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Product Management Root Cause Analysis Question: Investigating WeWork's business model and rapid expansion issues

What are some reasons why WeWork failed?

Financial Analysis Strategic Thinking Problem-Solving Real Estate Technology Coworking
Root Cause Analysis Real Estate Tech Business Model Startup Failure Corporate Governance

Introduction

WeWork's failure represents a significant case study in the tech and real estate industries. This analysis will systematically examine the root causes behind WeWork's downfall, considering both internal and external factors that contributed to its collapse.

  • WeWork's business model and value proposition
  • Key factors leading to its failure
  • Lessons for the broader tech and real estate sectors

Framework overview

This analysis follows a structured approach covering issue identification, hypothesis generation, validation, and solution development, focusing on WeWork's specific challenges.

Step 1

Clarifying Questions (3 minutes)

  • Looking at WeWork's rapid expansion, I'm thinking there might have been issues with scalability. Could you provide more details on WeWork's growth rate and geographic spread?

Why it matters: Understanding the pace of expansion helps assess if it outpaced operational capabilities. Expected answer: Rapid expansion across multiple countries within a few years. Impact on approach: If confirmed, would focus on operational challenges of rapid scaling.

  • Considering WeWork's business model, I'm curious about their occupancy rates. Do we have data on average occupancy across WeWork locations over time?

Why it matters: Occupancy rates directly impact revenue and profitability. Expected answer: Fluctuating occupancy rates, potentially declining over time. Impact on approach: Low occupancy would suggest issues with demand or pricing strategy.

  • Given the tech company valuation, I'm wondering about WeWork's technology investments. Can you share information on their tech stack and any proprietary systems?

Why it matters: Helps determine if WeWork's tech justified its valuation as a tech company. Expected answer: Limited proprietary technology beyond basic management systems. Impact on approach: If confirmed, would focus on the mismatch between valuation and actual tech capabilities.

  • Thinking about corporate governance, I'm interested in the leadership structure. Could you provide details on the founder's role and the board's composition?

Why it matters: Leadership and governance issues often contribute to company failures. Expected answer: Strong founder control with limited board oversight. Impact on approach: If confirmed, would explore how governance issues affected decision-making.

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