Why do you need to set the WORKON_HOME environment variable?

I haven't used my python/virtual environments in a while, but I do have virtualenvironment wrapper installed also.

My question is, in the doc page it says to do this:

export WORKON_HOME=~/Envs
$ mkdir -p $WORKON_HOME
$ source /usr/local/bin/virtualenvwrapper.sh
$ mkvirtualenv env1

I simply did this at my prompt:

source /usr/local/bin/virutalenvwrapper.sh

And now I can list and select an environment by doing:

>workon

>workon envtest1

My question is, since this works for me, I'm confused why I should be creating an environmental variable WORKON_HOME and point it to the ~/Envs folder? What does that do and how come mine works fine w/o it? I don't have that /Envs folder either (I know the script creates it).

Reference: http://virtualenvwrapper.readthedocs.org/en/latest/