WeWork

Spacious turned idle restaurants into $29/day coworking, then sold to WeWork

Sam recounts founder Preston Pesek's company Spacious, which leased restaurants during their dead daytime hours and resold the space as hot-desk coworking for about $29 a day before WeWork acquired it.

“But Spacious, what it did originally was they would find restaurants that were only open at night or had most of their business from 6 to, you know, dinnertime. And they would do a coworking thing where they, you would pay a little bit of money, $29, I believe. And you would get access to, to, to use this restaurant as a coworking, uh, place.”

Adam Neumann was 'a megaphone of my best self,' says a WeWork insider

Sam shares research from people who worked with WeWork's Adam Neumann. One woman described talking to him as looking into a mirror that was a megaphone of her best self, making her believe she was the best and could do anything.

“Adam, Adam was unique on a one-to-one convo. It was like looking into it when I talked to him. It was like looking into a mirror and seeing myself, but that mirror was a megaphone of my best self. He made me believe that I was the best and I could do anything.”

Sam wanted WeWork or LinkedIn to buy The Hustle, then HubSpot cold-emailed

Sam recounts rejecting private-equity and legacy-media suitors because they felt like a culture mismatch, and how he'd long fantasized about a tech company (WeWork, LinkedIn, Salesforce) buying The Hustle. HubSpot reached out unsolicited last fall and the plan clicked.

“And so in my head, I always thought, you know who should buy us? WeWork. I thought WeWork should buy us, like when they— before we found out that they weren't that great. And then I thought, um, LinkedIn should buy us. And then I started thinking, oh, what about like a Salesforce or like companies like this? And then last fall, HubSpot reached out to me and I was like, oh my God, this is finally happening.”

Entrepreneurship as a vehicle for freedom, then a separate LLC for moonshots

Begelman frames entrepreneurship as buying freedom first: get one business to profitability and self-sufficiency, hire management so you're not working it full-time, and only then spin up a separate LLC for the crazy moonshot — go buy a mountain or launch a WeWork.

“And then if you still want to do your crazy fun project or moonshot, set up a separate LLC, hire better management for your existing company so that you're not working full-time on your company that makes you your living. And then, you know, go buy a mountain, go launch WeWork, you know, whatever that is.”

Steal thisGet one business to profitability and hire it out, then ring-fence your moonshot in a separate LLC so it can't sink your livelihood.

Real estate value creation: change of use beats the comp

Shaan's core real estate playbook from 'Confessions of a Real Estate Entrepreneur': you can outbid everyone when you see a higher-value use, e.g. subdividing a warehouse into storage units, the same move WeWork made renting office floors by the desk.

“the whole game with real estate is you sort of need to see value where others don't. So other people look at this 25,000 square foot store warehouse and they say, okay, warehouses are valued at X dollars per square foot, so this building is worth Y. And what you need to say is Hey, if I subdivided this warehouse into tiny storage units and I add it all up, now it's worth, you know, X plus Y dollars per square foot.”

Steal thisBuy assets where you can change the use to a higher per-unit value; the spread lets you outbid buyers who only see the current comp.

Islands' social metrics: 47 app opens per week, 50% retention

Greg's college group-chat app Islands (sold to WeWork in 2019) had standout engagement: daily users sent 30-50 messages a day, weekly users opened it 47 times a week, the average user invited 2.1 people, and 45-day retention was ~50%.

“Like the daily active users would send between 30 and 50 messages every single day. Weekly active users would open the app 47 times per week. The average user would invite 2.1 people. It was a beautiful product. People loved it. So it had like engagement, it had retention, and retention was 50%, 45 days.”

Sam reverses on remote work: from hating it to planning a WeWork

With a $14K/month San Francisco lease ending in May, Sam goes from anti-remote to embracing it, realizing the 'rent an office part-time' service everyone wants already exists (WeWork) despite the hate WeWork took months earlier.

“Our lease in the office, our lease in San Francisco is like $14K a month. And I think it ends in May. And I don't know. I mean, everyone in their head's like, yeah, it's like, there should be like a service where you can like rent it and like only go some of the time. And I'm like, you mean WeWork? Like, yeah, that's a thing.”

Membership perk cards: FoundersCard ~$10M, Select ~$2M, near 100% profit

Sam estimates FoundersCard does about $10 million in revenue and the Select card about $2 million, both essentially 100% profit since the membership-perk model has almost no costs. He's surprised they're not bigger; the WeWork founder told him members barely used such perks.

“I think if I guess that FoundersCard is $10 million in revenue, Select is $2 million in sales. But other than people, 100% profit because you don't have any costs. Right. And I talked to the founder of WeWork about this when he spoke at HustleCon, and he told me that they had that as well for their members and no one used the perks.”