WeWork Has Infiltrated PropTech Place, There Is Nothing We Can Do About It, And What It Means For The Industry
When we launched PropTech Place last month, we knew that for a complex office operation to run efficiently in 2019, we needed to deploy multiple technology platforms. Of course, we have technology to control the temperature, play music, make coffee, filter water, and other tasks. However, at the core of our “office stack”, our “system of record” to use parlance often thrown around in PropTech was (and still is) Managed By Q.
We use Q to run operations from keeping the office clean to making sure we have an ample amount of paper clips. It’s not always the most glamorous jobs that get accomplished by Q, but it’s sometimes the most important for our members.
Q was born in NYC out of venture development firm PreHype in 2014. I was introduced to Dan Teran, the Co-Founder and CEO of the company, by my friend Steve Schlafman, who was then at RRE Ventures. Steve, along with Homebrew, led a Series Seed round for the company and I was lucky enough to invest as an angel alongside them. I was drawn to Dan by his passion for re-inventing the workplace and his natural ability as a leader. Culturally, I also thought his Everybody Cleans policy was brilliant. This was at a time when lots of people in the venture space where questioning the impacts of the gig economy, and Q was able to show that a startup could treat workers differently than the norm. The Managed By Q model, while initially labor intensive, gradually gravitated to a software heavy business model. The company never owned or leased any office space, other than its own.
While Managed By Q was growing, another company located just a couple of subway stops away, that started in 2010, was growing at an extraordinary clip. The executive team at WeWork also had a vision of the future of the workplace. They believed in using tools like software to create efficiencies for companies small and large to manage their workplaces. However, they believed that controlling every aspect of the brand and experience, the “top down” approach, was the way to go.
Until 2019 these two strategies were separate. For those companies that wanted services and amenities but in their own space, they could plug into Managed By Q. For companies that wanted one outsourced manager to take care of everything, they could do an enterprise deal or basic membership deal with WeWork.
On April 3rd, WeWork announced that it had acquired Managed By Q in a cash and stock transaction and those lines have become blurred forever. Although we did not sign a membership agreement with WeWork, PropTech Place is now powered at its core by a product wholly owned by WeWork. The behemoth can have its cake and eat it too. If you are an enterprise either large or small, good luck finding a way to run an office efficiently now and NOT use some software tool, or space tool, that is not somehow tied to WeWork. Some of the past acquisitions and investments the company has made have been head scratchers for me. Who knows? Maybe the team is just playing four dimensional chess, or just testing a bunch of things out. However, it would be tough to deny that although I’m obviously biased, this is a very shrewd acquisition for WeWork. They have just diversified the revenue base of their core business, and infiltrated many new offices across the world, including the office we call home, PropTech Place. Kudos to all involved!