What happened to WeWork? A before-times story.
WeWork was a train wreck in 2019 that we could not look away from, here is the book on it.
In Reeves Wiedeman’s captivating and thrilling book on Adam Neumann’s rise and fall that hit bookshelves this week, he details how Neumann and WeWork gave investors precisely what they drooled over.
He told them he would change the world, disrupt everything, pillage rivals, build faster, break more things, and do all the things to his start-up that made investors throw fistfuls of cash in his direction. His manic personality that could quickly calculate square feet to dollars and convince the biggest spenders to dole out billions to WeWork would promptly get tossed aside once the press got wind of his funny math.
And then those same bankers that were bending over backward to write bigger checks turned on him.
Like Mike Isaac’s Super Pumped, Billion Dollar Loser compiles many of the reported stories in one place and adds new colorful anecdotes that give us more insight into the company. Reeves spoke to over 200 people, and many of them did not have nice things to say about the Neumann’s. It is easy to pile on to a sinking ship, but Woah, some of the tell-alls are a doozy. Reeves knows what we want, and he serves it up, one alley-oop after another, and I am here for it all.
Like the time Adam “stood up at a company town hall and told his employees that if they were ever feeling depressed or suicidal, they should reach out to him directly.” A few weeks later, he announced someone had actually said something, and now they “were doing just fine.” WeWork had all the answers, even how to reduce depression! He must have been really high that day. Did you know Neumann kept air filters in his office to keep out the weed smell? Reeves will tell you about that too!
WeWork was not the first to take on more Venture Capital than it could handle, but it might be the last to take in billions of cash from investors who had nothing but a good feeling about the founder. Well, will we learn any lessons from this or anything? Most likely not, but we should hope so! The story of WeWork is also an eagle eye view into an industry that asked for more growth and at a faster pace over sensible things like… profit margins. Competitors to WeWork watched in awe. They knew they were not wired like Adam, and respected his ability to twirl the money guys into one another and have them empty their pockets, but they also asked, “where is this all going?”
There must be something else to what Adam was doing, right? Competitors would ask. He was not just flipping drab office spaces into something more culturally and aesthetically pleasing, right? There was some special sauce that he had, that none of us knew about it?
Well, that is the point, there was nothing behind the looking glass. Adam spoke the language of investors, and he spoonfed them meaningless platitudes that they gobbled up. He was going to change the world and bring people together, and oh right, it was a platform too. We can fault Adam, and he deserves the blame, but he gave the investors what they wanted. Masa at SoftBank said at the end of Adam’s run that “we created a monster.”
Yes, WeWork was created in a lab of stupid money. But did we learn any lessons? The next time a founder starts saying his laundry start-up will change the world, do we continue to invite him to all the conferences? Without Silicon Valley on the air anymore, do we even know how silly we have all become?
I hope the lesson from all this is for us to stop letting us believe in the hucksters. A huckster will spin, and we can either eat it up, feed the beast, or call it out. The money class has to stop rewarding the nothing-burger language that salivates over excessive multiples of revenue, and behemoth exits, while the rest of us are limited to the rigidity math.
Reeves’ book is an essential addition to your collection of — dunking on business leaders that the press and investors once loved and now kicked to the curb — like Bad Blood and SuperPumped.
By the end of 2019, a real estate executive was appointed CEO of WeWork because the chickens came home to roost. This company that leased real estate was low and behold, a real estate company.
Billion Dollar Loser is a fun romp through the WeWork years, a decade of excess, where people were free to work amongst strangers and share common spaces with a hint of concern. The demise of WeWork is a perfect symbol of the end of the teens when we also did not have to worry about a deadly pathogen.
The co-working era may be over, but can we all agree to kill off entrepreneur’s use of empty superlatives as well? For that request to come true, it will take the guys who write the checks to start evaluating their model as well and ask tougher questions of themselves and who they are funding.
The amount of constant dunking in the book would seem gratuitous if everything about WeWork was not seen through the prism of a decade of excess and largesse. We do not know what comes next, but I hope the future titans of finance become weary of founders saying they want to change the world by, for example, knocking down walls and covering shared space with plants. I also wish we could agree on basic science principles and that mask-wearing helps during a global pandemic.
