In December 2014 WeWork raised a fourth funding round to the tune of $355 million, giving the office-rental company a valuation of almost $5 billion. more
image credit: Betamore, The Verve Partnership
WeWork develops and manages “co-working office space” for the creative class. They provide flexible offices space, meeting rooms, and amenities plus food and classes, for a monthly membership fee. It’s like a gym, but for work. Or it’s the love-child of a private club and a coffee shop.
WeWork currently has 19 locations and leases 1.5 million SF. With annual revenue approaching $150 million my guess they have around 30,000 members @$5k per year per member. And it’s growing. By the time this blog is posted the numbers will be out of date.
While corporate America gradually wraps its head around the radical idea of collaborative space, “co-working” is all grown up.
Fundamentally, co-working is people-oriented, not space-oriented. Because it’s billed by the person instead of the square foot, office accommodation is now an HR issue. Facilities still manages the physical infrastructure and leasing but WeWork proves a modular mix of private and collaborative space can support all kinds of people and functions. With proof that generic build-outs really work, human-centered issues can take precedence.
While the shift is subtle, the implications are profound. Productivity (for people) rather than efficiency (for space) is the new office design driver. This makes sense, since payroll is 10x the cost of real estate. See The Efficiency Myth: How to Calculate the Real ROI for Workplace Change.
Real estate initiatives need to start with the people question – what do our people need to be most effective?” rather than the space question – how much square footage do we need?”
3 TAKE-AWAYS:
1. Generic office space really works
2. Office accommodation is an HR issue
3. Productivity trumps space efficiency
Now you know what 30,000 happy office workers know. Generic space is here. It’s time to focus on the people.