Why WeWork's Founder is Still Rich - Company Forensics
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- เผยแพร่เมื่อ 16 ธ.ค. 2023
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WeWork, once valued at an astounding $47 billion, initially impressed with its vision to transform office spaces. Founded in 2010, the company's rapid rise under Adam Neumann and Miguel McKelvey promised flexible workspaces. However, as it approached its 2019 IPO, revelations of substantial losses and governance issues led to the cancellation. The question lingers: was WeWork's unicorn status a genuine success, or did it hide deeper issues?
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Can we have series of successfull founders who had integrity?
I really like this… clearly they’re are few good ones…
No. To answer your question.
Great idea!! We're starting a new channel in January exactly around this:
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Nah. What normal to business world, real life, they call it cruel in internet. Internet is a full of sheltered kids.
That's a tough metric in a world where lying is rewarded! Yes please!
The modern corporate strategy is to pay all the important people up front as the business is initially capitalized . Then investor money is used to buy a market share for a few years. The business never really turns a profit and it collapses. But the founders and any investment bankers involved walked away with the money--years earlier.
Scam in fancy suits
founders and management getting millions in salaries
it's a ponzy scheme
This is called financialization. Where the end goal is creation of more money instead of real goods and services.
Are you a founder? If someone is going to give 10-15 years of their life into building something freaking risky, wouldn’t you want to secure your big payout regardless of what happens to the company? Would you be okay walking away with nothing?
Adam is now “revolutionizing” housing/renting an apartment with his new company “flow”. It’s basically super expensive rent to own but with “culture and fun”. He’s already raised a gagillion dollars 😑😑😑
Lol or raised $350m
Follow the religion of the guy then you will find out why this fraud is happening. Epstein, Weinstein, Bankman Fried, Madoff, and the list goes on.
Neo-feudalism
yup and joining him is the "great" marc andreessen... another grifter...
@@ianvance1647 I think the perfect term is Techno-feudalism, we are seeing this with the large social media conglomerates and yeah it isnt getting any better.
Hot Take: Don't be like Adam Neumann... be like Ben Chestnut (MailChimp Co-Founder) who didn't raise ANY outside funding and still managed to sell the company to Intuit for around $12 Billion
He also told employees they would never sell and did not give anyone other than the founders stock options.
I think I'll stick to masonry, construction work
Really?
Why him when he "In August 2022, Chestnut abruptly stepped down as CEO one month after sending a nearly 1,400-word email to a small group of employees identifying what he considered an alarming trend in his workforce: new hires introducing themselves in virtual meetings with their preferred pronouns".
Sounds like he lost control of the company.
Quote taken from wiki, as I had to google who he is!
This is a really bad example, getting ZERO outside funding and selling for billions isn't a brag. It's messed up you think that's a good thing.
@@RUHappyATM OP is really dumb...
That is how our whole economy works. Limited liability. Start a company, borrow money, pay yourself and investors obscenely while paying workers minimally, walk away rich before it goes completely under.
That's an idiotic comment.
@@pierrex3226 What at the GM bailout idiot ?
@@pierrex3226
No its not.
The investors lost but he walked away rich!
My favorite part of the movie was when he said, "It's scamming time!"
Did he scam all over everyone there?
He's making a joke reference to Jared Leto's Morbius movie where one of the cringiest line in Hollywood was said "It's morbin time" @@fauxhound5061
Adam Neumann was made a billionaire for being investors' idea of a founder...just like Kim Kardashian was made a millionaire for being network TV's idea of a celebrity.
Absolutely, just absolutely love it. I've been in startup-world for a long time, as a senior SME. I could never wrap my head around the intangibles . Numbers prove truth, right? That's why I'm not gonna be a billionaire, but man being so close to where the sausage is made is captivating :D Great video
🌭🏭 thanks for watching 🫶🏽
Trying to solve this puzzle at Convochat.
I worked in SoCal for 15 years, through corporate wellness contracts I got exposed to a few charismatic leaders. It is truly impressive and hard to explain the effect these people have. Even when you know it's BS... it's a bit unsettling honestly.
Mmm...kinda wonder if it's some techniques to try to gain confidence to take control and push bs that doesn't work...then it does not know...
how do i get a little money from all this. all i need is a couple of millions thats it
its called narcissism ;-) - nice facade shown to the outside world, little to none real substance within
@@peterkovari8703 Not just narcissism. There's a whole lot of psychopathy and sociopathy involved as well. There are millions of narcissists who can't get past first base. It takes a special 'self awareness' to know you've got this gift for bamboozling people. Ask Rumplethinskin. He's a pro at it.
Just ask a tough question about some BS in their company to those charismatic leaders. See that charisma collapse real fast as they get evasive and defensive.
I’m not sure Amazon is a good example of this “burning money” concept you speak of. I could be wrong. But, Amazon’s economics actually made sense. They were just reinvesting in the company instead of returning money to investors immediately.
Many companies today have economics that don’t make any sense.
I guarantee if you ask Every startup/company that burning money they will say they are reinvesting in the company, literally everyone including Amazon. BUT Amazon has AWS, literally the infinite money glitch that save the company during downturn. Bezos is lucky to have Andy(Amazon CEO now) as part of the company. Meanwhile you see in wework literally have no effort or people that can be relied on. People only find out they are not when it fails and suddenly say "I knew it", just like FTX, everyone literally thinking he is nerdy genius and when it fail, everyone pop up claiming they already predict it. This is not to say all of them are crook/scammer. Many founder-led company founder genuinely work hard to achieve what they have now, it's the beauty of capitalism, when you give someone a proper incentive they will work their ass off to get it.
Amazon was buring money to build up their cloud business AWS which is the leader at 33% of market share.
As an early employee of wework who lost everything from it, I ask myself this question once a week.
Bro. You're not at a loss. You don't know information outside your box. You don't have the steps to rebuild and yeah. I went through a similar ripoff. But my level of power was with nations. And global elites. Yours is child's play.
How can you lose "everything" when you're an employee? What did you lose?
@@pierrex3226he probably took a mortgage or was very dependable on pay he got while working there
@@dannylo5875what are you talking about
As an employee, didn't WeWork PAY YOU? So how did YOU lose everything from it?
I can understand if you said you were an early investor, you lost everything from it.
But how as an employee?
I love when you guys drop a video. Its always blessing 😂
Never getting tired of reading comments like this
isn’t curious how Marcelo Claure while being CEO and COO of softbank was in charge or overseeing the investment to wework and later on he ends up serving as executive chairman of wework??
Not a conspiracy, its quite common for big-ticket investors to have some sort of tie with the board of the companies they invest in. Some VC's even ask that the companies they invest allocate board seats to specific people they want on the board (in order to impact the corporate strategy from within)
Great work Kaya, bless up from Jamaica
One of the reasons why failed CEOs still get more investments is because they have the ability to fundraise and reach billion dollar evalulations, its a skill, even if its terrible for society.
Unfortunately you guys completely missed the huge impact that Masayoshi Son and his SoftBank Vision Fund had on Neumann and WeWork. Son kept egging Neumann to be bigger and larger which led Neumann to envision a ton of crap outside of the original core business. So I think Son had a decent amount of blame for WeWork downfall.
Oh yeah SoftBank is a pox on the whole ecosystem
@@DanielJoyce What can I tell you? Softbank is more or less a pox than other any mercenary hedge fund or VC.
There was no core business. It was just an office rental company - pure and simple!
Create a business and try to get some of that vision fund cash
Yes, but Adam is the one who somehow managed to get Son that excited about it.
AMAZING VIDEO "KAYA",THE EXPLAINER TIMES WAS VERY GOOD AND OF COURSE I JAVE TO HAVE YOUR BOOK,THANKS FOR THE INFO!!👍👍👍👍
The irony is that Jared Leto a cult leader is acting as Adam who led WeWork like a cult.
How is Jared Leto a cult leader? What did I miss?
@@pierrex3226i mean he has his own "spiritual retreat" thing he runs, so you know the "about us" page doesnt say cult, but it is.
Glad I found your channel. These are very entertaining and informative.
This is a brilliant video. Thank you for recommending the book too. I just bought it in audible. ❤
Would be interested to see your take in how the SoftBank valuation played into this. It is my understanding that Masayoshi Son played some very interesting games w/ valuations and inter-corporate agreements to inflate the value of the stock several times.
Thanks for this great video. Still it leaves (again) with a bitter taste. I do consider myself a Founder , the classical way. I'll never be able to "wear this mask" of dishonesty, conflict of interest, knowing that what I am doing is so selfish and will hurt someone. Not the Venture Capitalists recycling money, but honest people like me, employees etc. like Bankman-Fried or that lady, we need justice to take care and have a healthier way of investing money, less burning, more ethics.
9:50
“If this company realised it potential.”
If WeWork ever started to approach it’s ‘potential’. Regis would simply hire a firm to make a snappier brochure. Install top coffee machines. And Colourful Ping Pong tables.
Regis didn’t do so because it never appeared to anyone looking like WeWork was anything but a grift.
Isn't all this just a scaled up version of the multi-level marketing schemes like May Kay Cosmetics or Herbalife? Right down to the chanting at rallys to whip up excitement for the product. You're selling a sense of belonging and purpose to people who might otherwise have none. It's the classic confidence game. But sometimes it does work. That's why most companies are not started by PhD's but rather by good poker players.
He probably works for Mosad that’s why he still gets funding
Such an insightful look into the world of VC and wealth creation. Money doesn’t grow on trees; it materializes out of thin air.
Amazing job on the production of this video!
Excellent recap! Thank You for giving back to the start up community.
🫶🏽
Looking at the comments, this is being watched by idiotic, ignorant, neo Marxists with a victim mentality. The comments are shocking.
"Why is the guy irrisistible to venture capitalists?" Well he's part of the tribe like SBF, Altman etc. They look oit for each other.
I was about to say this. They look out for each other
The sacres tribe...
Great video, I hit the sub button before the halfway!
can we have a video of how many founders who really started from nothing, not borrowed money from family like Adam from his Sister, Elon from his Dad, Zuck with his family or Gates who's from a wealthy family.
It seems to me that a lot started from money or at least have money to begin with. And having money means having the connection as well. And I think it's being overlooked how money or connection really has the highest impact in making your startup a success. Imagine, if Jeff has no money to support him during the early years of Amazon? or Zuck with Facebook? Or if Amazon or Facebook were founded initially by minority founders who've no money nor connection?
Amazing informative video.
thank you and keep it up.
Love your lighting and the backdrop
Very informative and entertaining as the same time.
Everytime I watch a new vid of Slidebean I feel smarter and happier afterwards😅
If you like startup stories/teamwork. Watch the show “Halt and Catch Fire”. Excellent story telling, deep character development and ends well in a few seasons.
He made something that reeled in the big fish. It's a defective model made by a defective businessman to take advantage of a defective investment validation system.
WeWork is profitable in India. There are some interesting reasons behind it. It's run by real estate giants directly.
Shouldn’t believe what real estate people say. Believe the numbers.
Scam calling centers? 😅
Adam Neumann is basically Trevor Milton but with the ability to talk his way out of trouble
Thank yoy slidebean. The videos are awesome content and keep them coming.
Needed this video, working on my startup now, been...interesting so far, looking for funding at the moment...aint easy I'll tell ya
A nutcase came up with a crazy idea, well stoopeet idea. The entertaining part is that so many people fell to the irrational idea.
The name should have been WeWonk instead of WeWork. All productive people work. The is no need to say IWork or WeWork.
WeWork rented office building floors in chunks which meant chunk of $$ paid to building owners; then, WeWork turned around and retail rented to individuals who paid small scrappy amount for hours or 1/2 day a week. The administrative work probably wiped out profits. The wholesale acquisition and retail renting model was destined to fail.
i used to work in wework. and in all honesty. the workplace is filled with all kinds of people. you can go anywhere and find the right people for your current work or business. you want a graphic artist or a programmer? just look around the building and you will see them. it's like a market, but for people with different kinds of expertise. if the owners were only good people, this will definitely revolutionize the working industry.
Tech startups are about building a cult of personality, not technology.
not all. There are great bio tech high human impact. but unfortunately many of the founderes dont have the persnality to be newsworthy and covered.
this channel is so underrated
Attention is the new currency. I don't like my WeWork friend who worked for them but got 0 payout from IPO. But, Adam gained millions of free earned media. The solution is to have integrity but at the same time have charm and vision paried by proper business fundamentals and mechanics.
Great breakdown of WeWork business model however at 10:57 there is a typo in the text: it should be S1 Filing.
I think we need a video on what to do when we know nothing about running a business like is there someone we can hire, or where to find someone who knows what to do.
Arguably what sunk WeWork was the pandemic. That said, WeWork didn't have intangibles like IP to boost their market value. It's hard to make money just being an office landlord.
The pandemic isn’t what sunk wework. Wework being the dumbest idea ever is what sunk wework. I’ve lived in Manhattan all my life and I could tell you from day one that wework would fail for the fact that the whole model makes no sense. You can’t sublet already expensive office space cuz you would have to mark up the rent so high that no one can afford it.
They weren't the landlords - they leased the space!! No assets = no intrinsic value.
lol an argument takes two sides. nobody but you says the pandemic was responsible.
They were already on their knees before the pandemic hit. The IPO disaster (and subsequent valuation plummet) happened summer 2019
The guys absolutely brilliant. Learned from the best.
If there ever was a role Jared Leto would be a good cast for, it would be for a narcissist tech founder
He was widely criticized for taking this role oddly enough
This!!
This is a quality content
That was quite interesting. Thank you!
I live in the UK and have no idea what this is but sounds like a typical rich person con
Well it was also in the UK
@@ShinseiX Never heard of it. I'm 58 and a pofessional so prob not aimed at me?
Take a sublet business that makes low profits add a great salesman who cons people who think they are the smartest or coolest in the world based on "growth" and then use the new money to add more "growth" and use that to justify getting yet more money from the same pool. They were big for a quick second. Largest office renter in London for a skitch.
A lot of it (raising $$$) is also being at the right place at the right time😀. Of course the reverse is also true 😢.
Deep & touching. Thanks
Not sure why he was not prosecuted similar to Elizabeth other than a light would be shown on the VC community which most investors do not want.
Because Elizabeth Holmes claimed to be giving customers medical tests which were not true, and for some of these people, these were actually tests their lives depended on. She outright lied about what her company was doing while putting people’s lives at risk. Not defending Adam here, but he didn’t really commit a crime, investors could have and should have done better DD on the firm and business model and they would have realized it was a terrible business and that the founder had startling conflicts of interest and not invested or given him more money. But they willingly gave him money to spend as he saw fit, and he spent it partying, buying buildings for himself and overall living like a king instead of growing the business. Is that a crime? No. Is it immoral and sleazy? Yes.
@@ianstarkmholmes is in jail for defrauding investors. Not for medical fraud. The billionaire investors has money to hire top lawyers to sue holmes and the power to influence the judicial system to actually win against holmes, the poor people with false diagnosis has no money nor power and they still have medical debt on top of that.
We work was never worth 47,000,000,000 dollars it was over valued at that price. Huge difference
My brain exploded when you explained how much Morbius got for getting fired!
Great episode! Thanks
Thank you, for all that you do!!! Happy New Year!!!"Courage is the first step to change, and persistence is the key to success." - Winston Churchill🙂
Not related to the subject, but we just raised 34 million via Slidebeen. Thank you Caya.
04:07 Tokyo isn’t there…… 😂
It's funny how you use Amazon as this example of how insane investment into scaling pays off, even if doing so at a loss. At the same time you show a graph showing, wait a second, they were still making profit? So they were simply reinvesting their profits, and logic dictates therefore already profitable...
Please where can I find the deleted video on how to create an engaging content?
Great video!
What is the song starting from 16:24 till the end of the video? It sounds really nice.
Gwyneth Paltrow and Rebekah Neumann's relationship
Rebekah's father, Bob, is the brother of Gwyneth's dad, Bruce making them cousins in real life. And while we never see Gwyneth in WeCrashed, she and Rebekah shared an amicable relationship in real life.
It’s a big club.
What TV series/movie with Tom Hiddleston is it that kept getting featured in this video? Really curious cos it looks like it would be interesting.
It seems that the US regulatory system is also allowing this? Are there any Adam-equivalents in Europie?
they are everywhere search for byjus
Investors are easily fooled by Wizards of Smoke and Mirrors.
Great video ❤
Unbelievable that we live in a time where you can be that young and start a business, i would never had thought someone would take me seriously enough to invest. I had just gotten married in 2012 living in a one bedroom apt.
Great video thanks🎉
WeWorks big value was in its brand and corporate leasing. They offered me a fully furnished headquarters for $250k per month with a 3 year lock-in. They had an occupancy rate of like 99% in SF and were used as satellite offices by corporations for teams in smaller markets or who were remote. They should have focused on this part of the business sooner to lock in as many corporations as possible. Had they had committed 5 year leases with X number of headcount and say 3 years paid upfront, by end of 2019, they would have survived as a company. They relied on individuals way too much and way too long.
Their second business was WeLive. A golden opportunity they missed. They had the cool factor and could have made this a reality, buying up or subleasing buildings and dividing them up into tiny apartments in high cost of living and dense cities at premium prices. The pandemic probably would have screwed them due to rent forbearance but overall, this is a healthy segment of the market.
Welive did launch, but failed miserably (and quietly). Turns out things like communal kitchen facilities don't appeal to those who have the premium coin for their (tiny) living space.
What if they actually believe that it will work. Some part of their is broken, they just can’t evaluate the risks initially?
SoftBank got scammed.
wow a hidden gem channel!!!!!
💎 welcome 🫶🏽
they even have offices here in the netherlands!
Slidebean, i love your video but this video is a little darker, may be a filter or something. I dont know its an issue in my device or not.
This is the epitome of excellence. I read a book with similar content, and it was the epitome of excellence. "The Hidden Empire: Inside the Private Worlds of Elite CEOs" by Adam Skylight
so... create a CULT. got it
in my city there’s a WeWork office building
I enjoyed this
Great video
Wework was and is actually quite a good idea, Adam and his wife i think was the problem now the company is stained but i wouldnt be suprised if they actually manage to stay afloat and become a profitable business not maybe giga-huge but still enough.
loved it
Any documentary movie talked about WeWork?
every founder is still rich not just this one. they sell stocks when company valuation is high
Wework is a great company.
The investors lost when they removed him form the position.
His vision was achievable...
100m evaluation on a business with nothing but net liabilities and a waiting list of customers that would take 5 years to generate that evaluation was the initial red flag. Everyone that invested since then technically had fair warning and only contributed to pumping the bubble
7:47 dope blazer
09:16 Since when is a lease (an expense) at the same time a liability?
cheers from Costa Rica mae
Softbank screwed up with the contracts they did with WeWork. Essentially, he took 0 risk, and they took all of it. The bankers were clueless when putting the deal together. He's invested a lot of his money in hard assets, he'll be rich for a very long time.
What's the name of the movie?
It took 9 goes at it in various ways from founder, early stage employee to advisor, but I finally got it. I did fine, not complaining, but net I would have done better if I had focused all that effort as a pure hourly rate contract roaming ronin technologist in my 20s and 30s, the other thing I did with success and toys to show for it, probably the smartest average choice for someone who has any real edge in the tech game that is not brain hacking others - no options, no cursed cliffs, just pay me cash I can invest as I wish and I will move on when I am done fixing your issues or you get bored with me..
What is the movie about this called?
If adam neumann came to me with its "investment" pitch for "flow" and billy mcFarland came to me with his investment pitch for "Fyre Festival Sequel" *I'd automatically go with billy.*
I love Adam so much
Adam Neumann is a stench when he walks in the room ...