Shared offices with a mid-century modern decor are popping up in the world's largest cities. They are the many tentacles of coworking giant WeWork, which is now worth a staggering $20 billion. The company is in 20 countries and has over 200,000 members, and it plans to double all those numbers by 2020. But, 10 years ago, success seemed improbable.
Neither of the two founders, Adam Neumann and Miguel McKelvey, had any real estate experience. When they found themselves sitting in a drab Brooklyn office begging the landlord to rent them his building, and were told no, all signs pointed to their venture's not working out.
Here's their story and the eight lessons marketers can learn from it, including how to tell a story that's worth $18 billion.
1. Don't be afraid to pivot
Before there was WeWork, there was Green Desk. Adam was running a baby-clothing startup. Miguel worked as an architect. They met in an office space. After commiserating on the lack of resources for entrepreneurs, they pitched the building owner the idea of letting them lease the building to create a coworking space. At first, the owner declined. But they persisted, and a startup was born. Sort of.
Green Desk focused on sustainability. It featured recycled furniture and fair-trade coffee. And it opened its doors the same month as the 2008 financial collapse, which turned out to be good for business: People who were laid off flocked there, and the business was quickly profitable.
Adam recalled, "Within a few weeks, we realized it was more than a shared office space—it was a community." However, all of the branding, leases, contracts, and partnerships didn't reflect that. Adam and Miguel realized they were in the wrong business. So, in 2010, they sold their stake and started over.
Adam and Miguel's pivot provides a fascinating case study: Although WeWork has gone global, Green Desk has never expanded beyond Brooklyn.
Sometimes, a blank slate and a complete rebrand can be the most efficient path forward.
2. The strongest ideas come from customer research
There's another important lesson in how Adam and Miguel eventually settled on the idea of WeWork: They used the opportunity Green Desk had given them to observe their customers. They spent more than one year rubbing elbows with customers, watching what worked and what didn't, and noting the community that developed. "Back then we called customers tenants," said Adam. "Now we know to call them members."
Without first-hand customer research, the two founders couldn't have known that there was a market for the WeWork brand—or what the brand even was.
Marketers who want to dominate their niche should spend time onsite with customers.
3. Nail your vision early
While dreaming up WeWork, Adam and Miguel invested a lot of energy defining their long-term vision for the venture. It took them six months just to decide on the name.
And as early as 2010, they talked about WeWork as a metropolitan ecosystem replete with apartments, gyms, bars, and barber shops—an all-in-one destination for entrepreneurs. They wouldn't realize any of that for six years, but their clarity of purpose gave them an infectious level of certainty when talking to investors.
"He believes there's an energy behind the brand," said Chris Kelly, co-founder of the coworking startup Convene, speaking of Adam. "And people buy it."
As a marketer, it pays to invest a similar amount of effort into nailing your vision. A set of powerful beliefs can make your marketing much more persuasive.
4. Get the right people on the bus, and do it early on
When asked how he would advise his younger self, Adam replied, "People. Hire the best people. Don't wait three years." He concedes that one of his biggest problems early on was that he spent only 2% of his time recruiting, which delayed the company's growth, he said.
How much time will you spend hiring your next marketing superstar? How much time do you already invest in training your team? Adam insists he now spends 30% of his time recruiting, and he still thinks he could do more.
5. Bet on the power of experiences and community
WeWork is one gigantic bet on the idea that people crave community in their work environment. "Once you choose to enter a WeWork, you choose to be a part of something more 'we' than 'me,'" said Adam. "I call them the 'we generation.'"
Marketers can harness that phenomenon by creating a community around their product. No matter your service, it touches people in some way and makes them better at their jobs or life. If you unite those people and help them help each other, you can create a customer advocacy program that can lead directly to sales and growth.
6. Find partners with deep pockets
After WeWork grew to a midsize company based on subscription memberships from solo-entrepreneurs and tiny startups, it realized it couldn't scale all on its own. Luckily, the opportunity for the next phase of growth found WeWork.
The Atlantic reported that WeWork's cachet of "coolness" attracted large, stuffy brands such as HSBC, Microsoft, and IBM, which have much larger budgets. WeWork offers them a cheaper, more flexible way to house employees in satellite offices. It also gives them access to a talent pipeline of motivated young professionals: Liberty Mutual, for example, uses its WeWork membership as a recruiting tool.
Although "Build it and they will come" is perhaps the worst marketing advice ever, "Build a cool platform" is great advice for marketers who want to attract big partners with deep pockets.
7. First secure your audience, and then release more products
By all accounts, Miguel and Adam have realized their dream from 2010: WeWork has become an ecosystem. In 2016, it launched fully furnished micro-apartments called WeLive. In 2017, it acquired the coding academy The Flatiron School. This year, it has opened fitness studios called Rise, and soon it will open WeGrow, a for-profit elementary school.
With a core product that people love, WeWork has developed a multidimensional relationship with its members and can earn more wallet share with additional services. For all marketers, that is an instructive blueprint: Before you launch multiple products, invest in your core product until your audience is rabidly loyal.
8. Tell a big story
All marketers know that good stories sell, but most can't affix a dollar value to those stories. Yet with WeWork's story, we can: $18 billion.
WeWork's competitor, the publicly-traded IWG (better known as Regus Group), has more real estate than WeWork, according to The New York Times, and is comparable in many ways. Yet IWG is worth $2 billion. The difference between the two? WeWork, worth $20 billion, claims to be much more than just a coworking space.
"WeWork isn't a company," Adam told an audience of employees at WeWork's recent summit. "It's a state of mind." That emphasis on WeWork's mission and the insistence that it is far more than it appears to be is what has drawn a tremendous amount of WeWork's investors.
"It's an audacious, perhaps delusional plan for a company that made its mark by building communal desks and providing refreshments," wrote The New York Times. "And so far, it seems to be working."
What's your brand's greater narrative? Is it adding value? Perhaps, like WeWork, the most brazen way to hack growth is to learn to tell stories that really sell.
Continue reading "Eight Growth-Marketing Lessons From WeWork's Rapid Rise (And Its Imminent Global Domination)" ... Read the full article
MarketingProfs provides thousands of marketing resources, entirely free!
Simply subscribe to our newsletter and get instant access to how-to articles, guides, webinars and more for nada, nothing, zip, zilch, on the house...delivered right to your inbox! MarketingProfs is the largest marketing community in the world, and we are here to help you be a better marketer.
You may like these other MarketingProfs articles related to Marketing Strategy:
- The Great Compression and the Future of Marketing Post-Pandemic: Mitch Joel on Marketing Smarts [Podcast]
- Four Tips for Implementing Agile Strategies in Your Marketing to Increase Efficiency and Results
- Brand-to-Demand: A Powerful Approach for Marketers [Infographic]
- The Digital Pivot to Online Marketing: Eric Schwartzman on Marketing Smarts [Podcast]
- 12 Key Benefits of Influencer Marketing for Brands [Infographic]