> The only thing realistically driving WeWork's valuation (outside of the "SV pixie dust") is the potential for WeWork to sell direct or become a marketplace for ancillary services (e.g. business software, legal services, etc).

The way they go about doing that looks like an ad-ish model. "Here's a bunch of vendors that were willing to pay our vigorish to be shoved in front of you." That's tough to build a premium around if you don't scale the ads, or have a compelling story for the advertisers on how much more effectively WeWork converts their co-working renters than, say, Google AdWords. An A-B test WeWork might carry out is put in an AdWords campaign side-by-side with a WeWork-based campaign for as many vendor types they can think of, and measure the results between the two on an ( ad-spend : sales_expenses - revenue ) ratio basis, and tweak their strategy model from there. If I'm one of the vendors WeWork is trying to pitch to their co-working renters, then I'd immediately be thinking, "they reach a smaller audience than my AdWords purchases (or whatever other marketing channel I'm comparing to), but supposedly more targeted, so if I put some spend there does it really perform?"

If you are a new startup, then there is a lot of bullshit in the business world that wastes a lot of your time because you simply don't know better on what to spend your limited time upon. Having a SCORES-like concierge/advisor service on tap (for a fee after an initial time of trying it out, perhaps) might be another way for WeWork to build premium value. But not scalable.

If the premium on-site staff is highly attuned into their renters' concerns, etc., that might be a way to add value by using that information as a development input. But that's very non-scalable.

Their core value proposition seems to run right into competing against Google on an efficiency basis, so I must be missing something the investors didn't.