Reflections on WeWork's Fall: A Physical Workspace Is Just a Fixed Place to Work

From ACIDHOUSE, INC., this is Tetsuya Ashida.

With coworking provider WeWork's fall making headlines, I would like to discuss “why physical coworking spaces do not create added value”.

WeWork is a global company, backed by the SoftBank Vision Fund, that provided “coworking spaces with a rich, upscale feel” and “an aspirational atmosphere”. Just before its IPO, scrutiny of its founder and finances “uncovered one problem after another”, leading to the withdrawal of the IPO and a loss of credibility.

Read the Explanation

I Regularly Use Coworking Spaces Myself

I normally use a virtual office and work remotely, meaning I can work anywhere as long as I have internet access and my MacBook.

As a result, I regularly use coworking spaces in Japan and around the world, and I have also lived in a shared house for entrepreneurs.

So I would like to share my own experience-based thoughts about claims such as “spending time together in the same comfortable space creates collaboration or makes 1 + 1 = 10”, and the innovative experiences and productivity improvements people expect from community spaces.

Things Change Over Time After Opening…

Let's look at each one.

The People Who Come When a Space Opens Are Early Adopters

People who eagerly come when a space opens are so-called early adopters, the type with the drive to create new value.

Coworking spaces have existed for a long time under the name “incubation offices.” Until about 10 years ago, I also worked for a company that operated incubation offices.

*Incubation offices were unusual at that time, but several companies that have since gone public were tenants there.

Today there are many coworking spaces in Japan, but they no longer feel like incubation offices that kept producing rapidly growing companies.

I suppose both coworking spaces and the people who use them have become commodities.

The Late Majority Arrives for Different Reasons

The “late majority” that arrives some time after opening is not interested in the drive to create new value. They come simply because the space looks comfortable or costs less.

WeWork seems to be exactly this.

In the first place, a coworking space only really needs to meet conditions such as:

That is about enough.

But WeWork offers things like:

It does not seem to be pursuing faster business growth or creating synergies.

“I'm cool because I work there” seems to have been the value it provided.

Let me share a similar experience.

I have lived in a shared house for entrepreneurs, but most of the people living there did not start businesses.

They were salaried employees—some describing themselves as preparing to start a business—and many conspicuously lived there because they could rent by the month, it came with furniture and internet, they had private rooms, and the rent was reasonable.

Apparently it once really was a place inhabited entirely by entrepreneurs, but it was no longer like that when I lived there.

Physical Proximity Does Not Create an “Opportunity” by Itself

Here is the final point.

I don't think sharing a physical space every day with people who just happen to be there is the most promising way to generate innovation.

This is clear from the many success stories emerging from communities known as “online salons.”

Rather, it seems more natural for high-quality online connections to develop into offline relationships.

Today, in what is called a ubiquitous society, a single smartphone lets us access the information and resources we need whenever it suits us.

In fact, most of my work and network are based online, with concentrated, in-depth offline communication once a month.

Thinking about it that way, having no office by default and gathering as needed seems better in terms of both time and cost.

Also, not fixing yourself to one place of work should help keep your thinking flexible.

Summary

This time I discussed “why shared physical office space today provides no innovative added value”.