WeWork,the U.S.-based provider of co-working space, has been a subject of somefascination over here in the U.K. since it opened its first office in 2014. Itsportfolio of 10 London offices have developed a reputation for being a hotbedof activity for new and emerging companies, where talented tech types can rubshoulders with venture capitalists by the coffee machine. There are a range ofcommunity events laid on for tenants, including skills-sharing sessions forstartups and yoga. There is also free and unlimited beer on tap.
WithWeWork in the headlines again this month with its unveiling of "WeLive,"a line of short-stay apartments in the U.S. where well-heeled workers can enjoythe benefits of communal, no-strings-attached living, S&P Global MarketIntelligence decided it was time to take a closer look at the company. TakingWeWork up on an offer to spend a day working at its office in Moorgate, in theCity of London, your correspondent showed with a laptop in order to get a tasteof co-working life and talk to some of the occupants.
"We'reopen 24 hours, so you can come by any time to see how people are using theoffice," WeWork's PR said brightly, suggesting that there are some seriousworkaholics among WeWork's tenant base.
Source: S&P Global Market Intelligence
Thereare two main varieties of WeWork tenants: companies who rent whole segments ofoffice space, and individuals or "members," often freelancers, whopitch up and find a desk and an internet connection.
MattLerner, who runs the London operations of California-based investor 500 Startups and works with a staff of five in theMoorgate office, is one satisfied customer of WeWork. The office is centrallylocated and close to both venture capital firms in the City and the startupscene of East London, he said in an interview.
500Startups has made investments in some 1,600 companies, and will consider anythingthat is "legal, or close to becoming legal," Lerner said:
"Oneof the companies that has just come out of our accelerator is an exchange forhemp-related products. We also invest in a company that provides an exchangefor human hair. It's a platform that dis-intermediates the sale of hair bywomen in the developing countries to salons in the West, so that the sellerscan get a better price for it."
Fora company like 500 Startups, the big attraction of WeWork is flexibility.Lerner can rent space for his core team of five, but expand the amount of deskshe needs at any time.
"Werun a one-month program where we bring in founders from five to 10 startups,and suddenly I need space for 30 people. I can just rent another room down thehallway for as long as I need it," he said.
Theonly drawback of working in a shared space is that it can be noisy and alsotricky to make private phone calls, Lerner said, but added that this could be aproblem in any conventional open-plan office too.
Whilethe WeWork office may be a natural environment for someone like Lerner who isdeeply immersed in the startup scene, it's been a step change for someinhabitants interviewed.
Oneof these is Rob Weaver, director of property at real estate startup Property Partner, which is aplatform that allows investors to gain exposure to residential property withouthaving to buy the whole asset. Weaver is a well-known figure in the Britishresidential property world, having been RBS' global director of residentialinvestment management between 2012 and 2014. During these years he helped tooversee the bank's West Register subsidiary's sell-offof an estimated 1,300 distressed residential properties. Coming to a startup from a large, traditionalbank has been something of a culture shock:
"It'shard work. You just don't know what's around the corner. Working for a largebank is like steering a tanker. We were making plans for assets three years inadvance, but in a startup, things turn around more quickly. Here things changemonthly," he said in an interview. "A month in the life of a bankeris like a day for the type of companies in this building."
Fromthe perspective of a startup, a WeWork-style arrangement makes a lot morebusiness sense than the traditional landlord-tenant model, Weaver said:
"Ina regular office in London, we would have to have paid for a year's rentupfront, plus deposit, plus VAT, and we wouldn't be able to find a lease ofless than five years. That's too much capital for a startup to tie up inproperty that could have been spent elsewhere."
Andwhat about the fabled culture of free beer, table tennis and casualinteractions with venture capitalists?
"I see the table tennis tables are very well-used here. Honestly, I don'tknow how anyone has the time. Working with a startup is the most intense thingI've ever done," said Weaver.
Followinga day (and early evening) of observation at the Moorgate office, it seemed thatthere were few takers for the free beer. Perhaps they were all working toohard. However, the culture at the office seemed to be fairly relaxed andinformal, with three people bringing their dogs to work with them and plenty ofanimated conversations taking place over by the coffee machines.
Thespirit of collaboration and openness was also alive and well in the WeWorkoffice. The Property Partner interview was conjured up almost instantly byTwitter. No sooner had S&P Global Market Intelligence tweeted to PropertyPartner than the company's communications manager had come downstairs tointroduce himself. It's a far cry fromthe world of banking or REITs where the top brass is often very shy of speakingto the media.
WeWork'sco-working model appears to be a hit with the startup community, wherecompanies are unable to commit to long leases, but need very central locationsand all the amenities of a grade-A office. Don't be fooled by the fun and funkydécor and trappings; tenants here are a hard-working bunch and more likely totake their landlord up on the offer of being able to work round-the-clock than theyare to help themselves to beer.