Raconteur

Future Workplace 2020

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R A C O N T E U R . N E T 03 /future-workplace-2020 n early-2019, even though it was haemorrhaging cash, WeWork was valued at more than $40 billion. Two years earlier, then-chief executive Adam Neumann declared: "Valuation and size today are much more based on our energy and spirituality than on a multiple of revenue." Indeed, energy and spiritual - ity abounded. WeWork, which rents and converts office space, described itself as "a platform for creators that transforms buildings into dynamic environments". With its plush interiors, 24/7 access, co-working desks and ping- pong tables, the company provides freelancers and entrepreneurs with flexible, short-term contracts. It is a physical manifestation of how many see the new digital economy: open, playful, communal. The company's largest benefactor, the Japanese behemoth SoftBank, famously plans its investments according to a 300-year vision. But by the end of 2019, less than 300 days after a multi-billion-dollar injection of SoftBank cash, the mar - kets decided WeWork was, after all, just a real estate company. A planned IPO was shelved. Neumann stepped down. Thousands lost their jobs. The company suddenly seemed to be worth far less than the billions investors had piled into it. Despite the tenuous wisdom of making large venture capital invest - ments in companies that do not own any unique technology, WeWork is still with us. It now has 662,000 members in 37 countries, bringing the ethos of West Coast techies to most corners of the globe. It recently opened a lavish new 16-storey block in London's Waterloo. Persian-style carpets, books on how to boost creativity on the Tube and lunchtime wellness and "breath - work" sessions attract members to rent desks from £600 a month. Mathieu Proust, WeWork general manager UK, Ireland and emerging markets, says: "The way we work is changing and we are at the forefront of this change. People are increas- ingly expecting something different from their workplace, prioritising culture and technology." WeWork might have helped kick- start the flexible office revolution, but the company now has a plethora of competition. There are hundreds of such brands in London alone and many of them are attempting to undercut WeWork on price. When a number of companies are offering essentially the same thing, it is often "culture" – that nebulous but occasionally priceless frame - work – which will separate the wheat from the chaff. So what does WeWork and simi- lar outfits offer that is truly unique? Critics argue that while such com- panies once prided themselves on providing the environment for ambitious small-business owners to thrive, they now risk alienating and pricing out that demographic. Some, looking for community and mentorship, question the value of stylish desks and potted plants in achieving business success. Are we witnessing a change in what ambitious UK startups are looking for when they rent office space? Oleg Mukhanov, chief operating officer of Steadypay, an early-stage startup that helps provide finan - cial stability to gig economy work- ers, says the company used WeWork because "as a startup you were pretty much expected to be based in one". He says of WeWork in 2018: "WeWorks were filled with the spirit of startup and hustle." However, as a fast-growing busi- ness on a budget, Mukhanov decided: "There are better ways of spending our capital than having a fancy office space. If we need the cool factor, we can always go to a pub next door." As setting up a small business has become easier, the idea of working in a startup has also become more wide- spread. 2019 saw a 44 per cent increase in investment in UK startups. Tushar Agarwal, co-founder and chief executive of HubbleHQ, an office-finding website, which he describes as the "booking.com to WeWork's Marriott", says the growth of the startup sector has had a knock-on effect on workspaces. "The office market has changed more in the past five years than it has in the last fifty," he says. "We are generally seeing that as the entrepreneurial ecosystem matures and startups become scale-ups, the spaces these businesses want to occupy are also growing up." This means that many of the amenities WeWork offer may no longer be as attractive to some as they used to be. For instance, in the eyes of many founders, having a private office still seems to be an essential ingredient for success. And while bean bags and fridges full of beer are pleasant and good for networking, they are not always great for getting work done. Companies like WeWork helped to establish the concept of the flexible workplace, but whether the model can be profitable in the long term remains to be seen. It is difficult to assess whether WeWork and similar offerings can continue to encourage entrepre - neurship and innovation. They will no doubt always be an attractive option for some cash-rich businesses that want to prioritise staff condi- tions, but may not necessarily be the best place for an ambitious, boot- strapped founder to get started. Does the WeWork model still work? THE FUTURE WORKPLACE @raconteur /raconteur.net @raconteur_london The office space company once promised to "elevate the world's consciousness", but could WeWork now be scaring away the very entrepreneurs it used to cherish? Mikaela Aitken Journalist and copy writer, she specialises in urbanism and design and is a regular contributor for Monocle. Jon Axworthy Journalist, writing about health, tech, science and the future, his work has been published in T3, Wareable and The Ambient. Nick Easen Award-winning writer and broadcaster, he covers science, tech, economics and business, producing content for BBC World News, CNN and Time. Jack Apollo George Writer and media specialist, his articles on technology and culture have been published by the New Statesman and CLOT Magazine. Christine Horton Long-term contributor to specialist IT titles, including Channel Pro and Microscope, she writes about technology's impact on business. Katie Monk Freelance journalist and author, her work has been published in The Guardian, The Independent, Psychologies and Food & Travel. Rachel Muller- Heyndyk Journalist covering workplaces, culture and activism, she has written for The Independent, the i paper and HR magazine. Distributed in Jack Apollo George Published in association with Contributors Although this publication is funded through advertising and sponsorship, all editorial is without bias and sponsored features are clearly labelled. For an upcoming schedule, partnership inquiries or feedback, please call +44 (0)20 3877 3800 or email info@raconteur.net Raconteur is a leading publisher of special-interest content and research. Its publications and articles cover a wide range of topics, including business, finance, sustainability, healthcare, lifestyle and technology. Raconteur special reports are published exclusively in The Times and The Sunday Times as well as online at raconteur.net The information contained in this publication has been obtained from sources the Proprietors believe to be correct. However, no legal liability can be accepted for any errors. No part of this publication may be reproduced without the prior consent of the Publisher. © Raconteur Media raconteur.net Kamal Kant Kosariya/Unsplash I WE WORK FINANCIAL S Annual revenue and net loss of WeWork; losses exclude losses attributable to non-controlling interests ($bn) Company filings/Statista 2019 Publishing manager Ben Bruce Deputy editor Francesca Cassidy Head of production Justyna O'Connell Design Joanna Bird Sara Gelfgren Kellie Jerrard Harry Lewis-Irlam Celina Lucey Colm McDermott Samuele Motta Jack Woolrich Head of design Tim Whitlock Associate editor Peter Archer Managing editor Benjamin Chiou Digital content executive Taryn Brickner C O - W O R K I N G Revenue $1bn −$1bn −$2bn −$2bn $2bn $3bn Net loss 2016 2017 2018 2019 Oliver Pickup Award-winning journalist, he specialises in tech, business and sport, and contributes to a wide range of publications.

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