wework

WeWork

Photo by Charles Koh on Unsplash

Hulu's new documentary on the rise and fall of WeWork focuses on its charismatic, egotistical founder and CEO Adam Neumann, who was ultimately the company's downfall.

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Over a century ago, New York City's iconic Lord & Taylor building opened its doors. It has always been a monument to traditional, old-school retail. The building on Fifth Avenue in Manhattan was even declared a city landmark a decade ago. But on Tuesday, Hudson's Bay — the company that owns the department store chain — announced that it would be selling the building to seven-year-old start up WeWork. This sale is indicative of changes in an evolving economy.

WeWork's office-sharing model is helping to re-invent the concept of work space. Small and mid-size businesses can rent office space at a WeWork location. The company also aims to humanize work. They believe CEOs can learn from each other and that offices should have all the comforts of home. Hudson Bay's plan to sell the space to WeWork for $850 million reveals the economic value of co-working space over traditional brick-and-mortar retail space.

There are plenty of stories blaming millennials for the downfall of department stores and many other things. But millennials aren't making economic choices based on the intention of sinking long-established businesses. The failures of traditional department stores only demonstrates their lack of flexibility. These aging industries have not adjusted to the new culture millennials are bringing to the economy.

In the short term, these changes can seem negative and harmful. The effects can be widespread, resulting in thousands of lost jobs. But in the long term, these changes are natural and expected. There were major shifts during the Industrial Revolution or during the Dotcom boom of the '90s. And now, we are in the midst of a digital revolution of sorts. As a result, the culture is changing once again.

Millennials have different values from the generations that came before them. They have grown up with computers and mobile technology so they are used to convenience and ease of use. Traditional department stores are built to encourage as much purchasing as possible. Unlike generations before them, millennials often value experiences over items. When they need something, it makes more sense to buy it quickly online rather than sit through the sales pitch of a clerk. However, millennials are spending more than previous generations on activities like dining out and movies.

Another way to win over millennials is with lowering friction at check out. Starbucks is winning over customers with their customer loyalty app that makes paying as easy as waving a phone. The more stores support Apple and Samsung pay, the more millennials will want to shop there.

Soon, millennials will have more buying power than any other generation group. If businesses want to survive, they need to adjust to their desires. Millennials want customer experiences tailored to their preferences. Personalized experiences make them feel valued and wanted. They frown on general catch-all phrases and spiel. Showing attention in-store or through social media will create loyalty in millennials. Businesses should leverage their customer data to achieve the perfect personalized experience for these up and coming customers.

Rebekah Campbell is the chief executive of Posse, a location-based shopping recommendation app founded in Sydney in March 2013. In July, 2014, she wrote a blog post for the New York Times about her experience moving to New York to dive into start-up culture and develop her business. After getting sick of working on top of her partners in a tiny one-bedroom apartment, she decided to join a coworking space in New York's famed Flatiron district. Inspired by the pace and people of the city, she sought out a space that would introduce her to other entrepreneurs, and give her a low-rent alternative to a long-term commitment office.

According to the Harvard Business Journal, "Coworking spaces" are "membership-based workspaces where diverse groups of freelancers, remote workers, and other independent professionals work together in a shared, communal setting." Through ongoing research that involves interviewing coworking space founders and community managers, surveying coworking space employees and performing a regression analysis, researchers concluded the factors behind why people tend to thrive in coworking spaces.

First of all, people who work in these spaces put a lot of meaning into their work. Unlike corporate workers, they are entrenched directly into their passion. In turn, they are the ones to blame if things go wrong. Next, the environment is collaborative and diverse, meaning little direct competition, and plenty of opportunity to give each other advice and motivation. And even though it may look for a free-for-all, people that work in coworking spaces actually report feelings of more structure and community. Seeing all of those people around you hard at work will push you to work that much harder.

Sounds pretty idealistic, right? You have access to WiFi, a kitchen, meeting rooms, and can collaborate as you please. But on Campbell's search for the perfect coworking space, it was a bit of a Goldilocks situation. The first one was too "strict and stuffy" and the next one was "the work version of hippie commune houses." She found that a lot of these spaces had months-long waitlists. Though after a long search, she found what she deemed the best option for her team, and moved in.

At first, it was ideal. But shortly after, she started to notice some very significant problems. First of all, there was no guarantee that they could get the same desks everyday. There were a ton of rules. The noise-level was like a jungle gym, and Campbell often found people pitching her ridiculous ideas just for the sake of mock-collaboration. At the end of the day, she felt homeless.

While Campbell found that the coworking space didn't work for her, Business Insider suggests that offices can take aspects of coworking spaces to make them more collaborative and productive. By including networking and social events, and rearranging some desks, offices can replicate this commune-like atmosphere without going overboard.

So the coworking space is highly debatable, but if you're not one for the office, you can always try a coffee shop or your local library!

If you're interested in finding out more about coworking spaces, click here!