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Conductor buys their company back from WeWork (that’s a good thing)

(CORPORATE NEWS) In an effort to refocus, co-working giant, WeWork, is looking to offload many of its recently purchased assets which may work in the small companies favor.

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Once upon a time, WeWork, the popular, ever growing, co-working space giant, was valued at $47 Billion. But on August 14th, 2019, everything changed.

In August, WeWork submitted its first IPO paperwork for the company, not realizing it would almost immediately face incredible scrutiny from various entities, such as investors and the press, in regards to its finances. Although the company’s revenue doubled in 2018, Business Insider found that the company wasn’t actually earning any profit. In fact, reporter Rebecca Aydin reported on July 3rd that the company was losing $216, 000 every hour of every day.

But that’s not all. Since WeWork went public, the company has witnessed an incredible devaluation, from $47 billion, all the way down to $8 billion. Now, since we’re talking about billions of dollars here, the devaluation may not seem like a big deal for the future of the company, but I can assure you it is.

This devaluation resulted in Softbank, WeWorks’ biggest investor, taking over, and offering $1.6 billion to then CEO, Adam Neumann, in exchange for stepping down.

Throughout their growth, WeWork acquired more than 20 businesses, such as Spacious, a small co-working space in Manhattan, New York. Spacious’ CEO prior to the acquisition was Preston Pesek, who launched the firm in 2016. Pesek had a background in real estate and founded the business to leverage and monetize abandoned buildings and restaurants.

Customers had easy access to these spaces for a nominal fee, but because of WeWork’s recent decisions with finances, it made the decision to offload quite a few of its previously acquired businesses, including Spacious. They’re also looking to liquidate Managed By Q, which was purchased by WeWork from founder, Dan Teran in April.

In light of this news, Pesek anounced that Spacious will close its doors at the end of the year, alluding to WeWork’s refocus on its core workspace business. But while Spacious is set to close, Teran has decided to fight to re-acquire his company. In a article on The Real Deal, writer Rich Bockmann states that Teran said he’s actively looking to buy back his company.

Conductor, another company WeWork purchased more than 2 years ago, has already been successful in purchasing its company back, and it looks like it may be a better setup for its employees than previously. Co-Founder, Seth Besmertnik, stated in an interview that, prior to the sale of Conductor, he actually only owned 10% of the company. But with the re-acquisition of the company, Besmertnik and his partners, investors, and employees will be in full control. He says that under the company’s restructuring, employees will have “more than four times what they did when we sold the company”, which is clearly a better deal than what they had before.

But WeWork isn’t just liquidating co-working assets they’ve acquired. They’ve also laid off 2,400 employees in an effort to cut costs. Additionally, they’re also considering selling and/or shutting down other ventures, such as Meetup.com, a web platform that makes meeting up with like-minded individuals as easy as possible (purchased in 2017 for $156 Million). WeGrow, an elementary school in Manhattan, is also on the chopping block.

At the end of the day, WeWork just wasn’t as strong as users, investors, business partners, and the general public thought they would be. At a current valuation of only $8 billion (again, down from $47 billion), and with a $9.5 billion bailout from Softbank, the company will have to get really smart with their remaining finances. It’s obvious that the company is still in a state of flux, reevaluating their options and their main focus, but the question remains – can they still be saved? Maybe even more importantly, are they worth being saved? Only time will tell.

Rachael Olan is a Texas-based Staff Writer at The American Genius and jack-of-many-trades. She's well known for her abilities in Marketing, Sales, and Customer Service, with a focus on SaaS and eCommerce businesses. Outside of writing, Rachael spends much of her time with her swarm of pets, including a 70 lb tortoise named Frankie.

Real Estate Corporate

Zillow’s patent game is strong – they just got 3 for IBM’s creations

(CORPORATE NEWS) This company was just granted not 1 patent but 3 on tech more than twice their age! What does it mean for you? Nothing good…

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Welp. They did it.

We’ve been watching Zillow for some time now, and in the midst of even the strongest of OP Eds saying how terrible an idea it is, Uncle Sam officially handed them multiple patent keys to tech they didn’t invent.

How big do you have to be before you can clout jack with this much impunity?

I’m used to seeing this with small artists. Forever21’s Etsy spies find a cute, simple design, maybe do the work to alter the pallate a smidgen and rely on the ‘Matilda’s Dad’ strategy of “I’m smart, you’re dumb, I’m big, you’re little, I’m right, you’re wrong, and our lawyers will argue the same, peasant’.

But with technology, you can literally trace the code back to a source. It’s not like using teeth as a motif, it’s real, it’s definite, and it’s definitely really shocking that the government signed off on this.

Zillow’s not exactly startup sized, they’ve been in business since 2004. They’re a big name. Their competition probably can’t muscle their way in and out like they can. Matter fact, a company you may have heard of fighting them on patents has only been doing their doings since…wait, since 1911. Must be a tiny outfit, that was in some other business for over a century right?

It’s IBM.

What le freaque?

We all need to be concerned about this level of government sanctioned patent jacking, no matter what field we’re in.

I’ve heard before that if you’re just starting out, and low on funds, paying for your inventory and manpower are more important than filing anything with the government. Now we’ve got fresh, bloody proof that that’s 100% not true.

Your or your company’s intellectual property can be deeded off with a factor no more elaborate than whether the patent office likes your face that day, regardless of what kind of trail you’ve left, and as far as being run into the ground or laid off goes, that’s hardly a non-factor.

This decision represents a higher financial barrier to entry for everyone from Amazon entrepreneurs to realtors daring to use tech as basic as texting in their business.

Yes, literally.

Zillow’s patents, condensed for readability, are on:

Taking panoramic images for 3D walkthroughs

Multi-criteria search engines

And superimposing images scaled for size onto an area of land

Do all of those sound familiar? They should. We’ve been using that tech for years. And Zillow’s no Microsoft.

As always, we’ll have to see how this plays out. But if your New Year’s resolution was to take more bold steps in your business, maybe see if you can patent the idea of putting your picture in your email signature?

Apparently it couldn’t hurt.

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Real Estate Corporate

Redfin launches their Job Opportunity tool – gimmicky yet brilliant move

(REAL ESTATE) Redfin has launched a new tool that at first glance is a PR stunt, but at second glance is useful and pretty damn smart.

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According to the National Association of Realtors, 90% of people searching for new homes will turn to the internet in their hunt. It’s why real estate sites like Zillow, Trulia and Redfin exist. With competition growing tighter every year, Redfin has created a new feature to stand out from the rest of the pack: a job opportunity tool.

No, this isn’t specifically for job hunting. You’re going to have to look for specific employment opportunities elsewhere.

Instead, Redfin has collected information from sources like the Bureau of Labor Statistics, the US Census Bureau, and even the IRS in order to provide an informed look into the job climate for those looking to relocate.

Not only can users get an idea of how many jobs are available in an area, they can take a look at median salaries, and how these salaries add up against the cost of living.

Redfin’s tool calculates average housing, transportation, and tax prices, among other things, which can give people an idea of how far their salary will really go in a new home.

Plus, they’ve also created a tab for employers to research data regarding hiring prospects, expanding usage of the tool to those considering starting, expanding or moving a business.

On its own, the job opportunity tool is pretty neat. There are plenty of colorful visuals to make the information engaging and easy to digest. The tool also boasts a decent amount of variety, providing insight about jobs from bakers, floor sanders, midwives, and anything in between. It’s sure to provide interesting insights to anyone looking to relocate.

Primarily, it’s a smart business move on Redfin’s part.

The tool sets them apart from other real estate sites, giving them a traffic and brand boost with the markets they were already targeting. Many people looking to buy homes are, after all, making significant relocations. It also diversifies what Redfin offers, though, which might help them garner attention from other industries and break out of real estate in a creative way.

Above all, it’s a smart PR move for Redfin, to creatively present their data to news outlets and have their name in as many media mouths as possible.

Online real estate is still a budding industry despite being two decades old, and this is just one of many ways the industry is evolving. Still, kudos to Redfin for making something that is both an interesting gimmick and a useful tool for job and home hunters alike.

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Real Estate Corporate

Zillow hopes gov’t is dumb enough to grant them a patent on 30+ year old tech

(CORPORATE NEWS) Zillow continues to expand their offering, but can they succeed with all the patent lawsuits they’re in?

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Recently, Zillow quietly filed a patent for “automatically determining market rental rates for properties.”

The patent abstract says that it’s protecting “A facility for determining a market rental rate for a distinguished home located in a distinguished geographic area…”

It goes on to say that they receive attributes for the home, and runs it through a valuation model trained by rental listing prices and home attributes from recently-listed rental homes in the area, then reports the market rate that it comes up with.

If you’re familiar with Zillow, that probably means that you’re either a real estate professional, you’ve used it to find a home, or that you’re one of the people who idly flips through it ogling other peoples’ houses the same way that most people scroll through Twitter. But you’ll probably also recognize the service being described. It sounds like it’s basically a Zestimate, for rental properties.

A Zestimate is a home-value estimate that Zillow offers on its listings. It pulls pricing data from similar houses in the area, runs it all through an algorithm, spits out a rough estimate of what an appropriate price for that home might be. Better known as an AVM, which was developed in the 1990s.

It’s an interesting service. Though if you’ve ever played around on the site, you’ve probably noticed that the Zestimate can be way off. It’s not unreliable by any means, but it’s far from gospel about what a home is actually worth. The average Zestimate error for a house not currently on the market has been calculated to be around $18,000 as of July 2019.

It’s interesting that Zillow is going further down the Zestimate path. Earlier this month, they were sued by IBM for alleged infringement of seven patents. They claim that key Zillow features are built on unlicensed IBM patents, including tech that sounds an awful lot like what Zestimates would need.

IBM says that they’ve been trying to reach a patent licensing deal with Zillow for three years, which means that when Zillow filed suit against Compass for stealing Zillow’s intellectual property in April, they in turn were driving IBM to the end of its patience for not licensing theirs. (Does that mean that IBM should be suing Compass, too? Who knows!)

At any rate, it’s no surprise that Zillow’s considering a move deeper into the rental market. That kind of expansion has been a key part of their business plan for a long time now. While they’re certainly a leader in the “daydreaming about buying a house” space, they’re aiming to be involved with the entire home-purchasing process, from start to finish. From websites for Realtors, to instant homebuying and mortgage lending, Zillow’s dreaming of being the ultimate real estate service provider (even if they swore all along they never would practice real estate).

They’re not new to the rental space, either. Their current rental management system includes applications and tenant screening, as well as online rent payment. It’ll be interesting to see which of these expansions pay off for them in the long run.

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