University of Muenster School of Business and Economics westudy the next opportunity Presenting to the founders of wework Project team Pascal Lange Christoph Kirchner Marie-Sophie Kilian Timo Suellwold
Agenda Management Summary Analysis Recommendation Wrap-up 2
Mandate To create a world where people work to make a life, not just a living Create new disruptive business idea Not just do some small scale incremental improvements THINK BIG Management Summary 3
Westudy is the next disruptive concept of wework Analysis New strategy has to yield high growth (> 200% p.a.) Students are an interesting customer group in Europe and Asia later on Actions Start westudy as a community for students in Europe similar to North American student clubs or dorms Incremental improvements for wework and welive can follow later on Result High growth is achieved A new big market is set up for wework Management Summary 4
Internal: Extend your unique culture Your values and your mission: Mission: Create a world where people work to make a life not just a living Core values: Inspired Tenacious Entrepreneurial Grateful Authentic Together Key success factors Together: create a real family for your members Tenacious: inspire your members to reach their best and even more Analysis 5
Internal: Extend circle with mission and profit Steady growth rates above 200 % 16 bn USD valuation Key success factors Mission and values Achieve outstanding revenue growth rates Revenue and profit Analysis 6
External: Students fit perfectly into your community Look for a market where you can: Achieve high growth rates Create a community and a real family To what customers are your values attractive? Young and open minded people like community People who are new in a city Go for the student market Analysis 7
External: Europe fits your culture best USA Mainly dorm structure and student clubs with community feeling Europe Mainly private apartments without big communities high government grants for students in Europe (e.g. 1,000 USD in Germany per month, 1,500 USD in the Nordics and 300 USD in France only for accommodation) in addition no/low study fees High willingness to pay 400 million citizens and about 40 million students and still increasing Attractive market size Asia Asia as possible future market with huge population and increasing share of students, but lower price index Asia as potential follow up Analysis 8
Generation of Ideas: Look for outstanding growth potential A Two ways for the future Incremental improvement of wework and welive Wework: bring in basic every day services like haircutting e.g. to save members time Cooperate with entrepreneurial schoolarships: let winners stay for free in the beginning they will create additional jobs and will stay B Disruptive: Start up new business with westudy for students Recommendation 9
Prioritizing of ideas: Think big as deal breaker for incremental improvements Evaluation and prioritizing of ideas according to: Growth potential (Think Big) Strategic fit (fit to your values) Feasibility (fit to your assets 1. Disrubtive: westudy 2. Incremental improvement for wework and welive Recommendation 10
All important aspects are addressed in the implementation Product Promotion Price Placement 11
Westudy is the new way students want to live Product westudy builds communities of the We Generation in areas where there is no such culture as in North America westudy stands for: Attractive rooms Well furnished, bright rooms Big kitchens with coffee, draft beer and water Areas to chill, relax & have fun (billiard, table kicker or Ping-Pong) Study areas in form of coworking spaces with good IT-Structure Creativity rooms, ThinkTanks Sport centers The place to be: family feeling, think big & get inspired 12
Promotion is directly targeted at students Promotion Good parties Movie nights Inspiring talks of wework members, start up owners & entrepreneurs Open for insiders & outsiders Hackathon Lan-Parties Sharing on social media such as Facebook, twitter, Instagram and snapchat 13
Willingness to pay of students is used Price Depending on the country, region and city Approximately 1000$ per room Different room sizes available Flexible renting possibilities (one semester contracts) 14
Attractive location is everything Placement House renting in hotspot areas Near campus & scene departments Start in Europe with Berlin, Amsterdam, London, Paris, Kopenhagen & Stockholm 15
Students want to be part of a community Cross selling potential catch up of the We Generation in early stages Through events with wework/welive members students get inspired, develop their entrepreneurial mind, meet authentic leaders & possible partners Probability that these students wont give up this spirit & the way of living together is high They maybe move to another city, but the wework community will be already there They are happy to come home They already started to built up a network 16
Road map Actions Time frame 2017 2018 2019 2020 Development of WeStudy Concept Identifying possible locations and start preparations Start with first locations Expand location network in Europe Planning expansion from Europe to Asia 17
Financial assumptions Assumption Costs Assumption Revenue Costs in t$ Item In t$ Costs for development concept 3000 Students per building 70 Initial investments for facilities in every locations 500 Average rent per building per month 20 Operational cost (services, staff) per building per month Administrative cost per building per month 2 Marketing expenses per year 500 10 Average rent per building per month and student 1000 18
Positive NPV is achieved Calculation NPV in thousand $ 2017 2018 2019 2020 Locations 0 6 60 200 Revenue per location 0 5,040 50,400 168,000 Cost per location 0 2,304 23,040 76,800 Operating Margin 0 2,736 27,360 91,200 Investments Development of Concept 3,000 Inititial Investment for location 0 3,000 27,000 70,000 Marketing 1,500 1,000 500 500 Total Investments 4,500 4,000 27,500 70,500 Total Free Cashflow -4,500-1,264-140 20,700 Discounted Cashflow (WACC 8%) -4,167-1,084-111 15,215 NPV 9,854 19
Cross sell potential is huge Students at WeStudy at 2020 14000 Cross Selling potential 40% Potential new members for WeWork and WeLive 5,600.00 Revenue per member per year 40,000.00 Potential new Revenue 224,000,000.00 Potential revenue for WeWork and WeLive around 224 million USD based on students 2020 20
Potential risks are manageable Impact B A A Risk Missing brand awareness Mitigation Stronger promotion through events and special guests. Get your friends on board program B Cannibalization between WeLive and WeStudy Rooms for WeStudy are only open for current students Probability 21
What to do now? Key Challenges Create new disruptive business idea Not just do some small scale adjustments Monday Morning Actions westudy is introduced in Europe Asia as a follow up market for westudy Meet your architects for a kick-off meeting for the concept Ask your local managers to look for suitable locations Wrap-up 22
Thank you for your attention 23