This morning, my inbox blew up. Again.
As much as I’d love to spend the day/week responding to each and holding lengthy discussions, we do have 100s of integrations and automation upgrades to tackle over at Syncaroo, so I’m going to instead share my first glance thoughts about the partnership, and it’s potential impact on 5 (of the many) segments of the flex workspace industry that are closest to the two parties.
Disclaimer and full-disclosures: Upflex is integrated with Syncaroo, of which I am a co-founder, and Upflex have sponsored 4 editions of my weekly newsletter. However the thoughts shared here are my own, are unbiased and based off of the public statements made by WeWork and Upflex. The focus of my writing, companies and curations has always been to support flex workspace operators and members across the industry, that hasn’t and will never change. Now… off course, I may be completely off-base, and if so, I’d love to be corrected via a comment, email or on social.
Also: None of this is financial guidance, advice or recommendations. They are just my thoughts as a flex workspace geek. I also did not seek, or get, any kind of permission from either party to write and share these thoughts.
First up, the summary.
In too-long-didn’t-read (tl:dr) format:
The partnership makes Upflex the exclusive aggregator for booking WeWork’s global inventory. It also gives WeWork exclusivity (as a flex operator) on selling access to 3rd party spaces through Upflex. The news briefs also mention that WeWork will participate in Upflex’s Series A, but doesn’t disclose what size investment or stake that would include.
Updated to add: WeWork has not acquired Upflex.
So, given that, how does it affect the industry?
1. Independent (or We-competing) locations listed on Upflex.
Upflex’s promise to operators is to help them fill underutilized space, usually paid for by corporates. This could be seen as an extension of that plan, only the client isn’t paying Upflex directly, instead they’re paying WeWork, who then pays Upflex, who then pays the operators.
👍 Optimistic view: Potentially more customers & revenue for indies, paid for via WeWork Access.
👎 Pessimistic view: Potentially more WeWork customers, especially in regions without an abundance of WeWork locations. If they think they’re in ‘a WeWork’, how does that affect the indie brands and communties?
2. Corporates and brokerages using Upflex.
I’m sure a lot of corporates were contemplating WeWork-or-anything-else. Whether it’s their brand, their public status, or anything else, a lot of large corporates know (and often like) WeWork.
Often they’d choose to split their spend across an aggregator and a company like WeWork, to provide a greater set of options for their hybrid teams, with this partnership, those customers can use one platform (Upflex) to provide both options, whilst still centralizing billing and hybrid space management.
Following the recent news about JLL partnering with 4 platforms (including Upflex) to give their customers access to flex & on-demand workspaces, this also brings WeWork inventory to those employers and employees.
👍 Optimistic view: More corporations using Upflex, with a wider variety of choice for employees.
👎 Pessimistic view: Further abstraction of the relationship between employers and the operators they pick.
3. Corporates, governments and individuals using WeWork.
Having noted how much some corporations like WeWork, there’s a whole bunch who can’t sign up with them for a variety of reasons. From no local coverage (where employees live or want to work) to employees wanting a different kind of community, vibe, space or offering based on the work they need to do – there’s many times where WeWork’s offerings don’t ‘fit’.
The partnership gives WeWork customers access to 3rd party spaces, and therefor can secure more of those larger contracts, without competing in every single market.
There are some customers who smaller networks or independent spaces can’t secure, from governments to national and global chains, who can now connect their employees to local spaces.
👍 Optimistic view: More choice for employees, and potentially more revenue for spaces via an ‘ex’ competitor.
👎 Pessimistic view: Greater lock-in of employers for WeWork in the long-term.
4. Other aggregators.
If you’ve heard me speak at all in the last 2 quarters, not only has the pandemic changed how we work (no pun intended), but it’s also changed how humans interact with physical space. The whole process – from discovering space, to booking access, to checking in on arrival – is not only becoming more streamlined, but more integrated with existing software stacks and entirely new technologies.
What this deal means for other operators is that they can’t offer WeWork inventory to their users.
👍 Optimistic view: Even at WeWork’s scale, they only make up less than 4% of the whole flex workspace supply. There’s a lot of space to make interesting moves and partnerships still.
👎 Pessimistic view: It could lead to a race towards exclusivities like we see in the video streaming industry, where multiple subscriptions are needed to watch a handful of shows.
The recently-public-via-SPAC company is making moves to become the tech company they were ridiculed for not being when they tried to go public directly.
This deal amplifies the focus on their digital offering, as well as their shift towards becoming more “asset-light” in their expansion of offerings.
👍 Optimistic view: Less physical locations to manage could boost the firms revenues and earnings per contract.
👎 Pessimistic view: This may eventually lead to a conflict-of-interest between the two partners who may both want to win the corporate contracts for themselves.
There’s a lot still to be seen. But I think this partnership is a positive move for the industry, especially for folks like me who believe that more and more flex workspace options need to be as discoverable, bookable and accessible will make all operators, large and small, more sustainable.
To channel my inner-Simon-Sinek, the whole flex workspace industry is an ‘infinite game’, where the whole point is to keep ‘playing’, as oppose to a finite one where there can be only one winner. I could definitely go on and on as why that is, just ask Jamie Russo, who was the last person I believe I discussed this view with.
But… I mention it because I truly believe the way our industry grows and evolves, is for everyone to work towards making it easier, smoother, and more accessible to bring flex workspaces into the new world of work.