It's hard to look at this from a charitable perspective, though. Adam Neumann is basically Elizabeth Holmes, so I don't know why people keep giving him money.
I usually assume that I must be missing something. But AH is making it real, real hard to figure this one out. What in the fuck has crept into your brain if you think this is a good idea?
SV VCs love saying that it is about the person/team and their experience more than the idea. Okay. It's Adam Neumann, so, swing a dead cat anywhere on the planet and you'll hit someone more capable than that clown.
The idea is also rather basic. So, what happened here? How's this good for AH? Some sort of harebrained scheme where by _them_ giving Adam Neumann money, it means AN can plausibly be called 'a successful businessperson', and thus it makes AH not look like a bunch of fucking idiots who got conned?
Talk about throwing good money after bad.
Money that he lost in WeWork is not coming back, but the sales talent is still there. Taking "a water under the bridge" approach isn't unreasonable if AH is genuinely convinced he is that good at selling shit to people.
He is very good at selling VCs on investments, but honestly, it seems like that has more to do with having a big vision that you can promise them and not having the moral scruples to evaluate whether that vision is feasible. We see this with Elon Musk on his series N or O for SpaceX, and it looks like Adam Neumann is next.
WeWork's value proposition in the beginning was that Neumann(or the designer he hired) legitimately knew how to redesign/refurbish what was essentially a lackluster, old office building and make it seem like a great office. That part of WeWork was legitimate and Regus did not know how to do that(Regus still doesn't do that, at least in Europe). Now their big problem of having long term obligations with essentially short term cashflows was still a problem, but the unit economics at that stage were positive.
What set everything on fire was the fact that when they were injected with enormous amount of capital they essentially ran out of bad real estate in the markets they were in(this was the case in New York) and started going into the deluxe office buildings, where a WeWork facelift wouldn't do anything.
I can't remember the exact talk, but I saw a talk recently by some VCs that basically made the very interesting point that in certain businesses too much capital that has to be invested will eventually destroy the unit economics, and the 2 examples were Lyft and WeWork.
But yeah, the idea that WeWork didn't at some point have a legitimately differentiated, valuable offer that wasn't due to VC subsidies is not true.
That doesn't mean WeWork has a bad product (they have a great product due to the capital available to spend) or bad unit economics (most of those investments are probably decently cash flow positive), it just means it's a bad business.
This is a case where "unit economics" doesn't tell the full story.
Unfortunately, sales dominated orgs lead to terrible technical and operational challenges. (Whereas Neumann's efforts are dominated by fund raising.)
Like our sales GOAT, I imagine Neumann is similarly unfamiliar with objective reality. And otherwise unteachable.
I kinda get it. For Neumann's part, he's wildly successful, awash in cash. And has somehow avoided the consequences of his terrible decisions.
Another example of Failing Upwards.
That made me laugh. The similarities are there down to the strange quirks meant to make them both seem more interesting. Elizabeth has her husky voice and turtlenecks and Neumann has that barefoot in New York thing.
In both cases the early insiders made out that like bandits and I'm assuming that's exactly why they are getting checks now. Everyone is well aware this is nonsense but they are all hoping to offload on greater fools coughretail cough.
I would expect them to also acquire a couple other property companies for massive valuations that will turn out to also be worthless.
Definitely popcorn worthy.
With one big difference. I've worked in a WeWork. I know many people who have. The product is real and it did fundamentally change the idea of coworking (you ever heard of Regus before WeWork came along?). And I'd work at a WeWork again. It was a great experience.
Yes? Maybe I'm just old, but I remember them in the 1990s.
Pre-crash articles[0] suggest that WeWork introduced "community" to coworking spaces, which... okay. I guess time will tell whether that fundamentally changed the idea of coworking.
It's no big new discovery that people by and large prefer new things to old things. If WeWork had lasted long enough to become an old thing before imploding, perhaps we would have seen that the difference was mostly that. Or perhaps something actually new did happen, in which case it might now be lost under the clouds of grift and fraud.
0. https://www.forbes.com/sites/forbestechcouncil/2019/06/14/ho...
I would work at a WeWork too. WeWork spaces are great, especially when you compare them to competitors, who didn't burn massive piles of VC cash to make their spaces nice and rent them to me at a loss. That has nothing to do with Adam Neumann, only the money he extracted from investors under false pretenses.