Last week, the Japanese multi-national powerhouse Softbank announced that they would be investing up to $3 billion in the American firm WeWork which manages co-working facilities.
On the surface, this would seem to be a validation of the co-working concept, If this deal closes, it would put the value of WeWork at an impressive $20 billion – obviously they have made it to the “big league”. Since I am self-employed and have been shopping for a co-working facility for myself, I decided to pay a visit to the We-Work facilities in downtown San Diego to take a look for myself.
For those not familiar with it, “co-working” is a wonderful concept. It is a way for self-employed and independent professionals to inexpensively share office space and get some interaction and community in the process. Typically you pay a monthly fee – like a gym membership, and that gives you access to the facility and a desk, which may be used by other members at different times.
WeWork in San Diego occupies several floors of an office building in the downtown area. Their reception area has a large lounge and coffee bar as well as an outdoor patio. It looked like it would be a classy place to meet clients but not the kind of place for working on your laptop or for having a working meeting, so I naturally assumed the rest of the office space would be set up for this so requested a quick tour.
The first thing I asked about was the price. I had been quoted $250 per month for access to a desk in the facility but it was explained to me that the price had increased and it was now $300. I was shown the entire floor – most were empty but one narrow office had a group that seemed to be working away. “This is one of our ‘eight person’ offices” my guide explained and it was rented to a small company so would not be available to me.
Since this was an external office with a window that monthly rate was $3,500 – way out of my ballpark but even for downtown office space seemed expensive. I had to admit that people working in that offices seemed to be kicking ass, but I couldn’t imagine working in that environment for more than a few hours.
After seeing a larger but sparsely occupied offices space that had been rented by a company I was shocked by the space they have for individual professionals. I was shocked – it was a telephone both type “isolation chamber” and I couldn’t imagine why anyone would want to work in that thing – much less pay $300 a month for the privilege of working in a phone booth. Honestly, it looked like something that belonged in the prison system. It was the exact opposite of what I thought “co-working” was all about.
Clearly WeWork is mostly interested in the real estate aspects of co-working. They have added the trappings and branding of “co-working” for what seems to be a primary emphasis on selling office space to established companies. The only real innovation – if you can even call it that – is that these office space is rented on a month-to-month basis, not with a longer term lease.
WeWork will not destroy co-working – but I was disappointed in what I saw – they seem to be joining a long tradition of large corporations hijacking and monetizing concepts originally developed to help early stage companies. Let’s hope that others see co-working as more than an “excuse to sell office space” and as the inclusive and community building activity it was meant to be.