The impact of the shelved WeWork IPO on the industry has been and will continue to be far-reaching. Never before have we seen a company lose this much value so quickly, or been this dependent on the capital markets for survival. While much of this was self-inflicted, the truth is that there are many parties that will shoulder the blame for this.
If the rest of the industry can learn anything from this experience, it’s to never lose sight of the bottom line while pursuing your vision.
The public markets have spoken, and “growth for growth’s sake” is not a long-term viable strategy. The pendulum has swung, and there will now be a premium placed on companies that exhibit smart and sustainable growth, have a defensible business model with real barriers to entry, strong corporate governance, unit-economic profitability, the efficient deployment of investor capital, and a culture that prioritizes its people. Convene has been focused on all of this for nearly 10 years, and we have no plans on changing our thoughtful approach anytime soon.
While the longer-term impacts on the industry are hard to predict, we have seen some immediate reactions after WeWork’s IPO fallout that are worth highlighting.
Despite the “noise” around WeWork’s shelved IPO, we remain extremely confident in our business model, our approach, and in the macro opportunity that exists in front of us. Our model is fundamentally different – and our metrics prove it. You can read more about our financials and key differentiators in The Wall Street Journal – As WeWork Stumbles, Its Smaller Competitors Cash In; Business Insider – Convene’s CEO says the $500 million flex-space startup is a hospitality company that partners with real estate, not a tech company; and Commercial Observer – Coworking Buzz: Convene’s Ryan Simonetti on Everything Flex Space.
This industry is bigger than a single player, and regardless of what happens to WeWork, the structural shift towards real estate outsourcing is here to stay and will only accelerate in the years to come (CBRE recently published their Flexible Office Report that predicts the industry growing from 1.8% today to 13% by 2030).
The playing field just became level, and the sprint just became a marathon. We like our chances in that kind of race. Convene is not WeWork nor are we a coworking company. We are a hospitality company that strategically partners with Class A developers and owners to design and operate premium places for people to work, meet, and host inspiring events. And we do it by creating great experiences for our clients and making buildings more valuable for our landlord partners. Win-win.