People who are in the business of providing workplaces need to pay attention to WeWork, the coworking juggernaut that has been valued by venture capitalists at $5 billion. WeWork provides small sublet office environments, mostly for contingent workers (freelancers, contactors and entrepreneurs). About one-third of the U.S. workforce are now contingent workers.
According to a recent feature on Bloomberg Business, WeWork has 23,000 customers (members) in 32 locations in New York, San Francisco, Austin and Tel Aviv. Portland, Toronto, Berlin are next. WeWork is leasing up these new spaces with a recent $355 million cash infusion.
We need to pay attention to WeWork because it’s making money by providing the kinds of workplaces workers are willing to pay for.
1. Atmosphere and service. WeWork provides loft-style spaces that appeal to young creatives. The spaces are airy and open with exposed beam ceilings, lots of glass and modern fixtures and colors. Most importantly, the spaces buzz with energy. People pay to be in these spaces.
Lesson No. 1: Talent is attracted to inspiring spaces designed around interaction and energy.
2. It’s about the experience as well as the work. Each WeWork site has a “community manager” who coordinates experiences. These managers organize ping-pong tournaments, book clubs, yoga and meditation classes, talks on technology and Easter egg hunts. These activities encourage interaction and connection. They also make the place sticky: It’s fun to be there. Co-founder Adam Neumann calls it the “physical social network,” a place where authentic interactions happen.
Lesson No. 2: Actively curating the worker experience makes the workplace an attractor because true connections are encouraged, and delighters and surprises make being there fun.
3. Workers are not going back. The other WeWork co-founder, Miguel McKelvey, says: “The world has changed completely. All these buildings that we look at — towers which are full of soul-crushing acoustic ceilings and crappy gray carpets and draining environments with fluorescent lights — like, no one wants to work that way anymore … It has nothing to do with the economy. It has nothing to do with anything other than humanity.” Once workers experience a lively, connected, fully-supported workplace, they won’t go back.
Lesson No. 3: This full-service, experience-driven workplace — one that workers are willing to pay for — raises the bar for all workplaces.
4. WeWork can be part of a corporate strategy. Like Regus and other non-traditional coworking sites, WeWork’s drop-in spaces can be a valuable choice for mobile employees. Memberships for these types of spaces can be part of a larger corporate officing strategy. In many cases, these spaces may be the smartest and most affordable alternative for downtown locations in talent-rich cities.
Lesson No. 4: Today, the workplace is not where you go: Work happens everywhere. Corporate occupiers should consider coworking spaces as a creative solution for this reality.
What is most important about the WeWork solution is that its business model is based on providing workplaces that are so full of services and experiences that people are willing to pay to be there. Big corporations need to pay attention. Providing inspirational spaces loaded with experiences that bind and connect employees and create cultures where people want to work should be the goal of any organization. In this war-for-talent economy, incorporating the attributes that have made WeWork successful into a company’s own workplace strategy will create real competitive advantage.