Brief History Of WeWork’s Co-Working Culture
- Co-founder Adam Neumann owned a baby clothing company in Brooklyn prior to starting WeWork.
- Neumann worked in an office adjacent to co-founder Miguel McKelvey during his baby clothes venture in 2008, and WeWork blossomed soon after.
- WeWork is now valued at $16B, just two years after a $5B valuation.
Though co-working is nothing new, it’s safe to say that WeWork has led the way as the nation’s most popular shared workplace provider. WeWork founders Miguel McKelvey (pictured, left) and Adam Neumann (right) clawed their way into the office rental game in 2010 and turned it on its head. Their model was simple—take out cut-rate leases on a few floors of an office building, chop it into smaller parcels and charge a monthly rate to small businesses and individuals for membership. The end goal? To transform buildings into creative shared office space for entrepreneurs and small companies, with all the amenities Millennials could ask for.
WeWork opened its doors to NYC in April 2011, and by 2015 it had become the most valuable office startup in the city, having raised $970M with a $10B valuation—making it the 11th-most-valuable startup in the world.
The company received investments from industry leaders, including Boston Properties' 77-year-old chair, Mort Zuckerman, who controlled roughly $20B worth of prime office real estate at the time, and Fidelity Management & Research.
After another round of funding, the co-working company is now valued at $16B. WeWork has signed more than 50,000 members, has close to 30 co-working spaces around the world, and is planning an expansion into India. You’re likely to see amenities like free beer on tap, fridges stocked with food and foosball or ping pong tables at these offices.
The company has hit a few snags here and there. With its lease, spruce up, then sublease model comes the challenge of paying for fixed expenses with revenue that fluctuates based on demand—a balancing act that has the company downsizing. It has also been hit with a labor lawsuit that could reach the Supreme Court.
Still, its office footprint is growing. It shelled out $8M for its Atlanta debut in May, and expanded into Philly this month with two additional combined offices that gives it a 400k SF presence in the City of Brotherly Love.