WeWork's collapse and what it means for the Coworking Industry
WeWork's Collapse: A Cautionary Tale for Coworking Spaces
WeWork was once one of the most valuable startups in the world, with a valuation of $47 billion in 2019. But the company's IPO failed spectacularly, and its valuation plummeted to just $9 billion. WeWork's collapse was a cautionary tale for the entire coworking industry, but it's important to note that it (hopefully!) won't happen to all coworking spaces…
Why WeWork Collapsed
There were a number of factors that contributed to WeWork's collapse. One was its aggressive growth strategy. The company expanded rapidly, signing long-term leases for office space all over the world. But WeWork wasn't able to fill all of that space, and it ended up losing billions of dollars.
Another factor was WeWork's unique corporate culture. The company was led by Adam Neumann, a charismatic but controversial CEO. Neumann was known for his lavish lifestyle, party persona and not caring about the rules (or laws). This led to concerns about corporate governance and financial mismanagement.There were also various lawsuits from former employees outlining harassment, discrimination, and abuse.
Finally, WeWork's business model was simply not sustainable. The company relied on signing new members to cover its rent and operating costs. But as the market for coworking space became more competitive, WeWork had to offer more discounts and incentives to attract new members. This made it even more difficult for the company to turn a profit.
Why Area Coworking Madrid Won't Follow the Same Path…
Area Coworking in Madrid is a different kind of coworking space. It's an independently run space that's not dependent on outside investment. It's also looked after personally by us, Jack and Hugo. And our dog, Rufi. This gives Area Coworking Madrid a number of advantages over WeWork:
Independence: Area Coworking Madrid is independent of outside investors, which gives us total control over the business. This allows us to focus on the long-term success of the space, rather than short-term profits.
Personal touch: we are personally involved in the day-to-day operation of Area Coworking. This allows us to build relationships with members and provide them with a personalized experience.
Unique design: Area Coworking is known for its beautiful design and abundance of plants. This creates a warm and inviting atmosphere that members have told us that they love.
In addition to these advantages, Area Coworking also has a sustainable business model and a strong community focus. We have yoga, film nights, breakfasts and lunches and occasional drinks. We hope that this makes us well-positioned to succeed in the long term, even in the wake of WeWork's collapse.
Conclusion
The collapse of WeWork was a major setback for the coworking industry, but it's important to note that it won't happen to all coworking spaces. Area Coworking Madrid is an independently run space with a sustainable business model, a strong community focus, and a unique design. We hope that this makes uswell-positioned to avoid the same fate as WeWork.