What You Can Learn from WeWork's Debacle | Ep. #1209

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Welcome to marketing school. The only podcast that provides daily top level marketing tips and strategies from entrepreneurs that practice what they preach and live. Let's start leveling up your marketing knowledge with your instructors. Neil Patel and Eric Su hey margie school listeners listeners. I have an interesting stop for you. Did you know that Walmart improved their conversion rate by two percent for every second that they improve their low time in other words website the speed helps with conversions. In addition to that Google uses it to determine where your site ranks in their index. The fastener website loads the higher. You'll rink for that reason. I want to talk to you today. About a company called Dream House Dream Hose powers the web with fast websites and superior customer service brought to you by team web experts or super committed into your success online. We've worked with them to create a special offer just remarking school listeners. All you have to do is go to dream host dot com slash marking school to learn more and get your website online today today. Welcome to another episode of Marketing School. I'm Eric Su and I'm able to and today we are going to talk. Talk about what you can learn from. We works the buckle so as of this recording already been. It's been wild. This will come out of the week. Doc of Thanksgiving. I believe but it's still very fresh because we work was previously valued. They're a office space company. We used to use. We work as well. I believe you did too as well neo correct. Yeah we use a longtime. Yeah and they're great. I mean we loved office space and everything but what happened was they raised just a ton of money and their valuation popped up to about forty seven billion I believe and they were trying to IPO and what ended up happening was all the people that started digging. In due due diligence on their financials how the company is run and everything what ended up happening was people started uncovering all these things like the CEO had to sixty million dollar private jet. No they're just crazy things happening around the company where the parties all the time and. Then there's like this weird stuff going on where you know he was planning to have his wife was like number number two at the company or something like that. There's just a lot of stuff going on that people. Just were like. WHOA WHOA? We gotta pump the brakes here and you know long story short there. IPO basically had to to be cancelled and ousted CEO and what happened was as of this recording. Basically a couple of weeks ago Softbank their largest investor basically had to bail them out right and I think they build them out to the tune of about ten billion bucks or something like that and the craziest part about this is that the CEO founder. Adam Newman he got a pay out. I think FICA totaled about a billion dollars two hundred million seven billion crazy right like all this stuff happens and he still gets fat payout becomes a billionaire. So Neil I mean what's your take on this one lucky him good for him from being successful you know and I love we work dude so I wish I got the one point. Seven billion dollars the biggest thing that I ended up learning for this whole debacle is you can't marketers. We tend to do this. You can't put lipstick on a pig. A pig as the big you need to create a great product. Great Service Union had good economics. Good example of this. is we work you know. They're pitching themselves as new Tech Company. Just a real allstate company and I'm not trying to talk crap but they straight up just are a real estate company and when you look at we work. Everything thing that they're doing is it's fine but evaluations aren't like a real estate company. They're too expensive. As you grow within it becomes way too costly free and create more and more problems and when you look at that. Is that something that the markets investors on needed it keeps in mind. And when you're doing your company you know. Don't try to be like one of these companies like. Oh we're actually not a ECOMMERCE company. Our value should be better than we should operate. Operate like where a software company have higher valuations or whatever it is like just be realistic. You know what you are what you're good at and just focus on in double down. It's okay not being the biggest company out there the sexiest company. Just keep your head down and keep pushing for. This is so crazy reading this right now. The soft bank's latest investment will enrich him further. He will be able to sell nine hundred seventy billion dollars stock in exchange for control of the company and receive a nearly two hundred billion dollar quote consulting payment in exchange for a non compete agreement agreement. And he's super voting rights. That is so crazy. So the one thing I'll say to is worked out a really good deal for himself so I think one takeaway here is learn how to negotiate. Even when things are really working in your favor you still have some upside. Learn what the other party wants to learn how to negotiate. Well the book. I'd recommend the secrets of power negotiation negotiation. Great Book Right. Second thing I would say is this. You have to take care of your people. Because he's getting this fat while getting this fat payout we're talking. Thousands of employees always are getting laid off all these random companies too so they bought like conductor which is a SEO company and they bought these other companies that they tried to get there to basically got rid of. I've tried to sell ad so take people but also have governance to. It's not just by whatever it's not just you know. Smoke Weed Party. Oh you know what you're doing which is basically what I read about sheriff. That really happened but also take care of your cash. To two deals point. We work bird so much cash. It was just a cash burning but she'd need considering how much money they raise. They're really good at branding really good at Barclay themselves. But at the editor they ended up happening so I think it's still very salvageable. I think it's just eh couple of points that deal that I talked about. If you're being realistic you're not taking care of these items. Maybe the company while maybe company is just something that's going to go on fire in the time will tell but I think there's going to be less. Companies like this at the V season stuff in the future are going to be pushing more for profitability than just grow grow grow in. I'm trying to get people to like a seventy or eighty or one hundred dollars valuation when they should never have that option the birthplace yup agreed by the way the employee stock options are now worth nothing so we were added about ten thousand employs between the end of two thousand seventeen up to twenty nine thousand nine when issued stock options exercisable about twenty six the Bucks Route Twenty Six and twenty seven bucks but the keeping is as to not confuse you guys the shares now based on a new kind of soft bank save with their money shares are worth about like eleven eleven bucks per share now which basically means shares are now worthless right so these employees not only. They're losing their jobs. What the risks that they took? It just sucks right so again you know I come back to it again. You gotTa Take Care of your people because it's the people that end up making the business at the end of the day even if you have a marketing campaign it's the people that are running the marketing campaign. So that is it for today and don't forget to check out the growth accelerator. This is the live event that Neil do three times a year mazing spots amazing people amazing speakers and and you can apply at marketing school. I O slash live. That's before we go. Don't forget to rate review and subscribe. Help US grow. And we'll see you tomorrow. We appreciate you joining us for this session of Marketing School. Be Sure to rate review and subscribe to the show and visit marketing school dot. Io for more resources based on today's topic as well as access to more episodes that will help you find true marketing success. That's marketing school dot. Io until next time class has dismissed.

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