Billion Dollar Unicorns: WeWork Riding The Sharing Economy Wave

About 80% US consumers are expected to be using the sharing economy by 2017 and about 40% people are expected to be freelancers by 2020. These factors coupled with the surge in VC funding for sharing economy startups are driving up the value of shared-office company WeWork, which is among the top ten Billion Dollar Unicorns.

WeWork’s Offerings

Founded in 2010 by Adam Neumann and Miguel McKelvey in New York, WeWork provides its online network of members with shared office space, a sense of a community, and services. It generally rents space from landlords, turns it into a sleek, well-designed workspace with a communal atmosphere, and rents it out month-by-month at higher prices to companies, small businesses, startups, entrepreneurs, and freelancers.

Today the company has grown to 91 rent-your-office locations in seven countries and has about 50,000 members. It charges its members a basic membership fee of $45 per month for access to events, benefits, and its digital app that allows access to its member network. For $220 per month, a user can access a Hot Desk or any available desk in the common area of a Hot Desk Location. For $350 per month, it offers a dedicated desk. Services offered by WeWork include super-fast Internet, business class printers, private booths for phone calls, conference rooms, mail and package handling, online community managers, cleaning service, spacious and unique common areas, and other freebies like free beer, coffee, tea, and fruit water.

For $450 per month, WeWork offers fully furnished office spaces that can accommodate teams of up to 100 people. Its Private Office service is used by large companies like American Express, Business Insider, and Merck.

The WeWork model is typically used by people looking at a temporary workspace or small businesses that do not want to sign expensive 5- to 10-year leases. It is also popular with freelancers who like the work culture and the sense of community that it offers.

WeWork has now expanded its shared work space offering to shared living spaces. In April this year, it launched its WeLive apartments where you can forego signing a long-term lease in favor of serviced, furnished, shared living spaces. For $1,750 a month, you get Murphy beds that come out of the wall of a shared living space while the price for a private unit can go up to $2,550. It also offers an app that connects the WeLive dwellers to request services or plan activities with other WeLive guests. WeWork estimates WeLive will provide the company with 21% of its revenue by 2018.