Space to Suit

WeWork is pioneering the idea that a company’s workspace can also double as a meeting place

The office 10 floors above Connecticut ­Avenue in the Dupont Circle neighborhood of Washington, D.C., isn’t like most offices. For one thing, today this office has a Google-labeled ­minivan parked in it. In front of the minivan, employees from the Silicon Valley search firm are scooping candy from big plastic bins to give away to everyone who works here.

But free candy delivered by Google is not what is most unusual about this workspace. Most odd is that most of the people working in this office don’t even work together — ­although they clearly all love candy.

This is an office run by WeWork, a 5-year-old co-working company that leases space to over 25,000 members around the globe, most of whom are entrepreneurs, freelancers, and teams of small and midsize businesses.

The company has become both a darling of Silicon Valley’s tech establishment — which has invested a significant amount of money into WeWork — and a real estate powerhouse in Manhattan, where it is the fastest-growing lessee of new office space in New York. WeWork now leases a total of 3 million square feet of space in 41 different locations in 15 cities worldwide, stretching from Seattle to London to Tel Aviv, Israel. And yet, WeWork doesn’t think of itself as being in the real estate business.

“We’re in the business of making people happy and successful,” says 40-year-old co-founder Miguel McKelvey. “Our ­spaces are obviously a big part of that, but we think of what we offer holistically, in terms of what it means to work in the world today.”

To WeWork, and to many organizations that have shunned traditional office leases to work in shared spaces, what it means to work in the world today can be summed up in one word: collaboration. Workers at big companies have been hearing that word tossed about for a decade or more as their firms have plowed under the cubicle farms they planted in the 1990s in favor of more-open, less-private space for workers. As a result, 70 percent of office workers now work in “open-plan” spaces, according to the International Facility Management Association.

While big companies are still struggling to develop the right kind of collaborative environments — ones that foster creative co-working without sacrificing workers’ ability to concentrate on their daily tasks — small companies, especially startups, face a different challenge with collaboration. How do very small companies engage in meaningful, profitable collaboration when their office is someone’s living room or a coffee shop? And how do slightly bigger companies broaden their networks when the workers spend most of their time locked together in an office they might have leased above some dive bar?

What it means to work in the world today can be summed up in one word: collaboration.
WeWork’s solution: free coffee and beer. Well, it’s more than that. Occasionally, there’s also free candy. And ice cream. “There’s always something going on ­inside WeWork,” says Zack Christenson, a co-founder of ­Crowdskout, a data-­analytics company that works with small ­businesses and nonprofits and has had an office at ­WeWork in Washington, D.C., for 18 months. “Yesterday they had a food startup in here that was making small-batch ice cream. You meet a lot of people that way.”

For Crowdskout, which has grown from two to 12 people in the year and a half since startup, the most helpful meetings have been with other data companies and with nonprofits. “We’ve had a lot of informal conversations with nonprofits here about what their needs are, which is a huge help,” Christenson says.

This is why WeWork doesn’t talk about selling square footage. Sure, it leases large lots of office space, converts them into glass-walled, vibrantly decorated smaller spaces and sells use of that space to tenants, whom it only refers to as “members,” on a monthly basis. And, yes, its rapidly growing base of 25,000 members pay what, on a per-square-foot basis, can amount to a premium price over other office space in WeWork’s cities — anywhere from $45 a month for eight hours of access to ­WeWork’s common areas up to about $650 a month per person for a permanent, glassed-in office that is something like 65 square feet of space per desk. And, absolutely, because of that pricing, WeWork reportedly has a $150 million annual operating profit.

What the company insists it is really selling is not space but instead that thing small businesses struggle to be part of: a collaborative, easy-to-access community of peers and potential customers. A ­community that is available either during ice-cream breaks or through a Twitter-meets-­LinkedIn-style offering on WeWork’s app, where members post questions or list jobs.

“We’re not just abstractly applying a real estate growth strategy,” says ­McKelvey, who has an architecture degree and is chief creative officer. “We’re trying to authentically connect with our communities. At WeWork, you meet people with shared ­experiences. You even get emotional support, where you can find other people who understand the challenges of running a business. That’s all informal. It’s not measurable.”

McKelvey grew up in part in a collective headed by five single mothers in ­­Oregon. His 36-year-old Israeli-born co-founder, Adam Neumann, grew up in part on a kibbutz in Israel. So when he says he’s not trying to build a business but a community, it sounds genuine. “What a lot of us want is to find meaning in our work,” ­McKelvey says. “That can be a pretty ephemeral thing, but I think you really end up feeling the power of it when you’re in our spaces for a while.”

*Abridged from an article in American Way Magazine, read more at http://magazines.aa.com

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