I was reading this blog post by Fred Wilson last night and I think this unlocked a key insight for me[1]. WeWork (Uber, Peloton, Lyft, AirBnB, etc...) are not software companies. None of these businesses sell software, they use software to enable them to sell their end product: Commercial Real Estate (Rides/Freight/Food/Bikes, Exercise Bikes/Treadmills, Rides/Bikes, Home Rentals, etc...).

The mis-calculation that I made was that I thought using software to enhance a legacy business was something that public market investors would apply a high valuation multiple to. What it looks like is happening is that public market investors are comparing these companies to traditional industry companies they already know.

The interesting note is that Amazon, Google and Facebook all stumbled out of the gate, but they were able to pivot to selling software. Amazon with AWS, Google with Search Ads, and Facebook with Mobile Ads. I think this is the pivot that's going to have to happen for the latest round of companies that aren't doing so hot right now to start throwing off cash and increasing their valuations.

[1] - https://avc.com/2019/09/the-great-public-market-reckoning/