The best innovation often comes from looking at categories outside of your traditional competition or frame reference. Next-generation property player Wework is just one recent example of this, although its founders would probably blanch at being described as “property”. It’s impossible to understate just how hot their brand is. Valued at $20 billion, it’s more hotly tipped than a variety of long established property groups and with 250,000 members in 72 cities its growth curve is meteoric.
Wework’s genius has been its ability to create a buzzy, club-like community vibe that has proved both attractive and valuable to a growing generation of start-ups, creative professionals and the self-employed. Whereas traditional property brands think in terms of tenancy and facility management, Wework’s reference points have been members’ clubs and boutique hotels with their talent for feel, experience and community. But beneath the cleverly orchestrated atmosphere, the model is deceptively simple – make the basic service affordable and charge generously for the extras.
But as demand for flexible working spaces grows, Wework’s model of “real estate as a service” is being widely copied and spawning an industry of “co-working” spaces. The Wework brand therefore cannot maintain its differentiating vision of being the home to thriving businesses if it competes solely on price, flexibility, location and cooler sofas.
That’s why Wework’s recent acquisition of Designation – a Chicago-based design school is so interesting – and smart. The brand is recognising the “real estate as a service” model it has invented must evolve into something else that can increase loyalty, differentiation and crucially higher margin upsell to its members in the future. If the previous brand borrowed from the world of hotels and members’ clubs, it’s now taking inspiration from venture capital brands like Google Labs or Ycombinator by looking to shape, mentor and grow its members’ actual businesses – a brand differentiator that is more emotive, aspirational and crucially, harder to copy. That said, to truly position itself as interested in the wider growth of its members, Wework will have to look deeply at and invest in the human side of its delivery model and brand culture to truly foster a values-led service ethos that doesn’t start and end with flat whites and Scandinavian furniture. It’s increasingly in the business of culture and consulting rather than merely a more flexible property model. It’s a brave leap and an exciting one for one of the world’s true brand innovators.