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WeWork Business Model

WeWork Business Model

Curious to know how WeWork revolutionized the working industry? Learn their unique business model’s success story!

Digital era has brought innovations, and WeWork proves that an unconventional approach can be amazingly successful.

Introduction to WeWork

WeWork is a U.S.-based company that offers shared workspaces for startups, businesses, and entrepreneurs around the world. It was founded in 2010 as part of the OMG Real Estate Group. Now, it has over 647 locations globally, and is worth more than $20 billion.

WeWork’s model is based on providing flexible workspaces. These include internet, furniture, refreshments, and other services like printing, online accounting tools, receptionist services, and administrative support. Members also get access to members-only events. Other add-on services are available, such as dedicated desks or offices, with basic furniture and electricity included.

WeWork also partners with software vendors like Slack and Microsoft Office 365. They offer special discounts exclusively for members, accessible through the app marketplace. This model offers cost savings for businesses that need multiple offices, or those who need a presence quickly in new areas.

Overview of the WeWork Business Model

WeWork was founded in 2010. They provide flexible, on-demand office spaces for businesses of all sizes. Their goal is to give people better results when they collaborate with others.

They support entrepreneurs, startups, freelancers, small businesses, and enterprise companies. Their workspace and community amenities come with flexible rental agreements. Different tiers are available to meet different budgets. Customers can choose a private office or access amenities such as conference rooms, coffee bars, and yoga studios (in some locations).

Membership plans include WeWork services like building maintenance, cleaning staff, personalized support, reliable internet, and member events programs. Customers can also add creative services, like 3D printing (in select locations). WeWork has also partnered with many companies to give members discounts on shared ride transportation and online marketing tools & platforms that help small businesses like software startups.

All these services come together to create WeWork’s business model – a focus on providing vibrant workspaces that benefit customers on a personal and professional level.

WeWork’s Revenue Streams

WeWork makes money from two main operations: selling office space, desks, and services to customers – entrepreneurs, startups, freelancers, and large companies; and providing services to tenants like internet, food & beverage, and transportation. Also, they earn income from selling assets to tenants, like conference rooms and equipment, and optional services like event tickets, co-working subsidies, and consulting.

Most customers come through WeWork’s website. They also use digital marketing, and partner with coworking companies like WixShops. Plus, WeWork offers free WiFi so people can check out the work environment before signing up.

Orders are handled by third party vendors, or customer service reps in large locations. Members can get discounts for buying often, or for related third party products.

WeWork’s Cost Structures

WeWork’s cost structure is split into two: fixed and variable. Fixed costs are related to long-term investments such as office space and tech. Plus, ongoing operational costs like rent, insurance, marketing and staff.

Variable costs come from customers using WeWork. Examples are subscriptions, furniture and equipment hire.

Fixed Costs: Most of WeWork’s fixed costs are paid at the start. These include fees for getting new space or tech customers use. Plus, payments customers make when they join WeWork (e.g., membership fee).

Variable Costs: Variable costs are mainly customer-related. This includes monthly subscription fees, depending on usage and type of service. Plus, extra costs related to customer use like repairs or replacing items in shared spaces.

WeWork’s Expansion Strategies

WeWork has gone on an aggressive expansion strategy, allowing them to spread out globally. This approach has made them the leading provider of shared office space and other services.

They have made use of growth opportunities in popular markets and emerging markets such as India and Brazil. To get more space, they have invested and also acquired partnerships with local companies.

For example, in 2019, WeWork co-owned 30 different locations with Kroger Co., the biggest grocery chain in America. Both Kroger’s employees and the public had access to them. This is one of the ways WeWork has expanded its traditional coworking model.

They are also using an international expansion strategy. They are going into smaller cities, which don’t have many large companies who can afford their own office spaces. This helps them reach more customers and extend beyond cities like New York, London or Beijing.

Lastly, WeWork is utilizing digital technologies such as encryption and AI to create new products and services for their consumers. These AI-enabled products let members manage conference rooms remotely or reserve shared workstations without leaving their workspaces. By doing this, WeWork is appealing to modern businesses who need convenient access to sophisticated workspaces at an affordable rate. Plus, it increases customer loyalty through improved satisfaction levels.

WeWork’s Impact on the Real Estate Market

WeWork is an American firm offering shared workspaces, technology, and services to entrepreneurs and businesses. Founded in 2010, it has grown to 500+ locations across 80 cities globally. It offers members flexible workspace, amenities, programs and events at a fraction of traditional real estate leases.

WeWork’s impact on Real Estate has been substantial. There’s been a massive move away from traditional office leases to its flexible month-to-month model. In 2017, Microsoft, IBM and Salesforce took up 5% of IWG Group Flexible Workspace Solutions’ flex space centers, which includes WeWork.

WeWork’s growth in the real estate market has prompted landlords and developers to change their strategies to compete. This includes providing short-term tenants, as well as modern amenities, coworking areas and tech infrastructure. WeWork’s presence has also brought a financial boom for traditional office building owners, with tenants demanding longer-term, higher-priced leases.

WeWork’s Challenges

WeWork’s rapid growth has caused issues. It needs to make itself stand out from other coworking spaces. To do this, it’s focusing on building a strong community and offering perks. But, its immense size and long-term leases bring financial risks.

Reports say WeWork has sky-high debt and could slow its growth. Reports from 2018 suggest its leases account for 0.6 percent of all office rental contracts. This makes it vulnerable to changes in demand and seasonal fluctuations. It creates potential risk for investors in the long term.

For WeWork, the challenge is finding ways to remain unique and manage its big financial liabilities.


WeWork has crafted a revolutionary business model that meets the demand for modern office space. This offers advantages for both customers and WeWork. Companies can access popular sites rapidly and don’t need to invest in a permanent building, while WeWork generates more income faster.

WeWork is easing companies’ transition into the digital age, and its reputation is increasing. Evidently, WeWork’s modern approach is influencing today’s work environment greatly.

Frequently Asked Questions

Q1: What is WeWork’s business model?

A1: WeWork is a leading global provider of shared workspaces, offering services such as private office space, shared workspaces, meeting rooms, and more. WeWork’s business model is based on providing an all-in-one platform for businesses to lease office space, and it’s also focused on creating a collaborative community of members.

Q2: How does WeWork make money?

A2: WeWork makes money by charging businesses a monthly fee for each workspace they lease. This fee includes access to a range of amenities, including meeting rooms, coffee, and other perks. WeWork also makes money through corporate partnerships and additional services, such as consulting and technology services.

Q3: What are the benefits of using WeWork instead of renting a traditional office?

A3: The main benefits of using WeWork instead of renting a traditional office are flexibility, cost savings, and access to a collaborative community. WeWork offers flexible terms, so businesses can rent space for as long or as short a period of time as they need. WeWork also offers significant cost savings compared to traditional office rental, as businesses only pay for the space they actually use. Additionally, WeWork offers access to a supportive community of like-minded professionals.