Don’t Underestimate WeWork
I have a nice office at Fuld + Company, it’s one of the perks of being the CEO. In my office, I have two plants, one of which, for reasons that defy me, has thrived, growing to a size that was unimaginable two years ago. Some staff members started calling it Audrey.
About every three months, I have to move Audrey to a different location in the office, not so much because of its healthy development, but because I don’t quite know where it should go. In one spot, it interferes with people sitting at the conference table, in another, it impedes access to my desk. I wish I could just know where to put Audrey.
WeWork, the fast-growing provider of shared workspace, community, and services, would leverage data and analytics to know precisely where to put Audrey. That’s because WeWork strives to be more than just a provider of shared office space. Its vision is to become an outsourced provider of all things office – from leasing space, to arranging workstations, to anticipating employee needs, to offering design and management services to others. I find this scale fascinating because WeWork is a great example of a company whose strategy can easily be misinterpreted and underestimated. From a competitive strategist’s point of view, it’s a wonderful story of disruption and ripple effect.
WeWork, which was founded in 2010 and manages more than 10 million square feet of office space across 219 locations in 53 countries around the world, is combining data analytics, design expertise, scale, and customer intimacy to conceivably compete against companies that run the gamut from Regus, another shared office space provider, to the furniture retailer Ikea, to large property management companies like Tishman Speyer, and even hotel chains like Yotel.
Why? Because it doesn’t see itself as a provider of shared office space. It sees itself as an enterprise that allows employers to outsource all their employees’ workspace and housing needs.
At the core of this vision is analytics. According to an article in Wired Magazine, WeWork collects data on occupancy, how long workers spend at their desks, their preferences for photographs, décor, and, yes, plants. It knows the optimal amount of space employees require, and how to allocate workspace for the smallest footprint and the greatest efficiency. WeWork is currently focused on using the analytics it has collected on how people use its spaces to explore how to monetize this data, while growing its core product offering – renting office space. WeWork already manages an entire office building for IBM in Greenwich Village, Airbnb’s Berlin office, and Amazon’s Boston office. WeWork is also launching upscale dormitory style apartments, targeting young professionals in New York City, Washington D.C., and Seattle, as reported in Wired.
WeWork has spotted an opportunity to not only disrupt one industry, but many. Its definition of its competitive landscape is unique and defies traditional industry boundaries.
It views office work as occupying an extremely large value chain that encompasses where and how freelancers, small businesses, and large enterprises work, live, and interact with others. Boundaries that have existed between industries bound by legacy definitions, like “property manager” or “interior design” mean nothing to WeWork; it has re-drawn the competitive map and in doing so has the potential to out-maneuver competitors constrained by their obsolescent definitions of the industry in which they operate.
WeWork has the potential to achieve significant competitive breadth as a property manager, furniture provider, designer, residential property manager, and aggregator of surplus office square footage (think Uber for conference rooms). Any potential competitor who sees WeWork as just a niche provider of office space is sorely mistaken.