It’s a bloodbath . . . It’s a human tragedy of colossal proportions,” Amol Sarva said matter-of-factly. He was talking about Wework, the trailblazing co-working company that promised to change the course of humanity before it came crashing to earth just weeks ago.
Like other entrants in the flexible and co-working office industry, Mr Sarva’s start-up, Knotel, has toiled in Wework’s shadow since its founding four years ago.
But with Wework wobbling — the company has postponed its public offering, sidelined cofounder Adam Neumann, and is sacking thousands of staff — Knotel is hoping to grab the limelight.
“We’ve been waiting for the music to be over. And now the music is over, and it’s time to dance,” Mr Sarva said.
Knotel is spread across 250 buildings in 15 cities, and counting. In late August, while Wework’s offering was coming under scrutiny, Knotel closed a $400m investment from the Kuwaiti social security fund that pushed its value over $1bn.
“It’s very easy to be a small coworking business,” Mr Sarva said. “It’s like opening a book shop or a coffee shop. You can reach stability — as long as you don’t pay yourself. It’s hard to be a big one.”
Knotel is one of many competitors in the co-working and flexible office market aiming to capitalise on Wework’s troubles — and complicating its hopes for a revival. Some are funded by traditional landlords like Thor Equities’ Congregate or Tishman Speyer’s Studio. Others, like Convene, which focuses on shared conference space, partner with building owners. All are determined to distinguish themselves from Wework.
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“It’s playing into the hands of landlord operators,” one broker said of Wework’s struggles, noting that rivals were playing on customers’ fears that the company might go broke. “[They] can say: ‘we own the building, we’re the landlord. Don’t worry — we’re not Wework!’”
Like Mr Neumann, the Wework shaman, the outspoken Mr Sarva tends toward the casual. He curses liberally and greeted a reporter wearing a sweatshirt embroidered with the phrase: Crave Danger. But he displays the hyper-logic of a Mckinsey consultant — which he once was — before co-founding Virgin Mobile USA and then becoming a serial entrepreneur.
Mr Sarva regards the New York real estate industry as clannish and insular. “Hustlers, playboys, bankers — those are the people that own real estate,” he observed.
So, too, do upwardly mobile Indian immigrants like Mr Sarva’s accountant father. He came to New York in the 1980s and, taking advantage of a change to tax laws, bought residential apartments and eventually put together a chain of dialysis centres.
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