How an entrepreneur is using WeWork as his key into China

Evgeni Kouris, a 33-year-old entrepreneur, built a 13-person software company in Berlin he wants to move to China — but he knew he’d face high barriers to entry in that country.

Given the language barriers and regulatory obstacles, Kouris expected global expansion to be particularly challenging in China. “You can’t do any business without the proper government understanding and support and the right network and partners,” he told Yahoo Finance.

One of those partners is the popular communal working startup WeWork valued at $16 billion, which is expanding to China starting Friday. He’s snagged a desk there and will be building his Chinese business from WeWork’s new Shanghai location.

Kouris is the quintessential global entrepreneur. In 2013, he created Gamewheel, a platform that helps brands use ad games in mobile marketing. Born in Russia, he moved to Germany when he was 15 but frequently travels internationally. During one of his business trips to New York City he ended up meeting a potential client at one of WeWork’s 30 locations in New York City. He says the energy and aesthetic of the coworking space immediately fascinated him.

In fact, the concept appealed to him so much that he was one of the first people to sign up for WeWork Berlin, which opened on May 1. Previously, he’d rented a small space in a traditional office building.

“My team has been super motivated because of the amazing view of Tiergarten (an urban park) but we also love the quality of the office and the fact that everything is super well thought of,” he says. “It allows us the chance to operate in a grown-up and professional setting even though we’re a small company.”

This week he and several of his employees are in Shanghai attending the Mobile World Congress to connect with potential investors. Kouris says it was perfect timing that WeWork was setting up shop in Shanghai in just a few days, and was eager to sign up for an office. But because of the high demand he wasn’t able to secure a private office and instead got a desk.

WeWork has become ubiquitous across the US, but it’s also expanding internationally at an aggressive pace. Its first location in Asia will be in Shanghai’s Jing’an District, one of the city’s central business and commercial areas. Offices start at around $500 per month and individual desks start at $440.

Though three established companies have already committed to WeWork’s Shanghai location, the building is currently 70% full, according to Ruch. He says he expects the office (that can fit 500 members) to be 100% full by the end of the month.

“It’s been amazing to see that several companies want to use WeWork as a launching pad to go into other markets like China,” says Ole Ruch, managing director and head of WeWork’s operations in Asia. Ruch joined the company a year ago and was tasked with building out its international strategy and expansion, particularly in Asia Pacific.

Though ex-pats who have seen or heard of WeWork will likely be easily convinced of the value of a co-working space, Ruch says he expects the office to be 80% local Shanghainese and 20% foreigners.

“We provide a physical place where people like Kouris can come in and meet local companies, but we also offer professional services and partnerships that can generally be helpful to people,” he says.

Gamewheel was also accepted into an accelerator program run by Silk Ventures, a venture capital firm backed by the Chinese government. The program offers a two-week tour of the country and helps Kouris set up meetings with potential investors and partners. If Gamewheel finds a collaborator through the program, Silk Ventures then takes an undetermined amount of equity in the company.

Now, with a desk in Shanghai, Kouris will be able to invite prospective investors and partners to the office. Of course, he had his fair share of concerns before becoming a WeWork member, questioning the feasibility of building his own company culture in a coworking space. But, ultimately, he says Gamewheel has benefited from being a part of the WeWork community.

Kouris says it would be impossible to provide his employees with the kinds of perks that companies like Google or Facebook can offer — especially as fledgling companies spend their capital more cautiously.

This phenomenon is clearly palpable in startup hubs like Silicon Valley. Young entrepreneurs are growing increasingly conservative about their growth needs as VC firms scrutinize how their investments are being spent, Chris Roeder, international director at real estate firm Jones Lang LaSalle, told Bloomberg.

So for young entrepreneurs like Kouris, WeWork’s amenities — like high-speed internet, free coffee and fruit water, private phone booths and access to weekly lectures and networking events — are an integral part of the experience.

There will be two more locations in Shanghai and one in Hong Kong this fall. Plus, there will be a WeWork opening up in Seoul this summer and one in India later next year.

With over 60,000 members spanning 30 countries, WeWork is truly creating a global network. But it remains to be seen how the company will try to monetize on the relationships that are blossoming within its walls. Eventually, WeWork could charge commission or a cut of the revenue as more entrepreneurs cross country lines to grow their companies.

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