On the horizon, we can expect to see WeWork spaces in as many as a dozen cities in Southeast Asia with those places having multiple locations

In the immediate-to-near future, Southeast Asia can expect a rapid expansion of WeWork spaces throughout the region as the market becomes “crucial” for the future of the American co-working giant.

In an interview with e27, WeWork Co-founder Miguel McKelvey said the company expects to be in as many as a dozen cities in Southeast Asia with “multiple locations” in the locales.

Most immediate, Singapore can expect rapid development of WeWork spaces. With the imminent launch of its 71 Robinson Road space — and the transition of Spacemob into WeWork properties — the total number of spaces in the city-state will soon be four. After that, two more spaces will be launched sooner rather than later.

Beyond Singapore, WeWork expects to open new locations in Bangkok, Jakarta, Kuala Lumpur and Manila by the end of the year.

“We have pretty big responsibility to our business plan to grow pretty fast [in Southeast Asia]. We’ve projected this becoming a crucial market for us…and we have the capital behind us to make that happen,” said McKelvey.

While WeWork entered Southeast Asia quickly via the acquisition of Spacemob, M&A will be less common than simply building their own space. McKelvey says the Spacemob deal views was a matter of a good opportunity revealing itself at the right time.

“We met [Spacemob Founder Turochas Faud] through one of our other employees. We were in China and looking at all these markets and tons of people were saying, ‘are you looking at Southeast Asia because there is an entrepreneurial spirit that you should connect to’,” said McKelvey.

To be fair, WeWork has recently gone on an acquisition spree but besides Spacemob the purchases were more focussed on technology. For example, in early March it was announced WeWork had bought a digital marketing company named Conductor.

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When asked about potential hurdles McKelvey pointed to the typical bureaucratic complexities that can trip up any company.

While incorporating a business in Singapore is easier than opening a bank account, WeWork will quickly have to navigate the processes in Thailand, Indonesia and the Philippines. The rapid expansion across very different cultures is standard-operating-procedure in Southeast Asia, but for WeWork, this will be the most fragmented market it has taken on. To exemplify, check out the screenshot of current locations:

That being said, the company is eight years old and has matured to a point where it feels confident it can put the correct people in place to navigate finance, legal and cultural matters in specific countries.

Navigating competition via culture

Co-working is a competitive industry across Southeast Asia, but according to McKelvey, “almost everywhere people say that.”

“I think for us, we feel confident in what we do because we are doing it all over the world and have been working really hard about it over the last eight years. That isn’t something that gets too deep under our skins,” he said.

A major advantage for WeWork is the ability to tap into an international network. WeWork members — with some advanced notice, can use the membership credit system to book a time at any location globally. That can be incredibly useful for entrepreneurs, a notoriously travel-happy bunch.

McKelvey, who is the Chief Culture Officer and built a system called ‘Culture OS’, puts a lot of emphasis in building a space that allows people to “come from a place of love”.

The idea is that while the day-to-day emotions of an individual can often feel abstract and ephemeral, paying attention to certain details can make a major difference in how someone feels that day — thus improving the overall mood of the space. This, hopefully, would create a benevolent cycle that helps people look forward to going to the office every day.

Some examples are little tricks like having the CEO carve-out 30 minutes out of their schedule to walk around the floor, designing spaces with maximum ‘cross use’ purposes or making sure little annoyances (like a troublesome aircon system) are fixed.

Because WeWork has focussed obsessively on culture, the startup — if it can still be called that — has built the most recognisable brand in the global co-working industry.

Furthermore, while WeWork will have to adapt to specific cultural realities in Southeast Asia, the Culture OS system functions like a math problem. It is built on the idea that certain inputs create the desired output.

The executive team hopes that by training up the regional staff on Culture OS, they will be able to create a system that helps people find their place of love with a Southeast Asian twist while still remaining true to WeWork’s corporate culture.

McKelvey said they recently trained their Shanghai staff through the Culture OS system and were encouraged by the results.

Navigating criticism amid aggressive growth

WeWork’s hyper-aggressive expansion plans in Southeast Asia ar not particularly unique in terms of WeWork’s overall strategy.

In the eight years the company has been around, it has opened 230 locations in 71 cities. It leases 13.5 million square feet of space globally and has about 210,000 members from 20,000 companies.

WeWork made about US$900 million in revenue last year, according to Bloomberg, but is not yet profitable. Although Chief Financial Officer Artie Minson told the news company that they could be profitable if they eliminated “growth investments”.

The company also boasts a valuation at US$20 billion and has begun to woo major corporations — McKelvey highlighted that a major tenant in its Hong Kong offices is HSBC, one of the largest banks in the world.

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Recently, the valuation number and its corporate clients, has received some criticism in the media.

When any company’s public profile grows like WeWork’s has over the past few years, criticisms are inevitable. McKelvey said he does hear the cynics, but chooses to focus on the people who are excited about the future of WeWork.

“We are ticking every box in terms of what it takes to be a successful and respected company. I am sort of confused at the insight [critics] have into us as a company, that everyone else is missing, to think that somehow we are not making it,” he said.

He pointed to WeWork’s ability to lay out a clear strategy from day one and its track record of consistently executing on its goals.

“There is always someone who is going to look for the cracks”.

But even in critiquing, reporters consistently point to the company’s vibe. Its je ne sais quoi if you will.

It is what makes WeWork different from other companies. CEO Adam Neumann told Forbes in October 2017 that, “Our valuation and size today are much more based on our energy and spirituality than it is on a multiple of revenue.”

What WeWork has succeeded in doing is figuring out that ever elusive, and always desired, adjective called ‘cool’.

Its like a skateboard brand that finds itself being worn by every teenager who can ollie. People actually put WeWork stickers on their laptops, the t-shirts are worn and the events are usually packed.

The thing is, nobody would ever confuse a WeWork space for being “fancy”, “luxurious” or “swanky”. Basically anyone should feel comfortable walking-in and it genuinely attracts as many suits as it does hoodies.

“I don’t think we are trying too hard. WE is inclusive from the beginning. That’s the whole point.We’ve always been, ‘everyone is welcome’. There is no velvet rope, no barrier to entry. That goes for every industry,” said McKelvey.

Every industry?

“You can be an accountant and love it here.”

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Disclosure: WeWork is the Presenting Sponsor for Echelon Asia 2018 but this story was written as the result of an independent, separate, interview with Miguel McKelvey. WeWork had no oversight over the article ahead of publish.

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