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Comment by olliej | Hacker News Reader

Isn't it more "hard times for Silicon Valley companies that don't make money and/or makes losses that grow with increased users"?

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Indeed, it would seem that some companies are successful while others are not!

Crazy!

The most egregious such company (WeWork) actually being an NYC company.

Uber and Lyft both make losses that are directly proportional to their usage. Eg more users or more trips will only ever increase their losses.

WeWork makes a lot of money for the CEO - I recall he used a large amount of money he cashed out during earlier rounds to buy the building that We leases.

That's equally genious and stupid. WeWork has to be successful to be able to pay the lease. If WeWork is successful then he can continue to make money from WeWork via being a CEO. He should have 'diversified'.

It's even better - people clearly need office space, so even if WeWork fails he can lease to other people.

If WeWork fails to pay for their lease he can take them to court - and I would not be surprised if there are some fun creditor priorities in the bankruptcy terms of the lease agreements.

Seriously, I appreciate screwing the VC funders, but it does kind of demonstrate the kind of guy he is.

If WeWork fails it will likely be because people don’t need office space (i.e. a recession).

Much like Uber and Lyft, we work runs at a loss that scales with usage. In the event that continually losing ever increasing amounts of money somehow results in bankruptcy all of the people currently leasing office space will probably try to lease the building space directly.

WeWork is somewhat different. Its deflated valuation is because of a creative governance and self-dealings, rapid growth, and a tech-like valuation. If they paused expansion, they're basically Regus with better decor and more risk in a recession. Fundamentally, their business is viable, even without growth.

If you want to be geographically technical about it, Stripe is not a Silicon Valley company, but rather a company in a nearby city called San Francisco. Both Stripe and WeWork do seem to follow the "silicon valley model", however.

Okay, fair enough. Hard times for most of Silicon Valley then ;)

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