That's how capitalism works. To pretend like it shouldn't function that way would just be making nice platitudes to allow folks like [dipshit] Adam Neumann to skate off impact-free to his next bullshit-laden adventure. There must be pain to avoid an exact repeat of this retarded chapter.
Heh, I got a recruiter from WeWork bothering me this morning about to see if I was interested in "confidentially exploring this opportunity". I was debating looking into it, but with all the crap coming out with WeWork, I think I'll pass.
Make sure to look over the reviews on Glassdoor or Indeed. Sure those things are full of people with axes to grind but in the case of WeWork, you'll notice a suspiciously strong trend in the reviews. Almost like the place is a shitshow internally.
I just did that on your recommendation, and wow, you were not joking. The term "Kool-Aid" was used in half the reviews I read, and in the Jonestown context, not the crappy flavored beverage context.
How have we gotten to the point where a company that is considering a $10-46B IPO is in a position where 1/3 of its staff is redundant and can be laid off, where investors can look at that company and think it's a good and growing investment to sustain their public pension or hedge fund returns, where bankers and consultants can come in and say yes deprive these 5000 people of their income and livelihoods because we need to give the founders and early investors an exit, where "tech" has come to be defined as a more flexible office space leasing model that scales quickly, where the brightest new students want to replicate another SV "tech" success by following the same playbook.
There is something extremely wrong with the rate of innovation, productivity growth, the division of labor and capital, and the distribution of profits between labor and capital in developed countries today, and it's unsustainable.
Any company's valuation is completely divorced from their actual ability to generate revenue, their efficiency as an organization, or the value they provide to their customers.
Valuations are meaningless boasts. They're a con in the literal sense; it's a confidence game. The company's officers craft the best BS story they can, and see if they can convince any investors that the investors will make money off giving them some funding.
It works a lot of the time!
EDIT: the "thing that's wrong" is that money is not tied at all to innovation, growth, or productivity. It's just complicated, highfalutin horse betting.
I'd rather blame that on business models that are unsustainable and rely on VC and IPO money coming in to avoid bankruptcy. At this stage we are not very far from the structure of a ponzi scheme.
In fact if the company is that close to bankruptcy, I am shocked that the listing authority even green lighted the IPO.
This. I really don't get all of the clutching of pearls here. It's clear that investors aren't buying WeWork as-is and it's going to need radical changes to its valuation, management, and possibly business model to access public capital markets.
> where bankers and consultants can come in and say yes deprive these 5000 people of their income and livelihoods because we need to give the founders and early investors an exit
So if those 5000 people are doing work that is not valuable, we should keep paying them to do worthless work? There are a million worthwhile things we need people for, let's not pay them for busy work.
This is why we need a good social safety net... those people should be let go, and find new productive work... but as you pointed out, that will be extremely disruptive to their lives while they find new work. If we could support them with a safety during that time, to prevent this business decision from depriving them of their livelihood while they found a new place where their labor was productive, we could be both economically and morally efficient.
I’ve found this to be one of the strongest arguments for a strong social safety net, at least one centered around helping people to find new jobs or be retrained for new careers. Taxpayers and the economy in general do not benefit from preserving unnecessary jobs (whether in the govt or the private sector). It would be much better if society accepted that job & career turnover are necessary to a healthy functioning economy and embraced that reality by countering the disruptive downsides.
Even free market economists like Milton Friedman have argued for such programs. And at least for the time being, there is still plenty of work for people to do even if it’s different than what they were doing previously.
The hard part of this is designing the system in a way that avoids inevitable abuse, and then convincing people that it does so effectively.
I sometimes think the fears of abuse are overblown... people would choose to spend $100 to prevent $10 of abuse. It should obviously be taken into consideration, but eliminating abuse should not be the #1 goal.
Yes, I believe that as well (though I also don't think it means we should fully ignore actual abuse).
You'll often see the perception/possibility of abuse touted as a reason to replace many/all of these situation-dependent welfare programs with a Universal Basic Income, where there is much less to abuse and thus less need to police it.
Growing up in the inner city, I knew many people who took pride in their ability to manipulate the system, work as little as possible, and collect as much as possible. I don't think the fears of abuse are overblown at all.
I think this is why the working class tends to vote against social programs while the wealthy support social programs - working class people actually know "non-working" class people who live off the system.
Its not hard. Require people to pay back the money they received once they have a job. That’s how Switzerland does it. I‘ve seen so much abuse in Germany of the social security system that would be prevented by this simple measure.
Who deems what is "productive"? I've seen plenty of apps that were really great get turned into shit because they were monetized or put under new leadership.
The people paying for it. If nobody is willing to pay for your product/service, you have a hobby, not a business. Hobbies that cost billions of dollars a year don't usually last, unless the hobbyist is a Gates or Bezos.
Facebook. The infamous news feed used to be an actual feed that showed you everything your friends posted, not an algorithmic hellscape of fake news and ads. Sharyl Sandberg pushed to turn it into an advertising vehicle in 2012 because a social network that puts users first isn't profitable.
The market is pretty good at determining where resources should be allocated, as long as we mitigate the known shortcomings of a market economy - externalities, tragedy of the commons, etc.
I agree that I wish that not every app was designed to be VC style - grow to be huge, with large revenue and expenses. I do think there are plenty of examples of smaller, not VC growth type companies... they just, by definition, aren't as big and popular as the high growth, large audience, ones.
> as long as we mitigate the known shortcomings of a market economy - externalities, tragedy of the commons, etc.
Pretty loaded caveat there. I can't think of a market economy that's actually existed where we've adequately internalized externalities and protected the commons.
Not going to argue, but what are you suggesting we do instead? I think we work on adding those safe guards as best we can, rather than throw out the entirety of a market economy.
A fair point, and I don't have a silver bullet. But wherever we talk about markets optimizing utility we need to acknowledge that to-date that's purely theoretical, and hand-waving away externalities and the commons has brought the entire planet to the brink of ecological collapse.
In some ways, the tyranny and 'sub-optimal' allocation of central planning seems preferable.
I'm more on the mandatory cooperative enterprise boat. But like I said, I don't have a good solution.
I think if you are going to point out that every market economy has failed to properly handle externalities, you also should acknowledge that every centrally planned forced cooperative has ended up run by abusive leaders who do not take care of their citizens.
All systems are going to have powerful people who work the system for their own gain... mitigating that is the primary problem of government design.
> you also should acknowledge that every centrally planned forced cooperative has ended up run by abusive leaders who do not take care of their citizens.
I mean, that's my point. That abusive leaders who do not take care of their citizens in an economy centrally planned to not destroy the Earth is preferable to a "free" one that does.
It's a false dichotomy. The capitalist world has included horrible authoritarian governments that have perpetuated the same atrocities against humans as your "abusive leaders", just like these centrally planned economies haven't exactly been environmental stewards.
All else equal, I'm saying that I'd prefer a sub-optimal centrally planned economy that guaranteed strong environmental protections.
> "This is why we need a good social safety net...that will be extremely disruptive to their lives while they find new work. If we could support them with a safety during that time..."
I want to refrain from getting too political here, but what you are stating here seems to be one of the core reasons for why Andrew Yang is proposing the Freedom Dividend [1].
Depends where you are in the country. One of the reasons why setting one number nationwide doesn't feel workable (but the alternative - giving "coastal elites" more money - is even less politically possible than the original proposal)
> if those 5000 people are doing work that is not valuable
That’s a big “if.” When under pressure, managers and consultants will always claim they are cutting unproductive people, but time after time it turns out that they also cut things that were vital to the company’s long-term future.
This is especially true when the spotlight glare of a possible sale or IPO is on them, they will do anything to make its seem as if the company is more profitable/less unprofitable NOW, at the expense of the future.
I have no visibility into WeWork and these people, but I don’t automatically grant that the company will be better off without the work of these people.
(Ok, maybe the wave pool folks can go. And everyone in finance, WeWork’s finance and corporate governance people sound
like “they’re so crooked they could hide behind a spiral staircase.”)
> That’s a big “if.” When under pressure, managers and consultants will always claim they are cutting unproductive people, but time after time it turns out that they also cut things that were vital to the company’s long-term future.
Anecdata from following business and public sector news since the 1980s. Consider all the companies that would lay people off, claiming a headcount reduction, and give them a one-time package. So there is an immediate hit, to be made up for in the long run by lower ongoing operating costs, right?
Only nope, the eliminated functions were still necessary, so many of the laid-off employees come back as consultants, and charge more than their fully loaded costs as former employees.
Companies doing that gained a certain amount of flexibility, it’s always easier to get rid of a consultant than an employee, but all-too-often the company would trumpet the reduction in headcount and savings in salaries, while saying nothing about the need to increase operating costs on consultants, &c.
Again, I have no visibility into WeWork. Anything could be going on there. I simply don’t automatically grant that companies can perform big layoffs and magically only get rid of people who were producing less than they cost. And I don’t automatically grant that companies will perform the layoffs, and then actually realize the gains they promised.
Why would someone invest in a company that hired 5000 people more than it needed? Doesn't that suggest incompetence at the highest levels?
Even if you accept that it's the right decision, the lack of consequences for people that previously made such an apparently idiotic one seems astounding.
WeWork makes a mistake of overhiring, now it is laying off people to offset the effects. Are we blaming it to create those false jobs in the first place or canceling them out afterwards? They can't be both right at the same time.
While I agree with you, I think the point is: how was this so close to going public, being seen as a Unicorn. How is there such a disparity between the reality and the hype?
> So if those 5000 people are doing work that is not valuable
Hold on there, let's pump the brakes. Who said their work wasn't valuable?
I think this highlights a bigger problem with the current economic system. Our economy is focused on growth when it should be focused on sustainability. Growth for the sake of growth is not valuable for the long term.
It's not about growth in the aggregate, but rather that sustainability in the individual startup is sacrificed for growth.
In some cases, this ends up working out. (See: Amazon) How many companies have failed because they were a 10 million company that was trying to be a billion dollar company and flamed out?
> I mean... The best way of making a company sustainable is to reduce headcount.
I disagree, reducing headcount for sustainability could be disastrous. It could leave to decreased productivity, decreased customer satisfaction, and a multitude of other things that could lead to a reduction or destruction of the business.
> So if those 5000 people are doing work that is not valuable, we should keep paying them to do worthless work?
And
> This is why we need a good social safety net...
If we raise corporate taxes to create that social net, companies will fire more employees.
If we raise taxes on wealthy individuals, people will complain that we're stifling innovation -- which creates jobs.
If we raise taxes on everyone else to make up the safety social net, the taxes will most likely hurt consumer spending power -- which drives the economy.
So is it really so terrible to keep those people employed?
5000 people at 100,000k a piece is what? 500 million a year at their once prospective evaluation at $47 billion?
It's not a drop in the bucket, but it would be better if the company shared some of the profits to make up for the personal shortfall. It seems to me they could give a years worth of salary and still be okay at a $47 billion dollar valuation.
> If we raise taxes on everyone else to make up the safety social net, the taxes will most likely hurt consumer spending power -- which drives the economy.
Except that the money is going back to people who are going to spend it, driving the economy. We aren't taking the money out of circulation.
> Except that the money is going back to people who are going to spend it
1. People have disposable income. With higher taxes needed for the safety net, they will have a lot less of that. Less dinners,
2. One way to measure the success of the economy is to look at GDP. Another way to look at it is how much are people making from employment. GDP may still be the same, but actual employment may be lower. So yes, it can still drive the economy, but through the lack of jobs.
Less valuable != worthless. This conversation was probably about valuation, so recurring net revenue and cost cutting to justify the valuation enters the equation.
Agree that making it easier for people to transition between jobs/careers could be beneficial to society as a whole.
>There is something extremely wrong with the rate of innovation, productivity growth, the division of labor and capital, and the distribution of profits between labor and capital in developed countries today, and it's unsustainable.
The problem is the "innovation" is geared towards figuring out clever ways around constraints rather than creating or producing anything new. Sometimes those constraints are operational or logistical and circumventing them creates benefits. other times they're legal or regulatory and there for a reason and when you circumvent them you just end up screwing over the public.
> There is something extremely wrong with the rate of innovation, productivity growth, the division of labor and capital, and the distribution of profits between labor and capital in developed countries today, and it's unsustainable.
It's almost as tens of companies doing the same work in parallel for the sole purposes of increasing their number ticker isn't very efficient.
The key thing that would make things better, is if engineers organized into some sort of professional association or trade union. I don't mean a technology focused organization like the ACM or IEEE, but a politically focused one.
The reason engineers haven't been totally screwed is the explosive growth of the market in general. Engineers haven't been able to capture even a fraction of the value they've created, but fortunately attempts by capital to collude against labor have been undermined by the desperate need for more labor at various inflection points. Google, Apple, Adobe etc all colluded against labor, but then Facebook was desperately trying to catch up to Google and undermined that effort. That forced Google to give everyone an IMMEDIATE 10% pay raise and since then Google has attempted to pay "top of market".
Besides Facebook specifically, people like Paul Graham of Y Combinator tried to sell the startup dream hard, which was hugely helped by huge IPOs of Google and Facebook, and what at the time looked like upcoming huge IPOs of Dropbox and AirBnB (which did eventually IPO but took way longer and were less amazing compared to Google/FB). This forced the big companies to try to improve compensation and work environment. There is a leaked email of Sergey Brin saying, he was concerned about Googlers leaving for Facebook but even more concerned about them leaving to create the next Facebook.
The VCs and founders got, far, far too greedy and used tools like common vs preferred shares, liquidation preferences, delayed IPOs, and short exercise windows to totally eviscerate the very dream they were supposedly selling. It took a bizarrely long time for the labor class to realize that this was going on. People today still comically overvalue the value of their ISOs, and a major role of a startup CEO is to attempt to dupe young engineers into buying that debunked dream. In 2019, I think people are finally "getting it" and flocking to companies like Google and Facebook that are paying huge RSU packages to retain engineers while startups are having trouble hiring.
Both the big companies and the startups were upset and thrown off course by the election of Trump over Clinton. Clinton, whose campaign was hugely influenced by Google/Alphabet chairman Eric Schmidt, was planning on pushing to massively raise the visa limit to flood the labor market with H1B engineering talent. Even if H1B are paid market rate, their influx will of course increase supply and drive down what that market wage is, and of course not being citizens they have very low political power (this is one of the reasons why, I believe to the extent we do let in technology talent, we should offer them a path to citizenship ASAP).
The lobbyists tried to convince Trump on the same thing - if you paid attention, during one of the debates he started talking about the importance of Silicon Valley importing talent. He later backtracked on that point on Facebook, after his campaign advisors pointed out that when one of your central campaign platforms is "build a wall to stop immigration", suddenly pivoting to an open-borders H1B stance is going to hurt your campaign. So the H1B cap has remained relatively untouched for 4 years, which Google/FB/YCombinator/Andreesen Horowitz/Greylock Ventures and the rest of the usual suspects were not planning for.
My prediction is, between the VCs digging in their heels on fixing their equity offers and in general keeping up with Google/FB on liquid compensation, tied to the housing crisis in the Bay Area and other hot tech markets, the consolidation of most top engineering talent to FANG companies and a startup dark ages that's mostly about flipping crappy web/mobile apps to greater fools with little technological value will continue on for a few years.
The two biggest things that will get the pendulum swinging away from that is, if engineers and other tech workers organize into a professional political association, or if ...
I saw a graph showing total inflation (not just rates) of various sectors since 2010 or so. Wages and toilet paper are up maybe 17%. While rents, stocks, bonds and real estate are up 150-250%. That's the effect of unconstrained central bank liquidity injections.
I think the SV unicorns are also an effect of that too.
> where investors can look at that company and think it's a good and growing investment to sustain their public pension or hedge fund returns
Quite the opposite, I'd say. I'm pretty sure the problem is the investors and bankers came in and said "are you kidding me? this is a garbage-tier investment, call us back when you make X,Y & Z changes!"
> where investors can look at that company and think it's a good and growing investment to sustain their public pension or hedge fund returns
I have literally not heard a single investor say anything positive about WeWork. It's probably the most negative sentiment I've ever heard pre-IPO-- granted, I've only been actively investing for a short while.
Step 1: Take an idea that already exists and try to make it hip and cool
Step 2: Come up with a business name that starts with "i", "we", "me", "face", "my", "yes", "go", or "insta", and ends with a word representing the product. Or start with a word representing your product and end it with a things like "hub", "beat", "bot", "desk", "X" or "r". Or just misspell an existing word.
Step 3: Create an atmosphere that's superficially new, hip, open-minded, on-demand, and "with it". Wildly exaggerate how your business is going to disrupt things, going as far as to claim that you want to transform your business into a global village that everyone will want to live in. Insist that everyone will want to live and work on a YesBizz campus, drink YesBizz coffee, and eat YesBizz pancakes. Remember, you aren't just a business; you're a way of life.
Step 4: Go mad with investor money. Expand as much as you can while there are no consequences and checks are flying. Channel your inner megalomaniac. The bigger your business makes itself, the more investors will believe in it and the harder it will be for them to pull out. You're on track if you've got offices on every continent, even in countries that don't actually demand your product.
Step 5: Once reality begins knocking at the door, it's time to let out one of your first death shrieks by announcing an IPO valued more than most Silicon Valley unicorns. Just ride this one out and if things don't work out you can resign with a sweet golden parachute. If you did everything right, you'll still end up with a lot more money in your bank account than when you started, even if your empire is now burning down.
This would be hilarious if it wasn't true. But sadly, it is true. There was a really good, and very serious video comparing Regus and WeWork. They went over what you just said, more or less.
> How have we gotten to the point where a company that is considering a $10-46B IPO is in a position where 1/3 of its staff is redundant and can be laid off
I don't think those are contradictory to each other. And in WeWork's case, they were posed to 45B IPO, now it is down to 10B, the trajectory is now totally different, as with the staff that needed.
How about instead of cutting workers, oust the CEO, stop making payments on the leases for properties that he owns, and let him try to sue his own company while he's choking on his leverage?
Unless his stepping down voids his landlord-lessee contract with numerous WeWork properties, all this does is let Neumann continue to self-deal as a major shareholder without the bad optics of self-dealing as a CEO.
Yes, this is the sort of situation where it could rapidly spiral into a place where the building you work in is suddenly repossessed or otherwise unavailable. I would seriously consider not leaving anything that you need on a short term basis in there. You would get it back, because no amount of financial shenanigans between WeWork and any other involved part can result in someone else owning your stuff merely because it was physically located on the property, but there could be a period of time in which you are physically unable to reach it. In theory, it really shouldn't be more than a few hours or single-digit days at most (if you can't reach your property, that's theft from you), but the reality, who knows while everything is worked out.
Basically, in a nutshell, I'd suggest not leaving your computing gear in there. And you should probably form a plan B for where you and, if relevant, your team is going to work if it does close suddenly.
However, that should be all that is necessary. It's not really a panic situation for you, unless you absolutely can't work from anywhere else for some reason. What I laid out above is a worst case scenario for you, and probably quite unlikely. In reality I'd still expect you to receive some sort of notice, although it's possible it'll be fairly short.
(If you do decide to simply pursue other office space, you may want to get moving on that. This sort of news is going to chase a lot of WeWork tenants out, and you may want to strike a deal before they push the market up. That's one of the mechanisms I have in mind when I say this could collapse quickly; the news that they are in trouble can itself create more trouble for them.)
Had an interview with engineering at wework... the projects they pitch were things like creating a augmented reality system to visualize office build outs...
I picked up the vibe that none of their engineering endevors will drive any profits and basicly "sounds/look cool". I dont like being part of engineering teams that are cost centers and not value ads.
Unrelated, but my last company hired WeWork’s design arm to consult our office redesign. Upper management bragged up and down about getting one of the most talented design teams to lead our renovation.
Two months later, we all get an email saying that they weren’t going to take on the project after all. The rumor was that they took the upfront consulting fees, looked at our office schematics and said “nah, this isn’t worth our time.”
"WeWork used [a sensor network that tracked everyone throughout the building combined with machine learning] to learn that people drink coffee in the morning so they should hire a barista."
Every time WeWork recruiters email me, I wonder what they need this many software engineers for. At least Uber, Lyft, Airbnb, Pinterest, etc. have a lot of traffic from users. But WeWork?
I could see some pretty interesting systems for building management at scale being created, along with projects related to desks/chair/couch reliability, cleanability, etc. The internal dashboards for location health, product ordering, and scheduling are probably extensive too.
I wonder if at the end of this year we'll look back at these last 10 years and wonder if we've really even made as much technological progress as it seems when funding, # of unicorns, and throwing "tech company" around for every venture-backed company has been our main proxy for "innovation."
I feel sorry that WeWork receives a lot of negativity for “not going to be profitable” and “not being a technology company”. It might be true, but as a potential customer, I am extremely happy with their existence.
I live in Warsaw and 3 years ago there were not a single decent coworking place. Every option seemed depressing and overpriced for their offering. Then WeWork and their competitor Mindspace opened up. I chose the latter since it was closer to my home and I couldn’t be happier. I assume WeWork would be the same. Brand new building, ergonomic desk, good looking interior, many meeting places, phone booths, free barista services, free delivery pickup service, 24h access, free bike rental, shower, community events, even massage and manicure is hosted few times per month. All this for $400.
The price feels as a bargain. Not sure if it’s partly covered by VC money or is it due to competition by WeWork but as a customer I just want to thank them and hope it continues.
I don't think it is, though. WeWork's perks are a massive overhead cost, on top of the huge upfront cost of building out a space that is trendy. I have yet to see any evidence that this model is actually sustainable, even at smaller scale. Co-working spaces that are long-term sustainable tend to be some combination of more expensive, more boring, or less built-out.
$400/month is a VC-funded bargain? It's worse than that.
The real VC-funded insanity is to sign up for an American Express Platinum Business card. One of the rewards is a year of unlimited hot desk access to every WeWork in the world for $0/month.
I switched from being a long-term paying WeWork customer to receiving office space from them in one of the most expensive cities in the world for $0/month.
The price isn't just a bargain, it's an unsustainable subsidy. The reason the places you looked at before WeWork were boring and expensive is because that's what it takes to actually be profitable in the short-term office leasing space. You're thankful for WeWork because they're effectively funneling investor money to people like you who wouldn't normally be able to afford trendy office space.
It's the same as when people were so thrilled that Uber was half the price of a taxi... because investors subsidized every single ride. Take advantage of these things while you can because they will inevitably go away when companies actually have to make a profit.
I have nothing but bad things to say about WeWork from our experience. Perhaps it was our location.
* they consistently lost mail (or claimed we didn't have it until we pushed hard), including tax documents and government documents more than once.
* facilities were constantly broken or dirty.
* There just weren't enough bathrooms, piping was constantly leaking.
* Common areas were really lacking, so sales folks often noised up the hallways.
They also insufferably pushed their networking events and their app. I suppose We's typical tenant wants that kind of stuff, but we just wanted to work.
The couple WeWork offices I go to have pretty minimal staffing. 2 to 3 working the front door and on-site. 2 to 3 janitorial staffs; may be even part time. Unless they have lots of back office people, I don't see where they can cut personnel.
Hypothetically, if I had a working solution for WeWork that would add value by really differentiating them from most other cowork spaces (because its technical complicated). How would I be able to sell it to them?
I would mainly be worried that they copy it after explaining and a few demos. In the end they can hire a lot of people very quickly whatever their value is.
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[ 2.8 ms ] story [ 169 ms ] threadhttps://careers.wework.com/
wonder if anyone has any historical data on the number of job openings?
There is something extremely wrong with the rate of innovation, productivity growth, the division of labor and capital, and the distribution of profits between labor and capital in developed countries today, and it's unsustainable.
Valuations are meaningless boasts. They're a con in the literal sense; it's a confidence game. The company's officers craft the best BS story they can, and see if they can convince any investors that the investors will make money off giving them some funding.
It works a lot of the time!
EDIT: the "thing that's wrong" is that money is not tied at all to innovation, growth, or productivity. It's just complicated, highfalutin horse betting.
In fact if the company is that close to bankruptcy, I am shocked that the listing authority even green lighted the IPO.
This hasn't happened, hence all the flailing.
So if those 5000 people are doing work that is not valuable, we should keep paying them to do worthless work? There are a million worthwhile things we need people for, let's not pay them for busy work.
This is why we need a good social safety net... those people should be let go, and find new productive work... but as you pointed out, that will be extremely disruptive to their lives while they find new work. If we could support them with a safety during that time, to prevent this business decision from depriving them of their livelihood while they found a new place where their labor was productive, we could be both economically and morally efficient.
Even free market economists like Milton Friedman have argued for such programs. And at least for the time being, there is still plenty of work for people to do even if it’s different than what they were doing previously.
The hard part of this is designing the system in a way that avoids inevitable abuse, and then convincing people that it does so effectively.
You'll often see the perception/possibility of abuse touted as a reason to replace many/all of these situation-dependent welfare programs with a Universal Basic Income, where there is much less to abuse and thus less need to police it.
I think this is why the working class tends to vote against social programs while the wealthy support social programs - working class people actually know "non-working" class people who live off the system.
See Snapchat, Instagram, WhatsApp, and Reddit.
The people paying for it. If nobody is willing to pay for your product/service, you have a hobby, not a business. Hobbies that cost billions of dollars a year don't usually last, unless the hobbyist is a Gates or Bezos.
I agree that I wish that not every app was designed to be VC style - grow to be huge, with large revenue and expenses. I do think there are plenty of examples of smaller, not VC growth type companies... they just, by definition, aren't as big and popular as the high growth, large audience, ones.
Pretty loaded caveat there. I can't think of a market economy that's actually existed where we've adequately internalized externalities and protected the commons.
In some ways, the tyranny and 'sub-optimal' allocation of central planning seems preferable.
I'm more on the mandatory cooperative enterprise boat. But like I said, I don't have a good solution.
All systems are going to have powerful people who work the system for their own gain... mitigating that is the primary problem of government design.
I mean, that's my point. That abusive leaders who do not take care of their citizens in an economy centrally planned to not destroy the Earth is preferable to a "free" one that does.
It's a false dichotomy. The capitalist world has included horrible authoritarian governments that have perpetuated the same atrocities against humans as your "abusive leaders", just like these centrally planned economies haven't exactly been environmental stewards.
All else equal, I'm saying that I'd prefer a sub-optimal centrally planned economy that guaranteed strong environmental protections.
I want to refrain from getting too political here, but what you are stating here seems to be one of the core reasons for why Andrew Yang is proposing the Freedom Dividend [1].
[1] https://www.yang2020.com/policies/the-freedom-dividend/
That’s a big “if.” When under pressure, managers and consultants will always claim they are cutting unproductive people, but time after time it turns out that they also cut things that were vital to the company’s long-term future.
This is especially true when the spotlight glare of a possible sale or IPO is on them, they will do anything to make its seem as if the company is more profitable/less unprofitable NOW, at the expense of the future.
I have no visibility into WeWork and these people, but I don’t automatically grant that the company will be better off without the work of these people.
(Ok, maybe the wave pool folks can go. And everyone in finance, WeWork’s finance and corporate governance people sound like “they’re so crooked they could hide behind a spiral staircase.”)
Source?
Only nope, the eliminated functions were still necessary, so many of the laid-off employees come back as consultants, and charge more than their fully loaded costs as former employees.
Companies doing that gained a certain amount of flexibility, it’s always easier to get rid of a consultant than an employee, but all-too-often the company would trumpet the reduction in headcount and savings in salaries, while saying nothing about the need to increase operating costs on consultants, &c.
Again, I have no visibility into WeWork. Anything could be going on there. I simply don’t automatically grant that companies can perform big layoffs and magically only get rid of people who were producing less than they cost. And I don’t automatically grant that companies will perform the layoffs, and then actually realize the gains they promised.
Even if you accept that it's the right decision, the lack of consequences for people that previously made such an apparently idiotic one seems astounding.
WeWork makes a mistake of overhiring, now it is laying off people to offset the effects. Are we blaming it to create those false jobs in the first place or canceling them out afterwards? They can't be both right at the same time.
Hold on there, let's pump the brakes. Who said their work wasn't valuable?
I think this highlights a bigger problem with the current economic system. Our economy is focused on growth when it should be focused on sustainability. Growth for the sake of growth is not valuable for the long term.
In some cases, this ends up working out. (See: Amazon) How many companies have failed because they were a 10 million company that was trying to be a billion dollar company and flamed out?
Keeping extra headcount is the unsustainable "growth" play, usually
I disagree, reducing headcount for sustainability could be disastrous. It could leave to decreased productivity, decreased customer satisfaction, and a multitude of other things that could lead to a reduction or destruction of the business.
Headcount isn't just a number.
And
> This is why we need a good social safety net...
If we raise corporate taxes to create that social net, companies will fire more employees.
If we raise taxes on wealthy individuals, people will complain that we're stifling innovation -- which creates jobs.
If we raise taxes on everyone else to make up the safety social net, the taxes will most likely hurt consumer spending power -- which drives the economy.
So is it really so terrible to keep those people employed?
5000 people at 100,000k a piece is what? 500 million a year at their once prospective evaluation at $47 billion?
It's not a drop in the bucket, but it would be better if the company shared some of the profits to make up for the personal shortfall. It seems to me they could give a years worth of salary and still be okay at a $47 billion dollar valuation.
Except that the money is going back to people who are going to spend it, driving the economy. We aren't taking the money out of circulation.
1. People have disposable income. With higher taxes needed for the safety net, they will have a lot less of that. Less dinners,
2. One way to measure the success of the economy is to look at GDP. Another way to look at it is how much are people making from employment. GDP may still be the same, but actual employment may be lower. So yes, it can still drive the economy, but through the lack of jobs.
Employment is not an intrinsic good, it is a means to an end.
Agree that making it easier for people to transition between jobs/careers could be beneficial to society as a whole.
The problem is the "innovation" is geared towards figuring out clever ways around constraints rather than creating or producing anything new. Sometimes those constraints are operational or logistical and circumventing them creates benefits. other times they're legal or regulatory and there for a reason and when you circumvent them you just end up screwing over the public.
It's almost as tens of companies doing the same work in parallel for the sole purposes of increasing their number ticker isn't very efficient.
The reason engineers haven't been totally screwed is the explosive growth of the market in general. Engineers haven't been able to capture even a fraction of the value they've created, but fortunately attempts by capital to collude against labor have been undermined by the desperate need for more labor at various inflection points. Google, Apple, Adobe etc all colluded against labor, but then Facebook was desperately trying to catch up to Google and undermined that effort. That forced Google to give everyone an IMMEDIATE 10% pay raise and since then Google has attempted to pay "top of market".
Besides Facebook specifically, people like Paul Graham of Y Combinator tried to sell the startup dream hard, which was hugely helped by huge IPOs of Google and Facebook, and what at the time looked like upcoming huge IPOs of Dropbox and AirBnB (which did eventually IPO but took way longer and were less amazing compared to Google/FB). This forced the big companies to try to improve compensation and work environment. There is a leaked email of Sergey Brin saying, he was concerned about Googlers leaving for Facebook but even more concerned about them leaving to create the next Facebook.
The VCs and founders got, far, far too greedy and used tools like common vs preferred shares, liquidation preferences, delayed IPOs, and short exercise windows to totally eviscerate the very dream they were supposedly selling. It took a bizarrely long time for the labor class to realize that this was going on. People today still comically overvalue the value of their ISOs, and a major role of a startup CEO is to attempt to dupe young engineers into buying that debunked dream. In 2019, I think people are finally "getting it" and flocking to companies like Google and Facebook that are paying huge RSU packages to retain engineers while startups are having trouble hiring.
Both the big companies and the startups were upset and thrown off course by the election of Trump over Clinton. Clinton, whose campaign was hugely influenced by Google/Alphabet chairman Eric Schmidt, was planning on pushing to massively raise the visa limit to flood the labor market with H1B engineering talent. Even if H1B are paid market rate, their influx will of course increase supply and drive down what that market wage is, and of course not being citizens they have very low political power (this is one of the reasons why, I believe to the extent we do let in technology talent, we should offer them a path to citizenship ASAP).
The lobbyists tried to convince Trump on the same thing - if you paid attention, during one of the debates he started talking about the importance of Silicon Valley importing talent. He later backtracked on that point on Facebook, after his campaign advisors pointed out that when one of your central campaign platforms is "build a wall to stop immigration", suddenly pivoting to an open-borders H1B stance is going to hurt your campaign. So the H1B cap has remained relatively untouched for 4 years, which Google/FB/YCombinator/Andreesen Horowitz/Greylock Ventures and the rest of the usual suspects were not planning for.
My prediction is, between the VCs digging in their heels on fixing their equity offers and in general keeping up with Google/FB on liquid compensation, tied to the housing crisis in the Bay Area and other hot tech markets, the consolidation of most top engineering talent to FANG companies and a startup dark ages that's mostly about flipping crappy web/mobile apps to greater fools with little technological value will continue on for a few years.
The two biggest things that will get the pendulum swinging away from that is, if engineers and other tech workers organize into a professional political association, or if ...
I think the SV unicorns are also an effect of that too.
Quite the opposite, I'd say. I'm pretty sure the problem is the investors and bankers came in and said "are you kidding me? this is a garbage-tier investment, call us back when you make X,Y & Z changes!"
I have literally not heard a single investor say anything positive about WeWork. It's probably the most negative sentiment I've ever heard pre-IPO-- granted, I've only been actively investing for a short while.
Step 2: Come up with a business name that starts with "i", "we", "me", "face", "my", "yes", "go", or "insta", and ends with a word representing the product. Or start with a word representing your product and end it with a things like "hub", "beat", "bot", "desk", "X" or "r". Or just misspell an existing word.
Step 3: Create an atmosphere that's superficially new, hip, open-minded, on-demand, and "with it". Wildly exaggerate how your business is going to disrupt things, going as far as to claim that you want to transform your business into a global village that everyone will want to live in. Insist that everyone will want to live and work on a YesBizz campus, drink YesBizz coffee, and eat YesBizz pancakes. Remember, you aren't just a business; you're a way of life.
Step 4: Go mad with investor money. Expand as much as you can while there are no consequences and checks are flying. Channel your inner megalomaniac. The bigger your business makes itself, the more investors will believe in it and the harder it will be for them to pull out. You're on track if you've got offices on every continent, even in countries that don't actually demand your product.
Step 5: Once reality begins knocking at the door, it's time to let out one of your first death shrieks by announcing an IPO valued more than most Silicon Valley unicorns. Just ride this one out and if things don't work out you can resign with a sweet golden parachute. If you did everything right, you'll still end up with a lot more money in your bank account than when you started, even if your empire is now burning down.
I don't think those are contradictory to each other. And in WeWork's case, they were posed to 45B IPO, now it is down to 10B, the trajectory is now totally different, as with the staff that needed.
Here's your mistake. The failed IPO is a symptom, not a cause.
Now they're trying to fix this broken company. There were still too many people believing in the fantasy before.
Basically, in a nutshell, I'd suggest not leaving your computing gear in there. And you should probably form a plan B for where you and, if relevant, your team is going to work if it does close suddenly.
However, that should be all that is necessary. It's not really a panic situation for you, unless you absolutely can't work from anywhere else for some reason. What I laid out above is a worst case scenario for you, and probably quite unlikely. In reality I'd still expect you to receive some sort of notice, although it's possible it'll be fairly short.
(If you do decide to simply pursue other office space, you may want to get moving on that. This sort of news is going to chase a lot of WeWork tenants out, and you may want to strike a deal before they push the market up. That's one of the mechanisms I have in mind when I say this could collapse quickly; the news that they are in trouble can itself create more trouble for them.)
I picked up the vibe that none of their engineering endevors will drive any profits and basicly "sounds/look cool". I dont like being part of engineering teams that are cost centers and not value ads.
Two months later, we all get an email saying that they weren’t going to take on the project after all. The rumor was that they took the upfront consulting fees, looked at our office schematics and said “nah, this isn’t worth our time.”
Source: https://twitter.com/modestproposal1/status/10855834347880202...
If that's your best example of what value technology is adding to your company, you aren't actually a technology company.
I live in Warsaw and 3 years ago there were not a single decent coworking place. Every option seemed depressing and overpriced for their offering. Then WeWork and their competitor Mindspace opened up. I chose the latter since it was closer to my home and I couldn’t be happier. I assume WeWork would be the same. Brand new building, ergonomic desk, good looking interior, many meeting places, phone booths, free barista services, free delivery pickup service, 24h access, free bike rental, shower, community events, even massage and manicure is hosted few times per month. All this for $400.
The price feels as a bargain. Not sure if it’s partly covered by VC money or is it due to competition by WeWork but as a customer I just want to thank them and hope it continues.
The real VC-funded insanity is to sign up for an American Express Platinum Business card. One of the rewards is a year of unlimited hot desk access to every WeWork in the world for $0/month.
I switched from being a long-term paying WeWork customer to receiving office space from them in one of the most expensive cities in the world for $0/month.
The price isn't just a bargain, it's an unsustainable subsidy. The reason the places you looked at before WeWork were boring and expensive is because that's what it takes to actually be profitable in the short-term office leasing space. You're thankful for WeWork because they're effectively funneling investor money to people like you who wouldn't normally be able to afford trendy office space.
It's the same as when people were so thrilled that Uber was half the price of a taxi... because investors subsidized every single ride. Take advantage of these things while you can because they will inevitably go away when companies actually have to make a profit.
* they consistently lost mail (or claimed we didn't have it until we pushed hard), including tax documents and government documents more than once.
* facilities were constantly broken or dirty.
* There just weren't enough bathrooms, piping was constantly leaking.
* Common areas were really lacking, so sales folks often noised up the hallways.
They also insufferably pushed their networking events and their app. I suppose We's typical tenant wants that kind of stuff, but we just wanted to work.
It is a bargain, since the company is operating at a large loss.
> and hope it continues
I'd hope companies would keep giving me free things too. But I can assure you , it won't last!
I would mainly be worried that they copy it after explaining and a few demos. In the end they can hire a lot of people very quickly whatever their value is.