Last year (and I have been waiting to say that), I wrote about the power of recombinations and how it is a driving force for entrepreneurs in creating billion dollar businesses. I recently was reading about WeWork and its $1.5 billion valuation (which should rise to $6 billion this year) and realized it is an ideal example of the power of recombination (or some would say 1.5 billion examples).
Recombination is a phrase I picked up from Erik Brynjolfsson and Andrew McAfee’s book The Second Machine Age. To recap, recombinations are taking different technological improvements and combining them to create disruptive products. An example they use is Waze, the smartphone app that provides optimal driving directions. Waze is a recombination of a location sensor, data transmission device (that is, a phone), GPS system, and social network. The team at Waze invented none of these technologies; they just put them together in a new way. None of these elements was particularly novel, but their combination was revolutionary.
WeWork is a provider of shared office space for entrepreneurs that, as mentioned above, was valued at $1.5 billion last year when it raised $150 million from investors including Benchmark Capital. WeWork has 31 locations where it provides business services and office space to 15,023 companies. Given that many of us would like to start $1 billion companies, WeWork provides a great example of how recombination can be used to create billions of dollars of value. Continue reading “WeWork, 1.5 billion examples of the power of recombination”