WeWork just filed to go public - Check out the company's journey from one SoHo building to a $47 billion valuation
WeWork founders Adam Neumann and Miguel McKelvey met — where else? — at the office.
Neumann also had an interest in real estate — he fell in love with a vacant warehouse on Water Street while he was working in Dumbo, Brooklyn.
In an interview with Fast Company, Neumann recalled approaching the landlord and asking for the building. The landlord said, "You're in baby clothes. What do you know about real estate?"
Neumann said he shot right back: "Your building is empty. What do you know about real estate?"
He and his new friend McKelvey struck a deal to start a real-estate business there: Green Desk, which still exists today.
Source: Fast Company
In 2008, Green Desk became an early incarnation of WeWork. The company offered sustainable co-working spaces featuring recycled furniture, free-trade coffee, and green office supplies.
Customers, called "members," could rent a desk or a private office month to month. Neumann and McKelvey made money by charging more for those spaces than their lease payments.
Green Desk offered most things individuals and small companies needed: fully furnished offices, conference rooms, high-speed internet access, utilities, printing, and a stocked kitchen.
As the economy buckled under the weight of a failing real-estate market, Green Desk thrived. Neumann hypothesized that people liked being part of a community. Some who were laid off during the financial crisis started new businesses out of Green Desk.
Source: Fast Company
Something clicked for Neumann and McKelvey. They saw that it was the focus on community, not sustainability, that drove people to Green Desk. In 2010, they sold their stake and began WeWork.
Neumann and McKelvey had $300,000 between them, low credit scores, and no building. Still, they convinced a landlord to rent them one floor of a building on a trial basis.
Source: Forbes
The first WeWork location was just 3,000 square feet in a tenement-style building in SoHo. It had creaky floorboards and exposed brick, which the founders power-washed clean.
Source: Forbes
Early on, Neumann and McKelvey imagined office rentals as part of an ecosystem, complete with apartments, gyms, and even barber shops, that served the concept of a communal life.
"It was always thought of, 'How can we support this person who wants to live more collectively, live lighter — who wants to have less stuff, who wants to pursue their passion, pursue a life of meaning, rather than looking for just material success?'" McKelvey told Business Insider.
Source: Business Insider
They used their flagship location in Soho (which reportedly turned a profit one month after launch) to host developers and investors and grow the WeWork brand.
Source: Forbes
WeWork opened four more locations in the next two years. It caught the attention of Benchmark, a top venture capital firm that made early bets on Twitter and Uber.
Benchmark led a Series A funding round of $17 million, pushing WeWork further into growth mode. WeWork shot up to 1.5 million square feet of space and 10,000 members by 2014.
As even more venture funding flowed in, the number of WeWork locations skyrocketed.
Source: Business Insider, Forbes
In an effort to diversify its revenue streams, WeWork got into residential real estate in 2016. WeLive provides fully furnished micro-apartments. People can join these communities and instantly tap into amenities like free internet, maid service, and new friends.
"In the big picture, we see WeLive as a huge opportunity, as big as WeWork, for sure," McKelvey told Business Insider. "I think we're lucky to have a good foundation in place where people trust us and are interested in the product."
Source: Business Insider
In 2017, WeWork announced its WeGrow endeavor, a "conscious entrepreneurial school" for children 2 to 11-years-old.
Sources: WeGrow, Business Insider, Business Insider
WeWork bought Lord & Taylor's flagship store building in New York City in October 2017 for $850 million.
Sources: Business Insider, WeWork
Also in October 2017, WeWork opened its first gym. Rise by We is located at 85 Broad Street in New York City. It offers yoga, boxing classes, and a "superspa."
Source: Business Insider, Business Insider
WeWork confidentially filed IPO paperwork in December 2018 as The We Company. Neumann announced the filing four months later in April 2019.
Source: Business Insider
With a $47 billion valuation, The We Company publicly filed its S-1 IPO paperwork on Wednesday.
The filing provides the first in-depth look at WeWork's financial results. The document shows spiraling losses over the last 3 years, with the firm posting a loss of $1.6 billion 2018 on revenue of $1.8 billion.
It also reveals that CEO Adam Neumann volunteered to forgo a salary for 2018.
Source: Business Insider
WeWork declined to comment for this article.
Read more: WeWork isn't even close to being profitable — it loses $219,000 every hour of every day
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