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生活志
Bring order to complexity!

Review on the Cover Story (Bloomberg Businessweek, May 20, 2019)

5/19/2019

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Reading this week’s Bloomberg Businessweek is the first time I ever heard of WeWork, the giant unicorn company which rents and leases work space, and which has been lead this fashion of shared work space not only overseas, but also in China, for nearly a decade.

This article begins with the fact that Softbank had pulled back an intial offer of 16 billion dollars investment, in addition to the original 8.5 billion, and finally offered 2 billion to WeWork, who nonetheless appreciated this additional investment. Then it describes the rapid expansion of the company and the fact that they’ve been losing money like many other unicorn companies. It also plans to go IPO, which would remind us with the depressing performance of Lyft and Uber on the open market.

One feature that made this article different is that it applies many subject depiction of the CEO himself. The writer got exclusive interview with the CEO in person and described him as a highly optimistic, extremely energetic, and self-appreciating character. There are many conversations and interaction details in this article.

The very exclusive news is the ARK fund, which according to Buisiness Insider, is first exposed by this Bloomberg article. Actually Bloomberg had spoken on it (the same reporter) in a pre-annoucement state at the end of last year. This fund, simply put, is a pool of money used on buying buildings to lease to WeWork, and it is under the influence of the mother company though it is said to operate independantly as an umbrella company. It is what is called a REIT fund and I’m still trying to figure out the economic aspect of the fund.

It is a bold business model. A fund buying building to rent to its own mother company. Sounds a bit like a fraud, but it can indeed reduce transaction cost. The goal of WeWork is that this fund can raise people’s expectation for a building’s value with WeWork in it. However this logic doesn’t seem clear enough for me. I believe many comments are on the road since this article has been out for just 5 days, and I’ll continue cover this company on the website.

Click here to read the original article: WeWork Wants to Become Its Own Landlord With Latest Spending Spree
Click here to read the collected information on WeWork: Collected Information on WeWork (Updating)
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Review on the Cover Story (Bloomberg Businessweek, April 29, 2019)

5/18/2019

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This issue of Bloomberg Businessweek talked about the consumption habit of Generation Z, which refers to the generation born after 1995, although the precise classifications do differ. Generation Z, according to the passages, is becoming the main driving force of many economies, and only producers who know how to attract their attention will win the game. As far as I’m concerned, the whole report is about one thing, which surprisingly is not mentioned in any of the passages, the attention economics. Attention as a limited resource, is linked tightly with the allocation of wealth, which for the producers, is how much money people would like to spend on your products.

Several facts mentioned in the passages made me interested, one of which was how much of household spending was spent by generation Z in different countries. The gap was striving. In China, the percentage is 13, while in UK and US, the percentages are both 3. One-child policy indeed made our generation look a little spoiled. Chinese young people have better job expectation than western developed countries, as well, which also contributed to the gap in spending desire. Then our Japanese peer are the least willing-to-spend generation compared to their predecessors. I feel sorry for them.

Nonetheless, Chinese young people are faced with a more severe situation, the O2O debt. I’ve heard too many stories of this kind, and they made me doubt that the overspending fashion would ruin many of our peers. Or should I say, it has, already?

Also the Chinese part about Xiaohongshu and iQiyi, aroused my concerns. I remember several years ago my Media Economics teacher said that one day when we were watching videos, there would be buttons on the screen, to lead us to the shopping site. The attention merchants become real merchants, and thus the transaction costs would be quickly reduced. This topic requires a lot of reading and thinking, on which I will keep focus.
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    Wu Xiangyue

    A learner in business and tech, also in blog writing.

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