![]() Then WeWork arrived, and I had to drop it to four hundred and fifty, and then three hundred and fifty. Jerome Chang, the owner of Blankspaces, in Los Angeles, told me, “My average rate was five hundred and fifty dollars per desk per month, and I was just scraping by. Sometimes WeWork promised tenants a moving bonus if they terminated an existing lease in other instances, the company obtained client directories from competitors’ Web sites and offered everyone on the lists three months of free rent. Neuner began hearing similar stories from other co-working entrepreneurs: WeWork came to town, opened near an existing co-working office, and undercut the competitor on price. Invariably, WeWork charged tenants slightly less. As NextSpace grew, eventually opening a fifth California location, WeWork opened competing offices alongside each one of its facilities, never more than a few blocks away. All the V.C.s couldn’t wait to drink the Kool-Aid.”Ī real-estate agent informed Neuner that WeWork had opened a location in San Francisco, just a few blocks from NextSpace, and was charging cheaper rates. “What do I say to compete with that? Do I tell V.C.s, ‘You know, WeWork must be lying, so you should accept my smaller returns instead’? No one wanted to hear that. “They were saying they would become the biggest office-space provider in the world,” Neuner recalled. Neumann’s promises to V.C.s were so wildly optimistic, bordering on ridiculous, that Neuner was convinced WeWork had to be a scam. When Jeremy Neuner began having meetings with venture capitalists, he said, “their first question was ‘How do you compete with WeWork? Why should we invest with you instead of them?’ ” WeWork was reportedly losing millions of dollars each month, but it was expanding to new locations at a feverish pace. “Together, we can build a community that can change the world.” “Our company is about we and about collaboration,” Neumann proclaimed. Although WeWork was just two years old, and Neumann was only thirty-two, the company already controlled more than three hundred thousand square feet of office space he declared that WeWork would soon have ten thousand clients. “We’re planning to be all over the country very, very soon,” he said. Neumann told the audience that he ran a company in New York, named WeWork, that was “the world’s first physical social network.” His self-assuredness was mesmerizing. One of the conference’s other speakers was Adam Neumann, a six-foot-five Israeli with flowing black hair, who wore designer jeans and a dark blazer-fancy dress amid the crowd’s T-shirts. In 2012, Neuner went to a co-working-industry conference, in Austin, Texas, to appear on a panel and try to meet investors. They’re the fairy godmothers of success.” funding is the stamp of approval.” He noted, “In every startup story, the V.C.s supercharge everything. ![]() They had raised some money from family and friends, but, as Neuner put it to me, “V.C. ![]() Neuner and Coonerty also started looking for venture capital. Soon, NextSpace opened locations in San Francisco, Los Angeles, and San Jose. NextSpace provided a refuge for local freelancers desperate for office camaraderie, and within six months the company was turning a small profit. ![]() “We really believed that this would be a totally new way of working,” he told me. Neuner, who had attended Harvard’s Kennedy School after serving in the Navy, was looking to be part of a movement. Neuner and Coonerty named their company NextSpace Coworking. They leased a cavernous building a few steps from a surf shop and a sex-toy boutique, and equipped it with desks, power strips, fast Wi-Fi, and a deluxe coffee-maker. In 2008, Jeremy Neuner and Ryan Coonerty, two city-hall employees in Santa Cruz, California, decided to open a co-working space. ![]()
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