Coworking has made its way into the news in the last few months as industry giant WeWork struggled to present, and then withdrew its Initial Public Offering (IPO). Just because WeWork’s plan is crumbling doesn’t mean the industry is. Coworking remains a powerful tool for small business owners and remote workers looking for space.
WeWork’s Doomed IPO: What Happened
In August 2019, the We Company — the parent company to coworking giant WeWork — filed paperwork announcing the company was going public through an initial public offering. The company has 743 coworking sites worldwide, with another 124 on the way. It is reported to have 12,000 employees. WeWork leadership had estimated its value at $47 billion. It hoped to raise $2 to $6 billion by selling shares on the public market.
But the public sale process included some pretty intense financial scrutiny. Under that microscope, questions arose about the company’s profitability. Investors didn’t know what to do with the coworking company, or how to categorize it for comparison. They were also worried about CEO Adam Neumann’s “zany and idealistic” leadership style. With that weak initial showing, WeWork cut its valuation by more than 50% and the IPO was postponed to September 17.
Neumann didn’t survive the scrutiny. Investigations revealed that he had used the company for personal purposes and had trademarked the term “We” and then forced the company to buy it from him for nearly $6 billion. On September 24, 2019, he resigned as CEO, turning the company over to Artie Minson and Sebastion Gunningham.
Coworking Carries On
The problems with WeWork’s IPO weren’t ultimately about the company structure. The company tried to grow too quickly and couldn’t demonstrate that it was profitable at its global scale. Also, management problems like the kind that plagued Neumann can strike anywhere, regardless of sector or industry.
Coworking is alive and well, and growing worldwide, especially in developing countries with high numbers of remote workers. Even as WeWork pulls out of the public view, thousands of shared office spaces and coworking companies are there in the wings ready to welcome its members.
Coworking as an idea isn’t anything new. Wall Street may not know what to do with the idea of sharing expenses or minimizing costs, but entrepreneurs do. Business professionals have been renting out their spare offices or making arrangements for local meetings with their colleagues for decades at least. That’s because on Main Street, small-business owners know that every dollar counts when you are trying to grow your company organically and find space that suits your needs of the moment.
Why Local Coworking Spaces May be a Better Option
That small-business focus is why local coworking spaces like the PatchWork Collective are a better fit for entrepreneurs and small business owners than big franchises like WeWork. Every WeWork you visit has the same white walls and Scandinavian furniture. The company brand boiled down to a blank canvas within which their tenant companies could work.
Local coworking spaces are as unique as the places where they are found. Some are cool, conservative executive offices; others are eclectic collections of furniture and function that cater to a particular industry. Some focus on sustainability. Others are committed to supporting local retailers and businesses.
At PatchWork Collective, we are a coworking space with a heart of Ferndale. We are plugged in to our local community, living and breathing the success of our members. We aren’t in a hurry to expand. Instead, we work to give our members the space they need to grow their business naturally, and meet their needs.
Want to get into a local coworking space and out of your white box (or second bedroom)? Schedule a tour with the PatchWork Collective and see if our brand of coworking is right for you.