Why the valuation doesn’t make the company: [my] Hopin, WeWork and Uber
Based on my work experience at Uber, WeWork and Hopin
The Strategy and Biz Ops Hub uncovers the the way to, and the way not to, build your Biz Ops function. This week I focus on lessons learned for leadership, moving on from the roller coasters of WeWork, Hopin, and Uber.
Last week, the fickle nature of startup reality smacked us in the face with some cold truths. WeWork is dangling on bankruptcy's edge, and Hopin, once a $7+ billion giant, pawned part of its business (the flagship Events business) for a paltry $15 million.
🕯️ Let's have a moment of silence for their valuations - and the VCs who paid handsomely to be a part of the party. Moving on…
🎉 Let's celebrate the hard-won wisdom - and the people who worked their bottoms off building as fast, and as wide, as they could. To give those giants a fighting chance at becoming something meaningful.
The Selection. The Grind. The Alums.
Fast growing, well funded companies, with a ton of brand recognition, boast talent and resources galore. They are not places for the faint-hearted.
Getting in means surviving gruelling selection processes. Recruitment is stringent, and typically long. But these companies recruit world class talent. Uber had the famous 2h analytics test, plus numerous case interviews. WeWork had 9 rounds up to the C level for the region. Hopin had surprise case studies on top of the expected ones.
Once you are in, the benefits are tangible.
You have all the resources to perform at your best. At Uber we learned SQL in order to up our data analytics game. At Hopin we had experts in legal, accounting, partnerships and Corp Dev every International Expansion professional could dream of. I remember the old days working for a corporate for whom my €13 taxi cab business expenses were considered hefty!
You forge connections for life in the fires of fast paced growth. I still keep in touch with fellow managers at Uber who now hold C level positions across a variety of start ups. I pulled some WeWork folk to Hopin. Hopin’s alum community, in its own right, is alive and kicking. I can’t wait to work with some of those people again.
Lessons from the trenches
Each of the companies offered some unique learnings. When you see scaling from 500 to 1000 employees at Hopin, the change of a CEO at Uber, the failure of an IPO and subsequent destruction of culture at WeWork, something is bound to stick. Here is an in-exhaustive list, written on a flight, which for once took off on time.
Hopin:
A masterclass in Hiring: the hiring process at Hopin ensured we scaled fast and maintained very high quality of talent. Hiring took 3 weeks, 4 rounds, and kept the bar very high. To this day I can say my Hopin colleagues across Engineering, GTM, Biz Ops, Legal, Product, are of the best I have ever worked with. Post-Hopin the alumni community is strong.
A masterclass in Corp Dev: Hopin was a fast-growing, well-capitalised, but single product company. From a single product, we expanded massively into adjacent product lines, ensuring the longevity of the corporate body. Hopin (Events), acquired StreamYard (Streaming), and Streamable (Storage), and launched Superwave (Community). Now they have sold two of those assets. Hopin continues to exist as a multi-product company, and its teams work on the assets which would bring most value in a post-pandemic world.
Sophisticated GTM: as Head of International expansion I oversaw the launch of multiple new markets and designed various different GTM motions. In a 2 year old start up I designed and launched direct, channel partner, media partner and referral GTM motions. Not something you are typically exposed to, and can let alone drive.
Hard pass on these lessons though:
How to answer customer needs in a shifting market. 🎧
Corporate Governance. Lack of provisions for secondary equity sales for the founder, anyone? 💸
How to make good use of capital. 💸
Uber:
The Ultimate Data-Driven Machine: Uber captured and relied on massive amounts of data. To operate a marketplace you need to understand Supply, Demand and the delicate interplay between the two. Having attracted a bunch of clever people for its Operations roles - mostly ex bankers and consultants - they trained people to work on SQL and work with the data. We had the Hive database and layering on top a decentralised way for Ops Managers to extract and analyse their own data, vs waiting on a centralised unit. Coupled with monthly Green Light House driver meet ups and presentations, data helped Uber learn and scale fast.
David v The Taxi Lobby: You can say what you want about Travis but it takes real drive and stamina to go against a taxi lobby, let alone the taxi lobbies across a number of international markets. How to respond to the French taxi drivers, who torched Uber drivers’ cars and expressed their anger with violence? If you are going against a powerful lobby you need a legal team (15-20 at its peak in London), a PR team, and you need to be prepared for the really nasty tactics.
The power of PR: Another attack on Uber was about safety. Numbers are numbers, but perceptions are a different ball game. While I cannot speak of other markets, at least in the UK, accusations of lack of safety vs the regular taxies were based on false information and a confirmed concerted attack on the image of the company. Numbers about incidents caused by Uber drivers were not higher than any other taxi service.
Plan for Chaos and Outliers: If something could go wrong, it will go wrong. Plan for this. In designing any process, optimise for the unlikely. And get yourself a legal team and PR team.
Hard pass on these:
Reputation for “culture.” Because culture in one office can damage the reputation of the whole company. 🪰🍯
Timely response to the Bro culture of SF. It took a lot of effort to begin to counter. ⏳
WeWork (& WeWork Labs):
Everyone is in Sales: at its peak in London WeWork’s employee force was trained in sales. How you do it in general, how you do it at WeWork. How you do it in a way to be an advisor rather than a sleazy sales person. You develop also a love-hate-but-mostly-hate relationship with Salesforce. But you learn a process and more importantly how what happens on the ground trickles up to a simple dashboard.
Building a community is God Damn Hard: If you thought that you can start a slack channel and then your members will miraculously engage, think again. You need a driver, an ecosystem of partners to deliver value in many shapes and forms (see the point below), and… a budget!
Productising experiences: WeWork of course is a real estate company but our dabbling with services was at some point the panacea for small businesses. They wouldn’t come to WeWork for the services, but these surely helped differentiate. You learn what matters to your ICP, how to layer services on top of the product to demonstrate value, and what form said value takes. You also learn if those unit economics work, given the highly educated (and expensive) people you need to deliver said services.
Hard pass on the lessons about:
Valuations. ‘Nuff said. 🔥
Talking about a business as a “family.” 🙄
Corporate Governance. Also ‘nuff said. 🧙♂️
How to treat your top performers. Hint: walking back on agreements is not the way. 🏆
Accounting. May I remind you: “Community-adjusted EBITDA.” 🧮
So what should you make of these companies now?
The valuation is not the company. Because a hundred-ish investors in WeWork got, or didn’t, their money’s worth is beyond the point. Some of the best people ground through the trials and tribulations, and learned both what to do, and what not to do.
If you meet someone who was at these places during the building times, or the turbulent times, ask them about their stories. Chances are their learnings are from the real building blocks of tangible value. Their battle scars have captured in a few short years what some people could dream of getting exposed to in over a decade.
I will cheer to all of my ex-Hopin, and WeWork colleagues tonight.
May we build giants the way we know we should.
To continue the conversation, connect with me here: https://www.linkedin.com/in/vessclewley/