Lessons from WeWork’s puppy culture occupied a dedicated office at wework Sydney back in 2017. It was a real eye opener and was probably the main reason I had to leave the conventional startup culture/paradigm and restrict who I give coaching to.

Prior to being at wework I have always had our own office space for businesses I’ve been involved with. But hey everyone says co-working is great, so let’s try it I thought. Let me shed some light on the experience.

I started early, normally between 6:30am to 7:30am in the office. I’d see most other startup and gig economy types roll in to work between 9 and 10am. Often on scooters and sometimes with a tiny dog in tow. Some mornings it was straight to the free breakfast queue for a chat and warmup before they start their day.

At this point warning bells are ringing already.

For ages this flow got to me. I was conflicted. Something wasn’t right, and there was more.

The wework staff could be seen taking first serves before opening up the weekly breakfast bar to the community.  It would take 25-40 minutes for this cycle to happen. It felt like a lot of lost productivity across 50-100 ventures. Some would argue with me that it is great for morale. I get that, but I also remember a time when business profitability and productivity caused survivability and job security. That’s good for morale also.

I did queue a couple of times at that breakfast queue and absolutely hated myself for doing it. I did it to try and relate to our staff but I hated myself for it every time. I’ve never shared this with them so they will read it here first.

That all said the wework office had a nice aesthetic. It was calm, warm, cosy and felt comfortable. Too comfortable, something wasn’t right. I kept seeing “other peoples money”, investor dollars, paying for what felt like a very casual but high end existence. It felt too good, it was like a playpen for grownups.

In hindsight I think it bread a different type of work ethic. What I’m calling a “Puppy Culture” in testimony to the numerous dogs trotting around.

It’s not weworks fault explicitly that this culture exists, people own the way they operate but they do I think attract a type of startup suited to the playpen environment.

That said, there are some great hard working startups, aggressively focused and kicking goals in there. I was just bemused at how even at 8:00am the place was often void of life. I took videos and photos, I didn’t think people would believe me in the years ahead after it all collapses. I came from work cultures like Bankers Trust and Deutsche Bank where the office was half full by 6am and pumping by 7am. I couldn’t get my head around the stark difference.

I might be old fashioned but longer days get more done and that simply compounds up over time. The maths works. Yes the puppies will say it’s how you work, not the hours you work, it’s the culture that creates performance. In my experience these are people suffering cognitive dissonance. Yes culture is important, hard working, goal driven, accountable cultures like spoacex, amazon and salesforce. That shit works.

The puppies are busy convincing themselves the world is different now and we can casually, and with low pressure, survive and thrive. Some sort of work life balance that also comes conveniently with success.

Nope. Never seen that before. Doesn’t exist.

Constantly I was having the conversation with myself that this environment isn’t going to manufacture success for the majority of these people. Holistically, if people are starting work late and then finishing early to attend a community ‘gatho’ or vendor ‘promo’ event then there is repeat inefficiency. I’m not naive, some people work at night but I also know these people are a clear minority.

I know these communities are designed to make you feel a part of something bigger than your tiny venture, fill that gap. I can see the merits. Maybe it shifts you up the learning curve sitting in on a vendor sale pitch disguised as training. I’m not sure but I’m certainly skeptical. My alternative is 5 minutes on Youtube or maybe a podcast on the trip home. Learn smarter and fast.

The cost is that instead of just getting stuff done to create your success, to manufacture your luck, you were being distracted by stuff not explicitly part of tasks driving your goals.

I decided it was time to reduce our staffs exposure. I’d decided the environment and culture had a performance toxicity.

The last straw for me was seeing a wework sales staffer drinking coffee through a straw. Perplexed and concerned that I was missing out on something (my inner voice said don’t ask, you won’t like the answer), I naively asked why? “It stops my teeth going brown”, she said.

So, I told my staff that the wework business model won’t survive because it is dependent on a lot of tenants who won’t survive when VC/IPO money drys up in a couple of years. I was blunt and judgemental off the situation. Frankly, that’s needed in a laissez-faire situation like we were in. I said startups that survive ‘mostly’ wont be at places like this. They will literally be in garages, at their apartments, at universities where rent is free or incubators paid for by someone else – usually tech giants.

I mentioned this is a lease receivables nightmare in waiting for WeWork and that the culture here is too casual and we pay a premium for that to influence us in the wrong direction.

What wework founders aren’t understanding is the dynamics of “Black Swan” events. They need to read Nassim Nicholas Taleb. Essentially they are going up the stairs with higher rent premiums but will fall down the elevator shaft when the downturn arrives. WeWork are taking credit risk on the least survivable slice of the tenancy market for a premium – startups and temporary gig economy staff.

The gotcha in the model is that if this premium is still causing losses in the good times right now then how will it save them in a downturn. I dont think it stacks up. All their puppies are about to be eaten by the lions in the looming recession or starve slowly in the coming investor drought. It’s no surprise WeWork is desperate for an IPO.

The co-working space as an industry is thick with playpens to pick from and when the economy slows it’s easy to cut the rent and work from home. Their tenants are mostly digital businesses. There’s many factors weighing against WeWork, including some dubious founder activity at the top of their organisation but I will let others more thoroughly researched elaborate on this topic.

In this coming downturn I think they will fail.

p.s. I do have empathy for some of the wework staff there. There was a couple of very nice people on the front desk, always very helpful and polite.

Photo by Eloise Ambursley

Categories: Startups

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