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Comment by xwdv | Hacker News Reader

Before the next recession hits, WeWork will be the first to die.

I hope someone from WeWork reads this, and knows it to be true.

Isn't this why all the companies are IPO'ing currently? Lyft and Uber hit the 10-year investment marker and were essentially forced to exit, but all the others I feel just see the writing on the wall and know they can't outlast a multi-year recession.

Can’t say much about others but WeWork has been the product of a frothy bull market for a long time where anybody with a half decent startup could pick up generous venture capital.

But when that market tightens up, and we see less new startups coming out and with less money than before, those startups will take a hard sobering look at their finances and decide they simply can’t afford to blow money on shitty overpriced hipster co-working spaces, which unfortunately for WeWork is the only product they offer. WeWork will run into cashflow problems and that will be the end of it.

What would be the alternative for small companies who want to have some kind of space to co-locate? If they feel like they can't afford something like We Work, they probably aren't willing to commit to a dedicated office space.

Also, it isn't just tiny startups that are using We Work. The article stated that 40% of their revenue comes from large enterprises. The money will be much slower to dry up for the large, established companies.

> What would be the alternative for small companies who want to have some kind of space to co-locate?

In a recession? Probably remote work. A small startup that's running into cashflow problems, and who has no dedicated office space -- coworking spaces seem like the first overhead expenditures to get cut.

You do realize WeWork doesn't have a monopoly on shared office spaces? In fact, they aren't even the biggest player in the space - Regus is.

Yes I'm aware they aren't the only ones. The person I responded to is implying that total demand for coworking spaces would fall, and I was asking what the alternative would be.

Some possibilites:

-- Home offices for employees that can have one.

-- Move remote employees into corporate HQ or other existing offices, lay-off employees who refuse.

TFA implied that WeWork has more desks than IWG since the end of last year.

During a recession:

Individual contractors and small teams (<10) will likely go back to working from home or out of cafes.

Larger, enterprise teams will have more, and better, options and may cut expenses by downgrading to cheaper accommodations either via less "hip" direct competitors (Regus) or taking on cheap/discounted leases directly.

> I hope someone from WeWork reads this, and knows it to be true.

You mean the people (mainly the CEO) who is cashing out massively as a result of the IPO?

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