Thread: WeWork is imploding. This is a case in point about the problems of relying on venture-capital financing for everything...
The point of WeWork is to facilitate access to reasonably priced, convivial office space. It has sought to apply the logic of a tech startup to the hard-to-scale dynamics of in-person communities. Its problems were exacerbated by the pandemic, but they started long before that.
This is so fundamentally a category error. Probably nobody familiar with my work will be surprised to hear me say: WeWork would have worked much better as a co-op. It is a shame that we live in an economy that lacks the capacity for co-ops to access capital to do this right.
If WeWork were a co-op, the point wouldn't be to deliver outsized returns to investors, it would be to meet member needs. The greatest benefits of the company would go outward to the world through its members rather than being organized for investor capture.
If WeWork were a co-op, the priority could be less on making everything streamlined and uniform, but on building economies of scale where they're needed, plus local control where it is needed.
Think Ace Hardware (a co-op), not Home Depot (a big-box chain).
The tragedy was particularly poignant a few years ago when WeWork was shedding Meetup.com—a company it had acquired and then needed to sell off. A few of us at Zebras Unite, plus Meetup founder @heif, got together to see if we could make Meetup the co-op that it should have been all along: https://medium.com/zebras-unite/meetup-to-the-people-how-a-zebra-could-rise-from-a-unicorns-fall-cfa93d83bcdc
@heif The model made sense. Meetup gets revenue from its users. It is in the business of communities. A co-op model, accountable to fee-paying members, made perfect sense.
But of course potential investors just didn't know how that would work. It isn't done. There isn't policy infrastructure for that kind of conversion, that kind of #exittocommunity. Meetup got bought by an investment fund.
@heif This stuff shouldn't be rocket science.
It should be perfectly reasonable to transition a user-funded online platform to user ownership.
It should be perfectly reasonable to have a co-op franchise of affordable co-working spaces.
In this economy, however, VCs have to keep trying to bend their model to where it makes no sense, because investor profit maximization is the only language this system knows.
When things like this happen, take a moment to consider not just what *is* happening but also the negative space of what *is not* on the table but should be.
@ntnsndr Very good thread. Back when I was teaching business ethics we always talked about the hockey stick growth mentality of VCs and the ethics of it.
I’ve felt for a long time that there are so many good ideas—and so many jobs—that have been killed because investors weren’t seeing their 10x or 100x return. Small, niche products and services are important, not just whatever idea catches fire.
Problem is access to capital, of course. We need ethical structures but also ethical investing.
@ntnsndr you probably already know Melanie and Nonprofit Ventures, but just in case…
I think y’all should chat!
https://nonprofit.ventures/