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Adrian Weckler: 'WeWork is a mess but not fatal'

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New WeWork CEO Artie Minson will take over from Adam Neumann. Photo: Lauren Kallen/WeWork

New WeWork CEO Artie Minson will take over from Adam Neumann. Photo: Lauren Kallen/WeWork

New WeWork CEO Artie Minson will take over from Adam Neumann. Photo: Lauren Kallen/WeWork

Is WeWork's financial implosion a sign that the co-working model faces a bust? What might the excesses of CEO and co-founder Adam Neumann's former reign mean for the future of its Irish offices?

If the slew of new spaces announced in Ireland in recent months is anything to go by, co-working facilities may be more than a trendy tech fad. It's even now reaching into Ireland's Gaeltachts.

But no one would dispute that WeWork is a corporate mess right now.

Last week, Neumann was ousted as CEO after a botched IPO. His spending spree on private jets and ultra-luxury cars (he was chauffeured in a Mercedes Maybach, worth over €200,000) didn't help either. It finally pushed the company's financial backers to pull the plug on his tenure.

WeWork now faces a potential cash crisis and job losses are expected. It is looking desperately for more funding from its main backer, the Japanese venture investor SoftBank, and a number of US banks, to keep going at its current pace.

This might matter in Ireland, where WeWork has now expanded to be one of Dublin's biggest corporate tenants, with five buildings leased for its co-working spaces.

So is its cancelled IPO a sign that the co-working craze is unsustainable? Or might WeWork be based on a sound model but simply have fallen victim to the weaknesses of a CEO who The Economist last week accused of having a "billionaire ego"?

Only time will tell. But the growth in co-working spaces in Ireland shows no sign of abating just yet. There are now dozens, possibly hundreds (depending on your criteria), of such spaces around the country now.

It's not just in trendy digital dockland spaces, either. You'll see them driving through Carrick-on-Shannon, Drogheda, Tralee, Boyle, Gorey and other areas outside cities.

Earlier this year, I attended the opening of one (Modam) on Arranmore Island, off the coast of Donegal.

Last week, Údarás Na Gaeltachta added to the stock by announcing more support for co-working buildings in Gaeltacht areas around the country.

These 'Gteic' buildings now number eight, spanning from Cork (Ballingeary) to Spiddal (Galway), Belmullet (Mayo) and Gweedore (Donegal).

As an experiment, they might particularly test the concept of a co-working facility as they're based in parts of the country without any real office space.

They're also being watched for signs of what broadband can do for regional areas, as several of the Gteic localities have recently been connected to proper fibre broadband.

I know a few people using such facilities. It's a real mixture of business use cases, with tech in a minority. But those in situ eschew larger towns or cities because they love the area they live in.

They may be graduates, have business ideas or otherwise want a place to anchor their day-to-day career. Or they may want somewhere modern to work for extended periods at different times of the year. (This is what some who took space in the Arranmore Island co- working space told me: they like the idea of spending a month there, away from their base in London or Dublin.)

I've met plenty of these people over the years, some of them very successful. There's a handful down in Waterford - the Nearform founders, Cian O'Maidin and Richard Rodger, are a good example.

When the Ludgate Centre in Skibbereen opened a few years ago, it had more than a few successful tech founders who loved the idea of basing themselves in (for them) an idyllic area.

Back in the cities, there are numerous reasons why co-working spaces are now sought. If you talk to the founders of Stripe, they'll tell you that a good chunk of the working days early on were spent in local coffee shops. In Dogpatch Labs in Dublin's CHQ in the IFSC area, lots of startups have simply used it as an office centre.

The networking benefits of having a graphic designer, marketer or PR firm a few desks away is also frequently cited by people I've asked about it.

One factor that shouldn't be overlooked in the growth of co-working spaces is the rise in professional contractors. Some big companies in Dublin employ thousands of contractors, either through other businesses or independent freelancers.

While there's often a desk for them in their contractee building, sometimes there isn't. Such workers need somewhere to lay their laptop down. A café might do, but can be an unpredictable environment.

Besides, people are social. In my experience, many want to physically leave their domestic abode when they go to work and have some consistent social interaction. I certainly do.

To clarify, being a journalist means it's not really possible not to work at home, either in the evening or at weekends. But I don't think I could do it from the same room all day without seeing another person.

Even at weekends, if I have to work for a couple of hours, I'm more likely to bring a laptop to a cafe than sit at home with it.

Ultimately, it's something I would probably pay for. Given the numbers now using co-working spaces, I can only assume there are at least some others who feel similarly.

Outside my own personal preferences, it's still too early to say what the long-term commercial demand is for co-working spaces in Ireland.

Outside Dublin, a lot of them are State-subsidised in some way, particularly through local enterprise boards, grants or other subventions.

But quite a few aren't. The Portershed in Galway has mushroomed from being a run-down shell of a building held by CIÉ five years ago to a thriving work centre for dozens of companies and startups.

This came about mostly through the efforts of a few hard-working local entrepreneurs who wanted an alternative to office sheds in suburban business parks.

Together with the support of one or two friendly bankers, they got together to beg, borrow and build.

Other co-working spaces look similarly well set up. Don't write them off yet.

Sunday Indo Business