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Why WeWork Is going to Buy MeetUp

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WeWork is going to buy Meetup "a small, mission-driven operation company."

As a company, Meetup has long embraced its position as a small, mission-driven operation company. While other social software companies from the Web 2.0 era, such as Facebook, Twitter and LinkedIn, focused on keeping their users on their sites as long as possible. Meetup’s purpose was always to get people off the internet, and go walk their pugs together, practice speaking French, or organize for Howard Dean.

In the age of billion-person platforms that encourage users to make thousands of connections, it seemed old-fashioned, and certainly inefficient. It was a lot harder to scale the act of organizing people personally, around common interests than it was to grow a company that focused on digital interactions, none of which required that people leave their couches. As those companies added users and hustled toward initial public offerings but Meetup stayed focused and tiny.

CEO and co-founder Scott Heiferman was never in a hurry. The last time he raised funds in 2008; he selected patient investors like Pierre Omidyar and Esther Dyson, who believed businesses should also contribute meaningfully to society.

“Our number one priority was independence and to live within our means,” and “Our number two priority was growth.” says Heiferman.

So it is surprised to learn that Meetup has just sold itself to the poster child of hyper-growth: WeWork. After raising $4.4 billion from Softbank’s humongous Vision Fund, WeWork is now valued at close to $20 billion, putting it in league with Uber and Airbnb as one of the most highly valued private US tech startups.

(There are new reports surfacing that WeWork executives traveled to Israel over the holidays to raise more funds.)

WeWork’s co-founder and CEO Adam Neumann is rushing to build out a company that endeavors to control the future of physical space. Its executives talk in sweeping terms about an addressable market that encompasses every last square foot of office space in the world.

(“Tokyo is a billion. New York City is 400 million. Kansas City is 50 million.”)

Ask Neumann what he’s building however, and he’ll describe a community manufacturing machine; a startup that according to its mission, is a place where people “work to make a life, not just a living.”

“Community” is one of those buzzwords that gets thrown around to describe everything from the people who use LinkedIn to the Mississippi church group that passed around clothing after a recent tornado. But in the wake of the 2016 presidential election, there’s a growing awareness that digital community—the links we make online through social services—don’t always augment the act of getting people together face-to-face to meet one another.

Real-life community is irreplaceable. It’s also a much harder thing to program and few people know more about how to do that than the group of executives who run Meetup. “It’s the oldest thing in the world,” says Heiferman.

Describing a Jersey City single moms Meetup he’d attended recently. “It’s what it means for people to show up for each other.”

Earlier this year, Facebook founder Mark Zuckerberg announced that the company would sink more resources into its efforts to build communities. It convened hundreds of group administrators in Chicago for a Community Summit. Zuckerberg attended and used the event to unveil a new mission for the company: “bring the world closer together.”

 

Last year, Meetup launched a redesign aimed at helping it appeal to millennials and embrace new machine learning techniques to better connect its members for more casual meetups. Heiferman knew he couldn’t grow the company on enthusiasm alone. This past summer, he began speaking to investors to raise money. In light of the urgent need for Meetups, he explained, he endeavored to grow Meetup to a billion members. Pronto. Investment opportunities gave way to multiple acquisition offers from what Heiferman calls “the usual suspects”—and an invitation to meet from an unusual suspect: Neumann.

Over a month of meetings that included a late-night ramble through Manhattan, they hit upon a strategy that would allow Meetup to remain independent, just as Instagram had at Facebook, or Waze had at Google, while benefitting from WeWork’s cash, resources, space, and ambition. “The sole question on the table for Meetup is, ‘How could we have more impact on the world?’” Heiferman says. “So this is a big bet on how we can make Meetup more of a global phenomenon.”

Featured Image: Ztrategist

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