The rise and catastrophic downfall of WeWork founder and former CEO Adam Neumann has been chronicled in gleeful detail across the international financial press in the wake of his company’s ill-fated attempt at a public offering — which resulted in disastrous revelations about the company’s mismanagement, its devaluation and, ultimately, Neumann’s resignation.
But a new Vanity Fair article by Gabriel Sherman, titled “Inside the Fall of WeWork,” asserts that Neumann’s “millennial entitlement gone insane” and guru-like “egomaniacal glamour” extended beyond the business world and into the world of Middle East diplomacy.
[...]
Last summer, some WeWork executives were shocked to discover Neumann was working on Jared Kushner’s Mideast peace effort. According to two sources, Neumann assigned WeWork’s director of development, Roni Bahar, to hire an advertising firm to produce a slick video for Kushner that would showcase what an economically transformed West Bank and Gaza would look like.”
Kushner, he added, “showed a version of the video during his speech at the White House’s peace conference in Bahrain last summer.”
Sherman reported that Neumann also told his colleagues “that he was saving the women of Saudi Arabia by working with Crown Prince Mohammed bin Salman to offer women coding classes.”
Finally, an anecdote that connected Neumann both to Kushner and the Saudi prince involved a claim by Neumann that three people were going to save the world: Crown Prince Mohammed, Jared Kushner and Neumann himself.
Haaretz
What do you want to bet Kushner and the Crown Prince agree?
After all the WeWork scandal in the news, I still had to look up just WTF the company is. According to
Wikipedia:
WeWork is an American commercial real estate company that provides shared workspaces for technology startups and services for other enterprises.
And saves the world, of course.
You might have heard of Adam Neumann, the grifter mastermind behind WeWork, a failing real estate company that claims to be worth many billions.
The Guardian
I know that person under a different name: Donald J Trump.
Neumann, like Mark Zuckerberg or Travis Kalanick, Uber’s founder, is another offspring of Silicon Valley’s slash and destroy culture, reaping great wealth off a startup that was either actively corrosive or merely unnecessary.
After a disastrous public offering that forced Neumann out, WeWork, which rents office spaces from landlords and refurbishes them as tony workspaces for customers, announced this week it would lay off 2,400 employees. The cuts represent 19% of its workforce. Neumann, the former CEO, was set to walk away with a $1.7bn golden parachute. [...] Backlash from WeWork’s beleaguered employees may trim the deal – Softbank, the Japanese conglomerate that has been propping WeWork up with investment cash, could cut some of Neumann’s benefits.
But either way, he will exit the company he built a very wealthy millionaire or technical billionaire. He will never want for anything again. The same can’t be said for the 2,400 about to be unemployed.
The WeWork story is now a disturbingly familiar one, in an era when the economics of major startups can seem as surreal and ludicrous as whatever happens in the White House. Capitalism has always been a deeply flawed way of arranging a society, but big business, until around the 21st century, was at least bound by a few basic laws of monetary gravity. You were successful when you produced more revenue than the cost of running the business. You expanded when your profit margins increased.
[...]
Ford or US Steel or IBM could not just lose money and indefinitely survive. Their stock would plummet. Headquarters and factories would shutter.
Those days are gone.
While a few of the tech behemoths, like Amazon, Facebook and Google, do indeed turn profits, many others don’t come close. In the startup world, the logic is inverted, the math alchemic. You are worth the appeal of your idea to a bunch of rich people and companies who will keep giving you money in the hope that one day a fiction will be made real. You can keep losing money at spectacular rates as long as you, like a junkie after the next quick fix, keep expanding, at whatever maniacal clip the market justifies.
[...]
Uber is far more nefarious, driving down the wages of drivers and clogging city streets with unsustainable levels of traffic. It’s an unregulated cab company helmed by vulture capitalists.
And just
lost its license to operate in London.
WeWork is comparatively benign: a lousy real estate company, conceived by Neuman, that tricked a lot of people into thinking it was something more.
[...]
WeWork’s initial public offering showed it burned through billions a year, racking up huge losses as it continued to rent out office space in just about every city imaginable.
The business model, if it can be called that, is vulnerable to economic downturns, since WeWork is locked into long-term leases with its landlords. Tenants of WeWork can more easily walk away if business goes sour. But WeWork can’t exit a 10-year lease from an office building if a space suddenly goes vacant.
SoftBank doesn't have a savvy lending department? Or is this a friend-of-Jared-Kushner thing?
...but hey, do what you want...you will anyway.
