> We're going to look back on this company and say to ourselves "why did we fund a company to sign rental agreements".

Because there is just too much dumb money floating around and waiting to be invested after a decade of QE monetary policy. But instead of governments (worldwide) using said dumb money to invest in their future e.g. by building (or even maintaining!) infrastructure, teaching young students, fixing up environmental issues or helping people rebuild their savings/retirement, the money is forced into such "investments".

Next recession is gonna hit hard.

All of the options you listed would result in wealth redistribution. Asset value inflation and collecting rent are how you maintain or increase the wealth/income gap, not giving away your money to make other people’s lives better/productive.

Yes, it'll make investors richer, but they'll end up in a world that nobody likes to live in.

WeWork is offering its customers something of value, that while not unique, was rare. That it has to do largely with changing the normal contracts in their industry doesn’t matter much.

The issue is not with what they are selling it’s with how they are funding it. I think this story says a lot less about We than it does about SoftBank.

Rare? Regus was widespread in this space before WeWork was a twinkle in Adam Neumann's eye.

Is Regus really pin compatible with WeWork? WeWork offers cheap 1-desk offices with Internet/utilities bundled. Last I checked, Regus offered a "1-desk office" that was much more expensive, could fit several people, and didn't include amenities like Internet bundled.

There were online retailers before Amazon, too.

I suspect we may be still defining the actual market. There are definitely some components of the WeWork experience that are a hard sell even in their target market. The noise, lack of privacy, and casual nature for example. It would not be hard for Regus and friends to roll out trial balloons for variations on the theme.

I see WeWork has having a few damning problems that aren't issues of questionable business or accounting practices:

1) Since they're an challenger in a hot real-estate market, they're starting at a price disadvantage to anyone who already has properties. If other brands can copy enough of their magic at 20% less money, watch WeWork disappear from approved-vendor lists.

2) They're pushing for scale in a non-scale business. There's not huge synergies in supply, marketing, or purchasing. The fact they have hundreds of locations doesn't matter for many "I need an office in one specific place" use case. I don't doubt a WeWork of a handful of locations, as a niche product, would be a modest success. But they need that investor-pleasing hockey-stick growth which means "open 500 locations speculatively" and "generate huge debts and close 50% of locations once we figure out what won't perform".

WeWork rents out multi-story buildings packed full of single-desk offices. What "noise" and "lack of privacy" are you referring to? Both Regus and WeWork have hot-desk areas.

> Is Regus really pin compatible with WeWork? WeWork offers cheap 1-desk offices with Internet/utilities bundled. Last I checked, Regus offered a "1-desk office" that was much more expensive, could fit several people, and didn't include amenities like Internet bundled.

Depends on the market. Regus, as far as I know, doesn't put a lot of effort on build-out of the spaces they sublet. They take them pretty much as they are. It certainly wasn't a co-working space, but those weren't rare before WeWork either.

> There were online retailers before Amazon, too.

There certainly were online retailers before Amazon, but people didn't call them "rare" before Amazon.

"Rare" wouldn't be the word I would use, but the offering WeWork had, a few years ago, was unique and very well targeted to people like me: default month-to-month leasing of flexible 1- and 2-desk offices and hot desk spaces, all amenities included, at below-market prices.

1 vendor in a space is rare.

Regus wasn't the only vendor, just the largest one.

Also, I'd call one vendor in a space a monopoly. Rareness is about the ease of finding a vendor.

> WeWork is one of those strange entities that's greater than the sum of its parts

Or it's one of those entities that claimed to be greater than the sum of it's parts often enough that people started to believe.