How Adam Neumann’s Over-the-Top Style Built WeWork
wsj.com
wsj.com
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.
[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.
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.
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.
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.
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."
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.
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'.
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.
I would hope being merely accused of sexual harassment would have zero impact until it can be proved.
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.
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.
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.
source: https://techcrunch.com/2019/01/07/for-softbank-no-majority-s...
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.
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).
Yes.
> Are they so detached from reality?
Yes.
> Whatever happened to due financial diligence?
Too much excess and concentrated capital.
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 ;)
Would love to see the cost share agreement on that one.
Is literally WeWork's business proposition to customers.
>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.
He is living in la-la land...
> 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.
I think there are some pretty clear signs of manic-depressive episodes in Russ Hanneman's story arc.
>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.
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"
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...
eg:
> We now expects...
or
> We now expects...
Because... yes. It can produce some ridiculous results
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’