I was out for a drink with a (much younger) friend last week who was telling me that he was moving into a new office soon. They had a short lease in an office near Liverpool Street which looks like it will be converted to residential space. The new office sounded like one of those painfully trendy places with the availability of beer on tap being stressed quite a lot. – a sort of “If Carlsberg provided offices…”. He mentioned the name – WeWork.

Coincidentally, CoStar Daily News contained an item on them yesterday. Some truly amazing figures. Since starting in 2010 in New York, the company is now valued at $5 billion dollars – yes, that’s billion. They have become one of the biggest office occupiers in the US and are expanding rapidly in London. Clearly they’re doing something right. It’s hard to believe that something as prosaic as providing office space (albeit they’re cool, creative, co-working hubs) could produce such rapid growth. I’m not quite sure what the underlying business model is and, more importantly, what the kind of margins they’re making. I don’t really see any first mover advantage, network effects, lock-in, monopolistic potential etc. I can’t imagine that it is difficult to replicate the product. But it illustrates the potential for disruptive innovation in something that seems as mature as the office market.


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