Analyze the Collapse of WeWork's Flexible-Workspace Business: Three Root Causes

WeWork leased office space, fitted it out as shared workspace and rented desks and private offices to members on flexible terms. Explain why the company failed. Give at least three distinct reasons, and show how the reasons relate to one another. ```hint Sort the causes before listing them Group candidate causes into buckets such as the economics of a single location, how the company was financed and valued, how it was governed and what happened in its market. A reason that would have hurt even if every other bucket had gone right belongs near the top of your list. ``` ### Clarifying Questions - What should count as "failed": the IPO attempt that was pulled in 2019, the bankruptcy filing in 2023, or never earning the valuation investors once gave it? - Should the answer stay on business strategy, or also cover leadership and board governance? - How much financial detail is expected: the economics of a single building, or company-level strategy only? ### What a Strong Answer Covers - At least three reasons that are truly distinct, not one cause restated as several symptoms - A clear account of the core economics: what WeWork committed to pay for space and for how long, against what members paid and for how long - How plentiful funding and a technology-company valuation shaped the pace and style of growth - The role of governance and of outside shocks, kept apart from the structural causes - A ranking of the reasons that shows which one was most fundamental and how the others amplified it, backed by widely known public events ### Follow-up Questions - Airbnb also sells access to space it does not own. Which of WeWork's problems does a marketplace model avoid, and which could still affect it? - Suppose you had taken over WeWork in late 2019. What would you have changed first to make the business viable? - Was the flexible-workspace idea itself flawed, or could a different contract structure with landlords have made it work?