Ammirati on Innovation, episode 7: what business is WeWork in?
Ammirati on Innovation, episode 7: what business is WeWork in?

Scandals Aside, What Business Is WeWork Really In? | Ammirati on Innovation

158 0

Each month, “Ammirati on Innovation” episodes will look at ways that the disruptive-startup mentality is spreading beyond young entrepreneurs to big established corporations. Serial entrepreneur, venture capitalist and Carnegie Mellon B-school professor Sean Ammirati, who sits at the intersection of these high-change dynamics, provides insight.

Episode 7

In this episode, Sean and I kick off with a new look at the evolving WeWork and Softbank story. Sean explores what it means that SoftBank chose to invest even more money into WeWork, and now owns about 80% of the business. Plus, the fact that the former CEO is making $180 MILLION during the transition! I think we all can agree, that’s a pretty good consulting package.

In our last podcast episode, Sean compared WeWork to a real estate business. Now he says it’s basically a rental car company: they buy expensive fixed assets, and then they rent them out in very short units of time. But there are still reasons for optimism. For example, Sean says, Amazon has 5,000 WeWork desks in New York alone.

We also debate whether the SoftBank decision to keep WeWork running is a smart one. Are they following the sunk cost fallacy? Or doubling-down on their belief in WeWork’s ability to lead the transformation of work trend? Sean quotes hedge fund manager Howard Marks, who says, “To be a great investor you need to be two things: you need to be contrarian and correct.” SoftBank is definitely being contrarian. Only time will tell if they’re also correct.

Sean and I then jump to a discussion of a few of the Cloud Wars Top 10 vendors. I have some questions for Sean about ServiceNow, which now has Bill McDermott as CEO. You could argue that it’s the #1 most innovative company in the world; it’s growing at 35% and approaching a billion dollars in revenue per quarter.

Finally, we have a high-level discussion of innovation. Sean says his employer, Carnegie Mellon, has been ten years ahead of the world in AI – they were using self-driving cars in the aughts. Innovation works differently everywhere. But some recent moves by Microsoft, Amazon and Google to take a leadership position in AI indicate that the time for widespread, non-stop innovation is NOW.

You can also stream the audio-only version of this episode:

Thanks for watching! For more like this, we recommend:

Follow Sean on Twitter and LinkedIn for more valuable insights into innovation and entrepreneurship.

Stream more episodes of Ammirati on Innovation, via Cloud Wars Live

Cloud Wars Live Digital All-Stars

Sean Ammirati is one of our regular Digital All-Stars. These experts appear in regular video podcasts. The conversations focus on the critical themes shaping (and re-shaping!) the business world in the digital age of 2019. Our intention is to provide regular chunks of timely ideas and insights about high-priority subjects from industry veterans with diverse backgrounds.