For what it’s worth, this is my take on why WeWork is worth so much money.

I believe WeWork is building an Operating System for buildings. The same way that you install OS or Windows on your computer and then install apps on top of it. Soon, you’ll be able to install “WeWork” on your commercial property or multifamily (WeLive).

 

We Work is an operating system for buildings

We are now witnessing the experimenting phase. They are leasing their own properties, use their own infrastructure and build everything from scratch.

For example:

  • The interior design process
  • The financing of renovation
  • Sales
  • Marketing
  • Maintenance
  • Community management
  • Security
  • IT

Everything in this list is something that every real-estate company in the world does. However, it takes a huge amount of work to build software that helps make this processes efficient.

For example:

  • Better ticketing platform and material procurement software will cut maintenance expenses costs.
  • Having IT systems unified across many buildings will result in less downtime and less friction
  • Having the same design themes and furniture across assets, will reduce marginal costs as you get bigger

And so on and so forth.

I might be very wrong, but assuming valuation is not ridiculously bloated,  this is the only explanation I see.