By Karan Pujji
If you keep up with the latest startup trends, or if you’ve ever walked through the business districts of most major cities, then you’ve probably encountered WeWork. It’s the epitome of the modern, millennial-driven enterprise. It was founded by young, casually-dressed entrepreneurs. Its stated mission is to “build a community;” it emphasizes social consciousness and it even offers members beer and yoga classes.
Like so many 21st century startups, WeWork began as a revolutionary enterprise hoping to change the business world forever. And the company has certainly made its mark, successfully transforming workspaces to fill the needs of entrepreneurs and businesses.
However, on the heels of the company launching its recent rebranding effort, changing its name from WeWork to WE, the launch of this branding campaign has failed to alleviate many of the recent criticisms surrounding the company.
The largest, and perhaps the least surprising recent criticism for WeWork, involves money. Specifically, where they get it and what they do with it.
For years, WeWork has been stellar at raising money. But like pouring water through a spaghetti strainer, what comes in goes right back out. According to Reuters, in WeWork’s financial release last fall, the company’s “total revenue rose to $421.6 million from $198.3 million in the year-ago quarter,” but it goes on to say that “net losses jumped to $723 million over the first half of 2018.” Overall, the company barely manages to break even consistently.
What keeps this financially-precarious company afloat is a steady stream of investment from venture capitalists and investment funds, the most notable of which is Japanese-owned Softbank. Softbank has invested tens of billions of dollars in WeWork over the years, with another $2 billion investment at the beginning of this year.
These investments have led to WeWork being on the receiving end of many negative press stories, with critics citing that one of Softbank’s largest benefactors is none other than Saudi Arabia.
Through its government-owned Private Investment Fund, the Kingdom has been bankrolling Softbank in order to gain influence in the startup sector. This is the same Saudi Arabia that allegedly assassinated journalist Jamal Khashoggi. The same Saudi Arabia that persecutes women, members of the LGBTQ community, and far too many other innocent people.
In addition to these headlines surrounding the company, WeWorks leadership team has been on the negative end of recent press headlines as well, with the company’s CEO, Adam Neumann, allegedly buying properties, only to turn them around and lease them to his co-working business, leaving many to cite potential conflicts of interest.
The potential for reputational damage from all this is not lost on WeWork. But their solution, rather than to solve their internal problems and generate a positive narrative regarding the company’s accomplishments and success, is to take the typical big-business approach: launch a shiny new rebrand campaign.
Recently, WeWork announced that the company was going to be known as “the we company” and that they would be expanding into new areas, like housing and education. They added a trendy new logo and updated all their PR materials, and for the casual observer, it all seems nice.
But even this isn’t without its problems.
For starters, there’s already an organization known as “we” – the WE Movement, a Canadian charitable organization that’s been around for over 20 years. WE Movement isn’t some basement operation – they’re a large global nonprofit. Furthermore, the charity is currently operating in many of the same sectors that WeWork is moving into. With the recent lawsuits surrounding WeWork with respect to trademark-related issues, this name change has only contributed to generating further poor headlines for the company.
As the company works to expand and evolve, there is great optimism among many people in the business community for WeWork. However, like many companies, WeWork’s rebranding effort isn’t a solution – it’s a new coat of paint that will only chip away unless the company, like many in its position, addresses the problems at hand.
Karan Pujji is a former candidate for the Missouri General Assembly, and a businessman from St. Louis.