Has the WeWork bubble burst?

WeWork: A brand consultant's perspective

The embattled tech and community management behemoth may be teetering on oblivion, but WeWork is also the story of an extremely successful brand exercise.


Updates: 

04 November 2019, Monday, 6:06 pm (GMT+8): Adam Neumann, then-CEO and founder of WeWork, will potentially receive more than US$1 billion after selling his shares to SoftBank and collecting US$185 million in consulting feesHe accepted the exit package, and the bail out from SoftBank is now in effect. 

Once estimated to be worth US$47 billion, it is now US$7 billion after Japanese company SoftBank’s offer. Neumann accepts SoftBank’s offer of US$9.5 billion to WeWork including new debt and recommitted equity, as well as a tender offer to partly cash out Neumann and other shareholders. JPMorgan’s offer was not taken.

16 October 2019, Wednesday, 11:08 am (GMT+8): Leaning toward JPMorgan’s US$5 billion debt package vs. SoftBank Group’s offer. Payment-in-kind notes (PIK) might be included, estimated to yield 15%. - Bloomberg

WeWork is facing a crossroad between two financial rescue plans to stay afloat, with SoftBank offering a debt and equity investment package from SoftBank (taking over the reigns of Wework), or a multibillion-dollar debt financing by JPMorgan, over a revised creditline tied to the Initial Public Offering (IPO).

WeWork’s US$4.1 billion net worth CEO, Neumann, is now worth US$600 million, a result of the co-working company’s failure to complete an IPO, 47 days after releasing an offering statement. Neumann was forced to resign, and WeWork is now called The We Company.  In the Branding world, what positive lessons can we draw from this?

Aside from that, a new headache has been discovered: elevated levels of formaldehyde in their phone booths, forcing WeWork to close about 2,300 of them. Extreme exposure to this chemical is known to cause certain types of cancer.


The embattled tech and community management behemoth may be teetering on oblivion, but WeWork is also the story of an extremely successful brand exercise. 

The brand has always been about celebrating an individualistic mindset even as it espouses the benefits of networking and creating holistic communities.  

Here’s what we believe WeWork got right as far as its brand is concerned: 

1. An impactful and memorable name
We Work = WeWork. This is an affirmative statement, a vote of confidence in itself. The moniker directly references the company's key offering of great workspaces. It is alliterative, making it impactful and memorable.

WeWork NYC Houston courtesy WeWorkImage courtesy of WeWork

 

2. Audacious vision
WeWork's Co-founder and ex-CEO, Adam Neumann, did not believe in modesty. The company's prospectus states, "We are a community company committed to maximum global impact. Our mission is to elevate the world’s consciousness.” There is a further dedication to “the energy of we–greater than any of us but inside all of us". Bold and brazen statements fire the imagination and capture attention: they are sexy.

adamneumann WeWork, Courtesy VanityFairImage courtesy of VanityFair

 

3. Undeniable appeal to investors, market and consumers
The firm's exponential rate of expansion was fuelled by tangible offerings: the acquisition (on long-term leases) of sites in the most desirable locations of the world's key business cities; outfitting them into flexible, appealing workspaces, that synced with a millennial zeitgeist. This drew investors and consumers alike, fuelling an escalation of confidence in the brand's success.

WeWork Hibiya Park, courtesy WeWorkImage courtesy of WeWork

 

Yet, a great brand can only get so far. Neumann's alleged self-dealing, management lapses and eccentricities have been exposed, creating a perfect meltdown at the point that WeWork filed for public offering.

 

Other image Credits: Getty Images, Bizjournals

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