As WeWork seeks to divest its companies, Meetup CEO David Siegel is looking for a new owner who can keep the brand alive.
At Meetup's headquarters in midtown New York City, a screen broadcasts event RSVPs that roll in at an average of 100 per minute. The events span the globe: "Ankara Board Game Enthusiasts" in Turkey, "Adelaide Walkers and Joggers" in Australia and "Myrtle Beach Live Music" in South Carolina all flash up in the same minute.
For 18 years, this is what Meetup has done — and little else. While other tech companies have become global powers by offering all manner of free services, Meetup kept it simple: It charged venues and later organizers small fees to coordinate events.
That is, until WeWork came along.
WeWork bought Meetup in November 2017 at a time when the real-estate rental startup seemed unstoppable. Almost exactly two years later, WeWork has emerged as a poster child of the excesses brought on by billions of dollars in private funding and a growth-now, profits-later mentality.
While WeWork and Meetup share some common traits around community building, the two companies are a contrast in how to build a tech company. Meetup raised $18.3 million over 11 years, concentrated on its core service and grew slowly. By comparison, WeWork raised almost $13 billion since its inception in 2010, in addition to a $9.5 billion bailout from Softbank in October, and sought to disrupt everything from education to personal living spaces.
Now, Meetup is in limbo. It's currently for sale, and changes have alienated some users. Recent layoffs cut the staff by a little less than 25 percent, and it's unclear what the asking price is for Meetup (WeWork paid $156 million for it two years ago).
Meetup CEO David Siegel said the company has faced new difficulties as a result of the WeWork chaos.
"The challenges are that there are certain associations people have around WeWork because of what has happened over the past three to six months," Siegel said in an interview. "Some good and some not as good, and I think separating Meetup from those associations is not necessarily a bad thing for the company."
As tension builds at WeWork to divest its noncore businesses, Siegel has a mandate to find a buyer, and to do so within the next month or two. He said he has met with a few potential buyers and is hoping to recommend someone to WeWork's board who not only offers the right deal, but can commit to keeping the heart of the company alive.
When asked whether Meetup co-founder and chairman Scott Heiferman would want to buy Meetup back, Siegel laughed and said, "I heard that, too," but stopped short of saying whether he had discussed the prospect with Heiferman.
"This is his baby. He built this incredible organization, this ecosystem," Siegel said.
Born out of 9/11
Meetup has one of the more notable and charming origin stories in tech.
Heiferman said he was on the roof of his apartment building in lower Manhattan when the Twin Towers collapsed on 9/11. In the days and months that followed, he noticed people were connecting more with neighbors, saying hello and checking up on them.
The next year, along with Matt Meeker, he launched Meetup as a way to get people offline and making friends in real life. Meetup started to take off in 2003 when the presidential campaign of Howard Dean, the former governor of Vermont, used it as a tool for grassroots organizing in the Democratic primary.
"It was all the kids who worked in the campaign. It was an organic process," Dean said. "They wanted a way to exceed the fairly small capacity I had as a candidate from Vermont, who no one had ever heard of."
Meetup pre-dates Facebook, YouTube, Instagram, TikTok and Twitter. It is not only older, but it's significantly smaller than the social media giants that came after it. Meetup has 49 million members, compared to 2.45 billion users on Facebook. However, Meetup shares the same global reach and is available in more than 190 countries.
Siegel is only the second CEO in Meetup's history, taking over in October 2018 from founder Heiferman 10 months after it was acquired by WeWork.
Compared to other tech companies, Meetup grew slowly but steadily. It added users and raised small rounds of funding, enjoying the kind of affinity most tech companies aspire to.
Derek Andersen, CEO and co-founder of Bevy Labs, a software product that helps large companies build communities offline, said he first fell in love with Meetup in September 2010. He was able to use the platform to scale up his Startup Grind event series, which connects techies around the world, to 600 chapters.
"It supercharged the group and started bringing in all of these really interesting people, and that is really the power of Meetup," Anderson said.
WeWork buys in
By the time it bought Meetup in 2017, WeWork was already valued at more than $20 billion — at least privately.
The company, which primarily rented office space for long leases and then offered those spaces for short term leases, had emerged as one of the rising stars among the startups of the early 2010s, along with Uber, Lyft and Airbnb.
WeWork, along with these other companies, was fueled by sizable investments from venture capitalists who funneled billions of dollars into their businesses and inflated their valuations will remaining private. Previously, tech companies had been pushed to go public and allow their stock to trade openly. WeWork, already bigger than many public companies, had no such need.
It also had ambitions to add new businesses. WeWork bought a series of smaller companies, including Managed By Q, an office platform management company, and Conductor, a content marketing company, to add more services to its offerings.
Meetup was one of those companies. Siegel said that by his count 27 interviews took place between MeetUp and WeWork executives, including WeWork's now-former CEO and co-founder Adam Neumann, over about three months. The synergies seemed obvious. WeWork wanted to figure out more ways to use its spaces, and Meetup was all about getting people together who who often need to find spaces.
Siegel said that meeting with Neumann, who has been known for his love of private jets, and for wanting to be the world's first trillionaire and to find a way to live forever, according to a Wall Street Journal profile, "was actually not that remarkable."
"Honestly, we sat on comfortable couches. It was very conversational. It was really more about culture fit and belief in company mission than hard charging, let me hear data, the analysis. I think what he was looking for someone who believed in Meetup and Meetup's mission as much as he did," he said.
But the speed of WeWork's success would be outpaced by its decline.
From IPO to sell-off
In a span of about six weeks, WeWork went from pursuing an initial public offering at a valuation of $47 billion to discussing bankruptcy.
The company's move to go public brought on scrutiny, particularly on Neumann, who would later be forced to step down as CEO amid concerns over his leadership style, which pushed breakneck growth but ignored an ugly balance sheet full of losses and long-term liabilities that made the company unattractive to Wall Street. Neumann was given a sizable payout, said to be as much as $1.7 billion, in September to step down.
Siegel described Neumann and WeWork as a parent company that didn't micromanage the day to day and gave him the flexibility to make decisions. But Meetup and other WeWork subsidiaries were soon forced to make tough choices.
In mid-October, Meetup announced it was testing a change to its business model that would generate new revenue.
Meetup had long made money by charging event organizers $9.99 and $23.99 per month to use Meetup to organize their events. Under the new model, organizers would pay $2 per month, but anyone who RSVPed to an event would also be forced to pay $2.
For a group with 30 RSVPs that meets weekly, that would come out to $242 per month to use Meetup, counting the $2 organizer fee. "That's a 1,210 percent increase in cost," Quincy Larson, founder of freeCodeCamp.org, pointed out in a blog post titled: "WeWork is desperately squeezing cash out of Meetup.com by taxing 225,000 communities."
A Meetup spokesperson said plans for the test had been in the works before WeWork's failed IPO and was not a result of its parent company's woes, but the announcement was poorly received. Shortly after the blog was posted, Meetup added a note clarifying the change and said it was "a limited test for a small number of groups."
Up for sale
Two weeks after the RSVP fee debacle, Meetup laid off almost 25 percent of its workforce, most of whom were said to be engineers. A Meetup spokesperson confirmed the reduction and said there are no further plans for layoffs.
"I think at times, the impact was probably not felt by our members and organizers, but there is an employee impact that exists," Siegel said, whether it was the layoffs themselves or missing out on having WeWork options that were supposed to go public.
Having a parent company that is consistently in the headlines, and not for positive reasons, has also led to a lot of questions, some of which Siegel doesn't have the answer to. However, he said his goal is to be transparent about what's happening.
"Sweeping things under the rug causes people to whisper, and that's never healthy," he said.
Siegel said he feels like Meetup, after 18 years of being a beloved brand, can survive its WeWork era and move onto a new chapter with a clean slate.
Over the past two months, he has been busy meeting with potential buyers, whittling down the offers until he finds the right one to present to WeWork's board.
"David and the Meetup team have been great partners to WeWork, and we're excited to support them through this next phase of the company," a WeWork representative said in a statement.
Just as prospective buyers sign standard nondisclosure agreements, Siegel declined to share whom he has met with. He did offer some hints, however.
"There has actually been quite a lot of Meetup organizers that have expressed interest in acquiring us and people who have attended dozens of different Meetups and have known us since our earlier days," he said.
Whoever Meetup's buyer turns out to be, Siegel said he's looking for someone who "shares our passion for our company and the impact we are able to have on peoples' lives."
"I think that is going to be really positive ultimately for our organizers and members," he said.