Adam Neumann and the Art of Failing Up
nytimes.com
nytimes.com
"And some came to wonder if Mr. Neumann had been wise to share, during a 2017 speech at Baruch College, a story from his first date with Rebekah. “She looked me straight in the eye and she said, ‘You, my friend, are full of” crap, Mr. Neumann recalled. “‘She then said, ‘Every single word that comes out of your mouth is fake.’”
mmhmmmm...
But I can't help but wonder: how much of this is envy? Who wouldn't want to be perceived as inspirational and forward-thinking when seeking support for a pet business endeavor?
The choice of which words to use to market your idea, the value of being able to recruit people to fulfill the idea, the ability to persuade people to fund your idea. Isn't there some value provided by inspirational leadership?
Neumann may have duped a credulous Son, but he put WeWork in the position where it received Son's consideration.
I'm not excusing the grifting and self-enriching.
At the same time, I've seen situations where the charisma and the resolute determination of a leader makes a huge difference in how the team executes. WeWork may be a glaring example of what not to do, but it's also an example of the value of politicking-- of agilely positioning your endeavor to receive investment, both monetary and emotional.
Pile-ons don't imply that other people want to be that person. Shaming feels good.
Most people would want to be perceived as inspirational and forward-thinking because they seek to be inspirational and forward-thinking. Sociopaths are more happy to manipulate perception to suit their purposes regardless of reality.
But I think it just goes to show how little merit has to do in this kind of economic system.
Where does it say merit or even sensibility is supposed to be a factor?
Sure but how many would want to be be perceived as "inspirational and forward-thinking" in the short term in exchange for being perceived as little more than a greedy charlatan in perpetuity?
It’s entirely derivative of where that leader is taking people. David Koresh was an inspirational leader. That didn’t create value, it destroyed value. (Arguably the better he was as a leader, the more value was destroyed.)
I guess I don't have the entrepreneurial spirit or whatever, because if my idea is not actually inspirational and forward-thinking, then no, I genuinely would not want to have the talent to manipulate people into thinking that it was. I don't think I'd like the person I'd become if that was my life.
But someone with cash will fall for them, and then, Ka-ching!
what else can it be?
She may have known every word was fake, but it was a turn on.
All leaders have gaps that need to be compensated for or filled in by associates both upstream and downstream, but especially subordinates, and this is usually accomplished by shrewd manipulation of resources, which can be either good or evil.
If a person in a leadership position can not grow the resources when that is the primary objective, either from investors or customers, that can be a sign that the talent of the so-called leader is more talk than action, sometimes even fantasy versus reality.
Sometimes that type of talent works better on investors than customers, sometimes not either one. Both are usually served by action even better than talk, and look how far talk can get you.
If this guy was working for Thos. Edison or for Elizabeth Holmes at an early time, their companies might have had faster growth than they did, with Edison's shareholders reaching institutional status earlier & bigger in the long run, and Theranos reaching it's final conclusion sooner as well.
If Edison or Holmes were working for this guy it wouldn't have made much difference if they had been below-average Joes & Janes instead.
Kind of puts celebrity in perspective.
The "Art of Failing Up" only requires getting an exorbitant amount of money from someone who is giving away money like candy.
https://www.bloomberg.com/opinion/articles/2019-10-23/how-do...
Masayoshi Son: What does your company do?
Neumann: We lease office buildings, spruce up the space and sublet it in small chunks.
Son: Hmm I invest in visionary tech stuff, this doesn’t really sound like my thing.
Neumann: Did I mention we are a state of consciousness. A generation of interconnected emotionally intelligent entrepreneurs.
Son: Okay yeah that’s more like—
Neumann: The world’s first physical social network. We encompass all aspects of people’s lives, in both physical and digital worlds.
Son: You’re crazy! I love it! But could you be, say, ten times crazier?
Neumann: You’re going to invest $10 billion in my company, which I will use as kindling to light the whole edifice on fire, and then when we are both standing in the ashes you will pay me another billion dollars to walk away while I laugh at you.
Son: All my life I have dreamed of meeting someone as crazy as you, but I never really believed this day would come.
Neumann: I’m gonna use your money to buy a mansion with a room shaped like a guitar, where I will play the world’s tiniest violin after all your money is gone.
Son: YES PUNCH ME IN THE FACE.
Neumann: Also I’ll rename the company “We” and charge it $6 million for the name.
Son: RUN ME OVER WITH A TRUCK.The other important tidbit from the article that I think is critically important is that a huge part (most?) of Son's fortune, after the .com collapse, was a single investment in Alibaba.
So, basically, Son got lucky. Of course, "luck" of this sort isn't possible unless you are willing to take big risks, which Son did, but so often, especially in the VC world, you see folks whose really sole main skill is a penchant for outsized risk-taking, and they got lucky, and then they are hailed as a "genius", where the only difference between them and thousands of others who failed is one lucky event, and of course, stastically, someone will get lucky.
When I first heard about Neumann's ridiculous platinum parachute, it made me angry about the state of capitalism, but honestly, if you are going to be a grifter, can't think of a better group to take it from than Son and the Arabian oil shieks.
An example of one such pieces was on the relationship between institutional investors and proxy advisers. Not a single joke or funny sentence unfortunately, but very interesting.
As long as the two types of content he writes are well written information about how the markets work or humorous viewpoints tinted with a mild amount of rage, I am a fan.
> Neumann: We lease office buildings, spruce up the space and sublet it in small chunks.
> Son: Hmm I invest in visionary tech stuff, this doesn’t really sound like my thing.
> Neumann: Did I mention we are a state of consciousness. A generation of interconnected emotionally intelligent entrepreneurs.
> Son: Okay yeah that’s more like—
> Neumann: The world’s first physical social network. We encompass all aspects of people’s lives, in both physical and digital worlds.
> Son: You’re crazy! I love it! But could you be, say, ten times crazier?
> Neumann: You’re going to invest $10 billion in my company, which I will use as kindling to light the whole edifice on fire, and then when we are both standing in the ashes you will pay me another billion dollars to walk away while I laugh at you.
> Son: All my life I have dreamed of meeting someone as crazy as you, but I never really believed this day would come.
> Neumann: I’m gonna use your money to buy a mansion with a room shaped like a guitar, where I will play the world’s tiniest violin after all your money is gone.
> Son: YES PUNCH ME IN THE FACE.
> Neumann: Also I’ll rename the company “We” and charge it $6 million for the name.
> Son: RUN ME OVER WITH A TRUCK.
I've worked with people like this in the past, who've done bad things and got rewarded for it. It does make me wonder if you can be a good person and also be successful, or if the rewards only go to those who are willing to achieve success at any means necessary.
Sure, us plebes will despise him, but he'll move around in circles with people like him, not us, those who have gotten rich by making the world a worse place, and then bought themselves an esteemed position in "society", where they congratulate each other on how brilliant they all are.
When I visit my clients in their office, which are not IT related, I often notice how grey or dark brown'ish are the walls. The vibe is kind of depressing in some old style offices in Montreal.
I must say that I really enjoyed going back to my shared office at WeWork. The light was nice, the vibe and I was connecting with people with similar mindset. I can't vouch for M. neumann, but I can say that my time at WeWork was really awesome. I would often invite my clients to WeWork so that we don't need to meet in their super depressive dark'ish offices. My clients were always amazed and impress by the WeWork offices in Mtl.
I quit, not because of the latest issue, but for personnal reason.
I miss WeWork and I will definitely renew my subscription later if they still offer thata amazing experience.
AirBnbs are cheaper than hotels because they don't have to pay for the licensing or meet the safety requirements of hotels. Ubers are cheaper than taxis because Ubers don't have to deal with taxi driver unions. WeWork looks better than standard gray-brown boring offices because WeWork style offices actually cost a lot.
This is why many people feel the value of WeWork may be $0.
Please note that "We" is a registered trademark. Fixed it for you: I'm a consultant and I rented some space at We®Work Montreal.
Landlords sell aluminium, we sell iPhones - Dave Fano
[Edit] Quote attribution correction
He's smitten the Salesforce CEO. Qualifies as failing up, I guess?
The evidence and vibes in the article demonstrate a lot of greed, but not a ton of dominance. In comparison, Travis Kalanick greyballed the government, vilified competitors, and literally brewed a culture of stepping on toes. It seems Neumann wanted to start a religion, but not necessarily one centered on dominance. Neumann was evidently pretty mean to his chief of staff, but this article makes him look like an delusional angel (in many metrics) compared to TK.
I personally find Neumann’s excess revolting, but it appears that the collapse of WeWork will mainly impact investor capital (primarily Softbank) versus the livelihoods and civil rights of tens of thousands of people. Or perhaps there’s more to the story?
edit: pertinent regulation: https://www.ecfr.gov/cgi-bin/text-idx?c=ecfr&SID=03efb7c1b34...
It turns out there is a case where a private pilot has had his license suspended after his wife carried edibles purchased legally in CO onto their aircraft without his knowledge. While article (b) in the link above seems to suggest this should have been legal, it may have been a result of them having carried the marijuana over state lines into Kansas, where marijuana use remains illegal.
And I'm glad he did. Do you want to go back to the misery of taxis?
Never had any of those experiences with taxis. Love the idea of rideshare, but I'm deeply convinced that Uber does not care about public safety.
The real problem is the people who follow them, validate them, and throw money at them. Big names who sit on their boards, etc.
At least in Neumann's case, the only thing that happened was some rich people lost their money. There were probably no pension funds, etc, investing in him. And their product didn't hurt anyone.
It's easy to quickly think that "if you're a 6'5" good looking man with great hair you can get away with anything", but people also wanted to believe in Elizabeth Holmes.
To me Elizabeth's Holmes case was even scarier: Investors wanted to believe in a "female Steve Jobs" so much that people were getting bogus medical tests. "Real people" -- not just wealthy investors who should be prepared to lose money -- got hurt.
And unlike the NY Times editors, it doesn't bother me that Adam Neumann walked away with $1 Billion. It doesn't hurt me at all, and it certainly doesn't occur to me that this money should somehow be redistributed to more "worthy" people. It's odd for an uninvolved spectator to feel bitter about this.
Notice that the Times was gushing about Theranos until the Wall Street Journal called them out, but they were skeptical about WeWork from the beginning. One played into their preferred narrative, one didn't.
You should care that society functions well, even if the parts that don't aren't the parts you are involved in.
And perhaps foolish investors learning a lesson is part of a well-functioning society.
Edit: I don't understand why this would get downvoted, and I am endlessly amazed by how weird or sensitive people are on HN. Just to downvote without even answering a simple fucking question in earnest.
To answer the question, they do. Many pension funds manage billions of dollars, so they're at the scale where complex investments like that start to make sense. Even when they don't directly do it, very large private companies like WeWork often start getting included in mutual funds.
I also thought about writing an entire sentence on it, such as, "I am asking this in earnest, not trying to make some point in a debate with a rhetorical question." But then I thought it would be too much.
But yes, pension funds do invest in private companies in a few ways. Some of it is relatively recent. They absolutely will invest during the “road show” of pre-ipo companies, but I’ve also seen numbers like up to 20% of vc funds coming from public pension funds [1]. It’s actually kinda a great idea imo, they’re definitely not betting the farm on these companies, and it’s a great way to get further diversification on an asset class that probably moves differently from other asset classes. They’ve also branched into things like real estate trusts, another kind of diversification that moves off-cycle from other asset classes.
[1] https://www.quora.com/Whats-the-relationship-between-pension...
Remember that the goal of the scam was to offload it to retail investors at a $47Bn valuation knowing it was not worth even a fraction. They were stopped but that doesn’t excuse them of the conspiracy. And they will surely try again.
What about the employees he screwed over and are getting laid off without severance?
Maybe the archival nature of the Internet will preserve this article and instead they'll be shunned from all the fanciest regattas and dressage competitions. It's maybe the only justice we can hope for.
There are very few things as bad as real estate negotiations (in the context of procuring a new office for a growing company), depending on the city they can take multiple months, require you to deal with all the furniture/decoration and require very long commitments. While tech is in the XXI century real estate contracts are still in the XX century, if you're lucky. Residential usually sucks less but it's still complicated as well.
I can think of, literally, thousands of things. And I've negotiated commercial and residential real estate several times.
Child sex abuse, human trafficking, the death of a spouse, or child, or parent, genocide, murder, negotiating a contract when you are a startup and your customer is a Forbes 50 company that insists on Net 120 terms, war crimes, wage theft by multinationals, cannibalism, pointless Hollywood reboots, HackerNews posters bragging about how they never enable JavaScript in their browser, etc, etc.
Is it really necessary to exaggerate to the point of being ridiculous to make the simple point that there's room for improvement in commercial real estate negotiation in the US?
It's not just this post: Americans seem to need to turn everything into "worst ever" or "best ever".
An inability to consider and relate multiple states is a trait of immaturity. The long tail of modern economics (which gives way to the long tail of education) ensures that this is a dominant perspective, over time.
Hollwood reboots are not worse.
I imagine things like this have gone on at thousands of companies before and now the rich ex-founders are heralded as geniuses. Neumann will Be in that camp in 20 years, giving Ted talks and writing VC posts
The fact that it was all legal is just mind-boggling.
Would absolutely be a different discussion if they had IPOed.