I am not much for summer vacation, but occasionally I do like to take a couple of days to tune out my work life. All the travel and meetings of my trip made it difficult for me to sit down and write a coherent piece for this week’s newsletter. So rather than begin this week’s newsletter with the usual essay, I will just offer up the following observation.
Of all the stories that caught my eye this week, I have been most fascinated by the analysis of the WeWork S-1 filing. As longtime readers know, I am a big believer in distributed work and the impact of the on-demand economy on society. WeWork is an obvious offshoot of that phenomenon. But the more you read the filing, the more you realize that the mutation of what has been an analog world into a digitized society is going to be messy. WeWork’s S-1 is packed with zany details and crazy jaw dropping facts that show a company finding creative ways of using software to find edges in a dirty old real estate business.
Needless to say, the S-1 and the double-dealing ways of founder Adam Neumann has led to so much shock and awe that nothing more really needs to be said. If you want outrage, you can start with The Verge writing about it as a soap opera. But for a more level-headed analysis of the IPO offering, put aside about 30 minutes to read the piece by former Hedge Fund employee Bryne Hobart. He is not in the attention game — and therefore, drama-free — and actually knows how to read the numbers and do the math. I learned more reading this artfully written analysis than anything else. In short, Hobart says that Neumann has done a great job of branding a stodgy product, and he has found inefficiencies but not a profit-making model.
The hullabaloo around WeWork is symptomatic of a larger problem: to date, most media coverage of startups has been through the lens of valuations and money raised, and not much attention has been focused on the business models of such high-flyers. No wonder there are so many disappointments. Actually, Wired UK did a decent job of poking holes in the WeWork hype machine all the way back in July 2018. Let’s face it; they were a “unicorn” darling and got far less scrutiny than their valuation deserved.
But you don’t really need me to tell you that — it’s all right there in the S-1! So, I’m going to focus on spending time with my family and reading in the shade while I still can. I assure you that the newsletter and I will be back to our old ways soon enough.