Disclaimer: We have not spoken to a WeWork executive and have no further background information. This is merely a thought experiment to exemplify what digital transformation is about.
WeWork, like so many other companies that depended on in-person interactions, is in deep trouble. After all, in a pandemic who wants to share physical co-working space. But could WeWork have fared better if they’d fully embraced digital transformation initiatives and created unique user experiences that extend digitally?
Although WeWork has the reputation of a cool startup in actuality it’s based entirely on an analog business model that happens to include technological aspects. Yet analog will never survive Digital Darwinism, now accelerated by COVID 19. If we were WeWork, the startup would have had a digital lifeline that would ensure they and their tenants survive the current crisis.
In the physical world, WeWork tenants meet with others off-line and online, mostly using their own (often imperfect) tools. The best digital tool WeWork came up with is a glitzy digital gadget for reservations, entrance and payment. But once out of the space, the stickiness disappears. Customer loyalty was born largely of convenience and the lack of a better, stickier alternative.
In today’s world, you have to go digital – even if your core business is based on analog. Here’s our three-step approach for a company like WeWork.
Clearly, digital reservation, access, and payment are the baseline – there is nothing innovative about that. A natural, next step is leveraging open APIs. Incredibly powerful, they provide unimaginable benefits when opened up to the public. APIs are a gift that will keep on giving and once up and running, they do so for free.
Through a developer portal the developer community would be able to create convenient plugins for WeWork tenants. For example, an extension to reserve WeWork space natively through an Outlook meeting with internal and external attendees. There is a thriving developer community eager to develop these types of plugins. All WeWork would need to do is to manage and monetize the API and nurture a developer community (e.g. via Hackathons). Why develop it in-house if the community is willing to develop it for free?
Additionally, to offer more convenience, WeWork could integrate its app with preferred vendors. WeWork tenants could order catering and supplies from within the app. Companies like SAP may want to embed WeWork accounting natively into their systems so all charges, whether the regular monthly/yearly fee, catering, or additional equipment are all automatically invoiced and charged. Like Uber for Business for all WeWork vendors.
Once up and running, step one and its already existing systems, processes, and data provide the perfect foundation to turn data into information, creating an additional stickiness.
Only WeWork knows reliably where its customers are, for how long, with how many people, and how that compares to companies comparable or aspirational to their tenants. With simple data analytics, WeWork can provide their clients with valuable insight such as:
“73% of companies in your industry and comparable in size used white boards in their meetings – you didn’t. 22% of those regarded as market leaders in your industry but located in other cities used WeWork half as often, but three times as long as your teams did.”
“We don’t know how productive you feel your team A is in comparison to your teams B and D, but we wanted to let you know that they have been using rooms for no more than seven people on average, have stayed two hours every time, and only ordered Red Bull. They also managed their bookings extremely well by spending only 68% per person per hour than the other teams within your organization.”
These are really simple data-driven insights. Nothing sophisticated but potentially valuable for WeWork customers. Now add machine learning to the equation and you’ll get nuggets like this:
“Over the past two years, 76% of the time on this day of the month, you’ve booked a week with us for fifteen people, starting the following Monday. Because it was a short lead time booking, you paid 7% more than if you had reserved the spaces a week earlier, and 12% more than if you had booked a month earlier. If you reserved similar spaces and time slots for the same number of people on a recurring basis for the next year, not only would you save 12%, but we will not charge you for not using our space twice in that time frame.”
Let’s get more sophisticated and add artificial intelligence for machine-based decision-making:
“Dear Ryan and Amy, your Digital WeWork Servant here. Don’t worry, I’ve:
“Oh, wow, thanks, WeWork!”
Now we are moving into defying-digital-Darwinism mode. Admittedly, it’s a heavy lift, but absolutely within reach. It will take time, budget, and relentless iterations that will never stop.
Imagine if WeWork not only provides obvious convenience features (step one) and intelligence (step two), but becomes a digital and physical place where teams, customers, employees, contractors, suppliers, partners, interviewees, mentors, service providers, the gig economy, everyone will convene on an ongoing basis.
Meet WeWork Cloud, a personal virtual office which integrates with all client apps. Outlook, Teams, Gmail, Zoom, Photoshop, Dropbox, GitLab, all a tenant needs to be productive and collaborate with their team, accessible by signing in once into WeWork Cloud from anywhere.
Not only does WeWork Cloud integrate with the tools clients already have, it also offers a marketplace where they can subscribe to, let’s say a “designer package” including Creative Adobe Cloud, Sketch, Sympli, Versions, Figma ProtoPie, InVision Studio, Procreate, Cinema 4D, Principle. A dream come true for any designer! With one click, the tool will be added to their virtual office space. No need to create an account or log in, it will be all preconfigured and accessible through WeWork Cloud.
In the marketplace recommendations section, tenants can explore new tools and recommendations based on their usage and what other users with similar behavior use – all fueled by machine learning and AI.
As a global company, WeWork would purchase these software licenses at a much more competitive rate and offer clients, not one tool, but an entire stack for much cheaper. Small startups can leverage all licenses directly through WeWork and don’t have to worry about maintenance or management – WeWork basically becomes their system admin. Teams at large organizations don’t need to request licenses through a painful bureaucratic process. If they have a WeWork license, they can easily add a package to their existing account.
Once logged into WeWork Cloud, tenants access a beautifully designed, intuitive virtual desktop with all their apps and files. They can access it from their laptop at home, a WeWork provided computer at their physical office or while vacationing at Copacabana (although we do not recommend the latter – enjoy the beach instead).
WeWork is also about community -- we get that. Countless tenants use the physical space to network and exchange ideas. WeWork Community will be a professional networking app for WeWorkers. Think LinkedIn + Match.com. Not only do clients have a professional profile (which can be conveniently synced with LinkedIn) based on which they can search and connect to fellow WeWorkers (just like on LinkedIn), but they will also be able to specify the people they’d like to connect with professionally. Let’s say, other tech startups trying to solve a similar problem for a different market with whom they can exchange ideas and lessons learned. Or maybe they’d like to connect with peers from their industry locally, globally, or in a specific country. WeWork Community’s algorithm would match them up and suggest an introduction (the Match.com component).
Additionally, the WeWork Community management team would facilitate cross-functional groups for like minded people where they can engage and virtually meet. Unlike LinkedIn groups, WeWork Community groups would be managed by the community team to ensure there aren’t any duplicates, only active groups remain open, and foster engagement through community engagement activities.
Once there is a thriving community, the team could even organize regular (virtual) events with well-known speakers from different industries (why not create a partnership with TED Talk?). Some could be webinar-style with no registration limits, others would be small and intimate roundtable discussions only for vetted attendees, such as executives at large companies or women tech leaders.
With WeWork Cloud and WeWork Community, WeWork could have morphed into a tech company that happens to offer beautiful office space. The added value doesn’t just evaporate when people can’t step into the office, be it because they moved or a pandemic hit. By extending the physical experience with a compelling digital one, WeWork could defy Digital Darwinism.
Now imagine you’re a competitor and witnessed WeWork adopt these digital transformation strategies. Digital technology such as cloud computing, artificial intelligence (AI), and other digital products and services are revolutionizing everything. Just because your industry has not yet been impacted, doesn’t mean it won’t. Even if WeWork doesn’t go this route, someone will and that will be the new business model you’ll be measured against. Either you match or top it or you’re out. Digital Darwinism is just as cruel as the natural one. If you don’t adapt, you’ll face extinction.
Again, this is merely a thought experiment to showcase the power of digital transformation strategies. Clearly, it isn’t something that will happen overnight – it’s a process. And because it takes time, there is no time to wait.
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