Odd Lots The Bullish Case for WeWork
Jul 22, 2019
Sandy Kory, managing director at Horizon Partners, offers a refreshing take on WeWork, challenging the skepticism surrounding the company. He discusses WeWork's innovative office environments and its struggle for valuation amidst market doubts. Kory argues that the company possesses untapped potential in a fragmented market, and he emphasizes its advantages in mature markets along with its flexible business model. He also highlights the need for strategic management to navigate competition and economic challenges while maintaining a positive outlook on WeWork's future.
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WeWork's Core Value
- WeWork's core value proposition is a better user experience through flexibility and community.
- This allows them to leverage scale for better economics and potentially disrupt the traditional real estate market.
Leverage and Disruption
- WeWork gains leverage through scale, enabling better economics and influence over suppliers.
- Their flexible month-to-month leases and customer-centric approach differentiate them in the market.
Hypergrowth and Capital
- Like Uber and Lyft, WeWork relies on access to cheap capital for hypergrowth.
- Their cash burn is primarily due to expansion into new markets, while mature markets likely have better economics.