WeWork

OYO Rooms

WeWork

WeWork's model was fundamentally a real estate arbitrage play dressed up as a tech company. They signed long-term leases on buildings (often 10-15 years), spent millions renovating them, then rented desks and offices to members on month-to-month or annual contracts.

The spread between what they paid landlords and what members paid was supposed to be the profit.

The problem was the mismatch. Long-term obligations on the lease side, short-term flexibility on the revenue side.

In good times, buildings are full and the spread is healthy. In bad times — say, a global pandemic that empties offices — you're locked into paying rent on empty buildings while members cancel month-to-month.

Neumann tried to juice margins with ancillary services: WeWork Labs for startups, Powered by We for enterprise buildouts, and WeWork's own internal ventures. The company also launched WeLive (apartment living) and WeGrow (a private elementary school run by Neumann's wife).

These distractions drained cash without generating meaningful revenue.

OYO Rooms

Asset-light hotel franchise and management. OYO partners with independent hotel owners under various models: franchise (OYO provides the brand, technology, and standards; the hotel pays a commission), lease (OYO leases the property and manages it entirely), and management contracts.

Revenue comes from commissions on bookings (typically 20-25%), management fees, and the spread between what OYO charges guests and what it pays hotel owners under lease agreements. The technology platform handles pricing, distribution, check-in, and quality monitoring.

OYO lists rooms on its own app and website plus third-party platforms like Booking.com and MakeMyTrip.

WeWork

Adam Neumann was a 6'5" Israeli former naval officer with a talent for fundraising that bordered on hypnosis. Miguel McKelvey was an architect from Oregon with hippie parents who raised him in a commune.

Together in 2010, they launched WeWork from a single building in SoHo, New York — though they actually started with a predecessor called Green Desk in 2008, which was a sustainable coworking space in Brooklyn that they sold to their landlord.

The original concept was dead simple: lease entire floors of commercial buildings at bulk rates, renovate them with trendy design — exposed brick, beer on tap, inspirational quotes on the walls — then sublease individual desks and offices at a premium. The "community" angle was the differentiator.

WeWork wasn't just selling desks. It was selling belonging, networking, the feeling of being a startup founder even if you were a freelance graphic designer working alone.

The timing was perfect. After the 2008 recession, commercial real estate was cheap and available.

The gig economy was exploding. Millennials were entering the workforce with different expectations about work environments.

And startups that couldn't afford traditional office leases needed flexible space. WeWork grew from 1 location to 5 within two years, and the waitlists were long.

OYO Rooms

Ritesh Agarwal was 17 years old, traveling around India on a shoestring budget, and staying in cheap hotels that were consistently terrible — dirty rooms, broken AC, rude staff, no standardization whatsoever. India had millions of small, independent budget hotels and guesthouses, but no consistency.

You never knew what you'd get. Agarwal dropped out of college, received the Thiel Fellowship ($100,000 to skip college and build a company), and started OYO Rooms in 2013 at age 19.

The model was elegant: partner with existing budget hotels, standardize their rooms (clean sheets, working AC, free WiFi, consistent design), put them on the OYO app, and take a commission on bookings. OYO didn't own properties — it franchised a brand and a technology platform to India's millions of fragmented small hotels.

By 2019, OYO had expanded to 800+ cities across 80 countries and claimed to be adding 64,000 rooms per month.

WeWork

WeWork grew through sheer aggression funded by seemingly unlimited capital. They would enter a city, sign leases on multiple buildings simultaneously, renovate at premium cost, and absorb losses until locations filled.

The playbook was Uber-style: spend aggressively, dominate the market, worry about profitability later.

The "community" brand was powerful marketing. WeWork events, networking mixers, and the overall vibe attracted a loyal member base that became free ambassadors.

Instagram photos of beautiful WeWork interiors drove organic demand.

Enterprise was the real growth engine. By 2019, over 40% of members were from companies with 500+ employees.

Microsoft, Amazon, and Salesforce all had teams in WeWork. Enterprise clients signed longer contracts and were more predictable than freelancers, but WeWork still spent far more acquiring and building out space than it earned from these relationships.

OYO Rooms

Blitzscaling — OYO expanded faster than almost any hospitality company in history, going from one hotel in Gurgaon to 157,000+ hotels across 35 countries in six years. The asset-light model enabled speed because OYO didn't need to build or buy anything — just sign franchise agreements.

Massive fundraising (SoftBank alone invested over $1.5 billion) provided the capital to subsidize hotel partners, underprice competitors, and grow at a loss. Geographic expansion from India to China, Southeast Asia, Europe, the US, and Japan.

Technology-driven pricing optimization that dynamically adjusted room rates to maximize occupancy. Brand standardization — the OYO red logo and guaranteed minimum standards gave budget travelers something they'd never had: predictability.

WeWork

Where to begin? The S-1 filing in August 2019 was a masterclass in red flags.

It revealed that WeWork lost $1.9 billion in 2018 on $1.8 billion in revenue — spending more than a dollar for every dollar earned. Neumann had taken $700 million off the table through stock sales and loans before the IPO.

He owned the "We" trademark personally and charged the company $5.9 million to license it. He had family members on payroll.

He flew on a private jet funded by the company.

The planned $47 billion IPO was pulled in September 2019 after investors revolted. The valuation was slashed.

Neumann was forced out and given a $1.7 billion exit package — for nearly destroying the company. SoftBank took control, cut thousands of jobs, and spent years trying to restructure.

WeWork finally went public via SPAC in 2021 at a $9 billion valuation.

Then COVID hit the commercial real estate market like a meteor. Remote work became permanent for many companies.

WeWork's occupancy plummeted. They filed for Chapter 11 bankruptcy in November 2023, listing $18.7 billion in debt.

The cautionary tale was complete.

OYO Rooms

Burning cash at an unsustainable rate — OYO reportedly lost over $300 million in a single year while subsidizing growth. The China expansion was disastrous, burning hundreds of millions with little to show for it before a near-complete retreat.

Hotel partner relationships were strained — many owners complained that OYO slashed prices to drive bookings while their costs stayed the same. Quality control across 157,000 properties in 35 countries was essentially impossible — guest complaints about dirty rooms and broken promises were constant.

SoftBank's enormous investment created pressure to grow at all costs, leading to expansion into too many countries and product lines simultaneously. The COVID pandemic devastated the entire hospitality industry, hitting OYO especially hard.

Valuation collapsed from $10 billion to $2.7 billion. The planned IPO has been delayed multiple times.

And the fundamental question: can you standardize millions of independently-owned budget hotels and actually maintain quality at scale?

WeWork

WeWork All Access — a membership that gives access to any WeWork location worldwide, targeting remote workers and traveling professionals. Dedicated Desks — assigned workstations in shared open-plan spaces for individuals and freelancers.

Private Offices — enclosed offices for teams, the bread-and-butter product generating most revenue. WeWork Workplace — enterprise software for managing hybrid work, office scheduling, and space utilization analytics.

On Demand — pay-by-the-day access to meeting rooms and workspace without a monthly commitment.

OYO Rooms

OYO Rooms — standardized budget hotel rooms across India and international markets, bookable through the OYO app. OYO Townhouse — mid-segment millennial-focused hotels in urban areas.

OYO Home — vacation rental management similar to what Vacasa does in the US. OYO Life — co-living spaces for young professionals (primarily in India and Japan).

OYO Workspaces — co-working offices. The OYO app — mobile booking platform with real-time availability, pricing, and reviews.

OYO OS — the technology platform that hotel partners use to manage operations, pricing, and guest communications.

WeWork

SoftBank Vision Fund was the largest and most consequential investor, pouring over $10 billion into WeWork across multiple rounds. Masayoshi Son reportedly agreed to invest after a 12-minute meeting with Neumann.

Benchmark was an early investor. JPMorgan Chase provided debt financing.

T. Rowe Price, Fidelity, and Goldman Sachs participated in later rounds.

The company raised more money than most companies ever generate in revenue.

OYO Rooms

Key investors include SoftBank Vision Fund (largest investor with $1.5B+), Lightspeed Venture Partners, Sequoia Capital India, Greenoaks Capital, and Airbnb. Ritesh Agarwal also did a $2 billion leveraged buyout to increase his personal stake in 2019.