Interview Transcript

What exactly did WeWork do differently?

Adam Neumann hit the nail on the head in terms of creating a brand and creating an approach that didn’t currently exist. When you think about it, the largest operator at the time was Regus and I actually worked for the company that merged with Regus for many, many years. So I was very familiar with the culture and the products and the services and what they were doing well and what they weren’t doing well. The problem with Regus is that they were so big and getting them to see things differently or to change was really difficult, and they lost that very innovative, entrepreneurial culture and they become really, really stale. So, it’s interesting. I’m not too sure that they didn’t see the opportunity to repackage what we did and create a different way to do it, and what I mean by that—the Regus locations, they look the same. Instead of resembling a cool hotel or a restaurant, which is sort of the WeWork design, it was very dull, corporate, boring, and then on top of it they’re kind of lifeless.

So, I think what WeWork did, and they did it really effectively, is they took something that was working and they just made it more interesting. Everything from the design element, to the parties, and the events, and the beer. They repackaged it in a really effective way. And their brand started off as more of geared toward start-ups. It was all about start-ups and “do what you love” and I think it really taps into this psyche of what people wanted. And then they started shipping more like an enterprise offering because they realized that was actually more profitable than going after the start-up community. So I feel like Regus was kind of rusting back and these guys kind of blew by them. Is it because they didn’t see it or they weren’t able to execute on it because, it’s like anything, you have a hotel chain, and if you have a lot of old products, it’s very difficult to take that old product and make it new and fresh. You try to do these renovations. Well, WeWork had the benefit of coming out of the gate and just creating a whole new design, approach, look, versus Regus having been around for over 30 years.

WeWork made it cooler, they made it sexy, they made it more interesting, and they spent a lot of resources and money in terms of establishing that brand, and they did it through social media. They knew how to tap into that user and it almost became like a lifestyle brand, right, where people wanted to be associated with it because it was a cool, fresh, new way to work. And what was happening was that, with a lot of big companies, even when they went after Enterprise clients, these Enterprise clients are already trying to attract younger, millennial workforce talent, and they would prefer to work in that environment versus sort of a stodgy, old, corporate kind of look.

I think that’s really where they did a really amazing job. Now, Regus’ answer to that was to create a new brand, which is their Spaces brand. It will be interesting to see how successful that is. Sometimes the culture is so pervasive within a company that you can’t just simply acquire new brand or slap a new name on it and create the same effect. It will be interesting to see how that works.

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