WeWork this week sued its Chinese competitor UrWork, stating in a New York lawsuit that the Beijing-based upstart has copied its name and logo. That lawsuit adds to the charge in London that UrWork is "passing off" by misrepresenting itself as WeWork in the way it operates.
The cases are interesting because they reveal something I tend to forget when getting excited about the world of "shared workspace," incubators and accelerators: WeWork is a landlord renting out office space.
Investors in the as-yet private company probably should be comparing its returns not to a superchip-centered innovator fueled by Red Bull-crazed, wild-eyed coders, or even someone who has come up with an app to deliver pre-mixed peanut butter from one store with jelly from another.
Investors probably should compare its performance to a real estate investment trust, or to International Workplace Group LSE:IWG, which owns the Regus brand. Another comp even may be a high-end landlord such as Hongkong Land (HNGKY) , owner of the bulk of top-flight space here in Central, our Wall Street.
Yet WeWork is now valued at $20 billion, according to The Wall Street Journal, and is No. 6 in the list of the world's most-valuable private companies. That's $8 billion more than SpaceX, which really does fire rockets into space - literally rocket science.
WeWork has cloaked itself in the livery of a tech company. Hop on its website and you're beckoned to no less than "The Future of Work." It bids you to "look forward to Mondays" with workspace designed "for fresh ideas, organic networking, and month-to-month flexibility."
The company's biggest endorsement came last month when the tech-focused Vision Fund set up and managed by Softbank Group (SFTBY) invested $4.4 billion in WeWork in combination with Softbank itself.
Of that money, $3 billion flows into WeWork's parent company. The other $1.4 billion heads to WeWork China, WeWork Japan and WeWork Pacific, which currently serves Southeast Asia and South Korea. All in my part of the world.
Softbank already had formed WeWork Japan as a 50-50 joint venture to bring WeWork's "transformational platform of space, community, and services for companies of all sizes" to the world's third-largest economy.
The glossy image is clear in the kinds of companies WeWork Japan is looking to serve: It lists "creators" and entrepreneurs first, then small- and medium-size businesses, and finally large multinational enterprises.
WeWork co-founder and CEO Adam Neumann said the goal is to "create a world where people work to make a life, not a living." He said the $4.4 billion support from Vision Fund/Softbank would "provide even more opportunities for creators as we set out to humanize the way people work and live."
Softbank founder, chairman and CEO Masayoshi Son said WeWork is "disrupting preconceived notions of work styles" and "opening up myriad opportunities for the next generation of creators around the world."
The Vision Fund/Softbank investment into WeWork will help "unleash a new wave of productivity around the world," he added.
But amid the hyperbole, let's keep the following in mind:
These guys sublet office space, that you share with a bunch of people you don't know.
It's cool office space, no doubt. And I'm sure there are "creators" there. However, that depiction makes it sound a bit as though the rest of us working stiffs sitting in Starbucks or our cubicles are destroyers by comparison, functional death stars that lure productivity to its doom.
It's a good question as to whether the Vision Fund should even be investing in WeWork. The $93 billion fund, backed by Apple Inc. (AAPL) and Middle Eastern sovereign wealth funds, promises to create a "strategic synergy group for information revolution."
Other investments include Guardant Health, which uses machine-learning detection in genomic non-invasive cancer testing; Brain Corp., which uses artificial intelligence to make robots; and Plenty, which is working with advanced nutrient technology to grow "super-organic" farms of indoor, vertical produce it says can be 350 times more efficient than conventional farming.
But because most tech starts small, it's a challenge for the Vision Fund to put billions to work. Buying into a company that rents space and then sublets it seems like a bit of a tangent. Yes, WeWork owns the Case architectural studio and designs really cool space. But renting out physical space seems kind of the complete opposite of what we think of when imagining the ethereal online world of the future that we're all inhabiting five minutes from now.
Part of the New York lawsuit will be an interesting argument as to whether UrWork is copying WeWork by using "Work" as part of its name.
OK, look, WeWork has a point. UrWork is awfully similar as a name, in structure, meaning and sound. But so too is ReWork, in which UrWork has now invested $3 billion to expand in Southeast Asia from its base in Indonesia.
Can you really say you've cornered the market on "Work" as a concept? That's what WeWork is set to do. After all, it's the "future of work."
I'm looking forward to a copycat case from our local Pacific Coffee chain here when it sues Coffee Holding (JVA) on the same ... ahem ... grounds. Or when JPMorgan Chase (JPM) finally has had it with Morgan Stanley (MS) after their nasty 1935 split and decides to give the copycat some legal stick.
Incubators and accelerators that invest in startups or mentor them really are attempting to bring into being the businesses formed by the world's best and brightest minds. Companies renting space that their tenant "members" share in a subdivided office with peers and strangers are landlords, pure and simple -- real estate plays more than an investment in our high-tech future.