How much should WeWork invest in digital collaboration tools versus physical workspace improvements?

Introduction

The trade-off between investing in digital collaboration tools versus physical workspace improvements is a critical decision for WeWork's future strategy. This scenario involves balancing the evolving needs of modern work environments with the core value proposition of WeWork's physical spaces. I'll analyze this trade-off by examining the business context, user impact, technical feasibility, and resource allocation to provide a comprehensive recommendation.

Step 1

Clarifying Questions (3 minutes)

• Based on recent market trends, I'm thinking WeWork might be experiencing pressure to adapt to remote work preferences. Could you share how our current occupancy rates compare to pre-pandemic levels?

Why it matters: Helps gauge the urgency of digital transformation Expected answer: Occupancy rates are lower, but slowly recovering Impact on approach: Lower occupancy would prioritize digital investment

• Considering our revenue model, I assume we still primarily rely on physical space rentals. What percentage of our revenue currently comes from digital services or add-ons?

Why it matters: Indicates potential for digital revenue growth Expected answer: Less than 10% from digital services Impact on approach: Low digital revenue would suggest opportunity for expansion

• Looking at user behavior, I'm curious about the adoption of our existing digital tools. What's the current usage rate of any digital collaboration features we offer?

Why it matters: Indicates user appetite for digital solutions Expected answer: Moderate usage, with room for improvement Impact on approach: Low usage might require more user education or feature improvements

• Regarding technical feasibility, do we have the in-house capability to develop advanced digital collaboration tools, or would we need to partner or acquire?

Why it matters: Affects timeline and resource allocation for digital development Expected answer: Limited in-house capability, likely need partnerships Impact on approach: Partnerships could accelerate digital offering but at higher cost

• Considering our current financial position, what's our available budget for new investments this year, and how is it typically split between physical and digital improvements?

Why it matters: Determines scope and scale of potential investments Expected answer: Moderate budget, historically favoring physical improvements Impact on approach: Limited budget might require phased approach or clear prioritization