WeWork, the New York-based startup that’s valued at 16 billion, has a two-pronged growth plan: co-living spaces as an adjunct to its co-working spaces, and international expansion focused on Asia.
“What’s really driving our company today are broader macro shifts in behavior, in how people are choosing to work and choosing to live,” said WeWork Vice Chairman Michael Gross, at the Converge tech conference in Hong Kong, as reported by The Wall Street Journal. “We’re looking at dense cities, with young populations. Cities like Shanghai, Hong Kong and Seoul, these cities are very attractive to us. You’ll see us entering all of these cities.”
The company raised $430 million from Chinese investors recently and plans to grow its users from today’s 50,000 to 1 million, notes WSJ. The first three open-plan offices in Shanghai are set to open next month.
“This is the future of work and if you’re a real estate landlord and you have a portfolio, it’s important to diversity yourself into this new of working, into this sharing economy and into the ‘we generation,'” WeWork co-founder Adam Neumann told CBS News.
WeWork’s mission at its 2010 launch was to disrupt traditional office space with environs equipped with desks as an office 2.0. model. Today there are 101 WeWorks in 29 cities, with 30 locations in New York alone—and now the company is banking on building out events like rooftop parties, entrepreneur sessions and PowerPoint karaokes to attract clients.
WeWork recently began expanding its model into flexible housing with spinoff WeLive, pay-by-the-month furnished rentals for entrepreneurial transients with nightly rates starting at $235. A room with four beds costs $495 per night and all come with private kitchens and bathrooms. A bar, group workout room and a large kitchen for communal meals are scattered throughout the building to encourage social interactions.
“Our goal is to be on par with other things in this area but to offer a higher level of service,” Miguel McKelvey, co-founder of WeWork said, in Yahoo. “We’re deeply invested in WeLive because we know there’s something special that we’ve created. But from a business perspective, it’s hard to ignore the fact that WeWork is incredibly successful.”
“WeLive brands its more expensive rooms far differently than comparable hotel options,” reports Fast Company. “It advertises rooms that represent a new way of living built upon community, flexibility, and a fundamental belief that we are only as good as the people we surround ourselves with. In that sense, the company’s hotel rooms are part of the members-only club it has been building since its founding in 2010.”
“Even though we are growing fast, we are not growing as fast as we can,” Neumann told Vanity Fair. “We have two things that limit the speed of our growth. First, and most important, we have to ask ourselves along the way, have we hurt the member experience at all? If the next building you open isn’t as good as the last one, you’re growing too fast. The second thing is, you don’t want to overgrow into negative cash flow.”
The sailing has not all been smooth. WeWork plans to cut 7% of its staff and has placed “a pause on hiring,” reports Business Insider.
“WeWork’s growth and expansion continues to accelerate and we expect to add hundreds of employees between now and the end of the year,” a spokesperson told Business Insider. Recent employee actions were part of the company’s talent review process to ensure that we have the right teams in place that align with the company’s priorities.”
“In a normal building, people don’t care about each other,” McKelvey told CBS News. “Here people all really do care about each other and they talk about it like it’s a family. They talk about a place where people really care, really want to connect [and] really want to help.”