WeWork's former CEO has a new startup, reportedly valued at more than $1B
cnn.com
cnn.com
I can’t believe this degenerate can start billion dollar companies left and right and honest people are constantly getting told we’re asking for too much to have things like work life balance or decent pay.
I’ll giggle like a school girl someday when the other shoe drops and the rich are being eaten.
Don't know how he manages to raise money. Who in his connections would risk such huge investments? Is it some kind of money laundering or something?
It's just 10 people after a $1B exit allocating 10% of their assets. Sounds crazy, but that's this guy's social circle. Really underlines how important is networking in business.
Money raised - $22B
Peak market cap - $47B (while private)
Current market cap - $4B
IPO price per share - $9.82
Current price per share - $5.47
Looking at this data, he hasn’t proven to be an incredible operator in terms of equity returns.
He has however demonstrated an incredible ability to raise institutional funding and drive increased private valuations.
Madoff’s numbers were fake. All of wework’s numbers were real and audited and public.
If you are a16z this is probably not a bad investment.
That's what I like to tell myself.
It does not matter if you are dead before people realise your contribution to the world. For example, Galileo won.
For example, there are people who hold the Scientific Revolution ushered by Galileo&co to be directly responsible for genocides and suffering (of humans and otherwise) on an unprecedented global scale.
In the long-term view suggested by inglor_cz, "change this world a little for good" is really just feel-good moralistic posturing. Without specifying "good for whom?", and "on what time scale?", it's a vacuous concept.
That said, you would benefit from learning about effective altruism, it is a philosophical and social movement that advocates using evidence and reason to figure out how to benefit others as much as possible, and taking action on that basis.
What wins is apathy; indifference to adopting new agency.
Stop believing typical meat bags are anything more; that a network of rich exists is entirely due to belief in them. They’re just meat bags. Their figurative identity is not sacrosanct.
It helps alot in life, project management, planning etc etc.
It’s not as important in a new market, but if you are in a fiercely competitive market (eg real estate) some rule breaking to advance you against the competitors is probably helpful to make a billion dollar company.
I.E. Uber, Deliveroo, WeWork etc might not be the hugely valuable companies they are today if they didn’t break the rules, regardless of how morally wrong that might be.
It yet remains to be seen whether they are a "hugely valuable companies" or just smoke and mirrors for gullible investors in an era of almost free credit.
So they are absolutely valuable.
(ie something is valuable if you can sell it right now for a lot of money - so all these companies are highly valuable).
Once you have got the $22B you have probably already done most of the incredibly ‘bold’ parts you need to do to set the company off.
[1] https://www.nytimes.com/2019/10/13/nyregion/welive-nyc-wewor...
Some prominent a16z figureheads have been talking a lot about crypto, not just about the usual value speculation and "decentralized finance" and all that but especially about the libertarian utopian visions that pretty much focus on eliminating state intervention and bypassing regulations, taxes and unions and reframing customers or tenants as "investors".
This may not be a crypto startup, but the language around it easily fits the same ideological bent. WeWork wasn't interesting because it was a real estate startup (its ultimate failure demonstrated how nonsensical the valuation was for its business model), it was interesting because of how it framed real estate. In other words: it wasn't functionally different from old school real estate companies but it was ideologically different in a way that appealed to this type of VCs. Given that Flow seems to be another real estate startup by the same CEO, it's likely that the ideological foundation will be similar.
Startups often use words like "paradigm shift" to make themselves sound more interesting than they are but I think some VCs and some startup founders genuinely want to "shape how we think" about econimical relationships, and a16z's behavior so far strongly indicates that they have a very specific paradigm in mind, disagreeable as many may find it.
I don't think anything good can come of this. A company helmed by Neumann taking over residential real estate doesn't sound like a great prospect if it succeeds, but given his track record and the eccentric way he ran We[Work] it seems likely it won't.
He has unlimited, free PR from every media company around the world.
He could found a pet rock company and make millions out of it.
This blog post [1] by Marc Andreessen, has a bit more information about the business idea.
And this is Flow’s website [2], which doesn’t have anything as of today.
I also live in Europe though.
Is it though?
I don't know about the US, but the UK simply hasn't got any protections in place to protect retired tenants from eviction.
I know in Portugal and in other parts of Europe many people enjoy these protections.
Retiring on a fixed income when your landlord is free to put up the rent 5-10%/yr during cost of living crisis, or kick you out on the street because they want their investment back isn't a fun way to live. Moving in your 70s is stressful and not fun.
Then there's just the cost. Most people simply don't have pensions that can cover a private rent, and lack the financial education and discipline to invest judiciously throughout their life to reach that point. And even if they were so inclined, there's no money left to do so after paying rent!
Since the financial crisis repayment mortgags have been as cheap as rent on a like for like home, so the security of owning your home is "free" as far as most people were concerned.
Without it being cheaper to rent, your 20% house deposit needs to grow at 6.7%/yr ABOVE the rate of house price inflation, over a 25 year term, to make investing it instead of buying property a viable alternative. In the UK, residential property has matched the stock market. So it simply wasn't a good strategy over the last 20 years.
At almost all of them there has been some form of social group formed to foster this sense of community. And at every single one the attendance rate was in the low single digits. Most people treat their home as a sanctuary and want a place to relax and unwind. Not necessarily to socialise.
And these aren't exactly soulless people who need to be rescued.
Lol what? Brand had no content and community didn't exist or was mostly remote companies needing meeting rooms. WeWork spaces were a bad value because I could get a desk at a real startup space, often sponsored by the host city and be surrounded by interesting people.
> Adam Neumann, founder of WeWork, lost investors $11 billion. He then raised $350 million for his next startup.
It's entirely possible he was being fraudulent as well, but he didn't A. mess with icky medical things or B. cross the line as obviously.
If we were a strictly rational utilitarian society he'd be in prison for 220 years but because literally everyone is basically just shooting from the hip roughly all the time...here we are. This isn't necessarily a bad thing, just I feel something we all forget very frequently.
I don't think you understand how risk works. You cannot judge him only on the downside, without considering the upside that could have been.
If you jail every startup founder who fails for 220 years, nobody would try to create risky startups, and your utopia would miss out on innovation.
And I don't think there's a suggestion that every startup founder whose company fails should be jailed - only that if there's some kind of serious wrongdoing, like fraud, involved. Unfortunately with the popularity of "fake it 'til you make it" it's easy for people cross the line, knowingly or unknowingly.
Incompetence is not a crime.
Fraud is a crime.
WeWork may have a bad model but there's still "something" actually there. Not with Theranos.
Neumann just parted some fools from their money.
I'm fully in the camp of people wondering why anyone is stupid enough to give Neumann even one cent of fresh capital for anything. But focusing the comparison between Holmes and Neumann on the amount of money they lost their investors is just plain wrong.
The way things work here is that we tend to comment when we find something interesting, surprising or if we have a useful insight to contribute. You could cut out 90% of the comments on VCs and startups here with the template "I don't understand why people care [about $thing]. If you don't like [$thing] but it's not your money, then so what?" but I don't think it would make HN a better place. Besides that - the people involved are grown-ups, if they're even reading HN at all I'm sure they can handle the criticism.
I'm just surprised that some seem to be almost insulted by it, if that makes sense?
The phrase is "unique leadership style", which is a euphemism for "that guy has no idea what he is doing".
I never understood how he revolutionized the "office market" with that wework stuff either. Renting out horrid shared office space with a coffee machine and printer? I guess the beer on tap was sort of original? At my old office we had beer bottles in the fridge, but still... In Oslo the prices for those wework offices were very expensive as well, and there were no quite place. Why not just go to a cafe or public library (or both) and save the money?
I think the future will see more people working remote and travelling around looking for nomad and WeWork style places.
Although a cafe will not have any of that, public libraries can often have some of that. But my point was that the horrid place they used to rent out in Aker Brygge (now taken over by another vendor) had very little of that as well. A shared noisy space + extremely tiny rooms for zoom meetings was all they had, and it wasn't cheap to rent a place there..
But at least here in Norway, there are other vendors that have much better deals. Perhaps things are very different in the US, but the product they offered here in Norway was not competitive. When I was in the market for something like that a few years ago, it was easy to find others offering much more (an actual office for myself) with access to a printer + meeting rom etc. for much less.
When WeWork came along it was 10x nicer than any other office I'd worked in