnt out.
Read 11 tweets
Apr 16, 2021
Quick update thread on the Stitch Fix thesis:
The tl;dr is Stitch Fix has permission from 3.9m consumers to auto ship them products. It’s ecom’s “recommended bar” but IRL and converts at 10-20%. They know what will sell before its even produced. Can monetize this from suppliers, with private label, + their Direct Buy app.
The market didn’t like Q4 earnings, which were impacted by lockdowns + freight issues over the holidays. SFIX also recognize revenue at checkout which (usually) happens after customers receive the order and decide what to keep / send back. Could be impact from Direct Buy ramping
Read 9 tweets
Feb 25, 2021
“Online friend finding and social discovery is currently growing twice as fast as online dating, and we think it will be a 2x larger market as well" - Match Group

👀 👀 👀
fwiw, all these apps will add audio rooms (long $API), video rooms, games, messaging tools that reduce friction of self expression (AR filters, stickers), subscriptions, etc.

Winners will figure out moderation at scale, move fastest on new features, and crack long-term retention
we may see some vertical products emerge IE friend finding for gamers. Winners will be ones who build a unique, defensible social / interest graph (we also may just see these swallowed over time by co's with existing matching algo's and monetization models like Match, Yubo, etc)
Read 5 tweets
Feb 23, 2021
Spotify's Stream On event:

"By 2025, we could have 50m creators on our platform, whose art is enjoyed by 1b users around the world. We want to be the place educators, entrepreneurs, storytellers, and artists can touch the world through audio" - @eldsjal

Spotify says it has 40% market share of music streaming and will get to a similar share in podcasting.

Paid-audio increases from $7b to $40b/yr. Combined with podcasting, becomes a $55b opportunity.

…eamoninvestordiscussion.byspotify.com
One of the more interesting things Spotify's doing: investors have always focused on perpetually low gross margins due to payouts to record labels. The biggest expense for most labels is marketing. Spotify's now starting to capture some of that marketing spend on its ad platform.
Read 4 tweets

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