OCTOBER 2017 FORBES ASIA | 45the criticism to heart. “I met with my spiritual teacher and went
to a therapist. I realized that if I came from a positive place, not
only will everyone feel better and I will feel happier, but the com-
pany will work better.”
DURING THE 12-MINUTE tour that confirmed enough for
Son to eventually write a $4 billion check, Neumann had time
to show off just one space: WeWork’s R&D center, which is
part Apple Store, part Home Depot. Laptops, touchscreens and
iPhones are wired to doors, lamps, fixtures and deadbolts. There’s
a test desk that, like a driver’s seat, adjusts to saved height set-
tings with the swipe of an ID. Next to it, a prototype phone booth
matches lighting and temperature to the user’s preference. A key-
less entry system, which costs about $3,000 off the rack, has been
replaced by a $4 00 WeWork version powered by a cheap Rasp-
berry Pi computer.
WeWork plans to turn each office into one giant connected
device that adapts to each user and sends constant feedback to
WeWork’s mission control. For Softbank vice chairman Ron Fish-
er, who sits on WeWork’s board, this tech leap drove the invest-
ment, since it will allow WeWork to efficiently scale to hundreds
of spaces and serve millions of members. “We did an enormous
amount of financial modeling—how they can grow, the margins
they can generate, the cash flows they can create,” he says.
To Neumann this technology-driven efficiency will become
a product all its own, something like a WeOS, which will make
WeWork indispensable even to companies that don’t have an
interest in co-working. Instead, WeWork will be able to design,
build out and run their offices. Additional revenue can come
via renting WeWork’s tech stack and staffing WeWork manag-
ers to foster community and keep the space running smooth-
ly. For companies, it’s a way to inject the WeWork vibe into staid
offi ces. For WeWork, the program takes the asset-light model a
step further by deemphasizing its biggest cost and risk—long-
term office leases.
To pull off both WeOS and its continued global expansion,
WeWork must solve what Neumann calls “the trillion-dollar
question”—how to keep each WeWork feeling authentic and arti-
sanal as it reaches McDonald’s-size scale. “We need to pay atten-
tion to the whole space—every room, chair and table—so it feels
uplifting and inspiring,” McKelvey says. “We have to train our
team members to run the space and promote community. If we
do all that, we create this positive energy that inspires people.”
For Neumann it all goes back to the kibbutz of his youth.
He remembers that it was hard to make friends at first. How-
ever, his family had the only VCR, and Neumann finally got
some kids to come to the house to watch movies. But the VCR
was gone. His mom had taken it to the hospital for a 24 -year-
old cancer patient with little time left. “The other kids were
extremely understanding, and we still ended up hanging out
together,” Neumann says, tugging at his T-shirt, his face red-
dening and his eyes tearing up. “The funny thing is that every-
one soon completely forgot about the VCR. And then one day,
two months later, we came into my house and the VCR had
returned. Nobody had to ask why.” F
WEWORK AND NAKED HUB
BATTLE IT OUT IN ASIA
South African Grant Hors-
field, founder and chairman
of Naked Hub, China’s larg-
est co-working operator, re-
enacts an exchange he had
with Christian Lee, managing
director of WeWork Asia, in
which Horsfield did his best
Winston Churchill impres-
sion: “Shanghai is our turf.
We’ll fight on the water, we’ll
fight to the sky, we’ll fight on
the land, we will not give up
Shanghai!” As he utters each
word, he pounds his fists on
the coffee table. “We will
take Hong Kong as well.”
Naked Hub, part of the
Naked hospitality group,
started out offering luxury retreats in the mountains of Mogan-
shan, a place long known as an escape for the Shanghai elite. It
ventured into hip co-working environments in 2015, commands
14 locations in Shanghai (WeWork has 4 there) and is the mar-
ket leader in Asia. In July, Naked Hub merged with Southeast
Asia’s largest co-working operator, JustCo. Together the pair
boasts 41 co-working offices in nine cities. With new locations
being built in Jakarta, Bangkok and Kuala Lumpur, their Asian
empire is growing. Not to be outdone, WeWork recently ac-
quired Singapore’s co-working provider Spacemob in an effort
to target Southeast Asia and Korea.
Jonathan Wright, associate director of flexible work space
services at Colliers, on the flurry of activity: “WeWork and Naked
are actively negotiating a number of deals in the market right
now to expand their footprint in tier-one cities,” he says. The de-
mand has far exceeded his own research estimates. “Corporate
occupiers are taking the sector more seriously in these centers.”
In Hong Kong, a Naked Hub site opened last month in the
trendy neighborhood of Sheung Wan while parts of the build-
ing are still under construction. Nonetheless, three floors of the
building are already fully occupied. Neighboring Sai Ying Pun
will be unveiled next month. Across Victoria Harbor, another
site in Kowloon East is being developed.
There are others competing for dominance in the region.
Chinese co-working unicorn URWork is flexing its muscles with
88 centers across 22 cities in mainland China, Hong Kong and
Singapore. The two-year-old operator is backed by heavy-
weight investors including Sequoia Capital, Alibaba’s Ant Fi-
nancial and Zhen Fund. Beyond Asia, URWork has lofty am-
bitions to open more locations in the U.S., and to challenge
WeWork by looking at cities like London, Paris and Berlin.
—Pamela AmblerA Naked Hub work area on Hong
Kong’s Bonham Strand.