Inside WeWork’s $20B Valuation: Is It Really Worth It?
In 2010, WeWork opened their first space in New York City. Eight years, and many billions later, WeWork is now the most hyped startup in the world.
By definition, WeWork’s model is ridiculously straightforward. WeWork is an office leasing company…that doesn’t own any properties.
What WeWork does is this:
They take up big commercial leases. They then decorate the space in their signature style with beer and coffee on tap. From there, WeWork rents out the same office space to freelancers, startups and smaller businesses in smaller chunks and month-to-month.
Despite not holding any assets initially (though that’s changing), WeWork has grown at a frenetic pace nonetheless. From nearly $1M in seed funding back in 2011, WeWork jumped to $1.5B three years later before peaking at the huge current $20B valuation.
By comparison, major property owner REIT SL Green — which actually owns real estate — is valued at $8.9B.
This insane level of growth has led to industry chatter that WeWork could be overvalued. In fact, others say their real valuation figure is $3B, based on revenue metrics of competitors like IWG and Regus.
Not to mention this: WeWork isn’t even profitable.
To make some sort of sense of all this, let’s take a look at their model, what they’re up to, and what’s in store for the coworking giant.
Creating efficient ecosystems
No longer a new entrant to the shared office space economy, WeWork aims to be the go-to platform for businesses.
Or as they say, in the WeWork Manifesto: “First, Office Space. Next, the World.”
Rather than just offering space, WeWork’s business model enables startups to focus on driving their business through the community of startups in their spaces.
One of its primary goals is to create an ecosystem that provides a range of services—right from free drinks to conference rooms and wireless services.
From the standpoint of managing space, WeWork has an efficiency that would make any slumlord green with envy (and that’s a compliment): WeWork has one workstation for every 50 square feet.
Crammed up space aside—the companies seem to like working side-by-side, WeWork’s disruptive model has played host to over 250,000 members across 22 countries.
Most analysts remain upbeat about its momentum, as well. Especially with its plans to open almost 400 offices across 27 countries in 2019. A move that will double the number of members year-over-year.
Co-working to ‘co-living’
The next business vertical is the co-living one with their WeLive concept. Their first one opened in 2016 right above an existing WeWork office on 110 Wall Street in New York City.
With WeLive, WeWork offers furnished, move-in apartments with a similar ethos to the office space—just show up with your bag and you’re ready to live.
The rents for these apartments will be inclusive of internet connection and cleaning services, with similar short-term month-to-month leases.
The company’s “WeLive” business model can be a high growth segment for WeWork. The co-living vertical might offset any decline in demand from commercial businesses.
But are they profitable, though?!
No. We mentioned that. But they don’t necessarily want to be. And they are hacking their top line revenue substantially.
An increase in occupancy rates has led WeWork to squeeze more revenue out of existing markets. Rapid expansion also played a major role in revenue growth.
Strategic choice or not, WeWork continues to book losses and burn cash. In the first six months of 2018, WeWork posted losses of $723M on revenue of $764M.
This does not concern investors as they are looking at the huge market opportunity available for WeWork. Japan-based Softbank, one of the largest investors in WeWork, has invested a whopping $4.4B in the company.
(That’s another story we will tell another time. Including how CEO Adam Neumann rode with the Softbank boss and signed a $3B investment deal on a digital cocktail napkin right there.)
The money backers expect WeWork’s valuation to reach $35B in the next round of funding.
This would put WeWork above other unicorns including Airbnb ($31B) and SpaceX (approx. $22B), making it the second-most valuable start-up in the United States behind Uber.
How Big Real Estate Moguls Avoid Taxes (And How You Can, Too) 👀
I was looking around Google for an old article on tax strategies and this five-year old video of myself happened to pop up.
I’m interviewing a tax expert about how real estate investors avoid paying taxes in perpetuity—AND how everyday citizens can do the same thing.
(Real estate—our TEMPLE I and TEMPLE II projects included—has a number of tax benefits savvy investors have capitalized on for years, including Opportunity Zone breaks and 10-year tax abatements.)
There’s the 1031 exchange, of course, which I’ve shared with you guys before.
Just to refresh your memory, the 1031 Exchange allows you to roll over gains from your last project into a new property TAX FREE—as long as said property is worth the same or more.
But there’s ANOTHER TAX LOOPHOLE that can take your portfolio to an entirely new level by splitting your capital gains into MULTIPLE properties.
So I thought I’d share it with you guys. 💎
You can check it out here.
Let me know what you think. 😎
PS: In our next update, I’m going to break down how real estate moguls get paid from their properties…tax free. 👀
PPS: If you want to learn how to implement generational wealth strategies like this one, you can join our NYCE wealth academy (TRIBE U) here.
How I run a $300M+ business from the beach…(and how you can TOO!)
Yes, you read that right.
If there’s anything the pandemic taught us, it’s that the paradigm of “office” and “workspace” has been shaken to its CORE.
Universities are teaching via Zoom, court dates are done virtually, FULLY REMOTE businesses are valued at $1B+, and legitimate Inc. 5000 startups are run from…wherever. 📲
This is my office for the day…
I am actually running our business from the beach, typing this from here.
It’s 4:28 pm CET, which means it’s 10:28 am EST and I am CRUSHING my to-do list.
(And the team will continue to crush it while I’m asleep. That’s the 🗝)
So how did we get here?
We launched NYCE and our mission to create 100,000 millionaires in March, 2020…just as the global COVID-19 lockdown happened. 😳
As a result, we shut down our main office and set EVERYTHING up to run remotely…
SMOOTHLY! And a system that allows us to outperform competition by 200%. (You can build this system, too. More on this in a second.)
Here’s what we were able to do since then:
- Gained 6M+ followers across all platforms 📈
- Add 1500+ new apartments to the portfolio 🤑
- Grow to $300M in real estate 🚀
- 105% investor returns 🎉
- 700K+ community members 🤝
And here’s the best part…
Having team members in all the main time zones gives us a 24-hour work cycle vs. 9-5/eight-hour on-the-clock performance.
This means we get 3x the productivity of a similar company. 🔥
Let me repeat that…3x PRODUCTIVITY vs. our competitors.
Meanwhile our project management software grants us 24-hour TEAM-WIDE connectivity that tracks all tasks and lets us know if productivity dips even a little bit.
There is ALWAYS someone senior awake. It could be Martin in Barcelona…Nat in New York…Vineet & Arif in New Delhi.
All the while giving YOU GUYS wealth hacks and daily content. 🔥
OK, so how can you do it?!
Well, the first step is to have an actual side hustle you’re launching. Not just an idea, a validated business.
MAJOR KEY: Do NOT spend money until you’ve made your FIRST DOLLAR! 🗝🗝🗝🗝
(You can catch a replay Business Launch masterclass here and see TRIBE member Nessa launched her business on the spot and got her first $45K client shortly after.)
One of the easiest ways to start is with Airbnb—you can start that in 10 minutes. Literally. (Here’s a guide if you need it.)
Once you have your business, you build a virtual infrastructure (you really just need two softwares, which are FREE), manage the team accordingly and run the business from there.
I’m gonna put together a step-by-step video breakdown this weekend inside the new TRIBE U on the FIVE key things you need to do this for YOURSELF. 💵 💎
From what software to use, how to build a team, how to keep.
In the meantime, drop a comment if you’re ready to build some wealth and any questions if you want more…
Let’s get to work. 🙌
PS: If you can’t be bothered with video and just wanna get to work, we’re hosting a TRIBE U workshop that will help you get this process started on the spot. It’s $479 $49. 🔥
EXCLUSIVE Q&A: This 26-Year Old Made $100K From Her IG In 90 Days. Here’s How She Did It 👀
Yes, it’s a pandemic. Yes, the economy is down. Yet, some entrepreneurs have found opportunity in the “new normal” (whatever that means).
In the public markets, FAANGs are booming: Amazon and Netflix are up dramatically, fueled by the need for home entertainment…and shopping.
One of them is Ariel Adams, a 26-year-old South Virginia-based realtor. In April, at the height of the lockdown, she had exactly 1000 followers on Instagram.
Fast forward to today, she’s attracted over 100K followers, has made $100K in online sales (again, during the pandemic), and is now showing others how to do the same.
We sat down with Ariel to discuss how she made $100K in 90 days, what she sold, how she got her first customer, and how you can, too.
Let’s get right to it. You work in real estate but were able to make $100,000 from your IG in three months. Let’s start with the product. What did you sell?
Yes, that’s correct. I was shocked myself! My sales came from my digital products, mainly my e-book From Instagram to Instant Money. My e-book dives into how you can optimize your Instagram profile to grow a following and sell your own product. I talk to the Instagram algorithm and how to beat it to ultimately monetize the platform. My other digital product is my course How to $ave Like the Wealthy. As a realtor, I would receive a lot of questions in regards to saving up for a down payment on a home. I decided to create a video outlining the best way to save money and accumulate wealth. Both of those products got me to six figures!
How did you secure your first orders? Who were your buyers?
My sales came from my following. I would collaborate with other brands with significant followings and post my product on their page. This drew in a lot of traffic to my products and also pushed me to 100k followers on Instagram. My buyers were typically people looking to earn passive income by selling a product or service through Instagram.
Was the objective of your advertising to gain followers and sell later? Or did that just happen as a byproduct of people buying your courses?
I never was trying to gain followers, I was always trying to sell. I think people would see my ad, go to my page, and then turn into a follower because I always provide valuable content on my page. My Instagram consists of personal finance infographics, real estate tips, and inspirational quotes. I think people naturally gravitated toward that and I was able to retain and gain followers.
How do you consistently market it? Is this a model anyone can use?
I try to set up placements on these bigger Instagram pages 2-3 times a week. I aim for business pages, women-owned business pages, and black business pages. My product resonates well with entrepreneurs looking to scale their business through IG. It is absolutely a model anyone can use. I recommend following the other steps I speak to in my e-book. This will ensure the most success.
Most aren’t aware that partnerships can literally boost your business. How did you come up with the idea of collaboration and what made you target those pages exactly?
Being savvy to Instagram, I was always aware of Influencer Marketing. A lot of people think that’s just girls posting brands to their million or so followers, but it includes placements with ANY brand that has a substantial following. I knew this was a key to success. Collaboration on bigger platforms would be the most helpful for my brand. I targeted people I thought would be interested in my product; women CEOs, entrepreneurs, e-commerce enthusiasts, etc. I made sure to stay within that niche.
How did you come up with this idea?
I was inspired by other online entrepreneurs. I saw them making thousands online and I thought to myself, “Hey, I can do that.” So I decided to do it. I asked myself, “What am I skilled in? What can I teach people?” From my previous life managing artists in the music industry, I became an expert in Instagram. Combining what I studied at the University of Miami (Business) and my knowledge of Instagram, that’s what sparked my e-book on the subject.
What’s the number one advice you’d give someone who’s looking to make money for themselves but isn’t sure where to start?
My advice would be to write down what it is you’re good at. Brainstorm what skills you have. Maybe you have a passion for food? Good, create and sell a cookbook. Maybe you’re good at writing? You can become a freelance resume writer. We all have skills we can capitalize on. And if you need to learn how to market yourself, then Google is your best friend. Read, read, read. Self-educate and you will be on your way, and of course download my e-book to learn how to sell through Instagram!
How to Invest In Real Estate Through Your IRA
How Big Real Estate Moguls Avoid Taxes (And How You Can, Too) 👀
How I run a $300M+ business from the beach…(and how you can TOO!)
How To Launch Your Business In 30 Days Or Less
EXCLUSIVE: This Entrepreneur Built A $7B Business Without Outside Funding. Here’s How He Did It
How Mark Cuban Invested $640k In A Company That Started…As A Prank
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