WeWork wouldn't be profitable on a private cabin model, as lovely as that sounds. Pitching the open floorplan as a "networking" perk is just a necessary evil, or good marketing, depending on how you look at it.
For the usual startup, WeWork is way too expensive.
Why do you say that? What are the alternatives that startups have?
Here in Tel Aviv at least, if you're a 5-10 person startup, you can either take the painful, long process of renting an office, which is both expensive in its own right, takes a lot of your time, and has a serious issue - you don't know what size you need!
The alternative is to go to WeWork, where you can start working almost immediately, have everything taken care of for you without thinking, and have peace of mind that you can scale to more offices within the WeWork as necessary (unless it's at capacity, but there're usually vacancies).
I'm not saying this necessarily a good business model for WeWork, but for startups, it's a great deal.
Beyond 10 people, most startups here realistically don't have that explosive growth in employees, so you can rent an office 3x your current size, and still come out cheaper than WeWork. In the mean-time you can sublet the empty space to other smaller startups on a quarterly basis until you need it yourself.
I realize that in other cities, the situation might be a different one, but at least in Berlin there are very few startups that have the luxury to of a "fuck profitability"/explosive growth strategy, which are realistically the ones that can afford a WeWork for more than a few months.
/unsponsored advert
I think the larger coworking spaces will have to excel on their consistency, ease of getting setup and cutting of costs from their economy of scale without becoming a RyanAir seat shrinking company. Whilst also not feeling like a traditional office.
The uses cases for "5-10 person company" and "gig economy freelancer hanging out at the WeWork in hope that some networking will lead to a big break" are different, I'll wager.