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They leased a cavernous building a few steps from a surf shop and a sex-toy boutique, and equipped it with desks, power strips, fast Wi-Fi, and a deluxe coffee-maker. Neuner and Coonerty named their company NextSpace Coworking. NextSpace provided a refuge for local freelancers desperate for office camaraderie, and within six months the company was turning a small profit.
Neuner and Coonerty also started looking for venture capital. In , Neuner went to a co-working-industry conference, in Austin, Texas, to appear on a panel and try to meet investors. Although WeWork was just two years old, and Neumann was only thirty-two, the company already controlled more than three hundred thousand square feet of office space; he declared that WeWork would soon have ten thousand clients.
Why should we invest with you instead of them? Do I tell V. No one wanted to hear that. All the V. A real-estate agent informed Neuner that WeWork had opened a location in San Francisco, just a few blocks from NextSpace, and was charging cheaper rates. As NextSpace grew, eventually opening a fifth California location, WeWork opened competing offices alongside each one of its facilities, never more than a few blocks away. Invariably, WeWork charged tenants slightly less.
Neuner began hearing similar stories from other co-working entrepreneurs: WeWork came to town, opened near an existing co-working office, and undercut the competitor on price.