Challenger to Watch 2017: WeWork
The $16bn 'startup' conquering the world of work.
There’s a lot of debate that goes on at eatbigfish about the Challengers To Watch list. Brands are nominated and we discuss – are they too niche? Too established? Are they a brand? What are they really challenging? Why this year? And so when WeWork was thrown into the ring we did the same. A challenger that can’t be ignored, that’s for sure, but are they a challenger to watch specifically this year?
The 6-year-old ‘decacorn’ disrupter has certainly made an impact on the world of work, leading the revolution in how companies and individuals rent office space; and is still growing fast. With a $16bn valuation, 110 locations across the world, and a doubling of its membership in one year to 85,000 – this is the goliath of the co-working category. 2017 will see them expand into India, Argentina and Brazil. And all without a conventional marketing spend.
“We don’t need to spend money on marketing. Because we’re part of a mission and a movement. And if you’re part of a mission and a movement, your members will sell you.”
But it’s not all sunshine and roses and free craft beer on tap. After WeLive launched in April last year, we expected to see the co-living concept begin to take off - but have they shaken up the private rental sector in the same way? It’s safe to say that, so far, WeLive hasn’t quite delivered on WeWork’s ambitious predictions. Having initially announced plans for 14 locations by the end of 2016, there are currently only two available, New York and Crystal City, VA, with no mention of new locations in the pipeline, and in December, rents at the existing buildings jumped up 50%.
Perhaps co-living as a concept is just proving a shared space too far. However, I wouldn’t write off WeLive just yet. Unlike their co-living competitors like Common in the US and The Collective in the UK, WeLive is offering nightly bookings of its apartments from $135 a night – offering a compelling alternative to a hotel room or Airbnb for a certain type of traveler, so perhaps a pivot is in the pipeline. As with another of our Challengers to watch – Jo&Joe – we may find that the reinvented dorm room/hostel approach gains legs in 2017, and WeWork already has an evangelical community of 85,000 members worldwide to sell it too.
These are interesting times for the 'new establishment' of Silicon Valley behemoths (see also Airbnb, Uber et al) as they become the target of new challengers entering their lucrative markets. It goes without saying that we expect WeWork to continue to grow rapidly this year (especially if today's reports of a possible billion dollar investment from Japanese telecom giant SoftBank prove true), but can they continue to be the co-working 'thought leaders' as well as the market leaders? One to watch.
