WeWork has created a lot of buzz with its flexible contracts and millennial-hipster style branding for what is essentially a "Regus-esque" office real-estate play. Its sister firms in the education and residential spaces have not troubled the stance of critical investment experts who have sometimes painted WeWork as the symbol of over-funding in the startup space.
Softbank continued to back the company’s rapid and risky international expansion, novel projects continue to emerge, and intriguing acquisitions have been made. Recently, WeCompany announced their intention to move into the smart cities space, a direction that when considered alongside other strategies, suggests bold and far-reaching ambitions for the firm. It seems like WeCompany won’t just provide a space for the startup-gig-freelance community but rather provide the startup-gig-freelance lifestyle to cities across the world.
In 2010, WeCompany CEO Adam Neumann co-founded WeWork with Miguel McKelvey, now WeCompany’s chief creative officer at their first co-working space in the Soho district of Manhattan. By 2014, backed by J.P. Morgan and Goldman Sachs among others, WeWork became the fastest-growing lessee of new office space in New York. Then, in August 2017, WeWork announced a $4.4 billion investment from Softbank, led by their enigmatic Chairman & CEO, Masayoshi Son. By January 2019, Softbank had invested a further $6 billion, taking their funding of WeCompany to $10.4 billion, from the firm’s overall $14.2 billion raised.
Today, WeWork’s $47 billion valuation baffles many. “To its doubters, WeWork is another unprofitable unicorn they question has the ability to flourish in anything other than a hot economy,” wrote Herbert Lash in a Reuters article. Pointing out that WeWork, that largely leases its real estate, is valued twice as much as Boston Properties Inc’s ($20.2 billion), one of the largest owners and developers of Class A office buildings in the US, whose share price has gained less than 15% in the past five years.
WeCompany’s value may be a product of their funding success but those seasoned investors are not throwing that kind of money at a simple office real estate play. The firm's smart city intentions show the underlying ‘We’ concept in a new light. WeWork’s flexible workplace buildings embody the remote working, freelance, gig-economy, and startup culture that prides itself on flexibility and innovation. Develop the essence of that workplace culture up to urban scales and you can begin to imagine a “WeCity” populated by freelancing, remote-working, innovation-focused “WeCitizens.”
“WeWork has created the physical-world equivalent of a digital platform,” says Arun Sundararajan, a professor at New York University’s Stern School of Business and the author of The Sharing Economy. “Its global constellation of companies and entrepreneurs allows members to tap into and realize value from these economic spillovers, within their local communities, and across cities.”
The essence of WeWork’s culture is not simply about flexible contracts and friendly work environments, it is creating spaces built on data analytics. WeWork has gathered masses of information on how people use workplaces and analyzed it to optimize those spaces for health, comfort, and productivity. The firm applies these data-driven insights in its buildings, supporting member goals to increase customer retention.
In November 2017, WeWork acquired Meetup, an online platform for “in-person events,” with 18 years of data on how, where, and why people gather offline. Last year, WeWork acquired Teem, a workplace analytics company that measures how workers use conference rooms. Earlier this year, the rebranded WeCompany acquired Euclid, a startup that uses wifi signals to understand how people move through physical spaces like airports and shopping malls. Thereby creating a portfolio of services that don’t just help support smart building and city development but that digitize human behavior to optimize all kinds of physical spaces.
Another piece of the puzzle was who should take charge of their smart city program. The hiring of former Google and Waze executive Di-Ann Eisnor appears to be a ideal fit and a bold statement of intentions. Eisnor will collaborate with designer, Dror Benshetrit, to head up the smart cities initiatives, guiding a team of architects, engineers, data scientists, and biologists among other experts. Eisnor is charged with taking “what ‘We’ has already done inside the building, take it outside, and reimagine a sort of connective tissue for 21st-century cities,” according to Quartz.
“The problems we face as a society are too complex for anyone to own,” says Eisnor, who had been sharing data and working with municipal governments to reduce urban congestion, during her time at the 90-million-monthly-user navigation services firm Waze. “When you’re dealing with so many different tools in order to solve these problems, we have to be working together.”
Another of Eisnor’s former employers, Google, has also ventured into the smart cities space with its sister company Sidewalk Labs. It's breakthrough project, the Toronto Quayside development, it still in design phases but is fighting a barrage of opposition. While some of the hostility is Google- or design-specific, much of it is a fundamental resistance to the idea of increasing commercial influence on our public spaces. In brief, they believe that the objectives of many, if not all, public spaces is in direct contrast to the core corporate goal of increasing shareholder value.
We have long speculated about what a city built and operated by Google would look like. Discussions on the topic generally revolve around data-driven, advertising-rich, intelligent, heavily-monitored, potentially Orwellian urban environments that find new value in our relatively uncommercialized public spaces.
There is limited specific information on WeCompany’s smart city strategy and no suggestion that they would actually develop neighborhoods or “take ownership” of public spaces in the same way as Sidewalk Labs. Despite the risk of opposition, smart cities offer a lucrative new frontier for innovative tech-firms with deep pockets. WeCompany certainly fit the bill but whether we citizens will want to live in WeCities, We will have to wait and see.