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I'm confused as to why this is so terrible. He created a very valuable company, worth billions of dollars. It makes sense that he should capture some large fr

I'm confused as to why this is so terrible. He created a very valuable company, worth billions of dollars. It makes sense that he should capture some large fraction of that wealth. Yes, some people will lose their jobs. But it's worth noting that those jobs wouldn't have existed in the first place if he hadn't started the company. His mismanagement has cost him and Softbank billions, which is appropriate as well. I say this completely aware of what a shitshow WeWork is. edit: For context this was a response to https://news.ycombinator.com/item?id=21325431 https://news.ycombinator.com/item?id=21325431 but the mods detached it for... some reason?

ianlevesque 7y ago
Did he though? The IPO revealed it to be essentially a scam that failed to fool the public.
Barrin92 7y ago
>He created a very valuable company, worth billions of dollars he created something that may very well lose its investors billions of dollars without ever turning a dime of profit. What the company is evaluated as on paper by people increasingly disconnected from reality isn't really meaningful. I'm not really sure what the market function or social function is of rewarding people with billions of dollars who create money-losing machines. If anything it's an indication that some part of the system is increasingly broken.
- nostromo 7y ago
  Perhaps I'm just not seeing any real victims here. Softbank and the Saudis wanted to roll the dice on some overpriced unicorns. They went into the deal with eyes open. And it looks like they're taking a massive haircut. Play stupid games... I do feel sorry for some WeWork employees that will lose their jobs. But, again, many of them joined hoping to get some upside when the company went public -- which was a gamble that didn't pan out. Thankfully it's a good time to be on the job market.
  - x0x0 7y ago
    Employees who have choices on where to work. Landlords who have choices about working with startups or not. Generally, industry partners on the fence about investing time in startups and choosing their business partners. Competitors damaged by Son's misinvestment giving WeWork billions to light on fire. Investors who didn't want to have to demand information rights and crawl though financials looking for rampant self dealing. Founders like me who resent fraudsters taking the shine off our industry.
  - xkjkls 7y ago
    > But, again, many of them joined hoping to get some upside when the company went public -- which was a gamble that didn't pan out. I'm sure many joined just because they wanted a job. We can't blame some random executive assistant for not knowing the ins and outs of the company's financial situation or the risk that they were taking. Their layoff will hurt.
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  - filmgirlcw 7y ago
    Dude, come on. They have 15,000 employees. Most of them are going to lose their jobs. Those are the victims. I agree I don’t weep for Soft Bank or the Saudis, but plenty of people took jobs not just on the promise of IPO riches. And laying off a company of WeWork and its subsidiaries size is more than just a handful of people entering the job market — a market that isn’t as good in every city, which is something to consider since We has quite a distributed workforce. Edited: it is 15,000 people — not 12. And most of them will end up losing their jobs. That’s a lot of people.
    - smeyer 7y ago
- hnaccy 7y ago
  Didn't he just fool rich private investors? I'm not shedding a tear if Softbank throws their money away.
- thrownaway954 7y ago
  "investors billions of dollars without ever turning a dime of profit" Too fcking bad... You do realize that this thing almost went public and as such the lost would have shifted to the shareholders who would have bought the stock while the original investors cashed out. You think those people would have had a conscience at that point. I think not. Fck all the original investors who most likely knew this company was a joke and fraud from the beginning but were hoping the IPO happened so they could walk away with more money.
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birdyrooster 7y ago
He didn’t create a very valuable company. It’s deeply in the red (the opposite of what you are claiming). Those people could’ve had better career paths without having to bail from WeWork. Other jobs did exist due to record unemployment numbers. That is why it is terrible. It’s a waste of an opportunity given to a guy who is a human shaped locust.
- akfanta 7y ago
  > He didn’t create a very valuable company. It’s deeply in the red (the opposite of what you are claiming). Unfortunately, in this day and time, sometimes company's value has very little to do with profit or even revenue.
  - xkjkls 7y ago
    It does until it doesn't. Capital injections don't last forever. Eventually profits and cash flow matter.
- lotsofpulp 7y ago
  Clearly someone thinks it’s valuable given that they are paying for it.
dd36 7y ago
If it’s holding real assets, the value is in the assets. Overpaying someone that cobbled them together is pretty ridiculous. I expect investor lawsuits.
celticninja 7y ago
What real value did he create? he created a smoke and mirrors show that seemed to imply value, which quickly evaporated once an S-1 was produced, opening up the valuation to some external scrutiny.
AlexandrB 7y ago
We work took more than $12 billion in funding and is now worth around $8 billion. I could create a more valuable company by taking the $12 billion in investment and putting it into a vault. Then I'd still have ~$4 billion left over for lavish parties celebrating my success.
- xkjkls 7y ago
  Of the $12 billion in funding he personally took $2 billion of it.
unlinked_dll 7y ago
It's not as simple as "these jobs wouldn't have existed anyway!" People plan their lives around their projected income, including salary/benefits/equity. With WeWork going down, people aren't just losing their current income, but their future income, and the opportunity cost from working anywhere else instead of WeWork. The man acted borderline fraudulently to investors, and the market responded once it was in the open. He was running a pump and dump scheme while skimming off the top, and now they're paying him 1.7 billion in severance while people are being laid off with worthless options, lost salary, and a black mark on their resume.
- x0x0 7y ago
  And (IMO) more than borderline fraudulently to employees. As a startup founder, shit like this poisons the environment both for investment and for hiring employees. When people make choices about where to work, stuff like Theranos and WeWork is distinctly not helpful. It gives our industry a patina of fraud.
  - unlinked_dll 7y ago
    I don't know the details of when the news broke, but I'd be interested to know how many people at We knew that Neumann owned some of the properties they were renting and not WeWork. Because if I knew that self-dealing was going on, I definitely wouldn't work there. If I found out, I'd try and leave as soon as possible. I can't imagine what it feels like to be at a promising startup with options and people are floating a 47-60 billion valuation at you, only to have a bunch of shady business come to light and then have that value evaporate before it was ever realized. Even if you didn't act on it, and pretended it was a lottery ticket - the emotional toll must be excruciating. I really empathize with the boots on the ground at some of these companies, they're working hard just like the rest of us.
gyrgtyn 7y ago
Maybe the people that did the work should capture some of that wealth?
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JamesBarney 7y ago
He created an 8 billion dollar company from 12 billion dollars. A feat many are capable of.
- nostromo 7y ago
  So go do it if it's so easy.
  - JamesBarney 7y ago
    The hard part is convincing someone to give you 12 billion dollars to set on fire. That part is extremely difficult and a skill which Neumann had in spades and which unfortunately I lack.
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ianlevesque 7y ago

Did he though? The IPO revealed it to be essentially a scam that failed to fool the public.

Barrin92 7y ago

>He created a very valuable company, worth billions of dollars he created something that may very well lose its investors billions of dollars without ever turning a dime of profit. What the company is evaluated as on paper by people increasingly disconnected from reality isn't really meaningful. I'm not really sure what the market function or social function is of rewarding people with billions of dollars who create money-losing machines. If anything it's an indication that some part of the system is increasingly broken.

nostromo 7y ago
Perhaps I'm just not seeing any real victims here. Softbank and the Saudis wanted to roll the dice on some overpriced unicorns. They went into the deal with eyes open. And it looks like they're taking a massive haircut. Play stupid games... I do feel sorry for some WeWork employees that will lose their jobs. But, again, many of them joined hoping to get some upside when the company went public -- which was a gamble that didn't pan out. Thankfully it's a good time to be on the job market.
- x0x0 7y ago
  Employees who have choices on where to work. Landlords who have choices about working with startups or not. Generally, industry partners on the fence about investing time in startups and choosing their business partners. Competitors damaged by Son's misinvestment giving WeWork billions to light on fire. Investors who didn't want to have to demand information rights and crawl though financials looking for rampant self dealing. Founders like me who resent fraudsters taking the shine off our industry.
- xkjkls 7y ago
  > But, again, many of them joined hoping to get some upside when the company went public -- which was a gamble that didn't pan out. I'm sure many joined just because they wanted a job. We can't blame some random executive assistant for not knowing the ins and outs of the company's financial situation or the risk that they were taking. Their layoff will hurt.
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- filmgirlcw 7y ago
  Dude, come on. They have 15,000 employees. Most of them are going to lose their jobs. Those are the victims. I agree I don’t weep for Soft Bank or the Saudis, but plenty of people took jobs not just on the promise of IPO riches. And laying off a company of WeWork and its subsidiaries size is more than just a handful of people entering the job market — a market that isn’t as good in every city, which is something to consider since We has quite a distributed workforce. Edited: it is 15,000 people — not 12. And most of them will end up losing their jobs. That’s a lot of people.
  - smeyer 7y ago
hnaccy 7y ago
Didn't he just fool rich private investors? I'm not shedding a tear if Softbank throws their money away.
thrownaway954 7y ago
"investors billions of dollars without ever turning a dime of profit" Too fcking bad... You do realize that this thing almost went public and as such the lost would have shifted to the shareholders who would have bought the stock while the original investors cashed out. You think those people would have had a conscience at that point. I think not. Fck all the original investors who most likely knew this company was a joke and fraud from the beginning but were hoping the IPO happened so they could walk away with more money.
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birdyrooster 7y ago

He didn’t create a very valuable company. It’s deeply in the red (the opposite of what you are claiming). Those people could’ve had better career paths without having to bail from WeWork. Other jobs did exist due to record unemployment numbers. That is why it is terrible. It’s a waste of an opportunity given to a guy who is a human shaped locust.

akfanta 7y ago
> He didn’t create a very valuable company. It’s deeply in the red (the opposite of what you are claiming). Unfortunately, in this day and time, sometimes company's value has very little to do with profit or even revenue.
- xkjkls 7y ago
  It does until it doesn't. Capital injections don't last forever. Eventually profits and cash flow matter.
lotsofpulp 7y ago
Clearly someone thinks it’s valuable given that they are paying for it.

dd36 7y ago

If it’s holding real assets, the value is in the assets. Overpaying someone that cobbled them together is pretty ridiculous. I expect investor lawsuits.

celticninja 7y ago

What real value did he create? he created a smoke and mirrors show that seemed to imply value, which quickly evaporated once an S-1 was produced, opening up the valuation to some external scrutiny.

AlexandrB 7y ago

We work took more than $12 billion in funding and is now worth around $8 billion. I could create a more valuable company by taking the $12 billion in investment and putting it into a vault. Then I'd still have ~$4 billion left over for lavish parties celebrating my success.

xkjkls 7y ago
Of the $12 billion in funding he personally took $2 billion of it.

unlinked_dll 7y ago

It's not as simple as "these jobs wouldn't have existed anyway!" People plan their lives around their projected income, including salary/benefits/equity. With WeWork going down, people aren't just losing their current income, but their future income, and the opportunity cost from working anywhere else instead of WeWork. The man acted borderline fraudulently to investors, and the market responded once it was in the open. He was running a pump and dump scheme while skimming off the top, and now they're paying him 1.7 billion in severance while people are being laid off with worthless options, lost salary, and a black mark on their resume.

x0x0 7y ago
And (IMO) more than borderline fraudulently to employees. As a startup founder, shit like this poisons the environment both for investment and for hiring employees. When people make choices about where to work, stuff like Theranos and WeWork is distinctly not helpful. It gives our industry a patina of fraud.
- unlinked_dll 7y ago
  I don't know the details of when the news broke, but I'd be interested to know how many people at We knew that Neumann owned some of the properties they were renting and not WeWork. Because if I knew that self-dealing was going on, I definitely wouldn't work there. If I found out, I'd try and leave as soon as possible. I can't imagine what it feels like to be at a promising startup with options and people are floating a 47-60 billion valuation at you, only to have a bunch of shady business come to light and then have that value evaporate before it was ever realized. Even if you didn't act on it, and pretended it was a lottery ticket - the emotional toll must be excruciating. I really empathize with the boots on the ground at some of these companies, they're working hard just like the rest of us.

gyrgtyn 7y ago

Maybe the people that did the work should capture some of that wealth?

deleted 7y ago

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JamesBarney 7y ago

He created an 8 billion dollar company from 12 billion dollars. A feat many are capable of.

nostromo 7y ago
So go do it if it's so easy.
- JamesBarney 7y ago
  The hard part is convincing someone to give you 12 billion dollars to set on fire. That part is extremely difficult and a skill which Neumann had in spades and which unfortunately I lack.

deleted 7y ago

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