1 00:00:12,119 --> 00:00:15,920 Speaker 1: Hello, and welcome to another episode of the Odd Lots Podcast. 2 00:00:15,960 --> 00:00:22,320 Speaker 1: I'm Joe Wisenthal and I'm Tracy Hallaway Tracy nineteen. There's 3 00:00:22,360 --> 00:00:24,400 Speaker 1: been a lot of interesting things that have happened in 4 00:00:24,760 --> 00:00:27,280 Speaker 1: markets so far this year, but one of the defining 5 00:00:27,360 --> 00:00:30,360 Speaker 1: characteristics I think has to be that it's really been 6 00:00:30,880 --> 00:00:32,720 Speaker 1: the year of the I p O, or at least 7 00:00:32,960 --> 00:00:34,879 Speaker 1: i pos have been a big story in a way 8 00:00:34,920 --> 00:00:37,280 Speaker 1: that they haven't been in a long time, right, and 9 00:00:37,400 --> 00:00:39,320 Speaker 1: not just any I p as We've had quite a 10 00:00:39,320 --> 00:00:42,199 Speaker 1: few tech company I p o s. Right, so we 11 00:00:42,280 --> 00:00:48,720 Speaker 1: had let's see Uber beyond Meat both like relatively uh, 12 00:00:49,520 --> 00:00:51,960 Speaker 1: I guess some people would call it unsuccessful giving the 13 00:00:52,360 --> 00:00:56,160 Speaker 1: share price performance since then. Well, Uber, I guess has 14 00:00:56,200 --> 00:00:58,160 Speaker 1: been a little bit unsuccessful in the fact that it 15 00:00:58,200 --> 00:01:01,400 Speaker 1: didn't have a pop and b on Meat is unsuccessful 16 00:01:01,400 --> 00:01:04,120 Speaker 1: in the other direction, in the sense that it's soared 17 00:01:04,240 --> 00:01:09,080 Speaker 1: to an insane degree since when public implying that the 18 00:01:09,080 --> 00:01:11,360 Speaker 1: the company left a lot of money on the table. Although, 19 00:01:11,400 --> 00:01:15,120 Speaker 1: to be honest, you know, when when stocks sore, I 20 00:01:15,200 --> 00:01:17,240 Speaker 1: get this argument that a company left a lot of 21 00:01:17,240 --> 00:01:19,840 Speaker 1: money on the table, But I doubt anyone who's really 22 00:01:19,880 --> 00:01:22,960 Speaker 1: complaining because they're all crazy rich now, so oh yeah, 23 00:01:23,160 --> 00:01:26,080 Speaker 1: you hear that all the time, that the underwriter's messed 24 00:01:26,120 --> 00:01:28,600 Speaker 1: up or something. But yeah, I doubt anyone who's standing 25 00:01:28,640 --> 00:01:31,240 Speaker 1: there watching like the listing price, watching their net value 26 00:01:31,240 --> 00:01:34,040 Speaker 1: go up, is actually upset about that one. Yeah, like, 27 00:01:34,040 --> 00:01:36,399 Speaker 1: are they really that upset? And they can always sell 28 00:01:36,480 --> 00:01:39,160 Speaker 1: more stock at a secondary if they want. But yeah, 29 00:01:39,200 --> 00:01:41,000 Speaker 1: as you said, you know, like that, we had some 30 00:01:41,120 --> 00:01:43,600 Speaker 1: like really murky I p o s this year already, 31 00:01:43,760 --> 00:01:47,120 Speaker 1: Uber being the most notable uh, the largest at the 32 00:01:47,160 --> 00:01:50,720 Speaker 1: time startup in the world or private company in the world, 33 00:01:50,760 --> 00:01:53,720 Speaker 1: I think, or close to it. Uh, it's kind of fizzled. 34 00:01:53,760 --> 00:01:56,360 Speaker 1: But actually it's been a pretty kind of euphoric year 35 00:01:56,440 --> 00:02:00,920 Speaker 1: now between Beyond Meat and Zoom Video and CrowdStrike was 36 00:02:00,960 --> 00:02:03,600 Speaker 1: another reason. One. There's a number of companies that have 37 00:02:03,760 --> 00:02:08,720 Speaker 1: found very enthusiastic receptions on the public market this year, right, 38 00:02:08,760 --> 00:02:12,480 Speaker 1: and I believe there's another one that's sort of waiting 39 00:02:12,639 --> 00:02:15,800 Speaker 1: in the wings. And this is a you know, even 40 00:02:15,880 --> 00:02:19,320 Speaker 1: compared to Uber, this is a really interesting company that 41 00:02:19,480 --> 00:02:25,160 Speaker 1: sort of generates a lot of very different opinions. Let's say, yes, 42 00:02:25,320 --> 00:02:29,480 Speaker 1: so you're talking about we Work, which is the famous 43 00:02:29,560 --> 00:02:34,639 Speaker 1: or maybe infamous commercial real estate company that's gigantic. I 44 00:02:34,639 --> 00:02:37,200 Speaker 1: don't know how many tens of billions it's worth right now. 45 00:02:37,240 --> 00:02:41,239 Speaker 1: I think maybe just under fifty billion, but right they're 46 00:02:41,320 --> 00:02:45,920 Speaker 1: known for taking out these big leases from building owners 47 00:02:46,000 --> 00:02:48,640 Speaker 1: and then re renting the space out to startups, and 48 00:02:48,639 --> 00:02:51,600 Speaker 1: it's a hip office environment and there's a lot of beer, 49 00:02:51,880 --> 00:02:57,200 Speaker 1: and they the company is incredibly controversial, to say the least. 50 00:02:57,200 --> 00:03:00,080 Speaker 1: There have been numerous profiles written of its c O, 51 00:03:00,200 --> 00:03:03,480 Speaker 1: who himself seems to be quite a character. Like many 52 00:03:03,800 --> 00:03:07,040 Speaker 1: uh these startup c e o s are lots of 53 00:03:07,040 --> 00:03:10,480 Speaker 1: people extremely skeptical that it's going to be a long 54 00:03:10,600 --> 00:03:14,840 Speaker 1: term money making business. But after Uber, it really is 55 00:03:14,880 --> 00:03:18,000 Speaker 1: the gigantic one sort of sitting out there waiting in 56 00:03:18,040 --> 00:03:20,120 Speaker 1: the wings. I don't think anyone knows exactly when it 57 00:03:20,120 --> 00:03:23,240 Speaker 1: will become public, but at some point it almost certainly 58 00:03:23,240 --> 00:03:25,440 Speaker 1: will have to file for an ip O. I like 59 00:03:25,520 --> 00:03:28,919 Speaker 1: that your description of we work office space is there's 60 00:03:28,919 --> 00:03:31,640 Speaker 1: a lot of beer, but but it's like a big 61 00:03:31,680 --> 00:03:34,760 Speaker 1: thing like of of it's office space, but it's supposed 62 00:03:34,760 --> 00:03:37,000 Speaker 1: to be cool and start up a start that means 63 00:03:37,360 --> 00:03:40,560 Speaker 1: beer taps and cold brew coffee on tap and stuff 64 00:03:40,600 --> 00:03:42,520 Speaker 1: like that. But I'm just going to point out you've 65 00:03:42,520 --> 00:03:45,920 Speaker 1: already sort of betrayed a slight bias because you called 66 00:03:45,960 --> 00:03:48,840 Speaker 1: it a commercial real estate company. And of course, the 67 00:03:49,000 --> 00:03:52,640 Speaker 1: big debate over we Work and its valuation and its 68 00:03:52,680 --> 00:03:56,880 Speaker 1: future is whether or not it's actually something more than 69 00:03:56,920 --> 00:03:59,440 Speaker 1: a commercial real estate company. Because if you're attaching a 70 00:03:59,480 --> 00:04:03,120 Speaker 1: fifty bill in dollar evaluation to something, you know it's 71 00:04:03,160 --> 00:04:05,720 Speaker 1: probably going to have the words tech in it or 72 00:04:05,800 --> 00:04:09,520 Speaker 1: some sort of like all encompassing lifestyle brand, and that's 73 00:04:09,560 --> 00:04:13,240 Speaker 1: the huge debate currently raging, right or it's got to 74 00:04:13,280 --> 00:04:16,800 Speaker 1: be a platform in some way to justify that. So 75 00:04:16,880 --> 00:04:20,080 Speaker 1: the interesting thing about we Work to me is, you know, 76 00:04:20,120 --> 00:04:23,440 Speaker 1: it's like, if you're talking about Uber, there's very easy 77 00:04:23,480 --> 00:04:25,279 Speaker 1: to come up with the bull in the bear case. 78 00:04:25,400 --> 00:04:28,000 Speaker 1: You say, okay, the bowl case is that sort of 79 00:04:28,080 --> 00:04:32,160 Speaker 1: on demand mobility is going to be gigantic and it's 80 00:04:32,200 --> 00:04:35,400 Speaker 1: barely even started, and that there's all other kinds of 81 00:04:35,440 --> 00:04:39,839 Speaker 1: businesses that they can layer into their UM ride sharing business, 82 00:04:39,960 --> 00:04:42,760 Speaker 1: like food delivery and other logistics things. And then the 83 00:04:42,800 --> 00:04:45,400 Speaker 1: bear cases, well, they're losing a lot of money, and 84 00:04:45,600 --> 00:04:47,880 Speaker 1: you can have a real debate and there seems to 85 00:04:47,920 --> 00:04:50,920 Speaker 1: be very legitimate. Two sides to it. And what's really 86 00:04:50,960 --> 00:04:55,280 Speaker 1: striking about We Work is it's extremely rare to find 87 00:04:55,520 --> 00:04:58,160 Speaker 1: a bowl or even a partial bowl, or an optimist. 88 00:04:58,560 --> 00:05:03,320 Speaker 1: It's universally, I think people are skeptical about this company. 89 00:05:03,360 --> 00:05:07,720 Speaker 1: And that's pretty unusual because usually there's someone or a 90 00:05:07,760 --> 00:05:10,880 Speaker 1: good contingent that says, no, you don't really get this right. 91 00:05:10,960 --> 00:05:14,000 Speaker 1: I mean, someone is clearly giving this company money, right, 92 00:05:14,080 --> 00:05:17,120 Speaker 1: So you know, bowls must be out there somewhere. They're 93 00:05:17,160 --> 00:05:20,680 Speaker 1: just not very vocal, I guess. So the good news 94 00:05:20,800 --> 00:05:24,119 Speaker 1: is we have a bowl, or at least a modest bowl. 95 00:05:24,440 --> 00:05:28,279 Speaker 1: We found one. We're going to hear the uh, the 96 00:05:28,480 --> 00:05:33,040 Speaker 1: less pessimistic case on we Work. He tweeted about it 97 00:05:33,480 --> 00:05:36,240 Speaker 1: a few weeks ago, and it was like it was 98 00:05:36,279 --> 00:05:40,120 Speaker 1: it was the true unicorn, someone saying something positive about 99 00:05:40,160 --> 00:05:44,240 Speaker 1: we work on the internet. The real unicorn, the real unicorn. 100 00:05:44,560 --> 00:05:46,279 Speaker 1: And so I knew we had to get him on 101 00:05:46,400 --> 00:05:49,480 Speaker 1: the show. So without further ado, let's bring him in. 102 00:05:50,320 --> 00:05:52,960 Speaker 1: I want to welcome to Odd Lots Sandy Corey. He 103 00:05:52,960 --> 00:05:57,000 Speaker 1: has a managing director at Horizon Partners. Out in the 104 00:05:57,080 --> 00:06:00,760 Speaker 1: Valley is a Silicon Valley investment banker, and we're going 105 00:06:00,800 --> 00:06:03,880 Speaker 1: to be talking about why perhaps the doom and gloom 106 00:06:04,040 --> 00:06:07,919 Speaker 1: story about we Work is overrated. So, Sandy, thank you 107 00:06:08,000 --> 00:06:10,720 Speaker 1: very much for joining us. Thanks a lot for having 108 00:06:10,760 --> 00:06:14,520 Speaker 1: me So, Sandy, I mean, as I sort of alluded to, 109 00:06:15,360 --> 00:06:19,440 Speaker 1: everyone kind of knows the pessimistic story about we Work, 110 00:06:19,520 --> 00:06:22,320 Speaker 1: and it really is relentless. And there's so many sort 111 00:06:22,360 --> 00:06:27,160 Speaker 1: of classical red flags that caused people to think that 112 00:06:27,200 --> 00:06:29,800 Speaker 1: this company will eventually fizzle or that it's a house 113 00:06:29,839 --> 00:06:34,800 Speaker 1: of cards. They come up with their own bespoke metrics 114 00:06:35,000 --> 00:06:37,280 Speaker 1: of how to measure their business. They have something I 115 00:06:37,279 --> 00:06:41,320 Speaker 1: think it was called community adjusted but uh, they lose 116 00:06:41,440 --> 00:06:46,880 Speaker 1: tons of money. Um. Their CEO is all kinds of eccentricities. 117 00:06:47,560 --> 00:06:52,080 Speaker 1: They announced recently they're launching a new off balance sheet 118 00:06:52,240 --> 00:06:55,240 Speaker 1: vehicle to buy buildings which will then be leased back 119 00:06:55,279 --> 00:06:57,880 Speaker 1: to WE Work. And somehow that's supposed to make the 120 00:06:57,920 --> 00:07:03,040 Speaker 1: buildings more valuable. Uh. The CEO had some questionable related 121 00:07:03,120 --> 00:07:07,360 Speaker 1: party transactions because he owned some buildings that which questions 122 00:07:07,360 --> 00:07:09,359 Speaker 1: about whether WE Work was getting a fair deal or 123 00:07:09,400 --> 00:07:12,680 Speaker 1: not in renting them. It's just like the red flags 124 00:07:12,760 --> 00:07:16,280 Speaker 1: with this company, which has become ubiquitous and cities all 125 00:07:16,280 --> 00:07:20,120 Speaker 1: around the world are so numerous, and that is why 126 00:07:20,160 --> 00:07:22,480 Speaker 1: it seems like almost nobody is willing to step up 127 00:07:22,520 --> 00:07:25,600 Speaker 1: and say, wait, there might be something here, This might 128 00:07:25,640 --> 00:07:30,240 Speaker 1: be really something valuable and growing. So, Sandy, what is 129 00:07:30,280 --> 00:07:35,920 Speaker 1: it at its core that people misunderstand about We Work? Well, 130 00:07:36,680 --> 00:07:40,080 Speaker 1: thanks a lot, Joe. It's a fascinating company, and it 131 00:07:40,160 --> 00:07:44,080 Speaker 1: certainly is polarizing. And I think, you know, I like 132 00:07:44,240 --> 00:07:46,520 Speaker 1: to try to take historical lens and looking at some 133 00:07:46,600 --> 00:07:49,200 Speaker 1: of these businesses, and a lot of the critiques that 134 00:07:49,280 --> 00:07:51,720 Speaker 1: you are presenting, I think have also been applied to 135 00:07:51,800 --> 00:07:55,560 Speaker 1: other companies over history, you know, that have been misunderstood. 136 00:07:55,920 --> 00:07:58,640 Speaker 1: You know, in the eighties, there was this wacky financial 137 00:07:58,680 --> 00:08:02,600 Speaker 1: metric that was being promoted by operators in the cable 138 00:08:02,640 --> 00:08:05,840 Speaker 1: industry because those businesses weren't really making money. It was 139 00:08:05,840 --> 00:08:09,120 Speaker 1: called IBADA and in people thought that was pretty wacky. 140 00:08:09,200 --> 00:08:11,640 Speaker 1: And of course now everyone uses ebitda as a as 141 00:08:11,640 --> 00:08:14,800 Speaker 1: a pretty reasonable financial metric, and that the cable industry 142 00:08:14,840 --> 00:08:17,680 Speaker 1: really did take off. Um, you know, back then and 143 00:08:17,960 --> 00:08:22,280 Speaker 1: for many years after. So um, I think that the 144 00:08:22,320 --> 00:08:24,400 Speaker 1: book case with We Work is that, look, you know, 145 00:08:24,480 --> 00:08:27,960 Speaker 1: in Q one, they released some financial information and Q one. 146 00:08:28,440 --> 00:08:32,400 Speaker 1: They they were annualized to three billion in revenue and 147 00:08:32,559 --> 00:08:36,120 Speaker 1: they were growing a year every year. UM. So I 148 00:08:36,160 --> 00:08:38,719 Speaker 1: think that's the start of something that potentially could be 149 00:08:38,840 --> 00:08:42,000 Speaker 1: very valuable. They're in a massive industry, commercial real estate 150 00:08:42,200 --> 00:08:45,000 Speaker 1: that's very fragmented, UH, and I think that they are 151 00:08:45,080 --> 00:08:47,160 Speaker 1: in a position to build you know, leverage in that 152 00:08:47,240 --> 00:08:50,520 Speaker 1: ecosystem in a really unique way. UM. They have a 153 00:08:50,520 --> 00:08:53,640 Speaker 1: growing brand UH that you know, gives them an advantage 154 00:08:53,679 --> 00:08:57,200 Speaker 1: in acquiring new customers or new users. You know. I 155 00:08:57,240 --> 00:08:59,520 Speaker 1: think they have built a little bit of technology that 156 00:08:59,559 --> 00:09:01,720 Speaker 1: can give UM leverage. I think they're probably still just 157 00:09:01,880 --> 00:09:04,679 Speaker 1: scratching the surface there. And in fact, that might be 158 00:09:04,720 --> 00:09:07,800 Speaker 1: one of the biggest bullish UH factors for the company, 159 00:09:07,840 --> 00:09:10,959 Speaker 1: which is that if they can dig in in technology 160 00:09:11,400 --> 00:09:14,400 Speaker 1: in an industry that historically has been allergic to technology, 161 00:09:14,640 --> 00:09:18,720 Speaker 1: there's a there's a big source of advantage there. So, Sandy, 162 00:09:18,840 --> 00:09:22,520 Speaker 1: you mentioned this notion of we work building up leverage 163 00:09:22,559 --> 00:09:24,719 Speaker 1: in the real estate industry, and Joe and I were 164 00:09:24,720 --> 00:09:29,679 Speaker 1: talking earlier about how if you have evaluation of this magnitude, 165 00:09:29,760 --> 00:09:32,880 Speaker 1: it's usually because you have a sort of growth story 166 00:09:32,920 --> 00:09:35,280 Speaker 1: attached to it, a growth story that might be you know, 167 00:09:35,320 --> 00:09:37,840 Speaker 1: a big brand, a platform of some sort, or some 168 00:09:37,920 --> 00:09:42,040 Speaker 1: sort of tech disruption angle. So talk to us about 169 00:09:42,080 --> 00:09:46,240 Speaker 1: how exactly we work is disrupting the real estate industry 170 00:09:46,280 --> 00:09:52,240 Speaker 1: and how exactly are they building up leverage within real estate. Sure, well, 171 00:09:52,440 --> 00:09:55,680 Speaker 1: I think on the leverage aspect, it's mostly a function 172 00:09:55,679 --> 00:09:58,720 Speaker 1: of scale. And I think that you know, coming across business, 173 00:09:58,800 --> 00:10:00,760 Speaker 1: you know, when you have massive scale, it gives you 174 00:10:00,840 --> 00:10:04,800 Speaker 1: leverage to get better economics and to push around suppliers 175 00:10:04,840 --> 00:10:07,520 Speaker 1: and vendors and so forth. Um So I think that's 176 00:10:07,520 --> 00:10:10,680 Speaker 1: the path that they are you know, kind of taking 177 00:10:10,800 --> 00:10:12,960 Speaker 1: that that should pay off, you know, with more and 178 00:10:12,960 --> 00:10:15,160 Speaker 1: more leverage that can kind of squeeze into better you 179 00:10:15,240 --> 00:10:18,160 Speaker 1: can unit economics in the future. Look at the core disruption, 180 00:10:18,200 --> 00:10:19,880 Speaker 1: I think it's just that they're you know, they have 181 00:10:19,920 --> 00:10:22,640 Speaker 1: a better a better user experience you know, for their 182 00:10:22,640 --> 00:10:24,760 Speaker 1: customers and so, you know, and that starts with the 183 00:10:24,800 --> 00:10:28,040 Speaker 1: flexibility of the of the product, which I think, you know, 184 00:10:28,040 --> 00:10:29,839 Speaker 1: on the one hand, it looks, uh, hey, it's just 185 00:10:29,920 --> 00:10:32,040 Speaker 1: month the month, what's the big deal. Well, you know 186 00:10:32,320 --> 00:10:35,719 Speaker 1: historically that the you know, one of the key aspects 187 00:10:35,760 --> 00:10:39,160 Speaker 1: of consuming commercial real estate, you know, renting an office 188 00:10:39,280 --> 00:10:41,760 Speaker 1: is a long term commitment that can be very painful 189 00:10:41,800 --> 00:10:44,360 Speaker 1: for for many many businesses, and so I think the 190 00:10:44,360 --> 00:10:47,480 Speaker 1: flexibility aspect is is very important. And then you know, 191 00:10:47,640 --> 00:10:50,280 Speaker 1: it also gives them a chance to reorient their business 192 00:10:50,400 --> 00:10:54,080 Speaker 1: around customers, ideally you know, using the Internet and technology, 193 00:10:54,520 --> 00:10:57,520 Speaker 1: and that can have really powerful implications and how they 194 00:10:57,559 --> 00:10:59,959 Speaker 1: operate their business and how they can build a compet 195 00:11:00,040 --> 00:11:03,480 Speaker 1: advantage of our time, you know, a Netflix or some 196 00:11:03,559 --> 00:11:06,160 Speaker 1: of the other great kind of disruptors that have built 197 00:11:06,360 --> 00:11:11,560 Speaker 1: service layers, you know, leveraging technology and the Internet. So again, 198 00:11:11,720 --> 00:11:14,040 Speaker 1: you know, in the beginning, Tracy was talking about how 199 00:11:14,080 --> 00:11:18,040 Speaker 1: to achieve such a big valuation. The idea is typically 200 00:11:18,080 --> 00:11:20,040 Speaker 1: you have to like, oh, we're a tech company or 201 00:11:20,160 --> 00:11:22,439 Speaker 1: we're a platform. But it kind of sounds like what 202 00:11:22,480 --> 00:11:26,800 Speaker 1: you're saying is no, we were just just a really 203 00:11:27,520 --> 00:11:34,040 Speaker 1: well run innovative landlord in a sense. But well not exactly. Look, 204 00:11:34,200 --> 00:11:36,600 Speaker 1: it's a very hard business to understand. There's lots of 205 00:11:36,640 --> 00:11:39,400 Speaker 1: sources of kind of misunderstanding. And you know, look, one 206 00:11:39,480 --> 00:11:42,680 Speaker 1: is is valuation. So you can find a valuation headline 207 00:11:42,720 --> 00:11:45,800 Speaker 1: of forty seven billion, but that that's a you know, 208 00:11:45,880 --> 00:11:49,040 Speaker 1: kind of based on a preferred instrument that soft bank, 209 00:11:49,120 --> 00:11:52,040 Speaker 1: which is kind of underrated, and they're there the complexity 210 00:11:52,040 --> 00:11:54,360 Speaker 1: of their financial engineering, so they you know, they came 211 00:11:54,440 --> 00:11:56,400 Speaker 1: up with that as part of the last announced round. 212 00:11:56,520 --> 00:11:59,520 Speaker 1: But then that I think the real valuation for the 213 00:11:59,559 --> 00:12:02,640 Speaker 1: company is more like twenty billion, which is the valuation 214 00:12:02,800 --> 00:12:05,720 Speaker 1: where kind of seller's got so that I think it 215 00:12:05,760 --> 00:12:09,120 Speaker 1: was a mix of common shareholders and early preferred who 216 00:12:09,160 --> 00:12:11,960 Speaker 1: sold in into around a few months back, and they 217 00:12:11,960 --> 00:12:14,960 Speaker 1: had a twenty billion dollar evaluation. And so yeah, look 218 00:12:15,000 --> 00:12:18,080 Speaker 1: it's a great question, is you know, is this is 219 00:12:18,120 --> 00:12:20,560 Speaker 1: this a tech company or not? Does it deserve a 220 00:12:20,640 --> 00:12:24,079 Speaker 1: software is a service revenue multiple? And I would say no. 221 00:12:24,520 --> 00:12:26,440 Speaker 1: You know, we're in the market where SASS businesses are 222 00:12:26,480 --> 00:12:29,160 Speaker 1: easily getting ten twenty times revenue, and so I don't 223 00:12:29,160 --> 00:12:32,040 Speaker 1: think that that is that is necessarily warranted here for 224 00:12:32,120 --> 00:12:34,600 Speaker 1: we Work. But is it worth you know, maybe five times, 225 00:12:34,600 --> 00:12:37,600 Speaker 1: seven times, eight times in this hyper growth mode, I 226 00:12:37,640 --> 00:12:41,439 Speaker 1: think it can be. So you mentioned the magic word 227 00:12:41,920 --> 00:12:45,160 Speaker 1: hyper growth, and of course I guess the key to 228 00:12:45,240 --> 00:12:48,600 Speaker 1: building up leverage in real estate for we Work is 229 00:12:48,880 --> 00:12:52,440 Speaker 1: growing so quickly and amassing so much market power that 230 00:12:52,520 --> 00:12:56,760 Speaker 1: you sort of basically just beat out competitors talk to 231 00:12:56,840 --> 00:13:00,560 Speaker 1: us about like this notion of hyper growth. How long 232 00:13:00,800 --> 00:13:05,200 Speaker 1: is it acceptable for a company to not post any profits, 233 00:13:05,360 --> 00:13:09,199 Speaker 1: you know, for the sake of building up its market share? 234 00:13:09,400 --> 00:13:16,680 Speaker 1: And how vital is funding to hyper growth? Well, that's 235 00:13:16,679 --> 00:13:18,720 Speaker 1: a great question, and I think, you know, we work 236 00:13:18,840 --> 00:13:22,400 Speaker 1: is a kind of a running experiment on how far 237 00:13:22,760 --> 00:13:24,560 Speaker 1: you know you can go. But I do think that 238 00:13:25,000 --> 00:13:27,079 Speaker 1: you know, you've got to keep the context in mind, 239 00:13:27,080 --> 00:13:29,000 Speaker 1: which is that we are in a world where money 240 00:13:29,080 --> 00:13:33,079 Speaker 1: is is historically cheap um and and access to capital 241 00:13:33,120 --> 00:13:36,560 Speaker 1: for hyper growth companies UM is you know, pretty open. 242 00:13:36,880 --> 00:13:38,640 Speaker 1: So I think you know, you can look at we 243 00:13:38,640 --> 00:13:40,600 Speaker 1: were going to say, hey, this couldn't have existed twenty 244 00:13:40,679 --> 00:13:42,640 Speaker 1: years ago, and it's kind of the meat at least, 245 00:13:42,720 --> 00:13:45,320 Speaker 1: you know obvious lots of these businesses UM like an 246 00:13:45,440 --> 00:13:48,240 Speaker 1: uber or a lift um, you know, depend on the 247 00:13:48,520 --> 00:13:50,480 Speaker 1: access to low cost capital, and so we worked as 248 00:13:50,520 --> 00:13:53,160 Speaker 1: as well. Um, you know, can they continue to grow 249 00:13:53,160 --> 00:13:57,319 Speaker 1: acent well into the billions of revenue um? That might 250 00:13:57,360 --> 00:14:00,680 Speaker 1: be difficult. Um. I think it's it's it is hard 251 00:14:00,760 --> 00:14:03,520 Speaker 1: to get too deep into the finances because while they 252 00:14:03,559 --> 00:14:06,200 Speaker 1: do release some financial formation, there's a lot that we 253 00:14:06,240 --> 00:14:10,240 Speaker 1: don't know about the kind of cohort economics and the 254 00:14:10,240 --> 00:14:13,600 Speaker 1: economics by geography, and so my I think the bowl 255 00:14:13,640 --> 00:14:16,920 Speaker 1: case is that in we Works more mature geographies, the 256 00:14:16,960 --> 00:14:19,320 Speaker 1: unit economics are pretty good. I think that's also the 257 00:14:19,320 --> 00:14:22,480 Speaker 1: bowl case for businesses like uber or door dash as well, 258 00:14:22,560 --> 00:14:25,800 Speaker 1: and that they are investing a lot in new markets UM, 259 00:14:25,880 --> 00:14:28,560 Speaker 1: and that is is kind of the big cash depleted. 260 00:14:28,760 --> 00:14:31,240 Speaker 1: So if in their mature markets, we Work is is 261 00:14:31,280 --> 00:14:34,040 Speaker 1: hemorrhaging in cash, then that's obviously pretty worrisome. But my 262 00:14:34,080 --> 00:14:35,880 Speaker 1: guess is that looking at more mature markets like a 263 00:14:35,920 --> 00:14:39,200 Speaker 1: San Francisco, UM, you know, looking at buildings that they've 264 00:14:39,240 --> 00:14:41,760 Speaker 1: been uh, you know, kind of leasing out for a 265 00:14:41,760 --> 00:14:45,120 Speaker 1: period of time, the uneconomics are are pretty good. And 266 00:14:45,160 --> 00:14:47,800 Speaker 1: I think with scale, you know that customer acquisition costs 267 00:14:47,800 --> 00:14:50,600 Speaker 1: advantage gets kind of more and more meaningful. UM. They 268 00:14:50,640 --> 00:14:53,600 Speaker 1: also are able to kind of squeeze out more efficiencies, 269 00:14:53,640 --> 00:14:55,840 Speaker 1: you know, from various suppliers and back to find the 270 00:14:55,920 --> 00:14:59,320 Speaker 1: leverage point once they are are renting, you know, fift 271 00:15:00,040 --> 00:15:03,240 Speaker 1: the building from a landlord. The landlord might need them 272 00:15:03,360 --> 00:15:05,800 Speaker 1: more than we Work needs the landlord. And that's just 273 00:15:05,880 --> 00:15:07,720 Speaker 1: on a building. The building basis, and I think kind 274 00:15:07,720 --> 00:15:10,160 Speaker 1: of similarly in a geo area. You know, we work 275 00:15:10,160 --> 00:15:12,040 Speaker 1: and have a lot of leverage by you know, having 276 00:15:12,080 --> 00:15:16,440 Speaker 1: a multiple buildings with with various landlords. So I think 277 00:15:16,520 --> 00:15:19,760 Speaker 1: it's it's an open question just how much uh you know, 278 00:15:19,840 --> 00:15:23,560 Speaker 1: better economics they can extract from suppliers, but I think 279 00:15:23,600 --> 00:15:25,360 Speaker 1: they certainly can and they do. I mean, they they've 280 00:15:25,480 --> 00:15:29,960 Speaker 1: said this that you know, they typically get their landlords 281 00:15:30,000 --> 00:15:34,720 Speaker 1: to pay ninety percent of build out costs versus industry average, 282 00:15:34,760 --> 00:15:37,560 Speaker 1: So that's an advantage. And then look on the flip side, 283 00:15:37,560 --> 00:15:42,080 Speaker 1: they still need to innovate with their user experience, uh, 284 00:15:42,120 --> 00:15:43,800 Speaker 1: you know, and their brand, you know, and kind of 285 00:15:43,840 --> 00:15:46,600 Speaker 1: the social aspect that they offer so that they don't 286 00:15:46,600 --> 00:15:49,720 Speaker 1: get caught in in a price war. You know, certainly 287 00:15:49,720 --> 00:15:51,840 Speaker 1: that the bear case on an uber or a lift 288 00:15:52,280 --> 00:15:54,120 Speaker 1: is that you know, they're selling a commodity there in 289 00:15:54,160 --> 00:15:55,880 Speaker 1: a price war where the margins that were going to 290 00:15:55,960 --> 00:15:58,880 Speaker 1: come from. And you know, with we work, you know 291 00:15:58,880 --> 00:16:02,000 Speaker 1: that that the better the experience they can offer, hopefully 292 00:16:02,040 --> 00:16:04,120 Speaker 1: you know, enabled by more and more technology, you know, 293 00:16:04,160 --> 00:16:06,880 Speaker 1: they'll be able to command that kind of premium pricing. 294 00:16:07,480 --> 00:16:09,280 Speaker 1: And I think, you know, one of those. One of 295 00:16:09,320 --> 00:16:12,160 Speaker 1: the cases of skepticism is looking at hey, you know, 296 00:16:12,200 --> 00:16:15,920 Speaker 1: the average member is only getting you know, fifty square feet, uh, 297 00:16:15,960 --> 00:16:18,360 Speaker 1: and they're paying you know, six thousand bucks a year. 298 00:16:18,720 --> 00:16:22,760 Speaker 1: That's crazy. Well, you know, I don't think it's necessarily crazy. Um, 299 00:16:22,800 --> 00:16:26,240 Speaker 1: given that what they're selling to their customers is not 300 00:16:26,320 --> 00:16:30,000 Speaker 1: just space, it's the the experience in the community, and well, 301 00:16:30,040 --> 00:16:31,960 Speaker 1: it's easy to be able to skeptical of some of that. 302 00:16:32,280 --> 00:16:35,480 Speaker 1: I do think that that that We Work users are 303 00:16:35,560 --> 00:16:38,640 Speaker 1: voting with their feet, and you know, seeing their massive 304 00:16:38,680 --> 00:16:43,080 Speaker 1: growth and high occupancy, it does seem like they really 305 00:16:43,080 --> 00:17:00,640 Speaker 1: do have that differentiated offering. Obviously real estate. Everyone in 306 00:17:00,720 --> 00:17:04,320 Speaker 1: real estate wants leverage. It's a leverage game. But that 307 00:17:04,400 --> 00:17:07,200 Speaker 1: can really come back to bite you in a downturn. 308 00:17:07,280 --> 00:17:09,720 Speaker 1: So I'm curious, like, let's say we were to hit 309 00:17:09,720 --> 00:17:14,040 Speaker 1: a recession. The We Work defenders. Is your argument that a, 310 00:17:14,760 --> 00:17:17,719 Speaker 1: they have their landlords to some extent over a barrel 311 00:17:17,760 --> 00:17:20,399 Speaker 1: because they occupy so much of their space that they 312 00:17:20,440 --> 00:17:25,520 Speaker 1: could renegotiate long term leases and be that obviously their 313 00:17:25,600 --> 00:17:29,600 Speaker 1: tenants that they would take a hit. But because they 314 00:17:29,640 --> 00:17:33,320 Speaker 1: offer more flexible terms, maybe they don't get as hit. 315 00:17:33,440 --> 00:17:36,640 Speaker 1: As bad as some other uh, some other landlords. Isn't 316 00:17:36,640 --> 00:17:40,440 Speaker 1: that the idea? Yeah, I think that's that's the book case. 317 00:17:40,480 --> 00:17:43,359 Speaker 1: And I think that the idea is that, you know, 318 00:17:43,440 --> 00:17:46,600 Speaker 1: like white bread consumption goes up in recessions because people 319 00:17:46,640 --> 00:17:49,320 Speaker 1: are switching from the fancy whole weight to the whitebread, 320 00:17:49,480 --> 00:17:52,480 Speaker 1: at least historically, you know, the flexible offering that they 321 00:17:52,480 --> 00:17:54,920 Speaker 1: have will be more attractive, you know. And I think that, 322 00:17:54,960 --> 00:17:57,240 Speaker 1: you know, intuitively, it makes sense, especially if you're a 323 00:17:57,240 --> 00:17:59,159 Speaker 1: small business. And so a lot of people say, oh, 324 00:17:59,200 --> 00:18:01,440 Speaker 1: what about these small businesses and startups, you know, what's 325 00:18:01,440 --> 00:18:03,760 Speaker 1: going to happen in a recession? And I think that 326 00:18:03,800 --> 00:18:06,320 Speaker 1: there's there's so many of them that that even in 327 00:18:06,320 --> 00:18:08,800 Speaker 1: a recession, there's gonna be you know, more than enough 328 00:18:09,160 --> 00:18:11,399 Speaker 1: to keep we work growing. I think that they're going 329 00:18:11,440 --> 00:18:13,760 Speaker 1: to be attracted to that we work you know, flexibility. 330 00:18:14,160 --> 00:18:16,639 Speaker 1: Um And and I think there's been anecdotal evidence, you 331 00:18:16,680 --> 00:18:19,000 Speaker 1: know that in a few markets like Salpollo that they're 332 00:18:19,040 --> 00:18:21,920 Speaker 1: in um where there was some uh, there was a 333 00:18:21,960 --> 00:18:24,760 Speaker 1: kind of minor recession, you know, they did see an 334 00:18:24,760 --> 00:18:27,880 Speaker 1: increase in demand. So I do think that that that 335 00:18:28,000 --> 00:18:30,440 Speaker 1: is a powerful argument they have, and then yeah, I 336 00:18:30,720 --> 00:18:33,880 Speaker 1: agree that they leverage they have with landlords will allow 337 00:18:34,000 --> 00:18:37,120 Speaker 1: them to renegotiate if necessary, um to get better terms. 338 00:18:37,119 --> 00:18:38,480 Speaker 1: And look, I mean I remember in two thousand and 339 00:18:38,520 --> 00:18:41,240 Speaker 1: eight looking at all these actors across the financial spectrum 340 00:18:41,280 --> 00:18:44,080 Speaker 1: and thinking all these are gonna go bust, And I 341 00:18:44,080 --> 00:18:45,919 Speaker 1: mean it wasn't really something to be happy about. But 342 00:18:46,280 --> 00:18:49,400 Speaker 1: as a kind of an amateur, you know, retail investor, 343 00:18:49,480 --> 00:18:51,480 Speaker 1: I tried to make some trades to take advantage of 344 00:18:51,480 --> 00:18:53,359 Speaker 1: these balance sheets that looked like they were going to 345 00:18:53,400 --> 00:18:55,040 Speaker 1: blow up. But but guess what, you know, a lot 346 00:18:55,119 --> 00:18:58,159 Speaker 1: of these institutions survived. And you know it was the 347 00:18:58,200 --> 00:19:00,960 Speaker 1: old what was it? What did they say? The amend, extend, 348 00:19:01,040 --> 00:19:04,399 Speaker 1: pretend And I mean it's nothing to be you know, 349 00:19:04,680 --> 00:19:06,959 Speaker 1: uh too cheerful about. But I do think that we 350 00:19:07,000 --> 00:19:09,600 Speaker 1: work will have that that type of flexibility where you know, 351 00:19:09,560 --> 00:19:10,600 Speaker 1: at the end of the day, a lot of these 352 00:19:10,680 --> 00:19:13,320 Speaker 1: landlords have their own creditors, um, and they're not going 353 00:19:13,359 --> 00:19:15,480 Speaker 1: to be looking to a victim major tenant and what 354 00:19:15,560 --> 00:19:18,840 Speaker 1: are their alternatives in a downturn where there aren't necessarily 355 00:19:18,880 --> 00:19:21,320 Speaker 1: as many um, you know tenants you know kind of 356 00:19:21,359 --> 00:19:24,320 Speaker 1: queued up for for big space. So I think I 357 00:19:24,320 --> 00:19:26,840 Speaker 1: think that, you know, some of the biggest sources of 358 00:19:26,840 --> 00:19:29,720 Speaker 1: of kind of misunderstanding what we work are. Yeah, this 359 00:19:29,800 --> 00:19:32,800 Speaker 1: vulnerability to a recession. Look, I think we're all still 360 00:19:32,840 --> 00:19:35,359 Speaker 1: scarred from the financial crisis of two, two does and nine, 361 00:19:35,440 --> 00:19:38,159 Speaker 1: you know, which is reasonable given how brutal it was. 362 00:19:38,280 --> 00:19:40,960 Speaker 1: But I think that even there is recessions, very unlikely 363 00:19:41,040 --> 00:19:43,800 Speaker 1: will you'll approach anything like that. And I think we 364 00:19:43,880 --> 00:19:46,800 Speaker 1: work as actually pretty well positioned. So I think that 365 00:19:46,800 --> 00:19:49,040 Speaker 1: that is, to me, actually kind of one of the 366 00:19:49,080 --> 00:19:51,800 Speaker 1: weaker elements of the bear case. I think kind of 367 00:19:51,800 --> 00:19:53,920 Speaker 1: there's a there's an adjacent part of the bear case, 368 00:19:53,960 --> 00:19:56,240 Speaker 1: you know, which is, hey, they're there, you know, and 369 00:19:56,280 --> 00:19:58,320 Speaker 1: if you look at you know, fin Twitter, people called 370 00:19:58,600 --> 00:20:00,960 Speaker 1: a Ponzi scheme. You know, they've got these long term 371 00:20:00,960 --> 00:20:04,600 Speaker 1: releases and long term releases, you know, short term rentals. 372 00:20:04,600 --> 00:20:08,600 Speaker 1: That's crazy and it's like well wright liability mismatch. Yeah, 373 00:20:08,640 --> 00:20:10,199 Speaker 1: a lot of a lot of businesses have done that. 374 00:20:10,240 --> 00:20:13,520 Speaker 1: I mean, that's the ESPN business model. And ESPN is 375 00:20:13,560 --> 00:20:15,919 Speaker 1: not doing great today, but but historically, you know, they 376 00:20:15,960 --> 00:20:18,879 Speaker 1: would send these long term deals with sports leagues to 377 00:20:18,920 --> 00:20:21,680 Speaker 1: pay them exorbitant rice fees, you know, when they would 378 00:20:21,720 --> 00:20:23,760 Speaker 1: sign them. You know, people in media say that's crazy, 379 00:20:24,080 --> 00:20:26,600 Speaker 1: but guess what, you know, they made a lot of money. 380 00:20:26,920 --> 00:20:29,720 Speaker 1: And there are cases where you know, owners of assets 381 00:20:29,760 --> 00:20:33,240 Speaker 1: prefer you know, the certainty of getting paid and will 382 00:20:33,280 --> 00:20:35,879 Speaker 1: forego some of the short term upside um that you 383 00:20:35,920 --> 00:20:37,720 Speaker 1: can get when you take risk. And so I think 384 00:20:37,760 --> 00:20:40,480 Speaker 1: we work, we works path there is actually pretty common. 385 00:20:40,840 --> 00:20:42,199 Speaker 1: But a lot of folks, I think in the real 386 00:20:42,240 --> 00:20:45,320 Speaker 1: esty industry look at that and think and think it 387 00:20:45,560 --> 00:20:47,480 Speaker 1: you know, it can't last. But in fact, I think 388 00:20:47,480 --> 00:20:49,240 Speaker 1: it's actually been a path that's worked pretty well for 389 00:20:49,240 --> 00:20:52,600 Speaker 1: a lot of businesses across industries. So Sandy, I have 390 00:20:52,640 --> 00:20:56,359 Speaker 1: a different um sort of bear case concern, I guess, 391 00:20:56,359 --> 00:20:58,479 Speaker 1: and I think when it comes to a lot of 392 00:20:58,600 --> 00:21:01,320 Speaker 1: sort of disruptive company or unicorns, I think there's a 393 00:21:01,320 --> 00:21:03,960 Speaker 1: tendency to think that they all come in to the 394 00:21:04,160 --> 00:21:07,959 Speaker 1: market whatever it might be, you know, cars or in 395 00:21:08,000 --> 00:21:10,080 Speaker 1: this case real estate, and they come in, they do 396 00:21:10,160 --> 00:21:13,800 Speaker 1: something different, they disrupt the market, and that that business 397 00:21:13,800 --> 00:21:17,240 Speaker 1: model can continue forever and that the market basically stays static. 398 00:21:17,280 --> 00:21:19,240 Speaker 1: And of course what tends to happen is the market 399 00:21:19,280 --> 00:21:23,280 Speaker 1: actually adapts quite quickly, usually to a lot of these 400 00:21:23,280 --> 00:21:26,720 Speaker 1: new business models um and you also get competitors at 401 00:21:26,760 --> 00:21:29,240 Speaker 1: the same time. So in the case of we Work, 402 00:21:29,320 --> 00:21:32,560 Speaker 1: you know, they come in with these short term office 403 00:21:32,600 --> 00:21:35,520 Speaker 1: rental offers. They come in with, as Joe puts it, 404 00:21:35,880 --> 00:21:38,840 Speaker 1: office space with lots of beer available on tap in 405 00:21:38,880 --> 00:21:43,919 Speaker 1: this community atmosphere. Is there not a risk that by 406 00:21:44,000 --> 00:21:48,200 Speaker 1: making those two things so popular in the real estate market, 407 00:21:48,240 --> 00:21:51,800 Speaker 1: that those things start becoming the norm. And we Work 408 00:21:51,920 --> 00:21:54,960 Speaker 1: basically sort of arbitrage as its own edge out of 409 00:21:55,000 --> 00:21:58,000 Speaker 1: the market because we've already seen some other companies like 410 00:21:58,160 --> 00:22:01,639 Speaker 1: UM read us for In to start to sort of 411 00:22:01,640 --> 00:22:04,119 Speaker 1: follow this model. You know, they've redone a lot of 412 00:22:04,160 --> 00:22:07,119 Speaker 1: their office spaces to make them look more like we 413 00:22:07,280 --> 00:22:11,680 Speaker 1: Work kind of offering. So is that a risk. That's 414 00:22:11,680 --> 00:22:14,919 Speaker 1: a great question, and I think it is risk. I 415 00:22:14,960 --> 00:22:17,560 Speaker 1: think that you know we Work, you know, and I 416 00:22:17,560 --> 00:22:19,480 Speaker 1: think you know you you ask that question, I think 417 00:22:19,480 --> 00:22:21,600 Speaker 1: in a great way, and because it really is, you know, 418 00:22:21,680 --> 00:22:24,320 Speaker 1: relative to their industry peers, and so you know, I 419 00:22:24,359 --> 00:22:27,320 Speaker 1: think one of the biggest sources of criticism in Silicon 420 00:22:27,400 --> 00:22:29,800 Speaker 1: Valley of We Work is, hey, there's not much technology 421 00:22:29,880 --> 00:22:32,720 Speaker 1: or there's no technology well, you know it's relative. You know, 422 00:22:32,960 --> 00:22:35,000 Speaker 1: we Work isn't competing with Google. If they were trying 423 00:22:35,000 --> 00:22:37,480 Speaker 1: to compete with Google and search, they need to hire 424 00:22:37,520 --> 00:22:40,040 Speaker 1: you know, a million of the best engineers on the planet. 425 00:22:40,080 --> 00:22:42,760 Speaker 1: But we're we're talking about an industry that is historically 426 00:22:43,040 --> 00:22:46,760 Speaker 1: allergic to technology, and so we Works bar wasn't as 427 00:22:46,840 --> 00:22:49,560 Speaker 1: high I think to to innovate and offer a better, 428 00:22:49,880 --> 00:22:52,520 Speaker 1: you know, better user experience. But yeah, that's right. You know, 429 00:22:52,600 --> 00:22:56,639 Speaker 1: can competitors come in and offer comparable um, you know, 430 00:22:56,680 --> 00:23:00,639 Speaker 1: experiences and compete on price, and I think Regus, I mean, 431 00:23:00,640 --> 00:23:03,440 Speaker 1: I think their brand spaces is you know, kind of 432 00:23:03,440 --> 00:23:06,360 Speaker 1: an attempt at that. You know, there's also Industrious, which 433 00:23:06,400 --> 00:23:08,440 Speaker 1: is a well funded startup that's that's taking a little 434 00:23:08,440 --> 00:23:10,720 Speaker 1: bit of a different path, but it's also pretty similar. 435 00:23:10,960 --> 00:23:13,359 Speaker 1: And so you know, you kind of get this attack 436 00:23:13,359 --> 00:23:16,280 Speaker 1: of the clones, right, which you know, that's still I 437 00:23:16,320 --> 00:23:18,880 Speaker 1: think that was referring to the old kind of laptop 438 00:23:18,920 --> 00:23:22,399 Speaker 1: wars when Compact came out of nowhere to have a 439 00:23:22,560 --> 00:23:24,600 Speaker 1: giant business in a couple of years, but but really 440 00:23:24,640 --> 00:23:27,600 Speaker 1: got beaten up by clones. So what's gonna happen? Do 441 00:23:27,640 --> 00:23:30,399 Speaker 1: we Work? Uh, They're gonna have to execute, And to me, 442 00:23:30,520 --> 00:23:34,080 Speaker 1: that's the biggest question is can they execute? And you know, 443 00:23:34,200 --> 00:23:37,920 Speaker 1: can they you know, focus on a few key priorities 444 00:23:38,320 --> 00:23:41,240 Speaker 1: and build technology that can compound to create more and 445 00:23:41,240 --> 00:23:44,760 Speaker 1: more advantage. They've got more capital than competitors, They've I 446 00:23:44,800 --> 00:23:48,119 Speaker 1: think they've hired you know, arguably you know better, better 447 00:23:48,160 --> 00:23:51,120 Speaker 1: folks at technology and engineering. So I think they've got 448 00:23:51,119 --> 00:23:54,160 Speaker 1: the ingredients to do that. I'm not sure if they are. 449 00:23:54,240 --> 00:23:56,760 Speaker 1: I just don't know, but I think that to me, 450 00:23:56,840 --> 00:24:00,320 Speaker 1: the most compelling Bear criticism is that while you know 451 00:24:00,359 --> 00:24:02,960 Speaker 1: that the CEO and the leadership you have a ton 452 00:24:03,000 --> 00:24:05,800 Speaker 1: of credit for for building this company is so fast 453 00:24:05,840 --> 00:24:08,960 Speaker 1: and doing some pretty amazing things, Uh, they haven't shown 454 00:24:09,040 --> 00:24:12,119 Speaker 1: really a kind of a consistency around prioritization. And so 455 00:24:12,160 --> 00:24:15,080 Speaker 1: when you look at some of the great operators in tech, 456 00:24:15,160 --> 00:24:18,600 Speaker 1: like Jeff Bezos, they've been super focused and that's kind 457 00:24:18,600 --> 00:24:22,280 Speaker 1: of created a culture of operational rigor, financial rigor that 458 00:24:22,359 --> 00:24:25,200 Speaker 1: has um kind of percolated throughout all the different lines 459 00:24:25,200 --> 00:24:27,399 Speaker 1: of business at a company like Amazon, and so for 460 00:24:27,520 --> 00:24:30,440 Speaker 1: we work, I think they're getting really good people there, 461 00:24:30,720 --> 00:24:32,920 Speaker 1: but that doesn't mean that they're going to be able 462 00:24:32,960 --> 00:24:36,480 Speaker 1: to execute and and you know, build software and build 463 00:24:36,560 --> 00:24:39,639 Speaker 1: you know, financial discipline because the growth inevitably will slow 464 00:24:39,720 --> 00:24:42,240 Speaker 1: down and they will need to kind of trade growth 465 00:24:42,440 --> 00:24:45,600 Speaker 1: for profitability um and they need to be able to 466 00:24:45,680 --> 00:24:49,200 Speaker 1: have evidence of that as they approached the public markets. 467 00:24:49,240 --> 00:24:51,280 Speaker 1: So it's a great question. I think right now, you know, 468 00:24:51,320 --> 00:24:54,240 Speaker 1: their their brand does still give them an advantage. You know, 469 00:24:54,440 --> 00:24:57,159 Speaker 1: it might be, you know, look a little thin, but 470 00:24:57,200 --> 00:24:59,080 Speaker 1: I think a lot of times brands you know, can 471 00:24:59,160 --> 00:25:02,040 Speaker 1: look thin if you look from certain direction. On the 472 00:25:02,040 --> 00:25:05,320 Speaker 1: other hand, I do think that the average non expert 473 00:25:05,440 --> 00:25:08,199 Speaker 1: potential you know, customer in this space would would go 474 00:25:08,320 --> 00:25:11,359 Speaker 1: for we Work over a spaces or an industrious or 475 00:25:11,359 --> 00:25:13,960 Speaker 1: another brand, because we Work does have that brand, but 476 00:25:14,040 --> 00:25:16,280 Speaker 1: it doesn't necessarily last forever. And they really as a 477 00:25:16,320 --> 00:25:18,240 Speaker 1: company are going to need to be able to to 478 00:25:18,800 --> 00:25:23,280 Speaker 1: commit themselves towards focused execution, to innovate and and use 479 00:25:23,320 --> 00:25:26,800 Speaker 1: more technology to build that differentiation. So to me, to me, 480 00:25:26,880 --> 00:25:29,720 Speaker 1: that's really the multibility and all question is, you know, 481 00:25:29,840 --> 00:25:33,800 Speaker 1: can they execute? Just so people are clear about some 482 00:25:33,880 --> 00:25:39,199 Speaker 1: of the questions regarding this company's ability to focus or 483 00:25:39,200 --> 00:25:44,120 Speaker 1: engage in focused execution. In two seventeen, it was reported 484 00:25:44,640 --> 00:25:47,920 Speaker 1: that we Work had made an investment in a company 485 00:25:48,000 --> 00:25:53,240 Speaker 1: called wave Garden, which is a company that makes wave pools. 486 00:25:53,560 --> 00:25:55,800 Speaker 1: They are reading from the New York Business Journal. Spain 487 00:25:55,840 --> 00:25:59,879 Speaker 1: based wave Garden is touted as an engineering company specializing 488 00:26:00,200 --> 00:26:04,480 Speaker 1: mad manmade lagoons that could be used for recreation, surfing, 489 00:26:04,680 --> 00:26:08,960 Speaker 1: in various water sports, other things that the company has 490 00:26:09,240 --> 00:26:11,840 Speaker 1: dabbled into. I think it has like a place where 491 00:26:11,840 --> 00:26:15,600 Speaker 1: you can live. They've opened up a talked about launching 492 00:26:15,680 --> 00:26:19,840 Speaker 1: a grade school. So that is indeed. I mean it's 493 00:26:19,880 --> 00:26:24,160 Speaker 1: almost like an understatement to ask whether this company really 494 00:26:24,200 --> 00:26:28,520 Speaker 1: knows how to do uh focused execution. Joe, I can't 495 00:26:28,560 --> 00:26:32,119 Speaker 1: believe you don't understand the synergy sic value of of 496 00:26:32,119 --> 00:26:34,440 Speaker 1: of wave pools. I just don't think you've got this. 497 00:26:35,080 --> 00:26:38,640 Speaker 1: I don't have the CEO, Adam Newman. I definitely don't 498 00:26:38,720 --> 00:26:41,640 Speaker 1: have his vision any like. There have been numerous profiles 499 00:26:41,640 --> 00:26:44,840 Speaker 1: of him. Business Week our publication here did a great profile. 500 00:26:44,880 --> 00:26:47,240 Speaker 1: It was just a New York mad profile of him 501 00:26:47,280 --> 00:26:50,080 Speaker 1: basically about you know, he's like, oh, we're not a 502 00:26:50,080 --> 00:26:52,959 Speaker 1: real estate company. Where changed the world? You know, like 503 00:26:53,040 --> 00:26:57,760 Speaker 1: one of very sort of classic California Silicon Valley style 504 00:26:57,880 --> 00:27:01,679 Speaker 1: of talking about changing everything. I think to most people 505 00:27:02,320 --> 00:27:06,000 Speaker 1: it feels like a pretty big red flag. Yeah. Look, 506 00:27:06,040 --> 00:27:09,280 Speaker 1: I mean I guess the you know, the bowl case 507 00:27:09,400 --> 00:27:12,440 Speaker 1: is all publicity is good publicity. But yeah, I've read 508 00:27:12,440 --> 00:27:15,119 Speaker 1: a lot of this similar things, and is it is 509 00:27:15,119 --> 00:27:18,120 Speaker 1: a little scary, you know that It's really hard, I think, 510 00:27:18,119 --> 00:27:21,960 Speaker 1: and this is a really kind of an underappreciated phenomena 511 00:27:22,000 --> 00:27:25,320 Speaker 1: when you have a startup CEO to have so much 512 00:27:25,359 --> 00:27:28,280 Speaker 1: success so quickly, I think it's really hard to to 513 00:27:28,400 --> 00:27:30,639 Speaker 1: not learn the wrong things, or at least some of 514 00:27:30,640 --> 00:27:33,960 Speaker 1: the wrong things from success. And so that might be 515 00:27:34,040 --> 00:27:37,520 Speaker 1: happening here. You know. I hope that the persona that 516 00:27:37,720 --> 00:27:39,840 Speaker 1: is um that that you see when you read these pieces, 517 00:27:39,880 --> 00:27:43,960 Speaker 1: you know, I hope that's kind of ironic, you know, uh, 518 00:27:44,359 --> 00:27:45,960 Speaker 1: And you know, I hope he's got some people around 519 00:27:46,080 --> 00:27:49,000 Speaker 1: him who are really sharp and who will question him 520 00:27:49,040 --> 00:27:51,120 Speaker 1: and orn't just going to say yes. I think they've 521 00:27:51,160 --> 00:27:53,840 Speaker 1: got a strong CFO. I don't know any of the 522 00:27:53,840 --> 00:27:55,720 Speaker 1: C level folks personally, but I think they have a 523 00:27:55,800 --> 00:27:59,320 Speaker 1: very strong discipline CFO. That's really important. So someone has 524 00:27:59,359 --> 00:28:01,960 Speaker 1: to call the ce on on some of the nonsense, 525 00:28:02,000 --> 00:28:05,400 Speaker 1: because I can't defend the nepotism. That yeah, that that 526 00:28:05,480 --> 00:28:07,359 Speaker 1: to me, if we're talking about red flags, that's the 527 00:28:07,400 --> 00:28:10,200 Speaker 1: one that I would be really focusing on because it's 528 00:28:10,400 --> 00:28:14,359 Speaker 1: terrible for culture when people are being promoted and given 529 00:28:14,359 --> 00:28:17,880 Speaker 1: responsibility for the wrong reasons. Now, I don't think I've 530 00:28:17,880 --> 00:28:20,680 Speaker 1: got enough information to really judge if there's something that's 531 00:28:20,720 --> 00:28:23,080 Speaker 1: on toward going on there, but I I you know, 532 00:28:23,160 --> 00:28:25,119 Speaker 1: back to say like a Jeff Bezos, I mean, it 533 00:28:25,119 --> 00:28:28,040 Speaker 1: would be ludicrous for anyone, and you know, for one 534 00:28:28,080 --> 00:28:30,680 Speaker 1: of his relatives in Amazon to get promoted or to 535 00:28:30,760 --> 00:28:33,960 Speaker 1: get something just because of their their last name or 536 00:28:34,000 --> 00:28:36,440 Speaker 1: their their family, Like everyone would would realize that would 537 00:28:36,480 --> 00:28:39,280 Speaker 1: just be kind of anathema to their culture. So I 538 00:28:39,320 --> 00:28:42,160 Speaker 1: don't I hope that this is more of just kind 539 00:28:42,200 --> 00:28:44,479 Speaker 1: of silly stuff that percolates in the media. Is kind 540 00:28:44,480 --> 00:28:46,960 Speaker 1: of misunderstood. But but it's it's also hard because you 541 00:28:47,000 --> 00:28:49,440 Speaker 1: can look at Amazon and say, well, what about Amazon, 542 00:28:49,600 --> 00:28:51,680 Speaker 1: you know, and their focused I mean, aws, what the 543 00:28:51,720 --> 00:28:53,600 Speaker 1: heck did that have to do with with with retail? 544 00:28:53,960 --> 00:28:56,040 Speaker 1: And so we work as starting you know, a school 545 00:28:56,080 --> 00:28:58,760 Speaker 1: business and this business and that business, and well, you know, 546 00:28:58,800 --> 00:29:01,200 Speaker 1: I think within reason can make sense to try new 547 00:29:01,240 --> 00:29:03,920 Speaker 1: products and be innovative and and so you know we work. 548 00:29:04,040 --> 00:29:06,480 Speaker 1: I think actually has in many ways done a great 549 00:29:06,520 --> 00:29:09,120 Speaker 1: job moving quickly. UM. They've been very aggressive on M 550 00:29:09,160 --> 00:29:11,560 Speaker 1: and A. I've seen them kind of behind the scenes 551 00:29:11,600 --> 00:29:14,560 Speaker 1: on some deals, and I think they're actually pretty pretty 552 00:29:14,560 --> 00:29:17,240 Speaker 1: savvy as far as moving quickly. They also I think 553 00:29:17,240 --> 00:29:19,520 Speaker 1: are are working with a lot of tech startups as 554 00:29:19,560 --> 00:29:22,240 Speaker 1: a customer UM in ways that I think are pretty 555 00:29:22,280 --> 00:29:25,400 Speaker 1: enlightened relative to most bigger companies. So, you know, so 556 00:29:25,440 --> 00:29:27,560 Speaker 1: they're they're kind of ability to move fast can be 557 00:29:27,600 --> 00:29:30,600 Speaker 1: a real asset. At the same time, if if they're 558 00:29:31,200 --> 00:29:34,120 Speaker 1: you know, unfocused and priorities are shifting constantly, you know 559 00:29:34,200 --> 00:29:36,600 Speaker 1: that that's the thing that that worries me the most. 560 00:29:36,640 --> 00:29:39,360 Speaker 1: But I think they very well might have a handle 561 00:29:39,480 --> 00:29:41,720 Speaker 1: that that this is an issue and they might be 562 00:29:41,800 --> 00:29:44,280 Speaker 1: taking kind of proven measures to build that culture of 563 00:29:44,320 --> 00:29:46,680 Speaker 1: operational discipline. If they can do that, then I really 564 00:29:46,680 --> 00:29:48,760 Speaker 1: think it's a business that that could make soft Bank 565 00:29:48,800 --> 00:29:51,680 Speaker 1: look really smart. But it's to me that that question 566 00:29:51,720 --> 00:29:54,160 Speaker 1: around execution that is really the one that that I 567 00:29:54,200 --> 00:29:56,320 Speaker 1: would be studying the most if I was trying to 568 00:29:56,360 --> 00:30:00,240 Speaker 1: make a trade on the business. So there's one They're 569 00:30:00,800 --> 00:30:03,200 Speaker 1: big red flag that a lot of people have focused on, 570 00:30:03,240 --> 00:30:07,240 Speaker 1: aside from the sort of Silicon Valley cliche type CEO 571 00:30:07,400 --> 00:30:10,000 Speaker 1: who wants to change the world, although I guess this 572 00:30:10,040 --> 00:30:14,720 Speaker 1: other red flag is slightly related. But the community adjusted 573 00:30:14,960 --> 00:30:18,080 Speaker 1: EBITDAW which has already been mentioned a couple of times 574 00:30:18,120 --> 00:30:21,840 Speaker 1: in this conversation, this is the thing that we work 575 00:30:21,920 --> 00:30:26,400 Speaker 1: trotted out ebitdawes basically earnings you know, before interest, tax, 576 00:30:26,640 --> 00:30:31,920 Speaker 1: depreciation and amoritization and community adjusted ebitdas stripped out a 577 00:30:31,960 --> 00:30:35,640 Speaker 1: bunch of costs, a bunch of we work costs like marketing, construction, 578 00:30:35,720 --> 00:30:37,960 Speaker 1: basically things that we work. Said we're going to go 579 00:30:38,040 --> 00:30:43,240 Speaker 1: away once it reached some sort of maturity level, whenever 580 00:30:43,280 --> 00:30:49,040 Speaker 1: that might be. How can investors take companies seriously when 581 00:30:49,080 --> 00:30:54,160 Speaker 1: it not just unveils adjusted earnings, which are, as you mentioned, 582 00:30:54,200 --> 00:30:58,840 Speaker 1: you know, fairly regular in the financial industry nowadays, but 583 00:30:58,960 --> 00:31:04,360 Speaker 1: when it veils adjusted earnings under the umbrella of community 584 00:31:04,400 --> 00:31:07,360 Speaker 1: adjusted EBITDA because I think to a lot of people 585 00:31:07,400 --> 00:31:09,760 Speaker 1: that just sounds like the company's sort of not taking 586 00:31:09,840 --> 00:31:14,360 Speaker 1: itself seriously. That's a great question as well, And I 587 00:31:14,920 --> 00:31:19,400 Speaker 1: don't know the strict definition behind that term. But it's 588 00:31:19,440 --> 00:31:23,120 Speaker 1: really important that they are you know, very serious and 589 00:31:23,120 --> 00:31:27,040 Speaker 1: incredibility building in their use of financial metrics. I think 590 00:31:27,080 --> 00:31:30,440 Speaker 1: it's such an unusual business that it is reasonable that 591 00:31:30,520 --> 00:31:33,840 Speaker 1: they might have some new metrics that they're sharing, you know, 592 00:31:34,080 --> 00:31:36,160 Speaker 1: even when they go public and the rumor is that 593 00:31:36,200 --> 00:31:39,480 Speaker 1: they've already filed, they will have to be very transparent 594 00:31:39,520 --> 00:31:42,000 Speaker 1: around you know, what does that metric means specifically, and 595 00:31:42,360 --> 00:31:44,880 Speaker 1: what does the business look like kind of under the 596 00:31:45,480 --> 00:31:48,840 Speaker 1: you know, under more conventional metrics. UM. So that's really important. 597 00:31:48,840 --> 00:31:51,440 Speaker 1: You know, they did a debt offering last summer and 598 00:31:51,800 --> 00:31:53,720 Speaker 1: that you know, and so you can, you know, by 599 00:31:54,440 --> 00:31:56,520 Speaker 1: I believe, you know, buy some of that debt on 600 00:31:56,520 --> 00:31:59,719 Speaker 1: the open market. And it's not priced like the business 601 00:31:59,720 --> 00:32:01,320 Speaker 1: is about out to go bust. Now it's not. It's 602 00:32:01,320 --> 00:32:04,920 Speaker 1: not priced like treasuries. There's some risk, but I think 603 00:32:05,000 --> 00:32:06,760 Speaker 1: that is a good way to look at at how 604 00:32:06,760 --> 00:32:08,680 Speaker 1: does the market think about the business. And I think 605 00:32:08,720 --> 00:32:10,920 Speaker 1: the um you know, the yield on that debt is 606 00:32:10,920 --> 00:32:14,000 Speaker 1: is nine percent, so it's not the most high grade. 607 00:32:14,480 --> 00:32:16,720 Speaker 1: But I don't think the folks that are are looking 608 00:32:16,760 --> 00:32:19,040 Speaker 1: closely at the numbers and really have seen the most 609 00:32:19,040 --> 00:32:22,480 Speaker 1: I don't think they're showing, um, you know, too much 610 00:32:22,800 --> 00:32:26,320 Speaker 1: concerned about that, but certainly you know when they are 611 00:32:26,320 --> 00:32:28,720 Speaker 1: public and filing as a public company that they're gonna 612 00:32:28,720 --> 00:32:31,160 Speaker 1: have to be really rigorous in their metrics and and 613 00:32:31,200 --> 00:32:32,760 Speaker 1: they're not gonna be able to be kind of cute 614 00:32:32,800 --> 00:32:36,760 Speaker 1: and cheeky about about their differential metrics. So yeah, I mean, 615 00:32:36,760 --> 00:32:40,000 Speaker 1: I'm with you on being pretty curious, if not skeptical, 616 00:32:40,240 --> 00:32:44,400 Speaker 1: on how they're using that metric. Sandy, Corey really appreciate 617 00:32:44,600 --> 00:32:48,680 Speaker 1: you coming on the Odd Lots podcast. I actually think 618 00:32:48,880 --> 00:32:50,160 Speaker 1: I don't know if I would say I'm what we 619 00:32:50,160 --> 00:32:54,600 Speaker 1: work bowl after talking uh to, but I feel like 620 00:32:54,640 --> 00:32:56,880 Speaker 1: I have a little bit more of a grasp about 621 00:32:56,920 --> 00:32:59,200 Speaker 1: why the whole thing might not be some house of 622 00:32:59,240 --> 00:33:03,400 Speaker 1: cards that's on the verge of inevitable inevitable collapse. I 623 00:33:03,440 --> 00:33:07,520 Speaker 1: appreciate your contrarian take and thank you for coming on. Well, 624 00:33:07,560 --> 00:33:26,400 Speaker 1: thanks to Left for having me. I appreciate it. Thanks Sandy. So, Tracy, 625 00:33:26,400 --> 00:33:30,120 Speaker 1: are you convinced? I mean, this is such a cop out. 626 00:33:30,200 --> 00:33:34,120 Speaker 1: I think there's some value there, but I'm not necessarily 627 00:33:34,120 --> 00:33:37,640 Speaker 1: convinced about the valuation. I mean, after that conversation, I 628 00:33:37,720 --> 00:33:41,160 Speaker 1: sort of come out thinking that we work is sort 629 00:33:41,200 --> 00:33:45,840 Speaker 1: of a leveraged play on the health of the wider economy, 630 00:33:45,880 --> 00:33:50,680 Speaker 1: but also on free flowing liquidity from venture capital funds, 631 00:33:50,760 --> 00:33:55,040 Speaker 1: which is sort of like a double risk to me. Yeah, 632 00:33:55,120 --> 00:33:57,600 Speaker 1: I mean it seems like the way I think about 633 00:33:57,640 --> 00:34:02,320 Speaker 1: it after talking to him is the at if they 634 00:34:02,560 --> 00:34:05,480 Speaker 1: I guess it kind of goes back to the focused execution. 635 00:34:05,560 --> 00:34:09,000 Speaker 1: But the basic offering of here is a very nice 636 00:34:09,120 --> 00:34:12,200 Speaker 1: office space that has a pleasing aesthetic that it's very 637 00:34:12,239 --> 00:34:15,239 Speaker 1: flexible and easy to get in and out of. It's 638 00:34:15,280 --> 00:34:17,600 Speaker 1: not a bad product to offer. You could see the 639 00:34:17,640 --> 00:34:20,600 Speaker 1: appeal and that if they can just make that brand 640 00:34:20,640 --> 00:34:23,480 Speaker 1: really synonymous with good office space. And we've all been 641 00:34:23,520 --> 00:34:27,680 Speaker 1: to most offices across New York City or whatever, excluding Bloomberg, 642 00:34:27,680 --> 00:34:30,600 Speaker 1: which is fantastic, but most offices are very boring and 643 00:34:30,640 --> 00:34:33,640 Speaker 1: the lighting is bad and the sort of dreary. So 644 00:34:33,760 --> 00:34:37,600 Speaker 1: if you could have this sort of very good aesthetic 645 00:34:37,640 --> 00:34:40,600 Speaker 1: to an office and scale it up, uh, you could 646 00:34:40,600 --> 00:34:43,239 Speaker 1: see the appeal. You could see how that might be 647 00:34:43,320 --> 00:34:47,440 Speaker 1: something that could scale up. It's definitely a product. I 648 00:34:47,440 --> 00:34:51,560 Speaker 1: think again, like the danger in this case when it 649 00:34:51,600 --> 00:34:54,960 Speaker 1: comes to the valuation is basically when this like huge 650 00:34:55,040 --> 00:34:58,719 Speaker 1: story starts getting attached to what is actually a relatively 651 00:34:58,960 --> 00:35:03,160 Speaker 1: simple product and the CEO is actually quite keen on 652 00:35:03,160 --> 00:35:05,480 Speaker 1: on that story. You know, the things that come across 653 00:35:05,880 --> 00:35:07,879 Speaker 1: in the Business Week profile and also the New York 654 00:35:07,960 --> 00:35:12,480 Speaker 1: Mac pieces that he's the sort of self proclaimed visionary 655 00:35:12,480 --> 00:35:15,080 Speaker 1: who wants to change the world and is starting all 656 00:35:15,120 --> 00:35:17,200 Speaker 1: these new other businesses in order to do that. So 657 00:35:17,560 --> 00:35:20,600 Speaker 1: I think the story is sort of part of the 658 00:35:20,719 --> 00:35:24,520 Speaker 1: selling point of the company, but probably also its biggest risk. Well, 659 00:35:24,560 --> 00:35:27,600 Speaker 1: and also, you know, we're talking about what would happen 660 00:35:27,640 --> 00:35:30,360 Speaker 1: in a downturn, and you know, you could make the 661 00:35:30,480 --> 00:35:34,879 Speaker 1: argument that, um, you know, because they're flexible offerings, maybe 662 00:35:34,920 --> 00:35:37,160 Speaker 1: they won't get hurt as bad. On the other hand, 663 00:35:37,800 --> 00:35:39,759 Speaker 1: you have to wonder, like how many of the we 664 00:35:39,920 --> 00:35:45,319 Speaker 1: Work tenants are themselves startups, tech startups who themselves may 665 00:35:45,360 --> 00:35:48,960 Speaker 1: have visions of one day selling to an uber or 666 00:35:49,120 --> 00:35:53,000 Speaker 1: we Work, or getting a really big investment from soft 667 00:35:53,000 --> 00:35:55,160 Speaker 1: bank one day. And so when you think of like 668 00:35:55,200 --> 00:35:57,520 Speaker 1: a house of cards, you're like, how much is this 669 00:35:57,640 --> 00:36:01,400 Speaker 1: all just a really leveraged bet on the same pool 670 00:36:01,440 --> 00:36:05,359 Speaker 1: of money, the same pool of cheap capital, the same 671 00:36:05,480 --> 00:36:07,200 Speaker 1: end where you're going to sell to a Google or 672 00:36:07,280 --> 00:36:10,240 Speaker 1: Facebook or an Uber or lift for or an Amazon. 673 00:36:10,960 --> 00:36:14,839 Speaker 1: And if that sort of if the liquidity evaporates, if 674 00:36:14,880 --> 00:36:17,960 Speaker 1: one day SoftBank doesn't want to fund all these startups 675 00:36:18,040 --> 00:36:20,759 Speaker 1: or keep backing all these unicorns, or there is a 676 00:36:20,760 --> 00:36:24,040 Speaker 1: real downturn among major tech companies that could be due 677 00:36:24,120 --> 00:36:27,120 Speaker 1: to regulation, whether that would just sort of ripple like 678 00:36:27,160 --> 00:36:30,879 Speaker 1: a bomb through all of their you know, the bread 679 00:36:30,880 --> 00:36:33,440 Speaker 1: and butter tenants that they have in New York City 680 00:36:33,520 --> 00:36:36,480 Speaker 1: and Silicon Valley and other big cities around the world. 681 00:36:36,520 --> 00:36:39,640 Speaker 1: Like it feels just in some sense like an incredibly 682 00:36:40,040 --> 00:36:44,640 Speaker 1: concentrated bet on a particular style of doing business that 683 00:36:44,719 --> 00:36:47,000 Speaker 1: we've really seen to merge over the last decade. Really 684 00:36:48,160 --> 00:36:51,560 Speaker 1: it's startups all the way down, and all those startups 685 00:36:51,640 --> 00:36:54,840 Speaker 1: end up going back to you know, Starbucks coffee shops 686 00:36:55,000 --> 00:36:57,480 Speaker 1: when the when the bubble bursts, right like, if it's 687 00:36:57,520 --> 00:37:00,279 Speaker 1: really bad, they're just gonna scope out free disks where 688 00:37:00,280 --> 00:37:04,920 Speaker 1: with a power outlet and WiFi forget we work alright 689 00:37:05,000 --> 00:37:07,960 Speaker 1: well on that happy note, This has been another edition 690 00:37:08,000 --> 00:37:10,440 Speaker 1: of the Odd Loots podcast. I'm Tracy Alloway. You can 691 00:37:10,480 --> 00:37:14,839 Speaker 1: follow me on Twitter at Tracy Alloway. And I'm Joe Wisenthal. 692 00:37:14,960 --> 00:37:18,279 Speaker 1: You can follow me on Twitter at the Stalwart, and 693 00:37:18,360 --> 00:37:21,759 Speaker 1: you should follow our guests on Twitter. Sandy Corey, He's 694 00:37:21,880 --> 00:37:25,719 Speaker 1: at Sandy Corey with a K. He was. It was 695 00:37:25,760 --> 00:37:28,839 Speaker 1: his tweets where I saw the contrary and we work case, 696 00:37:28,880 --> 00:37:31,040 Speaker 1: so you definitely want to check him out and be 697 00:37:31,120 --> 00:37:34,520 Speaker 1: sure to follow our producer on Twitter, Laura Carlson at 698 00:37:34,600 --> 00:37:38,040 Speaker 1: Laura M. Carlson, as well as the Bloomberg head of podcast, 699 00:37:38,120 --> 00:37:43,400 Speaker 1: Francesco Leavy at Francesca Today and Bloomberg Podcast has a 700 00:37:43,400 --> 00:37:48,360 Speaker 1: new home on Twitter. The handle is at podcasts. Thanks 701 00:37:48,360 --> 00:38:00,920 Speaker 1: for listening, O