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0 pointspembrook6y ago0 comments

WeWork and its investors did not try to value it like a high margin software company. WeWork was valued like a standard, overly optimistic growth company. This is another narrative invented by tech journalists who don’t understand how valuation works.

Regus is a mature company with no plans for massive growth. Of course their Value (p/e of under 20 I believe) is going to reflect that.

Meanwhile, look at any non-tech company in growth stage. Take Shake Shack for example. Their P/E ratio is 170. Chipotle had a p/e of 400 a few years ago.

Nobody thinks Shake Shack and Chipotle are tech companies. These valuations reflect the prospects of growth—-not misplaced beliefs about restaurants being tech companies.

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throwaway35636y ago

The latest Wework TV ads sell it as an “operating system” for workspaces, among much other showy language filled with business-transforming technology buzzwords. It definitely sounds like they’re marketing as some unique proprietary tech, and I wouldn’t be surprised at all if the aim was to justify their absurd valuation figures.

pembrookOP6y ago

Except, every company in 2019 is marketing themselves as if they have some unique proprietary tech. I just saw an ad for Holiday inn that did this.

None of these things mean smart investors (or even customers) are being hoodwinked by this marketing nonsense however.

jjeaff6y ago

Adam Nuemann was certainly trying to push the "tech company" narrative. I heard a few old interviews with him and he was always sure to mention their "technology platform" and how they spent a very long time developing it.

So he must have thought someone was swallowing that.

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