It’s fascinating when a company’s public relations gets ahead of its reality. Any strategic PR or marketing plan should emphasize an organization’s strengths and rebut weaknesses and threats, but there’s such a thing as too much hype. This is particularly true in the tech sector.
Case in point: WeWork. The Gizmodo headline, “WeWork To Delay IPO Amid Suspicion It’s Not Actually A Tech Company Worth $47 Billion” sums it up nicely.
Was WeWork the victim of its own PR? In part, yes. Like Uber before it, it was hyped relentlessly as the next unicorn, attracting buzz for the hip decor of its workspaces, the entrepreneurial types it attracted, the communities it built, even quirks like vegetarianism. The stories were interesting, and they said a lot about the future of work, at least for the short term. But they didn’t dig very deep.
Uber — another shiny unicorn that has stumbled recently — truly turned the taxi category on its head by solving its inherent supply and demand issues. By contrast, WeWork didn’t exactly disrupt its industry. Temporary office-space has been available for decades, led by Regus, which was founded in 1989.
But it was WeWork that packaged its offering as something new — coworking, tapping into the power of community. For entrepreneurs and other solo or small businesses, it was a great way to leverage the sum of its parts and create an ecosystem. That was truly innovative, and it was a real part of the business offering.
Yet the real PR coup was WeWork’s positioning. It held itself out as a technology company. And that positioning – as a high-growth tech startup serving other high-growth tech startups, or at least wannabes – is how it was able to lure so many investors.
It had all the trappings of a Silicon Valley start-up, yet WeWork was always a real estate company, with the typical risks of a real estate company, like high fixed costs and vulnerability to market cycles. When investors and industry-watchers finally read the prospectus put out by WeWork in advance of its planned public offering, it triggered plenty of concern. It was stuffed with vague language, empty industry jargon (“space as a service”) and showed no clear path to profitability. It’s valuation promptly plummeted, and the IPO is on hold.
All unicorns start off losing money. Amazon didn’t turn a profit until 2017. But you could cut the last three words off the Gizmodo head and it still makes sense. WeWork will delay its offering in part because a positioning ultimately needs to be grounded in reality.
Bloomberg points out that for such filings, Rule 421 of the Securities Act requires companies to use “plain English.” That can go a long way in PR and marketing, too.