7 Actions Independent Coworking Spaces Need to Take NOW to Minimise Fallout From WeWork’s Imminent Collapse

October 1st 2019: WeWork’s investors have fired it’s CEO and Founder Adam Neumann.

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They have shelved it’s planned IPO and announced 000’s of job cuts.

But the fallout won’t end there and well run Independent Coworking Operators need to act now to insulate their businesses from what’s coming down the tracks.

What’s just happened?

Investors love IPOs. It is their exit strategy. In getting to the point of being able to exit and bag a return on their early investment the core business must be capable of demonstrating current and future value to market. On a more base level the market for the IPO must value the company more than investor debt. This is where expectation meets reality, or in Neumann’s case where delirium meets reality.

As the IPO approached and was then fast tracked Wework’s investors began to realise their place in what had become a Ponzi scheme. Investor debt far exceeded a likely sale price so scraping the IPO is a first step in the liquidation of WeWork. The various creditors are now moving frantically behind the scenes to strip away any assets of potential value. Some may be trying to steady the ship but as survival instinct kicks in it will get very messy.

With so much debt and so much rent falling due on leases, many of which are overpriced, its hard to see what is there to strip. Remember WeWork leases 98% of its offices so no disposable assets there. With such uncertainty surrounding the company landlords will become very wary. Watch out for stories of missed rents and attempts by WeWork to exit leases. When that becomes the narrative there is just days if not hours in WeWork.

Sometimes really good companies are forced to cancel their IPO and for all but a handful subsequent life expectancy is very short indeed. Very few still exist 18 months later.


So what does this mean for the Coworking Industry?

On the plus side 527,000 people are going to be looking for a new place to work and if you have survived in WeWorks shadow then you may be in for a boost. In the short term at least.

Many of their corporate tenants will be badly burned by their experience and so are likely to return to traditional leases and reversing a trend that that others will follow and this will impact the whole Cowork Industry.

We can expect to see lots of news stories questioning Coworking and forecasting its demise. It wont but it will experience a very considerable upheaval.

Most worryingly for those who’s principal business is Corporate members is the likely retreat back to traditional leases. No business wants uncertainty.

How can Independent Coworking Operators insulate themselves from the fallout?

1)      Be proactive NOW.


2)      Talk to your landlord. He may not be aware of the coming news. Let him know you are and make him aware of WeWork’s own failings and make sure he can differentiate your business from theirs.

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3) Talk to your bank manager and assure him that your model is not similar to WeWork’s. Maybe a draft set of financial headlines from your last quarter is worth the effort of putting together. If you happen to have WeWork as a direct competitor, you can point out the potential growth in membership.


4)      On that point you might want to consider tailoring an offer to anxious WeWork Members. Don’t think WeWork wouldn’t be returning the “favour” if the boot was on the other foot?

5) Rededicate to the 5 core values of Coworking. It is easy to let things drift at times.

6)      Be open with your members. This is probably the most important step you can take.

a)      Individual Members: Engage early with them, let them know about WeWork and its problems NOW so that when the shit hits the fan it is not news to them and that they understand why what happened to WeWork will not be happening to you.

b)      Corporate members. New members may be scarce over the next while so its important to keep the corporates you have happy. Much the same advice as with individual members but this is another instance where a set of your last quarters headline numbers might be reassuring. Remember if the narrative becomes WeWork Failing =Coworking Failing that is what the overworked CEO will take from this.


7)      Keep your hands in your pocket. Cash-flow may be tight over the coming 6-12 months so stay liquid.

Fergus MurphyComment