Hey Jessenterpenuers
Tech companies are a time a cousin these days everyone wants to be the Facebook of Assholes or the Uber of Sandwiches; there's always another gimmick up their sleeve. If one person finds a model that works and not even profitability, only works in terms of investors and VC's like it. You can be sure it will quickly be mimmic'd and ripped off and applied to another sector.
We see this with blockchain too; there's not a centralised system that someone isn't trying to blockchain for a quick buck.
The unicorns have arrived
As tech companies became these unicorn darlings with the likes of Facebook, Twitter, Uber, Amazon, Google, Netflix and the like, other budding entrepreneurs thought of exciting ways they could take these models and apply them to various niches.
We have Airbnb now for short term residential rentals and holiday stay. Airbnb is a weird one it started as a pretty ingenious idea, but as more investors came on board, it becomes a toxic tech company and a massive money grab and a shadow of its former self. If you think Uber dodges some ethical boundaries, then Airbnb will be a doozy.
So why do I mention Airbnb? Because it gave rise to this business model of merging property with tech where tech doesn't play all that big a part in it. It worked, and someone thought let's takes this idea and apply it to commercial real estate, and poof WeWork was born.
Image source - pymnts.com
WeSmirk
WeWork is/was and probably will always be a shared office space company, they take out long term leases on commercial property, renovate it into office space and then rent that to freelancers, startups and small scale businesses looking for a flexible place to work from time to time. This is not a new idea, the model has been around for ages, and there are more independent businesses doing this with their property, and they own the property mind you.
So to stir up a hype WeWork went the tech route instead and pitched itself as a tech company where you can find and book office space at any of their locations via their site or app.
They are a series of tech companies that aren't tech companies, the notcoms if you will. They are traditional companies with tech expenses that any company its size would have and overall that as a tech company. Another popular notcom would be something like Peloton, the streaming workout company. I mean you can't make this stuff up.
The Not Com Bubble
These companies get huge valuations as if they were building some breakthrough technology and are seriously overcapitalised from the beginning and then need to keep the funding rounds going to stay alive. Eventually, they aim to have a massive valuation so they can IPO and dump their shit stock on the public and retail investors.
WeWork was ten years in the making, at a 45 Billion dollar valuation and ready to IPO, the investors were licking their lips. But to IPO, you need to provide a ton of documentation and expose your companies inner workings to the world.
Uncovering WeWork saw a business burning cash, being kept alive for no reason. Like someone with just a brain left and not having a body and the brain is in a comma its all about the life support.
The company is now feeling the pinch of not being recapitalised, and each day brings it closer to bankruptcy. The company plan to let go of 4000 staff and while the big ups will still get their big paydays until the company goes bust, its the team that will be burned from this whole issue.
Business needs a reboot
I hope that this is the start of something, where this company being propped up by cheap money come to an end. This constant need to try and build the next monopoly in a sector isn't an admirable pursuit its one of greed and harms the economy more than it does it any good.
All these companies do is suck up potential resources, squash or absorb any promising competitors and try to divert as many streams of income as possible to themselves where they then can be allowed to sit back and relax and not have to compete.
We need more free markets, more options, more competition which is what leads to real innovation.
Let's connect
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