Neumann turn office space with “community” into a $47 billion company? Not by sharing.

By Reeves Wiedeman

Photo: Joe Darrow; Filippo Bacci; Michael Kovac/Getty Images; Getty Images/Getty Images

In early January, employees of the We Company, formerly known as WeWork, gathered in Los Angeles for its annual summit. As with many of the company’s events, it was more tent revival than corporate off-site. The Red Hot Chili Peppers performed. Jaden Smith and Adam Rippon spoke. Diddy and Ashton Kutcher announced the winners of the annual Creator Awards. Adam Neumann, one of WeWork’s founders, took the stage as he typically does at such gatherings. Neumann is six-foot-five with long dark hair and the easy charm of a man worth several (theoretical) billions of dollars who still manages to surf regularly and used to skateboard around the office. He is known for making bombastic pronouncements, like this one at an all-company event last year: “There are 150 million orphans in the world. We want to solve this problem and give them a new family: the WeWork family.” In L.A., Neumann told his employees that the newly formed We Company would now have three prongs — WeWork, WeLive, and WeGrow — with a single, grandiose mission: “to elevate the world’s consciousness.”

WeWork was born as a co-working space based partly on the idea that it should be easier for entrepreneurs like Neumann to get their ideas, good or bad, off the ground. Its core business is simple: lease offices from landlords — the company owns hardly any real estate — slice them up, and rent them out in smaller portions with an upcharge for cool design, regular happy hours, and a more flexible short-term lease. There are hundreds of co-working companies around the world, but what has long distinguished WeWork is Neumann’s insistence that his is something bigger. In 2017, Neumann declared that WeWork’s “valuation and size today are much more based on our energy and spirituality than it is on a multiple of revenue.” He has long maintained that categorizing WeWork as a real-estate concern is too limiting; it is a “community company” with huge ambitions. “We are here in order to change the world,” Neumann said that same year. “Nothing less than that interests me.”

In this mode — which is his usual one — he can sound like a satirical version of a start-up founder. The years between Steve Jobs’s ascension to business deity and the fateful afternoon when Elon Musk tweeted that his company might go private at $420 a share have cemented the legend of the iconoclastic founder as a modern American folktale. Spreadsheets are out; megalomaniacal ambition is in.

And what Neumann has accomplished is staggering: WeWork now has 466,000 members working out of 485 locations in more than 100 cities in 28 countries. Its revenue has grown from $75 million in 2014 to $1.8 billion last year. Three years ago, it had 1,000 employees; today, it has 12,000 and is adding 100 every week. It has installed 22 million square feet of the glass partitions that have defined an era of workplace aesthetics, and last fall, it became Manhattan’s largest tenant. (In Central London, it is second only to the British government.) In the wake of Uber’s (disappointing) debut on the New York Stock Exchange, the We Company is now America’s most highly valued start-up, at $47 billion — at least for the moment. At the end of April, Neumann announced that the company had filed paperwork to begin the process of an IPO.

Inside the company, however, employees and executives describe an environment that can be marked by the chaos, churn, and misbehavior that have come to characterize hypergrowth start-up life, not to mention questions about its business: WeWork lost $1.9 billion last year. But WeWork has already reshaped the commercial real-estate world, and it has its eyes on the rest of our lives. As Neumann recently told a person close to the company, he believes that WeWork’s size and scale could put it in a position to help deal with some of the world’s largest problems, like the refugee crisis, saying, “I need to have the biggest valuation I can, because when countries are shooting at each other, I want them to come to me.”

Dock 72 in the Brooklyn Navy Yard will house a giant WeWork space. Photo: Ian Bartlett

One day this spring, Neumann sat at a large conference table in his office at WeWork headquarters in Chelsea and apologized that he had only limited time. “It’s hard in a short time to get to know someone and to be able to authentically describe truth,” he told me. Beyond elevating consciousness, Neumann explained, each of the We Company’s three parts has a more specific mandate. WeWork is building “a world where people make a life and not just a living.” WeLive, which offers furnished studio apartments in the Financial District starting at $3,175 a month, is a salve to the global increase in loneliness and suicide and a way to ensure that “no one ever feels alone.” WeGrow, an educational arm that includes an elementary school and a coding academy, is tasked with “unleashing every person’s superpower.” I asked Neumann what his superpower is. “Change,” he said. “I think it’s the best superpower to have.” He then asked if I had seen the TV show Heroes. “There was one [character] that was very strong,” he said. “He had the ability to have all superpowers.” Neumann neglected to mention that this was the show’s villain: a serial killer who murdered people to get their powers.

Neumann was born in Israel and moved to New York in 2001 after what he has described as a difficult childhood. His parents divorced when he was 7, and he lived in 13 different homes over the first 22 years of his life. He served five years in the Israeli navy before moving into a Tribeca apartment with his sister, a former Miss Teen Israel who had become a successful model. Neumann enrolled in business classes at Baruch College, and as he told its graduating class in 2017, he spent his early days in New York largely going to clubs, “hitting on every girl in the city,” and figuring out how to get rich. As Neumann tells it, a friend from Israel visited and asked if all the partying was worth leaving his home, at which point Neumann dropped out of Baruch to pursue his first big entrepreneurial idea: a collapsible women’s heeled shoe. It didn’t work, so he pivoted, as a single, childless man in his 20s, and launched a company called Krawlers, which sold baby clothes with built-in kneepads. The tagline was “Just because they don’t tell you, doesn’t mean they don’t hurt.”

Krawlers failed to take off. “We are already noticing the tough economic times,” he told Women’s Wear Daily in early 2008 as the recession hit. By then, Neumann had met Miguel McKelvey, an architect with a similarly unusual upbringing. While Neumann spent several years living on a kibbutz in Israel, McKelvey was being raised by a collective of five single mothers in Eugene, Oregon. After college, where he studied architecture, McKelvey moved to Tokyo and started a website called “English, baby!” that used American pop lyrics as a language-learning tool. He eventually got bored and moved to New York to take a job at a Brooklyn architecture firm, where he spent several years designing American Apparel stores. By 2008, McKelvey had persuaded Neumann to move Krawlers to Dumbo, where Neumann sublet part of his space to another company to save on rent. Both men were itching for something new, and after a bit of brainstorming, McKelvey and Neumann convinced their landlord to let them try an experiment: They took over an empty space in one of the landlord’s nearby buildings, divided it up into semi-communal offices, and rented them out.

The original space, Green Desk, was an instant hit, and the landlord wanted to expand it into his other Brooklyn properties. But McKelvey and Neumann decided to sell their share of the business and go off on their own. They opened the first WeWork in 2010 on the corner of Grand and Lafayette Streets. It had exposed brick and exposed wiring, which McKelvey installed himself, and was modeled less on a traditional office than a boutique hotel.

The original WeWork still exists as an homage to a new era. Nine years later, it’s now slightly dated but still filled with the same mix of small companies working out of tiny glass-walled offices, some of which have been there since the beginning. (An architectural-rendering firm has a model in its office of an Australian building designed to look like Beyoncé’s body.) There are now four more WeWorks within a few blocks and 66 in total throughout the city. Courtney Wallace, who has worked for the company at that location since 2011, told me he was certainly amazed by WeWork’s growth but didn’t think Neumann was. “I would argue Adam would say he’s surprised it took so long,” Wallace said.

Neumann and McKelvey didn’t invent the idea of “co-working” — the New York Times had already devoted an entire article to the concept and the many such spaces that had opened in recent years — but the pair realized there was money to be made from the recession. Real estate could be had for cheap, even in Manhattan; laid-off workers needed space to launch their freelance careers; and millennials were looking for more from their workspace than a watercooler and a cubicle. While McKelvey brought his design-and-construction background to WeWork, Neumann dove into the aggressive world of New York real estate with a hustler’s verve. He struck a deal for WeWork’s second space, across from the Empire State Building, while polishing off a bottle of Johnnie Walker Black with David Zar, whose family owned the building. After touring a property owned by Jared Kushner, then a young real-estate mogul, Neumann coaxed Kushner into a bar for shots of tequila and later settled a dispute by beating him in an arm-wrestling match. (Neumann and his wife, Rebekah, remain close with Kushner and Ivanka Trump.) “The past ten years was the decade of ‘I,’ ” he said in 2011. “This decade is the decade of ‘We.’ ”

And, in many ways, it has been: Everything from the bedding company Brooklinen to “post-cable” streaming network Cheddar has been incubated in a WeWork. A Breitbart writer worked out of a WeWork near the White House. Billy McFarland, who later created the Fyre Festival, was often late on his rent in Tribeca. More recently, WeWork has rented space to giant companies from Facebook to Amazon.

But disrupting the deeply entrenched world of commercial real estate required capital, and Neumann excelled at pitching his company to investors. Neumann has raised more than $12 billion in venture-capital funding, and early investors talk as much about buying into his energy and ambition as they did WeWork’s bottom line. “WeWork Mars is in our pipeline,” Neumann declared in 2015. (He told WeWork’s staff at one point that he’d met with Elon Musk and offered the company’s services in prepping for any future Mars missions but that Musk wasn’t interested.) Early on, Neumann told friends he was building a $100 billion business.

The charisma and soaring rhetoric he presented to investors also appealed to a workforce willing to work long hours with relatively low pay in exchange for believing they were building a world-changing company. Within WeWork, a mystique quickly developed around Neumann, who did little to downplay it. (Until recently, an executive conference room at WeWork headquarters was decorated with a large photograph of Neumann surfing a wave.) He has bragged about working 20-hour days and regularly called executive meetings that would begin after midnight. “I’ve had meetings that started at 2 a.m. where he joined us 45 minutes late, but that meeting was worth millions,” a former WeWork executive told me. Many people told me they bought into WeWork’s grand mission only when Neumann was doing the preaching. At the beginning of every week, WeWork employees were required to stay after work for a “Thank God It’s Monday” team-building event that could last for hours. Neumann would typically speak, after which employees often walked around handing out shots of tequila.

WeWork spaces earned an early reputation for having a partylike atmosphere thanks to free-flowing beer kegs, and the corporate environment was no different. One former employee says Neumann offered her tequila during her job interview, and liquor was a constant presence at pretty much every company event, another perk for the largely millennial staff. Many employees know the name of Neumann’s favorite tequila, Don Julio 1942, and offices around the country would keep it stocked for when he came to visit. One morning in 2014, not long after WeWork opened a new location in Washington, D.C., an employee arrived to find the game room trashed. There were cups lying around the room, which smelled to him like weed. When the employee reviewed the security footage from the night before to identify the culprits, he saw Neumann and Michael Gross, WeWork’s vice-chairman, drinking and playing on the Time Crisis arcade machine.

The ultimate perk for many employees — and a nightmare experience for others — was the annual Summer Camp, a multiday affair initially held at an upstate camp owned by the family of a WeWork executive. All kinds of activities were offered — yoga, ax throwing, leaf printing, a drum circle — along with entertainment by an expensive array of visiting performers. The Chainsmokers once played and received WeWork stock as part of their fee, while the Weeknd was flown in from Toronto by helicopter. (TenaciousWe, an employee band, has also performed.) “It was just so much everything,” one former executive said. “Alcohol, drugs — there was not a lot of food. That was the only thing there wasn’t a lot of.”

In 2017, the event was moved to a park outside London; employees were flown in from around the world. One told me that he and his colleagues would simply walk up to the bar and ask for two bottles of wine each. “They would give you two bottles of rosé, and we’d drink them like Edward Forty-Fucking-Hands” — it’s a drinking game — “while we’re watching Florence + the Machine,” he said. One employee told me she knew it was time to leave the company in 2017, when she woke in her teepee to find an unknown colleague urinating on the canvas just above her head. “Talk to any community manager under 24, and it’s the greatest weekend of your life,” the employee said of Summer Camp. “But I am not here to get peed on.”

Summer Camp was also the place where Neumann’s gravitational pull was at its strongest. At last year’s event, according to a report in Property Week, a British real-estate publication, Neumann sat onstage next to his wife and McKelvey as the crowd sang “Olé, Olé, Olé.” A WeWork employee from India started chanting, “Let’s go, WeWork, let’s go!” while another from California screamed, “You’re changing the world, Adam! We love you.” Augusto Contreras, a WeWork employee from Mexico City, proposed to his girlfriend next to a dodgeball tournament. “I felt like I was surrounded by my extended family,” he told the company blog. He had been at WeWork for seven months.

The WeWorld (clockwise from top): Rise by We, a wellness center in the Financial District.  WeMRKT, a store featuring products made by WeWork members. WeLive, furnished apartments on Wall Street. Clockwise from top: Photo: EMILY ANDREWS/The New York Times/Redux/EMILY ANDREWS/The New York TimesPhoto: COLE WILSON/The New York Times/Redux/COLE WILSON/The New York Times/Redux

In 2017, WeWork opened its 200th location, in Singapore, and Neumann finally found a partner whose ambition matched his own. Masayoshi Son, the head of SoftBank, a Japanese conglomerate, had overnight gone from being a minor player in the venture-capital world to investing more money in start-ups than many VCs could hope to invest in their lifetimes: In 2016, SoftBank had launched the Vision Fund, a $100 billion investment fund backed primarily by $45 billion from the Saudi Arabian government, which needed a place to park its money. The Vision Fund began making enormous bets on Uber, Slack, DoorDash, and dozens of other companies, employing a strategy that has come to be known, with some derision, as “blitzscaling”: pumping up a company to a market-dominating size as fast as possible, without worrying about profit. Son met Neumann at WeWork headquarters and told him he had precisely 12 minutes for a tour, after which he invited Neumann to join him in his car, where Son sketched out a deal on his iPad to invest $4.4 billion in WeWork. Son told Neumann to make WeWork “ten times bigger than your original plan” and to recognize that, in a fight, being crazy is better than being smart — and that WeWork wasn’t being “crazy enough.” Son said he thought WeWork could be worth “a few hundred billion dollars.”

The premise of Son’s investment was that WeWork could do much more than rent desks to solo accountants and small branding firms. Since its early days, Neumann had called WeWork “the world’s first physical social network,” and as he put it to me this spring, the company’s SoftBank-funded losses were merely laying the groundwork for all kinds of growth. “We’re investing money in building an infrastructure that tremendous revenue already flows on. And there’s an endless amount of revenue that can flow on it,” he said. Neumann has claimed multiple times that WeWork is at the stage Amazon was at when it sold only books. The idea is to build a machine capable of leasing, designing, building, and managing space at an unprecedented scale, on top of which various kinds of moneymaking enterprises can be built. The results thus far have been fitful. As one example, the company has long tried to sell services to its members, such as health insurance and business software, but today this accounts for just 5 percent of its revenue.

The company’s valuation has also been based on the notion that it is, if not quite a tech company, at least a technologically forward-thinking one. Even WeWork’s rivals admit that its vertically integrated system for opening spaces up has helped it expand at a remarkable speed while keeping its increasing costs in check, relatively speaking. (Being able to buy furniture in bulk helps, as does the company’s avoidance of union labor.)

It has lately been investing more in technology to better understand how people use its space, and Shiva Rajaraman, WeWork’s CTO, described a typical WeWork to me as “an Amazon warehouse with a lot more soul.” The company uses data to improve its management of conference rooms and analyze its customers’ interests to better plan community events. (Rajaraman said the company had found that WeWork members in Brooklyn and San Francisco enjoyed “urban gardening.”) The manager of a WeWork space in Flatiron told me that “one of our best learnings” since opening was that people liked sitting at several desks in the back of the room that were near the windows. This, he said, was something they hadn’t guessed, before admitting it “makes a lot of sense.”

WeWork is a “capitalist kibbutz,” where weakness won’t be accommodated. “On the one hand, community. On the other hand, you eat what you kill.”

On a practical level, SoftBank’s cash infusion helped WeWork cover the increasing costs of its whirlwind expansion as the real-estate market got more expensive. It also began spending heavily to fill all the desks it was adding. Just a few weeks after SoftBank’s investment, Shlomo Silber, the owner of Bond Collective, a  New York–based co-working company, turned on his phone at the end of Rosh Hashanah to find dozens of his customers had forwarded an email from WeWork offering to buy them out of their leases and give them as much as a year of free rent. WeWork’s occupancy rate went up, but the deals made it difficult to determine the natural demand for its product. WeWork employees in multiple cities told me that savvy companies would take advantage of a few months of free rent in one WeWork, then wait for a new location to open so they could move and take advantage of another deal.

The company’s appetite for growth was rapacious, and for someone who claimed to be building a business around the crunchy concept of community, Neumann had adopted the hard-nosed tactics of a real-estate tycoon. In 2015, a landlord kicked out two tenants’-rights organizations from their offices in downtown San Francisco to make way for WeWork, which reportedly offered to pay double the rent. In 2017, Neumann called an executive at Blackstone, the large investment firm, to complain that it had invested in a rival, and he once told a New York landlord who had leased space to another co-working company that not only did he plan on crushing that company but he would no longer work with the landlord.

WeWork has also accused several of its co-working competitors of trademark infringement, including UrWork, WE Labs, and Hi Work. In a 2017 lawsuit against UrWork, the company said it did not claim “exclusive rights to the ordinary word ‘Work,’ ” but objected to “the combination of a two-letter pronoun followed immediately by the word ‘Work.’ ” Neumann and McKelvey have cited their communal upbringings as formative to WeWork’s conception, but Neumann has also described the kibbutz as “a failed social experiment,” flawed because “everyone made the same amount of money.” WeWork, he says, is a “capitalist kibbutz,” where weakness won’t be accommodated. “On the one hand, community,” he has said. “On the other hand, you eat what you kill.”

One afternoon in May, I visited the new WeWork-designed Soho headquarters of Thrive Global, Arianna Huffington’s company dedicated to “ending the stress and burnout epidemic.” Huffington greeted me and a PR representative from WeWork by saying she had recently spoken to the new boss, whom WeWork had just hired as its head of global communications. “I got to know him when he was representing Travis at Uber over a big crisis,” Huffington, an Uber board member, said, referring to Travis Kalanick, the ride-sharing company’s founder and former CEO, whose brashness eventually became more than Uber could bear. “So a big bond was formed.”

The Thrive office is part of WeWork’s recent effort to move away from leasing space to companies small enough to squeeze into a glass box. More than 40 percent of WeWork’s business is now with companies of more than 500 employees, some of which have entire spaces all to themselves: There are ten WeWork floors in a single Greenwich Village building that are occupied entirely by IBM. Companies can choose to let WeWork outfit their offices in the same general aesthetic as a standard WeWork location or pay more for a bespoke offering called Powered by We. Thrive had chosen the former; its office had several of WeWork’s signature phone booths and a lighter, brighter look, which WeWork introduced under the direction of Adam Kimmel, a former fashion designer who is now WeWork’s chief creative officer. Kimmel told me that WeWork has a team of 50 visual artists, who crank out more than 1,000 pieces per month, but Huffington had decided to decorate Thrive’s space with artwork by her daughter instead.

The We Company’s headquarters in Chelsea, where more than a thousand of its employees work, is something of a testing ground for how it can serve even larger organizations. (The company will eventually move into the old Lord & Taylor flagship on Fifth Avenue, which it recently bought.) The sixth-floor entrance is flanked by a full-service barista and a “living room” with an array of couches and lounge chairs roughly the size and feel of a West Elm showroom. There are Foosball and bumper-pool tables, along with three video-game consoles. Beyond that is the WeMRKT, an “in-office bodega,” as a WeWork spokesperson called it, next to a kitchen with a dozen taps serving beer, cider, cold brew, Merlot, Pinot, several kombuchas, and seltzer.

On one of my visits, signs advertised astrology readings for employees that afternoon.

Aside from a few offices reserved for Neumann and a handful of executives, the headquarters has almost no assigned desks, and some WeWork employees describe a near-constant mental and physical battle to find a space with enough quiet and privacy for concentration. (The private phone booths are coveted, as they are in most WeWorks.) Joel Steinhaus, a WeWork executive, told me that his previous office at Citi allocated 200-to-250 square feet per person, while WeWork has shrunk that number to around 50. (A WeWork spokesperson says the number is higher.) WeWork claims that additional common spaces and amenities make up the difference, but also that closeness has benefits. A half-dozen WeWork employees repeated the same talking point to me about the narrowness of its staircases and hallways, which are there to foster community by forcing people to physically interact with anyone they walk past. They say any cost savings from fitting in more people is merely a bonus.

Building community is what WeWork has always promised, and its pitch to large corporations is not just hip design and flexible leasing terms but what WeWork calls its “WeOS,” referring to its expertise in helping companies optimize both space and overall culture. (In 2017, McKelvey was named WeWork’s chief culture officer, and he’s fond of using one of WeWork’s many internal slogans: “Operationalize Love.”)

But in dozens of interviews, current and former WeWork employees and executives questioned whether the company’s culture is itself one worth spreading. Despite the company’s slogan “Make a Life, Not Just a Living,” employees at all levels have often reported working 60- or 70-hour weeks, and events like Thank God It’s Monday and Summer Camp were mandatory. At its annual summit, the company keeps track of employee attendance at panels and events by scanning wristbands given to each person; excessive absences are reported to managers. A number of employees describe a regular cycle at WeWork: New people would arrive, excited by the company’s mission, only to get burned out, leave, and replaced by a fresh crop. Multiple executives told me Neumann’s cheerleading was critical to the company’s success. “From a business perspective, the cult is working,” said one executive.

Employees say turnover at the company has been dizzying. Multiple people told me Neumann has expressed a desire to turn over 20 percent of WeWork’s staff every year — he denies this — whether through attrition or firings, as a means of keeping staff on its toes. There have been two publicly reported rounds of mass departures, both of which the company said involved culling unproductive workers. But employees say that restructurings, in which entire teams are suddenly disbanded, are a regular occurrence. “When you’re at WeWork, there’s a certain lack of culture, which is ironic for a company selling culture,” one former executive told me. “If there is a culture, it is that of a revolving door.” The need to hire employees at a rate to keep up with its growth has led to occasional hiccups in its hiring process: In 2015, Neumann chastised a group of employees for not Googling a job applicant after finding out that WeWork had hired the Hipster Grifter, a Brooklynite who had become briefly famous several years earlier for scamming her way into jobs and cheating people out of money.

The focus on growth often seemed to leave little room for other concerns. Two people told me that during an early town hall when WeWork had just over 100 employees, Neumann took questions alongside two other executives, Michael Gross and Noah Brodsky, and someone asked about the lack of diversity among the executive team. Neumann disputed the point by referring to himself and the other people onstage, saying, “I’m a brunette, Michael’s blond, and we have a Noah.” (Brodsky, who is gay, went bright red.)

Employees and executives say much of the culture stems from Neumann, whose rule by fiat could be frustrating. Last summer, he announced at the end of a companywide meeting that WeWork employees would no longer be permitted to expense meals that included meat. Several senior members of the company had no idea the announcement was coming or what it even meant. Hundreds of employees joined a Slack channel to debate the policy, while some found various ways around it: A person in the New York tech world said WeWork employees have asked her to expense the meat when they go out for meals.

Especially at the top, WeWork looked to some like a boys’ club. The executive ranks have been sprinkled with Neumann’s friends from Israel as well as his extended-family members. During an executive off-site meeting in Montauk, he gave a joking toast to the virtues of nepotism. In a job interview, the first question one former executive asked a young female applicant was whether she had a boyfriend (he was later fired). Last year, two female employees reported that they were having trouble getting a meeting with Adam Kimmel, the chief creative officer, to whom they reported. According to multiple people with knowledge of the situation, Kimmel later said he hadn’t met with the women because he and his wife, the actress Leelee Sobieski, had a rule against meeting alone with a member of the opposite sex. (WeWork disputes this.) In October, Ruby Anaya, the former head of culture, sued WeWork, alleging she had been groped at both the company summit and Summer Camp by colleagues (the lawsuit is pending).

Several people told me they worried about what the company’s younger employees might absorb from their experience. A former WeWorker who now runs a company told me, “I spend a lot of my time on culture and HR, and it fucking slows you down worrying about how people feel.” But one employee told me his WeWork experience had made him think about what he would do differently if he were ever to run his own start-up. “You can move fast and break things,” he said, citing Facebook’s widely adopted empire-building ethos. “But you can’t move fast and break people.”

One of WeWork’s few female senior executives is Rebekah Neumann, Adam’s wife. Their first date is now part of company lore: Rebekah told Adam, who was still working on Krawlers, that he was “full of shit” and needed to make something of himself. “Rebekah and I are co-founders in life,” Neumann told me. “We met, and she suddenly added to my vocabulary words like ‘The Game of Life.’ ” Rebekah studied business and Buddhism at Cornell and initially chose the former, working as a stockbroker at Smith Barney before going to India to study yoga. (She later tried to follow her cousin Gwyneth Paltrow into acting, but it didn’t stick.) She agreed to marry Adam only if he developed a spiritual practice, and she introduced him to Kabbalah, which he has cited as foundational to WeWork’s creation; he has encouraged members of his executive team to meet with an instructor from the Kabbalah Centre. The Neumanns have five children, and at various company events, Rebekah has extolled the virtues of motherhood while speaking to WeWork’s employees, many of whom she made uncomfortable at last year’s Summer Camp while talking about supporting her husband as his company grew: “A big part of being a woman is to help men manifest their calling in life.”

Rebekah has held various titles at the company; she is currently the chief impact officer and the head of WeGrow, a school on the third floor of WeWork’s Chelsea headquarters, opened in 2017 as a “conscious, entrepreneurial school committed to unleashing every child’s superpowers.” (WeGrow includes the Flatiron School, a coding academy for adults that WeWork acquired in 2017.)

The Neumanns started the school in part because they couldn’t find one suitable for their kids. It costs $36,000 for 3-to-4-year-olds and $42,000 for children up to 11; there are plans to expand through high school. “In my book, there’s no reason why children in elementary schools can’t be launching their own businesses,” Rebekah, who has no background or training in education, said when WeGrow launched. Its head of learning told the Post that the school had identified one student who “just loves to project-manage” and paired her with a mentor in WeWork’s events department.

The third We — WeLive — opened in 2016 with one location in the Financial District and another in suburban Washington, D.C., offering small apartments supplemented with shared amenity spaces. Much as WeWork was born out of the ruins of the recession, WeLive occupied 110 Wall Street, which had flooded during Hurricane Sandy. The company quickly learned that its expertise in commercial office space didn’t neatly translate to the more complicated requirements of a residential building. Neumann insisted as recently as last year that “WeLive is going to be a bigger business than WeWork,” but the concept has struggled. The company once projected that by 2018 it would have 69 WeLive locations. It still only has two. (A third, in Seattle, is slated to open next year.)

WeWork continues to expand in many directions. In 2016, it invested in a Spanish company that makes wave pools for surfers. A year later, it opened a gym called Rise by We (WeRun and WeWorkOut were considered but rejected) managed by Neumann’s brother-in-law, a former professional soccer player in Israel. A second location is opening later this year in the Brooklyn Navy Yard as part of Dock 72, a large new development that will include 220,000 square feet of WeWork space. (While approaching the building on a tour this spring, a WeWork employee had to assure me that a nearby business called We Rub You was “not a WeWork massage parlor”; it sells Korean BBQ sauce.) In January, WeWork opened a space in Flatiron where seats can be reserved for $6 per half-hour, coffee not included. WeWork has invested in a food company that sells a turmeric coffee creamer created by Laird Hamilton, the surfing legend. It also has a stake in a company that produces a keto-friendly coffee creamer, run by Jimmy, Jake, and Jordan DeCicco, three brothers who operate out of a WeWork, rent a three-bedroom apartment in WeLive, and workout at Rise by We.

When I met Neumann in his office, a framed poster on the floor showed what looked to be terraformed cities with the year 2048 written in large type. “I should hide that,” Neumann said, smiling. He couldn’t talk about it right now, but the one thing he could say was that, whatever it was, it was actually going to happen by 2028.

In May, WeWork launched an investment fund called ARK, which would allow the company to begin buying property. (Neumann jokingly told Bloomberg the name stood for “Adam, Rebekah, and kids,” and he didn’t reject a comparison to Noah’s Ark; a spokesman later clarified that it stood for “asset, return, kicker.”) The fund also solved a thorny problem that has recently emerged. Over the years, Neumann has personally owned a stake in four buildings where WeWork became a tenant, including the one occupied by IBM, which he acquired in 2015 with the Israeli fashion designer Elie Tahari for $70 million. (The Neumanns also own a $1.7 million house in the Hamptons; a six-bedroom townhouse in Greenwich Village, renovated to include a “stroller parking garage”; a $15 million, 60-acre estate in Westchester; and four apartments in Gramercy that cost a combined $35 million.) The Wall Street Journal reported in May that WeWork had paid more than $37 million in rent to an unnamed “principal stockholder.”

The arrangement was criticized as a blatant conflict of interest, and with the company moving toward an IPO, Neumann said he would sell the buildings to ARK at cost. “I never bought the buildings to make money,” he told me, claiming he had simply wanted to show skeptical landlords that WeWork was a viable tenant. “My stock makes so much more money than any investment I could do. I should buy more WeWork stock if I want to make money.” Still, Neumann has told people over the years that he has sold more than a hundred million dollars of WeWork stock during various investment rounds. In recent years, he has made personal investments in a number of companies, including a hotel chain for digital nomads, the medical marijuana start-up of former Israeli prime minister Ehud Barak, celebrity chef Dan Barber’s bespoke-seed company, and Life Biosciences, which is dedicated to “a future where age-related decline is not a fact of life.”

Just before last Christmas, Masayoshi Son called Neumann with bad news: A plan for SoftBank to invest $16 billion into WeWork, including $4 billion it had already promised — and to become its majority shareholder — was dead. The stock market had tanked, and the Vision Fund’s investors, including Saudi Arabia, were hesitant to invest more in real estate. SoftBank ended up investing another $1 billion in WeWork, and buying another $1 billion of stock from employees and other investors. This was more money than Neumann’s smaller rivals had raised combined, but it was still a disappointment, and presented as such in the media. At the company summit in January, Neumann told employees that news coming from outside the company was often “fake or misinformed.” (In 2017, he told the Economic Club of New York he thought fake news was “a great term.”)

Will WeWork work? The company has existed entirely in an expanding economy, and its business has never been tested by a downturn. WeWork argues that in a recession, larger companies will downsize into its spaces while laid-off workers will need them to start their solo careers. But it’s also very possible that large companies who currently have ancillary spaces in WeWork will identify those as easy costs to cut, and entrepreneurs will revert to coffee shops. A third argument goes that WeWork occupies so much space that many landlords will have no choice but to renegotiate its leases.

During the dot-com boom, a company called Regus became a stock-market darling by offering similar but much blander flexible offices. In 2000, Fast Company published a story about Regus titled “Office of the Future,” highlighting its efforts to bring “community” to the workplace. But the bubble burst and Regus went bankrupt. The company recovered and rebranded as IWG, but its existence presents another conundrum for WeWork. IWG currently has roughly 3,000 locations and 2.5 million customers worldwide, numbers that dwarf WeWork’s. IWG is profitable and now has a hipper, WeWork-ish offering. It is publicly traded and worth around $3 billion.

Everyone in real estate expects the kind of flexible office space WeWork offers to become an increasingly large part of their world, and many of the company’s rivals are grateful to Neumann for preaching the gospel of co-working and shorter-term leases. Even people critical of WeWork’s culture, or skeptical of its focus on hypergrowth, say it will likely remain a force in commercial real estate. But many, too, have begun to wonder what can explain the $44 billion in valuation difference between WeWork and IWG. In a financial disclosure last year, when it was in the process of losing $1.9 billion to fund its growth, WeWork acknowledged, “We have a history of losses, and we may be unable to achieve profitability at a company level.” It also published a financial metric it called “community-adjusted EBITDA” — earnings before interest, tax, depreciation, and amortization, which is an accountant-approved way of measuring a company’s performance — that excluded many costs, like marketing, construction, and design, that WeWork claimed would disappear once it reached maturity, in an attempt to show it could make a healthy profit; the Financial Times dubbed WeWork’s doctored version “perhaps the most infamous financial metric of a generation.” WeWork employees told me they would be happy if the company were worth half of what SoftBank said it was going to be. “Even if it goes down to $5 billion, Adam’s still worth a billion dollars,” one rival said, expressing concern about the perverse incentives of the modern economy. “So from an objective perspective, was it a mistake to take this hemorrhage-inducing risk? You could argue that was the rational mode.”

Back in his office, Neumann remained upbeat. “Before you ask, let’s set an intention,” Neumann told me, after a WeWork spokesperson said I had time for one more question. “Ask a question that has an opportunity to give something to your readers that could make them grow.” I told Neumann I had read a comment of his from 2016 in which he said he was ultimately working toward the creation of a WeWorld, with the various parts of his company forming a broader ecosystem that people would have little reason to leave. I asked if that was still his goal and whether there wasn’t something potentially problematic with that idea. “It’s a good question, so you did very well,” Neumann said. “I don’t think we could single-handedly change the world. I think we can build an organization that can be a catalyst to effecting long-term measurable change. Instead of thinking of it as a WeWorld, let’s just think of … Powered by We. And only Powered by We for the things that want it. Think of it as what we call internally a WeOS. An operating system that makes work better, living better.”

With an IPO on the horizon, he thought the company needed to start doing fewer things better. It was canceling Summer Camp. He wouldn’t pursue WeSail and WeBank, two old ideas that were recently unearthed, despite telling another reporter in January that WeBank was “coming.” (I didn’t get a chance to ask for an update on WeWork Mars.) Neumann was open to change. He even thought he might get his long hair cut short. But he wasn’t giving up on his grandest visions, and he asked a spokesperson to email me an internal company “narrative” he was using to summarize its near-term ambitions. It included the koan “We are captivated by the limitless potential of We.”

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markasaurus

3 YEARS AGO

'He then asked if I had seen the TV show Heroes. “There was one [character] that was very strong,” he said. “He had the ability to have all superpowers.” Neumann neglected to mention that this was the show’s villain: a serial killer who murdered people to get their powers.'

In the TV show Heroes, there are actually two characters that have the ability to have all superpowers - one is a serial killer that gets the powers from someone else by killing them, and the other is someone who absorbs another Heroes ability just by being close to them. I doubt he's referring to himself as the serial killer...

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charley.marsteller

3 YEARS AGO

There has been much said about certain types of personalities and distinctive hair/hair styling. So many seem to find themselves in the news. Have you heard about this?

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imgiovanni

3 YEARS AGO

(Edited)

This is not a $47 billion company, it’s $12 billion in venture capital funding looking for an exit before the whole thing craters. Thus, the impending IPO, leaving public investors on the hook for all the losses.

This reminds me of the health club chains like the shuttered David Barton which has a business model based on the fact that most members rarely if ever show up, allowing the gyms to sell too many memberships. Then one day they all close down, immediately opening a new chain under a new brand name. The difference here is that if and when this company shuts down, hundreds of thousands of workers, entrepreneurs and small businesses will be left out in the cold, while the founders and venture capitalists walk away with all the cash. The 1% always win in the end.

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StopWithTheHalfTruths

3 YEARS AGO

Pffffft. What he mean is:

“We are captivated by the limitless potential of ME.”

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rockabyebb

3 YEARS AGO

I worked in a WeWork space briefly. There was no sense of community or collegiality. Coffee urns were often empty, water cups were tiny, and the staff were always playing with their phones. It felt like prison because a key card was needed to go EVERYWHERE and woe unto you if you needed to unlock a door while carrying something. It was overpriced, awful, and I personally cannot understand their growth. The millennials who supposedly love these working conditions need to get out more.

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scottallen4691

3 YEARS AGO

I clicked on this article because the thumbnail photo of this guy in the Google News feed made me think it was a story about Howard Stern. Never mind.

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CookieGugglemanFleck

3 YEARS AGO

We're overdue for the salacious fall of an egomaniac. And why does every cult-leader have the same haircut and insufferable, power/status hungry partner? The grandiosity of the two of them is fascinating DSM-IV textbook stuff. The self-destruction is of course imminent as we've seen this story a thousand times. God, I wish Gawker was still around. This is totally in their wheelhouse.

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nerd314

3 YEARS AGO

Bravo to the writer of this piece. Gripping, fascinating read, with so many quotables. This is the kind of journalism I subscribe to New York for. Thank you.

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aeolis.

3 YEARS AGO

I had an office in the Empire State WeWork for a few years. I didn’t quite realize what a “culture” it was when I moved in. I enjoyed a lot of the member perks, but overall it was just a noisy, cheesy place to work. The only thing I really miss is the coffee fountains.

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justtoclarify

3 YEARS AGO

Did he and Elizabeth Holmes go to same seminar on art of BS? I kept waiting for him to talk about synergy and maximal potential and a whole bunch of words strung together that add up to nothing. Why and how do people believe these snowball artists when their story makes zero sense?

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plev10

3 YEARS AGO

Any business profile that includes Gwyneth Paltrow and Leilei Sobieski should carry a warning label.

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gilbertzilla

3 YEARS AGO

reply In reply to plev10

Agreed

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bob.trollman

3 YEARS AGO

"The Red Hot Chili Peppers performed. Jaden Smith and Adam Rippon spoke. Diddy and Ashton Kutcher announced the winners of the annual Creator Awards " How '90's..... arrogant, self righteous, excess... right before the kboom...

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AsYouLikeIt

3 YEARS AGO

They did a WeWork piece on PBS Newshour and interviewed gushing Gen-Z's who loved the open space and "cool" layout of their offices in TriBeca, which I have visited for business. But my take is that this is helping usher in the "gig" economy more quickly: no benefits, no security, no real jobs. Try getting a even car loan with a series of temping gigs. The idea here is that none of these folks under 35 will ever remember being in an economy with "real jobs" which is what corporate America is hoping for I have a feeling.

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bob.trollman

3 YEARS AGO

(Edited)

reply In reply to AsYouLikeIt

"open spaces" is dying in the real office. Someone finally got clued you're not as productive without a work area and with constant interruptions.

Like all things "gen-z" and techie, "gig" is nothing new - It's a rebrand of the "side hustle", as we used to call it.

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AsYouLikeIt

3 YEARS AGO

reply In reply to bob.trollman

Agreed, although on this massive scale, it's really all about businesses shifting the risk of doing business all onto labor.

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aeolis.

3 YEARS AGO

reply In reply to AsYouLikeIt

To be fair, WW has a great partnership with TriNet, which allows startups and small companies to essentially join a collective go access those types of businesses.

I’m a former WW tenant, so I have a lot of thoughts on this article (not really disagreeing with much fwiw), but I’m not sure where you’re getting this idea that it’s essentially a land of temp jobs. It’s a place for companies, start ups, or even an individual to get a glossy office space without doing any work.

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fka_mc0325

3 YEARS AGO

How did WeWork’s Adam Neumann turn office space with “community” into a $47 billion company?

Trick question, this company isn't worth 47B and anyone reviewing their valuation can attest to that. They are losing money by the nose and haven't turned a profit in ages. What Adam Neumann did successfully do was create a shell of a company that could be worth a substantial amount if it pulled back from scaling and worked their actual product.

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titocat1

3 YEARS AGO

Yeesh.

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arundelxvi

3 YEARS AGO

God. Reading this article I just hate modern life, and people like this.

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rs959903

Vulturati

3 YEARS AGO

reply In reply to arundelxvi

Stories like this of such grandiose frauds running so wild convince me that all of this is going to end in a nuclear war and collapse of civilization.

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ryanchrisxp

3 YEARS AGO

reply In reply to arundelxvi

Yes, but we fall for it. Every time.

The fall of WeWork’s Adam Neumann

The inside story of how the CEO went from the top of the world to out of his company.

Adam Neumann speaks onstage during WeWork Presents Second Annual Creator Global Finals at Microsoft Theater on January 9, 2019 in Los Angeles. [Photo: Michael Kovac/Getty Images/WeWork]

BY KATRINA BROOKERLONG READ

It was a glorious spring morning in New York, and sunlight streamed through the windows of 115 West 18th Street. This is the global headquarters of The We Company, and I was there to meet with its CEO and cofounder Adam Neumann. He greeted me warmly as I was ushered to his office, and he gestured for me to follow him to a small room in the back of his workspace. He said he wanted to show me something.

He looked happy, smiling confidently, the way a guy sitting on top of company valued at $47 billion might.

The room in the back was small, Spartan—a stark contrast from the bustling We headquarters just beyond. It had one window, overlooking a small alley. A whiteboard sat in the corner and was covered with scribbles. Neumann blocked it with his long arms and politely asked me not to look. These were his private thoughts, he said. He comes here to meditate as well as to pray, he told me, nodding toward some beads lying on a small table. With his long black hair and T-shirt that read Always Love, it was very easy to picture Neumann sitting here in lotus pose, chanting mantras.

Hanging above the couch was what he brought me here to see: a massive picture of himself. It was not quite life-size—Neumann, as all profiles note, is 6’5″—but it took up most of the wall. Neumann was on a surfboard, gliding over a glassy sea. His lithe, athletic build, jet-black hair, and intense expression were striking.

But something else caught my eye. The water looked oddly flat. There was no curl or barrel or crest. It was hard to tell if there was a swell actually forming. I asked if he remembered how big the wave was. “Huge,” Neumann replied immediately and emphatically. I looked again. He seemed to sense my confusion and launched into an explanation about the position of the photographer, the reef, how the ocean moves. I don’t know much about surfing, and I wanted to move on with our interview, so I let it drop.

Looking back on this moment, knowing what I now do about Neumann, I realized that I had seen a side of him that was significant: He was insisting that others see his version of the world. He said the wave was huge, so it was.

It was this force of personality that built him and his company.

It also tore him down.

The fall of Adam Neumann has been so swift and sudden, it’s hard to grasp fully. Publicly, his descent began on August 14, with the release of The We Company’s jaw-dropping IPO prospectus. The document revealed a bleak picture of the company’s financial state: $900 million in losses in the first half of 2019; $47 billion in lease obligations; its revenue was effectively doubling annually but its expenses were such that no matter how much it grew, We was losing $1 for every dollar it made; and its corporate governance, which included granting Neumann’s wife the ability to name his successor if something happened to him, raised eyebrows even among people used to founders having outsize power. There were other issues as well. Rett Wallace, CEO of the analyst firm Triton Research, told Bloomberg, “The prospectus is a masterpiece of obfuscation.”

Investors expressed little interest. Subsequent reports indicated that We had to lower its asking price from one which would have valued the company at $65 billion all the way down to $10 billion before deciding on September 16, 25 days after the S-1 document was publicly shared, to delay the stock offering.

Two days later, the Wall Street Journal chronicled a number of incidents of questionable judgment by Neumann, and six days after that, on September 24, he was ousted from his job. Artie Minson, the company’s former chief financial officer, and Sebastian Gunningham, former vice chair, were named co-CEOs that same day.

How did a guy who started the year running one of the most highly valued private companies in history end up here?

If the stories emerging from Neumann’s tenure at We were scripted for a lurid soap opera, they’d be tossed out as too outlandish. There’s his marijuana use, his private jet, his strange family dynamics, celebrity friends, and a Japanese tycoon who gave him $10 billion. The full extent of the chaos and problems that marked Neumann’s reign over We are still unfurling. In both Neumann’s leadership and the company he’s left behind, we are seeing just the tip of the iceberg.

What’s increasingly clear, however, is that Neumann’s undoing began well before this summer’s fiasco on Wall Street. Through interviews with executives across different divisions and regions of the company, a complicated picture of Neumann emerges. (A Neumann spokesperson, citing quiet-period restrictions, could not provide comment.) He had a real shot at greatness. His vision for his company was so compelling that he transformed the real estate industry in ways that will reverberate for years to come. But money, fame, and hubris in the end led to bad decisions, a toxic work culture, and now, a company on the brink.

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HEIGHTENED EXPECTATIONS

In 2008, at the nadir of the global financial crisis, Neumann and his cofounder, Miguel McKelvey, began renting temporary office space to freelancers, startups, and anyone else who needed a place to work. More than just desks and chairs, what the young entrepreneurs believed they were selling was a respite from the chaos of the outside world. It was a clubhouse of sorts, where other young strivers could work together, collaborate, and feel less alone. To foster this sense of belonging, WeWork hosted happy hours, group yoga, inspirational speakers, and other social events.

From the beginning, the rise of WeWork has both fascinated and confounded outsiders. The company seemed only to go in one direction: up. Between 2010 and 2019, its membership grew from 450 to 527,000. That upward trajectory attracted the attention of rich and powerful people, who began circling around Neumann, telling him things that all young, broke entrepreneurs want to hear: He would be one of the greats.

“WeWork is the next Alibaba,” Masayoshi Son, CEO of SoftBank, declared last August, shortly after writing Neumann a fresh billion-dollar check. It was a heady comparison: Son had invested $20 million in the nascent Chinese e-commerce startup in February 2000; Alibaba’s market cap is now $500 billion.

Son’s money and clout helped give Neumann an aura of invincibility and an imperative to grow even faster. “You need to think bigger,” Son told Neumann, according to a former WeWork executive who was privy to the nature of their conversations. Neumann opened more and more locations and launched a myriad of new ventures, to prove his and his company’s worth to his investor. The more WeWork grew, the more money it needed, and the more Son was willing to provide, ultimately investing more than $10 billion by January 2019 in both equity and debt and via both WeWork and international joint ventures. The company’s valuation climbed to $47 billion, and after Uber went public in May, WeWork was the most valuable venture-backed company in the United States. Neumann—and those around him—became increasingly convinced of the company’s destiny in reshaping the future. (SoftBank declined to comment for this story.)

“Like Steve Jobs, he is very good at seeing the big picture,” Walter Isaacson, the author of Jobs’s biography, told me in May. He did not respond to a request this week for further comment.

A DIFFERENT KIND OF COMPANY

“One day when we go public, it’s not going to be a technology IPO, it’s going to be a new type of company, which in the future we will have more and more, because entwining physical and digital has never been more important,” Neumann told me back when he still felt sure of his position at the top.

Neumann had total control over the company’s direction. The company jet, which featured prominently in that Wall Street Journal article before Neumann’s ouster, was accounted for as an equipment charge in financial statements, and was used almost exclusively by him and his family. His management could be imperious. Some describe being made to wait outside his office for hours to meet him. And he was not the kind of boss who welcomed debate or different points of view. Insiders say that when they tried to persuade him against pursuing an idea or project, he would at times punish employees. They would lose their job titles, resources, or be relocated. “This is someone who did not ever want his reality to be pierced,” says one top executive who asked not to be named in this story. He, like other managers I interviewed, feared retaliation from both We and Neumann. “Their legal department does not play nice,” another employee explained.

People close to Neumann were starting to worry that the money, adulation, and celebrity were going to his head, clouding his judgment. Last winter, WeWork led a $32 million investment in a snack company started by surfer Laird Hamilton, one of Neumann’s friends. Laird Superfood sells coffees, coconut sugar, powdered drink mixes, and kombucha by the keg, among other things. One manager close to the transaction says the deal confused the internal investing team. It allocated capital that had been intended for technology investments. It also didn’t seem to fit with the company’s “space-as-a-service” business. One employee was told to hold off on a deal with a technology company because it was unclear where Neumann wanted to deploy capital.

Increasingly, Neumann seemed more interested in celebrity ventures.

Neumann told people that he had met with actor Hugh Jackman about a project, and Jackman was later spotted in WeWork’s offices. In August, Ad Age reported that WeWork and Ashton Kutcher, the actor and tech investor, had pitched NBC on a Shark Tank-style series based on WeWork’s Creator Awards. It was not picked up.

Adam Neumann and Ashton Kutcher hug onstage during Nashville Creator Awards hosted by WeWork at Marathon Music Works on September 13, 2018, in Nashville. [Photo: Terry Wyatt/Getty Images/WeWork Creator Awards]

SEARCHING FOR ITS AMAZON WEB SERVICES

At a heated board meeting, Neumann clashed with his directors because they disagreed with his idea to start selling space to corporate clients. Board members worried that the company would be veering too far away from serving freelancers, startups, and the like. “You are all wrong,” Neumann told his board. The argument was moot: He had complete control over his directors as the company’s dual-class shares gave him a voting majority. By the time the meeting was over, he had approval for his plans.

Over time, WeWork added several enterprise offerings, including Custom Buildouts of company offices and private offices in unbranded WeWork buildings (known as headquarters by WeWork). Late last year, the company claimed that more than 1,000 large businesses used WeWork to offer its employees flexible work arrangements. It also stated that businesses with at least 1,000 employees comprised 25% of its membership. In its IPO prospectus, the company stated, “We expect enterprise to continue to be our fastest-growing membership type, currently representing 40% of our memberships.”

One project designed to appeal to enterprise customers was called Powered by We. Large companies could enlist WeWork to build and manage their offices and impute a WeWork-like vibe to workspaces. During WeWork’s global summit in 2018, Veresh Sita, who was at the time the “CWeO” of WeWork Enterprise and Powered by We, told the crowd, “You heard earlier speakers talk about [Powered by We] as our equivalent of AWS [Amazon Web Services]. We have built these amazing workplaces and we’re now able to take these workplaces into enterprises.”

A C-level executive with access to the company financials claimed that Powered by We generated $200 million in its first four months. WeWork hired top-tier talent in New York and Silicon Valley to work on Powered by We, and the division’s reference customers include such major corporations as BlackRock, Salesforce, and Microsoft. A FastCompany story last February stated that “since January 2018, WeWork has signed deals for 220 custom offices from a bank of 2,000 enterprise-level clients. . . . As of September 2018, it had generated $1.1 billion in revenue for leases and services.”

The business model for Powered by We, though, had problems. As a new venture, it was losing money. It only resembled Amazon Web Services in that it let enterprise customers save money from having to manage their own real estate, not in its high profitability. “Customers realized with Powered by We that WeWork was dumb enough to take on the costs of their construction and management,” says one manager.

Because Powered by We was losing money, Neumann grew impatient with it. In January, a proposed deal in which SoftBank would have invested $16 billion in We had fallen through. “We’re going back to scrappy,” Neumann told me back then, after SoftBank invested only an additional $2 billion. In the wake of that event, employees noticed that he seemed to be changing his mind frequently about strategy, projects, and employees.

With Powered by We, he shifted decision-making authority from headquarters to the WeWork regions. This caused tension and confusion between the managers. There were fundamental disagreements over how to implement the services. Neumann fostered the tensions by pitting some executives against one other. Now, as the company is attempting to distance itself from Neumann’s reign, the future of Powered by We is uncertain. Some insiders suggest it may be eliminated along with other Neumann-era projects, such as WeGrow, WeLive, and Rise by We.

LEADERSHIP QUESTIONS

The Wall Street Journal reported one instance of Neumann’s pot smoking on a private jet, and it and other publications have chronicled instances of free-flowing alcohol at the company as well as Neumann’s enjoyment of top-shelf tequila.

Some employees now offer separate accounts of his use of marijuana and alcohol during work hours. One manager recalls Neumann smoking pot on the way to a meeting with one of the largest companies in the world. Another describes how before major meetings Neumann would, at times, drink heavily to soothe his nerves.

Neumann’s rages around the office were also infamous. “When people saw him coming, it was like the Red Sea parted,” one former executive recalls. “No one wanted to get in his way: You would either get berated or humiliated or asked to do some impossible task.” Calls in the middle of the night were common, as were tirades over infractions or perceived breaches of trust. For employees, this behavior was destabilizing. One manager recalls receiving an angry late-night call. The following day, Neumann apologized, promising it would never happen again.

“Adam had a Game of Thrones approach to management,” says one executive who worked closely with Neumann. One employee recalls Neumann telling him that colleagues were making disparaging remarks behind his back. In another instance, Neumann asked for volunteers to be the focal point of a “firing squad”-style meeting. This involved one manager agreeing to listen silently as others aired grievances about him or her.

At an offsite meeting, Neumann told the gathered managers that it had come to his attention that one of them in the room had betrayed him by authorizing the purchase of an expensive coffee machine. One person familiar with the episode says that Neumann, as in a scene out of an Agatha Christie novel, demanded that the guilty manager step forward. At another, in Montauk, New York, he told managers to join him for surfing at dawn. Later that day, he made clear he had noticed who had skipped the session, dividing them into a group separate from the rest. He pointedly referred to his fellow surfers as his “warriors.”

ADAM’S ENABLERS

Neumann ruled WeWork through a tight-knit crew, which included his wife, Rebekah; his brother-in-law Chris Hill, who served as chief product officer; and vice chairman Michael Gross. His wife, for example, wrote and edited parts of the IPO prospectus, according to company insiders.

Neumann also relied on a group of his friends from Israel, where he grew up. Arik Benzino headed up WeWork’s U.S., Canadian, and Israeli operations. Roni Bahar is a director of development. Ariel Tiger, who served in the military with Neumann, was once CFO and then an executive vice president. Zvika Shachar, a childhood friend, served as head of security at We and according to his LinkedIn also held the title “VP, Special Projects, CEO Office.”

Employees describe them as an intimidating group who were fiercely loyal to Neumann. They would often inexplicably and randomly turn up at meetings to listen. For example, one manager recalls two of them turning up at an administrative meeting in the IT department, sitting silently, then disappearing.

On Thursday, the real-estate publication The Real Deal reported that Gross, Bahar, and Shachar were all in the process of negotiating their exits from The We Company. Other reports have added that as many as 20 people considered to be Neumann’s closest allies inside the company would no longer be employed there, including his family members.

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THE NEW GUARD

To execute Neumann’s orders, he relied on his co-presidents, CFO Minson and Jen Berrent, who also served as chief legal officer. Former employees describe the duo as the people who transformed Neumann’s plans and ambitions into action.

Berrent, who was COO until April, was regarded as an intimidating figure around the office. Neumann relied on her to handle personnel changes, in particular. Part of what intimidated employees was that they believed she kept a list of people that Neumann wanted to be fired. Neumann was particularly sensitive about those who seemed disloyal or critical. Employees at all levels of the company management recount that firings at times seemed random and unexplained. There are currently three lawsuits pending against the company—one claiming age discrimination, and the other two allege sexual harassment. In July, employees staged a sit-in on the 6th floor of the New York headquarters to protest one popular manager’s firing.

Minson, as CFO, helped Neumann get the money he needed to grow his empire. Although Berrent led the negotiations on the first SoftBank deal in 2016, Minson also played a key role in securing the billions the company raised from the Japanese conglomerate and its Vision Fund for WeWork and its subsidiaries. Last spring, he was instrumental in helping the company issue a $700 million bond offering, which gave investors their first full peek at We’s financial condition. The offering included a confusing accounting metric called “community-adjusted EBITDA,” which many investors had trouble understanding as it excluded key operating expenses from parts of We’s income statement.

The board also catered to Neumann’s demands. Its directors allowed Neumann to be able to borrow millions from the company. Most recently, in April, The We Company lent him $362 million. Also under their watch, WeWork leased space in buildings in which its CEO had financial stakes, though Neumann was not involved in the negotiation of these leases.

Despite the billions he pursued, Neumann liked to convey that he wasn’t motivated by money. In January, when I asked him about his stock in the company, he told me that at that time he would not cash in his stakes. “I, Adam Neumann, am not a seller.” In mid-July, in advance of the pending IPO, the Wall Street Journal reported that Neumann had cashed out at least $700 million in cash and loans.

Now, with Neumann gone, it’s Minson, Berrent, and the board’s job to clean up their old leader’s mess.

AFTER ADAM

The collapse of The We Company’s IPO has created serious cash-flow problems. The company is racing to find financing to cover its costs for the next few months as it scrambles to get its IPO on track. Even if it manages to get another IPO offering out to the markets, it’s unclear how interested investors will be. In the wake of We’s troubles, demand for high-flying startups seems to have cooled: Peloton saw its stock drop 11% on its first day as a public company; Endeavor, which was scheduled to go public on Friday, has shelved its plans.

Meanwhile, Neumann is keeping his head down, for now. The week he was ousted, he was spotted at his home near Gramercy Park. Those who worked closely with him say they are concerned about how he will manage now. Neumann had become so accustomed to the spotlight and the expectation that he would be a major player on a global stage. “He and Rebekah really thought they were going to have this platform, and be on this level that other really important people are,” says another former executive.

In May, Bruce Dunlevie, a We board member and partner at Benchmark, talked to me about Neumann. He described him as a visionary, who kept pushing farther and faster into increasingly unknown territory.

“When Alexander the Great left Macedonia he didn’t know he was going to India. He was going to put down a revolt in Thrace,” he told me.

At the time, this seemed like praise. Dunlevie declined to comment further for this story, so I couldn’t ask him if he’d meant something else by the comparison. Students of classical Greece, though, might view it this way: The famous young warrior conquered the known world, but after one night of heavy drinking, he contracted a mysterious illness, died within weeks, and his empire subsequently collapsed under its own weight.

‘WeCrashed’ Ending Explained: What Happened to Entrepreneur Adam Neumann?

BY MEREDITH LOFTUS

When I say “We,” you say “Work!"

WeCrashed, the latest Apple TV+ series, chronicles the rise and fall of WeWork, one of the world’s most valuable startups that once had a valuation of $47 billion. Adapted from the Wondery podcast of the same name, the series centers around the power couple behind WeWork, Adam (Jared Leto) and Rebekah Neumann (Anne Hathaway).

Over the course of eight episodes, Adam and Rebekah build their empire together. Between Adam’s charisma and Rebekah’s spiritual interests, the two went about trying to raise the world’s consciousness through their shared work space company. With each climb in valuation, despite the risky financial gambles, Adam was seen as a messianic unicorn, bringing the party wherever he went. He was someone worth investing in despite the math not adding up in his favor, bleeding money more often than making a profit. Meanwhile, Rebekah, growing more frustrated with her husband’s success and her lack of branding, makes her own Machiavellian moves, removing her best friend Elishia (America Ferrera) from WeWork so that Rebekah can be the chief branding officer. She later founded WeGrow, a new holistic approach to school. Tensions rise between Adam and Rebekah as they put their focus on building their personal empires, all while WeWork is about to move from a private company to a public one. Even when Adam and Rebekah reconcile while working together on the S-1 paperwork, the WeWork sandcastle gets knocked down.

Adam Neumann vs. The World

After his S-1 form makes the rounds in the financial world, Adam Neumann’s board starts to lose faith in his abilities to lead WeWork just weeks before the company goes public; there’s even real footage of Congresswoman Alexandria Ocasio-Cortez sharing her doubts of the company’s finances on the Congress floor. A few top employees try to convince Adam and Rebekah to rework their S-1 without pictures, which the Neumanns dismiss. The Wall Street Journal begins working on a story and Rebekah charges Damian (Troy Iwata) to kill the story, like his New York Times story that was killed during the WeWork summer camp years ago. In the end, The Wall Street Journal publishes their story and the WeWork board moves to remove Adam as CEO, as seen from Episode 1, “This Is Where It Begins.” Legally they can’t fire him because Adam owns the majority voting shares in the company, and he’s declared that he will never not be the CEO of WeWork. Adam suggests firing his entire board and filling it with employees or high profile celebrities, like Elon Musk or Barack Obama. The lawyers advise him and Rebekah against this and convince them that they have an image problem more than a legal problem.

Not only is Adam fighting with his board, he’s also at odds with the outside crisis PR team that comes in to help put out the fires caused by The Wall Street Journal article. Adam wants the team to respond to the comments and take the journalists out for drinks, the same way he used to win people over and make his deals go through. Staying in the foxhole has never been his style, so instead he meets with Bruce Dunlevie (Anthony Edwards) at Benchmark Capital but discovers two of his employees already there. Adam insults them and tries to convince Bruce to stay in his corner; instead, Bruce calls Adam “toxic” and threatens to break his arm if he doesn’t resign. Within minutes of this meeting, the exchange has already been leaked to the press. The leaks don’t stop there: Adam calls Masayoshi “Masa” Son (Eui-Sung Kim), while walking the streets of New York barefoot, in order to make a deal with him; Masa also shoots down Adam, vowing never to allow Adam to move forward as CEO and block the IPO. A neighbor snaps a picture of the heated exchange and becomes a viral meme. It’s not just his business partners against him – the public turns their back on Adam, too.

Unicorns Don’t Exist

Back in the WeWork offices, employees are freaking out over the changing tides. Miguel McKelvey (Kyle Marvin) attempts to calm everyone down by singing Bob Marley before Adam comes in and gives a rousing speech. Miguel is still reeling from when Adam shot down the idea of Miguel running WeWork without him. Miguel’s name was only featured a handful of times in the WeWork S-1 form; remember, he was the one who pulled an all-nighter making the original Greendesk deck while Adam went home and slept. Later, when Adam returns to the offices and finds Miguel alone looking over the blueprints for a new WeWork location, Miguel confesses how much Adam has frustrated him over the years, yet he loves him and hates everything the board is putting Adam through. Adam doesn’t show it much, but after this exchange, it’s clear that he does respect Miguel. These men have had their own journey building Greendesk and WeWork from the ground up. Adam tells Miguel he’s going to do the right thing; the next day, Adam votes himself out as CEO.

With Adam out of the picture, Cameron Lautner (O-T Fagbenle) is announced as the new CEO of WeWork. His primary focus is getting a handle of their financial situation. He addresses his new employees with a much-needed reality check. The promise of Adam’s dream was a nice thing to aspire to, but a shared work space company was never going to raise the world’s consciousness. Cameron tells the WeWork employees that they’ve been duped and deluded by a magician who has officially run out of tricks. He promises that they will receive fair wages (for once) and that from their hard work, WeWork’s best days are ahead. Though Cameron is considerably colder than Adam’s exuberant personality, the employees seem to be on board with having him as their new boss, even though it means getting rid of the party supplies, tequila, and the infamous WeWork gong.

The Soul of WeWork

As the new CEO, Cameron starts to remove the excess baggage to bring WeWork afloat. This includes shutting down Rebekah’s private school, WeGrow. Tearfully, Rebekah has to tell a room full of parents that the school that she's loved like another child is shutting down; this is after the tuition has already been paid for the next year and enrollment to other schools is closed. Rebekah assures the parents that their children have learned the meaning of resilience in order to go forth in the world, which the parents shut down as nonsense. Rebekah suggests that the parents open up their own school, which as tone-deaf as Marie Antoinette's famous misquote “let them eat cake.” She’s flustered by the parents’ outbursts, further showcasing her lack of awareness of the world around her.

Through the ups and the downs of WeWork, the love story of Adam and Rebekah has been the anchor of WeCrashed. After a tumultuous few episodes where their bonds were tested, they hold each other firm throughout the finale. For instance, Rebekah encourages Adam as he records a promotional video for the investors, as well as calming him down when he starts to lash out against the crisis PR team.

RELATED:Anne Hathaway On 'WeCrashed,' Working With Jared Leto, And Building Her Character

Adam told Rebekah that he started WeWork for her, that she was the soul of the company. When it’s just the two of them, Rebekah asks Adam to give it all up for her. She assures him that all they’ve ever needed was each other and their family, not the money. Because of his love for her, he’s willing to step down as CEO, but not before hatching a plan with her that will ensure he walks away with a substantial buyout. When they do succeed, the maverick’s gift to his muse is taking his family out of the country and securing the copyrights for the WeGrow curriculum back for Rebekah to start another school. At the end of the series, Adam and Rebekah have weathered the storms of life together and have come out the other side stronger than ever.

The One With All the Money

So what did it take for Adam, the man who claimed that he would never not be the CEO of WeWork, to humbly step down? As Rebekah is asking Adam to walk away from raising the world’s consciousness through WeWork, he remains unconvinced that the money doesn’t matter. Adam realizes that the only person who understands that and could give him everything he wants is Masa. In anticipation of the IPO, Adam and Miguel had fast tracked expansion, signing leases in new locations. WeWork is very much in the red, so much so that they can’t afford to lay off employees because they can’t afford severance. Cameron suggests to the board that they should reach out to Softbank for cash; otherwise they will go bankrupt. If you recall, Masa told Adam he won’t let him proceed as CEO; however, with Adam now gone, he could buy out Adam’s majority voting stocks and save the company. The future of WeWork stands in the balance of two men playing phone tag until Masa offers a high enough price to Adam for his shares. After a few days of back and forth, Masa offers Adam a whopping $975 million for his shares, $500 million loan for WeWork to keep the lights on, and $185 million consulting fee; this results in Softbank owning 80% of WeWork. Adam and Rebekah walked away from their company with all the money (or so they thought).

When Masa met Adam for the first time, he asked him a simple question: “Who wins in a fight: the smart one or the crazy one?” Adam answered that the crazy one would win; from there, he made questionable decisions in order to prove to Masa he was the crazy one worth investing in. However, that question would come back to haunt him. After Adam and Rebekah relocate their family to Tel Aviv, Masa calls Adam, only this time Rebekah answers the call. Masa asks her the same question, to which she replies that the smart person would win in a fight; he admits that she is smarter than her husband. Masa reveals that his question is a trick question because it’s never about the smart person or the crazy person – when all is said and done, it’s the one with all the money who wins. When Adam sold his controlling shares to Softbank, it’s suggested from the series that Masa had no intention of paying Adam his buyout package. The series ends with Rebekah frantically telling Adam the news, getting salt water in both their eyes and a somber instrumental version of Katy Perry’s “Roar,” once Adam’s personal anthem, plays over the couple.

Of course, that’s not where the story ends since WeCrashed is based on real events. Adam Neumann and the WeWork board sued Softbank, finally settling their disputes in early 2021. WeWork finally went public in October 2021 at $9 million, which was $38 million less than at its peak. Miguel McKelvey left WeWork in June 2020, yet celebrated WeWork going public with Adam. After being promised to make millions in its heyday, many WeWork employees made nothing and sued Adam and Softbank. As for the pair of unicorns, Rebekah Neumann plans to start a new school from her former WeGrow curriculum, and Adam has invested in a new company that’s described as the “future of living.” He’s begun purchasing apartment buildings in Fort Lauderdale and Miami as recently as January 2022.

Today, Adam Neumann is still a billionaire. If there’s anything to learn from WeCrashed, it’s that you should never count out Adam Neumann, even when the odds and the finances are stacked against him. As he has said, he’s a serial entrepreneur, so it’s only a matter of time before Adam is back in the public eye once again. If he ever decides to take another company public, maybe he should just leave the pictures out of his S-1 form.

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How Adam Neumann’s Over-the-Top Style Built WeWork (wsj.com)

105 points by ericzawo on Sept 18, 2019 | hide | past | favorite | 73 comments

anonweworker on Sept 18, 2019 | next [–]

Can I just point out that I called this a year ago?

BTW, I quit not long after posting this.

https://news.ycombinator.com/item?id=18018942

> (regular HNer here, posting anonymously for obvious reasons). I work for WeWork, and you don't know the half of it. In mid-August WeWork had their "Summer Camp" event, which was a three day all-hands company meeting in England. About 5500 of 7000 WeWork employees were flown into Heathrow and shipped out to a campground in Tunbridge Wells. Everyone was required to sleep in a tent, generally with four or five other tent mates, on air mattresses on the ground with thin mattresses.

Because of the vegetarianism thing, everyone was forced to eat WeWork-provided food, sans meat (though fish is okay!). This totally broke my ketogenic diet, which made me quite mad. See other comments about this being a form of group control.

For the first day and a half, we were subjected to a number of corporate "talks" which largely revolved around the cult of personalities of Adam Neumann and Miguel McKelvey. Adam Neumann particularly styles himself a televangelis or Jesus-wannabe and walks out into the audience, asking people about their deepest fears, delivering some ersatz corprorate sermon on the mount. There is no "me", only "we".

See also the time when Rebecca Neumann commands the gathered WeWorkers to hold hands, close their eyes, and pray.

Or the time that Deepak Chopra comes out and shows a disturbing video about childbirth (people were like, "is this an anti-abortion video?) and talks about how evolution and child development are intimately related, and how we should take our shoes off to let the ions flow, and leads a meditation session.

A fish rots from the head down, and this is one crazy fish.

mattmar96 on Sept 19, 2019 | parent | next [–]

Glad you made it out

javierrincon on Sept 24, 2019 | parent | prev | next [–]

So interested in watching a video of one of those internal events. Sounds like Herbalife cult.

vincent-toups on Sept 18, 2019 | prev | next [–]

Can't say that this is surprising, given the startup types I have worked with in the past.

[EDIT] I want to elaborate on this, actually. Rewards are good incentives until they become so large that they eclipse the value of the thing one is working on. At that point, you no longer attract people who want to accomplish things for their own sake or who even think they know how. With a large enough reward, what you attract are assholes who want rewards.

I hope we figure this problem out before people like this drive our whole civilization/planet off a cliff because they want to be rich. You'd think it would be obvious, and I think it is to many of us. But there are enough of these reward seekers and the rewards are big enough that they dominate the scene.

vincent-toups on Sept 18, 2019 | parent | next [–]

Further elaboration: a financial award is a great way to tempt an innovator out of their risk adverseness: it says, you can quit your job or whatever and not risk much if your innovation is valuable.

The ideal startup person is someone who already has the idea and knows its good but doesn't want to take the risk without some kind of reward to justify it.

But if the rewards get big enough, you get reward seekers without any fundamental idea who are just going to sit around trying to come up with them until they find one someone is going to bite on.

These two populations of people are totally different and only one of them actually cares about the product or making the world a better place.

tryitnow on Sept 19, 2019 | root | parent | next [–]

I am actually pretty skeptical of financial rewards, I think after a certain point they are far better at attracting the wrong type of person.

Of course, that leaves us with the question of how to attract productive innovators. I don't know. I'd probably lean toward some combination of restrained capitalism + massive subsidies to talented technical people + prizes for innovation.

VladimirIvanov on Sept 19, 2019 | prev | next [–]

"Both Neumanns could be impulsive at times, former executives say. Ms. Neumann has ordered multiple employees fired after meeting them for just minutes, telling staff she didn’t like their energy. She and Mr. Neumann have sent maintenance and IT staff to their homes to fix various items."

This really bothers me. I know that if I was at WeWork I would probably be fired for "bad energy" because it would be obvious that I was just working at a job and not part of the WeWork cult.

tempsy on Sept 18, 2019 | prev | next [–]

As crazy as it sounds, after having worked at a few high-profile startups/tech cos it's not as easy as it looks to find a co where the CEO/founder is not an eccentric billionaire or multi-millionaire.

filmgirlcw on Sept 18, 2019 | parent | next [–]

For high-profile places, you're not wrong. And it isn't just tech (though I think tech has its own special set of eccentricities), finance, Hollywood, fashion, media, transportation, the restaurant industry, food and beverage -- the places that become high-profile (which is not the same thing as successful), are usually helmed early on or during that success by someone eccentric.

Most of the time, the person isn't even a millionaire or billionaire when the company starts/grows -- but even at the very early stages, there is something different and slightly batshit about them.

And speaking from personal experience as someone who has also worked at high-profile startups (some very early stage), that's kind of part of the appeal. An audacious leader can be charismatic and compelling. And then once you're "in it" you start to normalize the increasingly batshit stuff you see, writing it off as "that's just X being X" -- which can often be unhealthy because with no accountability, things can go from "eccentric/audacious but ultimately helpful" to "this is insanity and is harming more than it is helping."

rlucas on Sept 18, 2019 | root | parent | next [–]

I call it "weird results require weird behavior."

Two problems tend to arise from it:

1. Ex ante, people who don't understand it think that just by being weird, they will have exceptional (weirdly good) results. So they are libertine or uncivil and that alone doesn't drive anything useful.

2. Ex post, people who achieved highly attribute the success to the weirdness, and take it as extra license to let the id flow free.

In fact, my belief is that a good bit of weirdness both causes and is the effect of some other qualities that in turn correlate with success: obsessive knowledge of a domain, obsessive levels of effort, single-mindedness, manic level charisma, inordinate confidence (itself charismatic), and willingness to be contrarian / unorthodox.

But man is it annoying when people are just assholes and wave it off blithely as coming with the territory.

camjohnson26 on Sept 18, 2019 | root | parent | prev | next [–]

It’s the same thing that causes people to follow cult leaders, we’re drawn to extreme people who display confidence and we project our own insecurities into them.

sharadov on Sept 18, 2019 | prev | next [–]

Sounds like another Elizabeth Holmes to me. What's surprising is that these snake oil sellers have made it so far? Are investors so stupid? Are they so detached from reality? Whatever happened to due financial diligence?

simplicio on Sept 18, 2019 | parent | next [–]

To be fair, you can actually give money to WeWork and get some office space. They seem massively over-valued, and investors seem weirdly OK with Neumanns using self-dealing to feather his own nest, but its, like a real company with an actual business model, and so far as I can tell, they aren't really making objective lies to investors to get them to hand over crazy amounts of cash.

On the other hand, no could ever actually buy an "Edison" blood test machine from Theranos. They were purely a fraud.

I guess its sort of an interesting question about wheter it looks worse to lose money investing in a billion dollar product that would legitimately be worth billions but doesn't exist, or one that does exist but isn't worth billions.

Analemma_ on Sept 18, 2019 | root | parent | next [–]

> and investors seem weirdly OK with Neumanns using self-dealing to feather his own nest

Well, sort of. The fact that this IPO has apparently attracted so little interest that it's getting pushed back or canned entirely tells me investors aren't OK with it. It's more like "SoftBank seems weirdly OK with it", and this fiasco is going to cost them so much money that I have a feeling they won't be so lenient with the next set of founders.

jazzyk on Sept 18, 2019 | root | parent | next [–]

The poster above is talking about the people who had invested in the company so far:

The We Company has raised a total of $12.8B in funding over 14 rounds. Their latest funding was raised on Jan 9, 2019 from a Secondary Market round.

https://www.crunchbase.com/organization/wework

ToFundorNot on Sept 18, 2019 | root | parent | prev | next [–]

Even Softbank wasn't okay, they did one round, but they then reduced their most recent round from 14b to 2b

source: https://techcrunch.com/2019/01/07/for-softbank-no-majority-s...

elliekelly on Sept 19, 2019 | root | parent | next [–]

I know the Vision Fund is massive but the fact that SoftBank was even considering having one fund make a $16 billion investment in one company is insanity to me.

sharadov on Sept 19, 2019 | root | parent | prev | next [–]

SoftBank does not seem so smart to me, I just think between the two Vision funds - 200B, they have so much money to play with, they don't seem to give a shit. And Masayoshi Son, can just go back to the Saudis and get more money if he needs to.

sharadov on Sept 19, 2019 | root | parent | prev | next [–]

Am not talking about the service that "WeWork" provides, unquestionably there is a market need for it and the success of the model shows. But all the red flags - with the self-serving CEO, I don't give a shit about his immaturity either, you have the money you can screw around plenty.

Ididntdothis on Sept 18, 2019 | parent | prev | next [–]

When you read the book about Theranos it’s mind boggling how unwilling these bigshot investors and board members are to question their own decisions even while seeing very clear warning signals. Instead they shoot the messenger. I remember similar stuff happening during Enron or the housing bubble in 2008. There were plenty of people with real concerns backed up by concrete data but they just got ignored and ridiculed. And then later “no one saw it coming”.

mrnobody_67 on Sept 18, 2019 | root | parent | next [–]

Anybody counting on investors or startup boards to exercise proper oversight of management is dreaming.

Short of the CEO being accused of sexual harassment or assault by an employee or being caught red-handed stealing from the company, they will keep the job -- especially if the company is growing revenue and continuing to raise money at ever high valuations that VCs/board members can use to mark-up their stock, take back to LPs and raise new funds to grow their assets under management that they can collect 2-3% on every year.

big_chungus on Sept 21, 2019 | root | parent | next [–]

> Short of the CEO being accused of sexual harassment or assault by an employee or being caught red-handed stealing from the company

I would hope being merely accused of sexual harassment would have zero impact until it can be proved.

nilkn on Sept 18, 2019 | parent | prev | next [–]

In fairness, there's a difference between fraud and investors just not doing due diligence and being swept off their feet by a charismatic and manic hard-partying founder. Investors do need to be responsible for their choices. My understanding (based on the HBO documentary) is that Theranos went so far as to present fake test results to investors.

rajacombinator on Sept 18, 2019 | parent | prev | next [–]

The investors are not stupid. (Except SoftBank maybe.) Most of them will make money once they figure out how to pay Goldman enough to dump this trash into America’s 401ks.

dlp211 on Sept 19, 2019 | parent | prev | next [–]

> Are investors so stupid?

Yes.

> Are they so detached from reality?

Yes.

> Whatever happened to due financial diligence?

Too much excess and concentrated capital.

NegativeLatency on Sept 19, 2019 | root | parent | next [–]

and FOMO of "The Next Big Thing"

hinkley on Sept 18, 2019 | parent | prev | next [–]

What happens when your hiring policy favors folks with little to no practical life experience?

A maniac surrounded by yes-men can be a terrifying thing. As leader of We Work he can only get up to so much mischief. Definitely wouldn't want him as 'President of the World'.

fullshark on Sept 18, 2019 | parent | prev | next [–]

All tech startup CEOs require some element of snake oil salesmanship. You are selling something to investors that doesn't exist yet.

coldtea on Sept 18, 2019 | root | parent | next [–]

Plus even when it does exist, it's mostly BS nobody really needs if not actually detrimental to the world, like Twitter...

rchaud on Sept 19, 2019 | root | parent | prev | next [–]

The snake oil is only necessary for companies who want to sell a vision of something that absolutely exists (co-working), but lacks the profitability threshold that investors would get excited about. So they have to turn this into a "it's Co-working...reimagined!" BS.

riazrizvi on Sept 18, 2019 | parent | prev | next [–]

It sounds like another Facebook to me, where the business model does make sense but it’s just based on a big secret of selling user data. Here the users are startups, and small companies. It’s no accident that you have to use WeWork’s internet access, you cannot get your own internet unlike with a normal office rental company. It’s also no accident that every visitor needs to sign in to declare whom they are visiting, otherwise you can’t get through the barrier. We don’t have total transparency on who the bond holders are, but just like with Facebook’s early investors, I bet the money comes from people who want the data for themselves.

Imagine how much more valuable it is to see which startups are starting to gain traction. Deep pocketed competitors can swoop in and compete with their business at a vulnerable time. Or VC’s who are wooing a company can see if they are the only bidders or if other funds are emailing them (they probably only see metadata of internet traffic but still valuable). Or recruitment consultants can pay to see who is hiring using general visitor reports Etc.

I think the outrageous shenanigans of the CEO are essential deflections that make the magic show work.

vincent-toups on Sept 18, 2019 | parent | prev | next [–]

Rich people have too much money and not enough places to put it.

cityzen on Sept 18, 2019 | parent | prev | next [–]

Not stupid, greedy AF

hogFeast on Sept 18, 2019 | parent | prev | next [–]

One story probably sums the total of my knowledge on this: when John Templeton was in his 80s, a billionaire, had been crushing it for five decades, he was researching the effect of planetary cycles and horoscopes on the market.

I know a few people who managed money with him in Nassau at this time. He wasn't senile. So what was he doing? He was willing to test his beliefs...about everything. He could put aside everything he thought he knew even after five decades of success and ask one simple question: what works?

Now ask the 30-year old BSD "crushing it bro" dude with the CFA and name brand fund manager on his CV about horoscopes. He will tell you it doesn't work but he won't be able to tell you how he know this (in most cases, he won't even understand the distinction between his thoughts and reality).

Most people in the industry know all the facts. They act very professionally at all times when talking seriously with the peers about their many opinions (none of them tested). They don't look at history, they don't look at what works, they don't look at their own decisions (usually, some good funds impose this on managers), they can't think creatively about risk, and they don't know the one or two facts that are important in a big woodpile of information.

One answer that history suggests, in addition to the above, is that this always occurs. This has been happening for hundreds of years. But no-one cares. This time it is different, I am special, I am unique, I have been chosen, etc. (if anything, changes in attitudes have made this thinking even more pervasive...young people are even more individualistic and education institutions generally encourage an indulgent self-image).

Btw: I have (unfortunately) read most books about investment. I am aware of only one book aimed at investors that actually looks at this effect at large (i.e. what is the relationship between technology and markets? why actually works? what has happened in these situations before? etc.): Engines that Move Markets. One book. A million books about speculation and bubbles...but how many books about actual markets, actual technology, and actual investment...one.

The closest is possibly Capital Returns and Capital Account from Marathon...but this is really just a narrative account of two decades. In terms of a "big theory" historical view, there is only one book. That fact alone should demonstrate how utterly disinterested the industry is in anything approaching knowledge (so none of the questions that you pose really matter...no-one cares).

yalogin on Sept 18, 2019 | prev | next [–]

Looks like this guy is the new Travis Kalanick. I don't know anything about WeWork or the CEO but its interesting that the personality of the CEO is what is causing grief for the company which the individual was instrumental in building.

alephnan on Sept 18, 2019 | parent | next [–]

Was Travis Kalanick involved in these kinds of self-dealing?

philwelch on Sept 19, 2019 | parent | prev | next [–]

I think that comparison is very unfair to Travis Kalanick.

ummonk on Sept 19, 2019 | parent | prev | next [–]

He makes Travis Kalanick seem sane.

ArtWomb on Sept 18, 2019 | prev | next [–]

On the off chance that some WeWorkers are reading this. My #1 request is for 24/7 hot desk availability. The 9am-6pm hours aren't working for me. Something like one credit per six hour block would be ideal. Often I don't even get started on deep work until after five o'clock ;)

I love the culture. And anecdotally at least, the method clearly attracts talented designers and developers outside the pale. Concentrating creative folks together. Fomenting spontaneous frissons at the various bagel breakfasts. Or around the tap at quitting time. I find it a welcome antidote to pre-packaged and polished corporatism ;)

frabbit on Sept 18, 2019 | parent | next [–]

On the off-chance that some WeWorkers are reading this, the only way I could be persuaded to share a space with someone who foments spontaneous frissons at bagel breakfasts is if you also supply high-powered Nerf guns.

lonelappde on Sept 19, 2019 | parent | prev | next [–]

> pre-packaged and polished corporatism

Is literally WeWork's business proposition to customers.

tempsy on Sept 18, 2019 | parent | prev | next [–]

Might have something to do with the fact that you can get 1-year of WeWork included as part of the American Express Business Platinum card right now ($595 annual fee).

Would love to see the cost share agreement on that one.

evanwarfel on Sept 18, 2019 | prev | next [–]

> One day, he proposed, the company could “solve the problem of children without parents,” and from there go onto other causes such as eradicating world hunger.

>Mr. Neumann has told several people over the past two years that a personal goal is to become the world’s first trillionaire.

Am I the only person to think these two ambitions may be somewhat at odds? Or rather, they both seem to be egomaniacal in nature, and being an egomaniac doesn't seem to lend itself to solving nearly impossibly hard problems.

Maybe after he has his exit, he'll put his money with his mouth is and start working full time on a foundation like Bill Gates.

xkcd-sucks on Sept 19, 2019 | parent | next [–]

Maybe he wants to grind up all the orphans in the world and tirn their blood serum into an elixir of youth, thereby solving the problem of their existence

fanpuns on Sept 19, 2019 | root | parent | next [–]

A Modest Proposal for the internet age

perseusprime11 on Sept 19, 2019 | prev | next [–]

"In a videoconference with the whole company Tuesday, Mr. Neumann, dressed uncharacteristically in a gray suit and a white button-down shirt, told the staff it has “played the private market game to perfection,” listeners said."

He is living in la-la land...

alephnan on Sept 18, 2019 | prev | next [–]

> The two have committed giving $1 billion to charity over the next decade.

rchaud on Sept 19, 2019 | parent | next [–]

Introducing "WeGive", controlled and operated by Neumann and family.

mrnobody_67 on Sept 18, 2019 | prev | next [–]

I want to learn more about the WeWork Summer Camps and what happened there....

anonweworker on Sept 18, 2019 | parent | next [–]

I just re-posted my account of Summer Camp 2018 to the comments for this article.

jonknee on Sept 18, 2019 | prev | next [–]

Highlights:

> After the group landed in Israel and left the plane, the flight crew found a sizable chunk of the drug stuffed in a cereal box for the return flight, according to people familiar with the incident. The jet’s owner, upset and fearing repercussions of trans-border marijuana transport, recalled the plane, leaving Mr. Neumann to find his own way back to New York, these people said.

> Many former employees said they didn’t always know how seriously to take some of Mr. Neumann’s pronouncements. Early on, he would throw out seemingly random ideas, like adding a pool in the basement of the company’s headquarters or starting an airline.

> He told at least one person directly that his ambitions included becoming Israel’s prime minister. More recently, he said that if he ran for anything, it would be president of the world, according to another person who spoke with him.

> One day, he proposed, the company could “solve the problem of children without parents,” and from there go onto other causes such as eradicating world hunger.

> In a 2015 investment round, Mr. Neumann sold tens of millions of dollars of shares. Soon after, the company launched a buyback program offering to purchase employees’ shares too. But the company gave employees a different arrangement, giving them a payout per share worth substantially less than what Mr. Neumann was paid

> A few weeks after Mr. Neumann fired 7% of the staff in 2016, he somberly addressed the issue at an evening all-hands meeting at headquarters, telling attendees the move was tough but necessary to cut costs, and the company would be better because of it. Then employees carrying trays of plastic shot glasses filled with tequila came into the room, followed by toasts and drinks.

> Both Neumanns could be impulsive at times, former executives say. Ms. Neumann has ordered multiple employees fired after meeting them for just minutes, telling staff she didn’t like their energy.

leesec on Sept 18, 2019 | parent | next [–]

You left out:

>He previously has instructed staff to fire 20% of employees a year, bemoaning the number of “B” players hired amid rapid growth. Managers were unable to hit the target even when they included attrition.

cududa on Sept 18, 2019 | root | parent | next [–]

Also that when the tequila was served after the people got fired, Run DMC popped out and started singing It’s Tricky

randycupertino on Sept 19, 2019 | root | parent | next [–]

This company is my cash cow, Let's have some shots and hash now We Work's my pitch, make me so rich I'm Sketchy is the title, here we go I'm Sketchy to buy a place, split up the space Rent it out to tech Co.s DJs, shots, parties w/ bros

I'm Sketchy, I'm Sketchy (Sketchy) Sketchy (Sketchy) It's Sketchy to trademark "We" Sell it back to my company That's $6 mill in my bank account I'm sketchy sketchy Sketchy Sketchy

I met this little girlie, her cuz Gwyneth was kinda Goopy Put her on my board The VCs forced her out, We had to transfer my voting shares real early

These VCs are really sleazy, All they just say is please me with solid financials Or spend some time to actually make some profit, I said "It's not that easy"

cpeterso on Sept 18, 2019 | root | parent | prev | next [–]

I downvoted you for making a non sequitur joke... but then I actually read the article! (I've removed my downvote.)

mrosett on Sept 18, 2019 | root | parent | next [–]

Truth that you wouldn't believe if someone made it up...

jonknee on Sept 18, 2019 | root | parent | prev | next [–]

That was in the second to last quote I had, but really the whole thing was quotable, what a mess of a company.

rkho on Sept 18, 2019 | root | parent | prev | next [–]

I'm absolutely baffled how the ghost of Jack Welch's stack ranking and forced distribution is still a thing in this day and age

tptacek on Sept 18, 2019 | root | parent | prev | next [–]

Unfortunately, that's not actually an uncommon management practice (maybe with different numeric targets) for big companies.

eschulz on Sept 18, 2019 | root | parent | prev | next [–]

Maybe be saw this interview and thought himself the next Steve Jobs

https://www.youtube.com/watch?v=7yh7ikSQwKg

save_ferris on Sept 18, 2019 | parent | prev | next [–]

This all reads like an episode of Silicon Valley. Unbelievable.

hinkley on Sept 18, 2019 | root | parent | next [–]

People want adventure, and nobody has bigger adventures than people who are manic.

I think there are some pretty clear signs of manic-depressive episodes in Russ Hanneman's story arc.

oh_sigh on Sept 18, 2019 | root | parent | prev | next [–]

Too bad TJ Miller went insane - next season would surely be We heavy. Now there probably won't even be another season - and I'm okay with that considering the last one.

Ididntdothis on Sept 18, 2019 | parent | prev | next [–]

Seems he and his wife would be excellent dictators. Keeping people on their toes by doing random stuff is one main skill in dictatorship.

cde-v on Sept 18, 2019 | parent | prev | next [–]

We as a society have failed and I don't think we can recover. Every single one of our systems not only enables those with sociopathic/psychopathic tendencies, but literally promotes them.

onemoresoop on Sept 18, 2019 | root | parent | next [–]

This is deep problem and extremely hard to fix.

jonas21 on Sept 18, 2019 | prev [–]

Naming your company "We" sure leads to some grammatically awkward and confusing sentences:

We now expects an IPO valuation far lower than the $47 billion price it got in a January funding round.

We said the new structure was created in part to make it easier to expand into new businesses beyond co-working, according to IPO filings.

He relishes trips in private jets. Last year, We bought one for more than $60 million...

52-6F-62 on Sept 18, 2019 | parent | next [–]

This is why in a lot of writing names of organizations and publications often get contrasting style in the text. Name in italicized text is romanized, or the opposite.

eg:

> We now expects...

or

> We now expects...

Because... yes. It can produce some ridiculous results

perl4ever on Sept 19, 2019 | root | parent | next [–]

First, click on your My Computer...

52-6F-62 on Sept 20, 2019 | root | parent | next [–]

You got me there. I'd put something like that in quotes!

I actually ran into that last week with a publication. Didn't have rights to a certain font's italics. Too much deliberation with design and edit. Solution ended up being single quotes. ex:

> click on ‘My Computer’

sdwa on Sept 18, 2019 | parent | prev | next [–]

Well, you just have to incessantly refer to it by its full name: The We Company.

dejj on Sept 19, 2019 | root | parent | next [–]

Or call it the WC. ‘Tis more funny in Europe.

mitchtbaum on Sept 18, 2019 | parent | prev [–]

We'll be good.

anonweworker on Sept 18, 2018 | parent | context | favorite | on: WeWork Backs Down on Employee Noncompete Requireme...

(regular HNer here, posting anonymously for obvious reasons). I work for WeWork, and you don't know the half of it. In mid-August WeWork had their "Summer Camp" event, which was a three day all-hands company meeting in England. About 5500 of 7000 WeWork employees were flown into Heathrow and shipped out to a campground in Tunbridge Wells. Everyone was required to sleep in a tent, generally with four or five other tent mates, on air mattresses on the ground with thin mattresses.

Because of the vegetarianism thing, everyone was forced to eat WeWork-provided food, sans meat (though fish is okay!). This totally broke my ketogenic diet, which made me quite mad. See other comments about this being a form of group control.

For the first day and a half, we were subjected to a number of corporate "talks" which largely revolved around the cult of personalities of Adam Neumann and Miguel McKelvey. Adam Neumann particularly styles himself a televangelis or Jesus-wannabe and walks out into the audience, asking people about their deepest fears, delivering some ersatz corprorate sermon on the mount. There is no "me", only "we".

See also the time when Rebecca Neumann commands the gathered WeWorkers to hold hands, close their eyes, and pray.

Or the time that Deepak Chopra comes out and shows a disturbing video about childbirth (people were like, "is this an anti-abortion video?) and talks about how evolution and child development are intimately related, and how we should take our shoes off to let the ions flow, and leads a meditation session.

A fish rots from the head down, and this is one crazy fish.

vorpalhex on Sept 18, 2018 | next [–]

That's outright cult behavior in a very disturbing sense. Often cults operate as a way to cover for some verboten behavior - usually perpetrated by the founders - and use the cohesive group identity to prevent people from leaking whatever inappropriate behavior is occurring.

ng12 on Sept 18, 2018 | prev | next [–]

> This totally broke my ketogenic diet

Absolutely infuriating. As a diabetic a high-protein diet is just about the best thing for me. I'd quit on the spot.

anonweworker on Sept 18, 2018 | parent | next [–]

Working on it ;)

everybodyknows on Sept 18, 2018 | root | parent | next [–]

An employee who could document health damage might have grounds for legal action, eh?

ncr100 on Sept 18, 2018 | root | parent | prev | next [–]

Wee!

GL!!

Bjorkbat on Sept 19, 2018 | prev | next [–]

I actually had to do some Google research to confirm that Deepak Chopra did indeed talk at a WeWork event. Wow.

I mean, I won't hold it against any individual to be into Deepak Chopra, I won't even hold it against a company of 100 people to invite Deepak Chopra provided the employees are aware that the company has a New Age vibe, a subtle scent of potpourri that just never goes away. 5000+ people though? Holy crap.

gaius on Sept 20, 2018 | parent | next [–]

I won't even hold it against a company of 100 people to invite Deepak Chopra provided the employees are aware that the company has a New Age

If you’re a devout believer in religion A and your employer forces you - unknown to you at the time you were hired - to attend religious ceremonies of religion B as a condition of your continued employment - that is surely massively illegal

djsumdog on Sept 19, 2018 | prev | next [–]

> Everyone was required to sleep in a tent, generally with four or five other tent mates, on air mattresses on the ground with thin mattresses.

I prefer keto diets too, but I think this would piss me off way more. I have really bad OCD. I wash my hands a lot; coworkers notice. I'm already self conscious about it. I can go camping but it takes a lot of mental prep (and I typically throw everything in the wash or away when I get home).

If a company forced me to camp like that .. da fuck?!

Not to mention everything else about that sounds pretty insane too.

village-idiot on Sept 19, 2018 | parent | next [–]

I love camping, away from everyone else. If you made me camp with my coworkers I would not be happy either.

joeframbach on Sept 19, 2018 | parent | prev | next [–]

The irony being that your weak immune system is making you more susceptible to the nasties...

totoglazer on Sept 18, 2018 | prev | next [–]

Lest anyone think this is hyperbole, I've heard even crazier stories from an employee I know personally who was there.

SOLAR_FIELDS on Sept 20, 2018 | parent | next [–]

There was a journalist that covered the event that also corroborates basically everything that the OP is saying as well: https://www.propertyweek.com/insight/the-cult-of-wework/5098...

megaman8 on Sept 19, 2018 | prev | next [–]

I'm all for reducing meat consumption. But having everyone do a hard and fast rule: no meat whatsover, seems extreme. People grew up with different values and diets. Until we can convince others, I think we should be more accepting of others values and not force everyone to do it one way.

village-idiot on Sept 19, 2018 | prev | next [–]

Do these people go nuts after getting rich, or is being crazy not an impediment to building a large company?

magduf on Sept 19, 2018 | parent | next [–]

George Bernard Shaw once wrote, "The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore, all progress depends on the unreasonable man."

People who have the audacity to do big things are frequently not reasonable people at all, and many times can be quite wacky. Sometimes this turns out well, like with Isaac Newton and Nikola Tesla. Other times this turns out very badly, like with Josef Stalin or Adolf Hitler.

komali2 on Sept 19, 2018 | prev | next [–]

At least half of that shit has to be illegal.

Have you considered leaking to like techcrunch or something? Hell even a major paper would probably take it up.

notyourday on Sept 19, 2018 | parent | next [–]

Dont leak to techcrunch. Hire an attorney. Walk away with six figures.

edem on Sept 18, 2018 | prev | next [–]

What the actual fuck? Why are you still working for them?

magduf on Sept 19, 2018 | parent | next [–]

Well, to be fair, he did say "working on it" in a reply above.

magduf on Sept 19, 2018 | prev [–]

>This totally broke my ketogenic diet

https://theoutline.com/post/6133/the-keto-diet-is-a-recipe-f...

The rest of what you describe sounds like a nightmare though.

ng12 on Sept 19, 2018 | parent [–]

I'd avoid prescribing dietary advice based on sensationalist articles. Ketogenic diets work for many people, dieters as well as diabetics, celiacs, etc. The science is sound as long as you understand the philosophy that makes it work.