It was hard not to do a double take scanning headlines this week. WeWork, a provider of shared office space, announced a $10 billion valuation. The jaw-dropping figure was revealed after Fidelity Management & Research agreed to invest $400 million in the company.
Just over a year ago, the company was valued at only $1.5 billion. WeWork’s success and explosive growth has been the subject of debate around the water cooler. How does a company that simply sublets office space become so successful in such a short period of time? There are a variety of reasons, of course. But, one thing is for sure … WeWork’s success has a lot to do with WHO is subletting their space and WHY.
WeWork rents office space to small companies, start-ups and the rapidly growing segment of independent workers. According to the Wall Street Journal, one-third of the labor market is made up of ‘contingent’ workers – freelancers, contractors, and the self-employed. These are the folks that look to WeWork to provide a new kind of work environment. Where the words ‘self-employed’ or ‘freelancer’ once evoked disparaging images of someone at home, unmotivated; sitting on the sofa in PJs, today it conveys an entirely new meaning. The social stigma no longer applies. Project-based work is booming as are opportunities for independent workers across diverse industries. These white-collar professionals now represent the fastest growing segment of contingent workers, driving demand for a new, flexible place to do business.
WeWork offers tenents (called members) a loft-style workspace and experience that emphasizes community. Geared towards the generation that recoils at grey cubicles or a 9 to 5 workday, members work in common areas or glassed offices depending on which flexible, pay-as-you-go membership is selected. The company takes care of the many hassles involved with self-employment. Wifi, printers and office supplies are available. There is even a group health insurance plan. Motivational quotes are scattered throughout the space. Each office location has a community manager in charge of events like Ping Pong, yoga, or life coaching sessions. And, at every location, you will find a free, tapped keg, surrounded by members socializing, networking, exchanging business cards and ideas.
WeWork goes way beyond providing just the necessities. It offers a community experience for people who are drawn to words like entrepreneurial, authentic, grateful, inspired and tenacious – – the same words WeWork identifies as its core values. And with the rise of freelancers demanding work-life balance and a work environment that supports this philosophy, we are not surprised by WeWork’s allure.
* The Death of 9-to-5, Richard Greenwald