Big Technology Podcast The Definitive WeWork Story — With Eliot Brown And Maureen Farrell
Jul 21, 2021
Eliot Brown and Maureen Farrell, both Wall Street Journal reporters and co-authors of "The Cult of We," dissect the meteoric rise and fall of WeWork. They explore how WeWork’s branding transformed it into a tech giant, attracting irrational investment despite its real estate roots. The duo dives into the unpredictable venture capital landscape, emphasizing the influence of charismatic leadership and the cultural nuances affecting startup ambitions. Their analysis uncovers WeWork's legacy and the broader implications for the startup ecosystem.
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WeWork vs. Regus
- WeWork's business model was similar to Regus, an existing office rental company.
- However, WeWork successfully branded itself as a tech company, achieving a much higher valuation.
Tech vs. Real Estate Valuation
- Tech companies are often valued at much higher multiples of revenue/profit than real estate companies.
- This is because tech companies, especially software companies, have the potential for unlimited profit.
Irrational Exuberance
- During the 2010s, irrational exuberance led to overfunding of startups, with many traditional businesses rebranding as tech companies.
- This was driven by a surge of money into venture capital, as investors sought high returns in a low-yield environment.
