27 ms·

How to Steal a Billion

118 points by cjbest 7y ago

logfromblammo 7y ago
I'd like to think that Adam Neumann will see some manner of ill effect for paying himself $1 billion of other people's money, while delivering negative value, but then reality comes crashing in to remind me that no, he won't. Consequences are for people who don't have a billion dollars.
- mmazing 7y ago
  "I need this billion dollars to avoid the consequences of taking this billion dollars."
- the-dude 7y ago
  "If you owe the bank $100 that's your problem. If you owe the bank $100 million, that's the bank's problem." ( J. Paul Getty ) https://www.brainyquote.com/quotes/j_paul_getty_129274 https://www.brainyquote.com/quotes/j_paul_getty_129274
- asdfman123 7y ago
  I'm going to bet that he has several months of hard reflection about life and maybe write a book about it. Maybe he'll try to pull a Steve Jobs and try a few new companies to redeem himself. But you know, the next few years of his life are going to be mildly unpleasant, and we shouldn't forget about the emotional impact about that. Maybe he'll have a very public come-to-Jesus moment that will be cathartic for everyone involved, or maybe he'll disappear from public life forever with his vast WeWork wealth and live on some estate in an exotic locale. But either way, this failure isn't going to be easy for him. He's going to feel several emotions and not all of them will be pleasant.
  - lordnacho 7y ago
    I think this is overly optimistic, what you're saying. What's he gonna lose? Friends who invested with him? He can buy new ones. Feel bad? You can literally hire a whole team of therapists for life. He can sit in his mansions and not be in the public eye forever, it's not like being in the public eye is some sort of requirement for living. Heck, he might even find a new following among people who want to emulate how he grabbed all that money.
    - asdfman123 7y ago
      I'm intentionally being tongue in cheek. Unless he's a total sociopath (which I don't think he is) he's probably going to suffer mild blowback, the kind of blowback and shitty feelings us mortals feel when we've been ousted from a job. But it's the kind of disappointment and anger that you get over in a few months. The only difference is he'll have a billion dollars and the ability to do whatever in life he wants. If you were in his shoes, would you go back and do things any differently?
      - JohnFen 7y ago
        > If you were in his shoes, would you go back and do things any differently? I wouldn't have been in his shoes, because I have a shred of decency.
      - lordnacho 7y ago
        > If you were in his shoes, would you go back and do things any differently? Maybe not hire a famous DJ for the announcement of layoffs.
        asdfman123 7y ago
        Oh man, that's awful, have a link for that? If this were reddit I would link to /r/aboringdystopia.
        lordnacho 7y ago
        https://www.businessinsider.com/wework-ceo-adam-neumann-layoffs-firing-tequila-shots-run-dmc-2019-9?r=US&IR=T https://www.businessinsider.com/wework-ceo-adam-neumann-layo...
  - _jal 7y ago
    Empathy is essential. And his con was a truly remarkable con during a run of remarkable cons, which attracts attention. But I have trouble sparing much sympathy for someone who has 10 digits to tide them over while they figure out what's next. If you're having trouble finding sympathetic targets in this fiasco, mayhap spare a thought to the several emotions employees whose options are underwater felt when they heard about their Superhero CEO's cash out.
  - logfromblammo 7y ago
    Not everyone experiences conscience in the same way. He might not even have one to torment him in his moments of solitude. And when you say "mildly unpleasant", I can only assume you mean that for the rest of his life, his sole source of genuine unpleasantness will be from his own psyche. Because he'll be worth a billion dollars. And while money can't buy happiness, it can remove every last speck of annoyance, peeve, and inferior market option. This failure will be easier for him than for most other people who fail far less spectacularly. Even if a thousand people make it their life's mission to persecute him at every moment of the day, he still has approximately a billion dollars more than all of them put together. All he really has to worry about is avoiding Saudi-controlled buildings and territories for the rest of his life.
  - ergothus 7y ago
    > But either way, this failure isn't going to be easy for him. He's going to feel several emotions and not all of them will be pleasant. Honest question: do you think it will be harder for him than for the rest of us that have to deal with failure and yet have to chase jobs and deal with the pressures that come from not being wealthy? Given the level of sociopathy likely required to get where he is at, I sincerely doubt it. I cant assume he feels as I would in thus situation because I literally couldn't GET into his situation.
  - JohnFen 7y ago
    > I'm going to bet that he has several months of hard reflection about life I really, seriously doubt this. He's laughing all the way to the bank.
- simonh 7y ago
  The thing to remember is, this all happened in the open. The people paying him all this money knew exactly what they were doing, know exactly what he was doing and even encouraged him in doing it. I for one will not be shedding any tears for Softbank's losses. Neumann may be a bit of a jerk, if the stories about him are true, but good luck to the guy. It’s not as though he hurt anybody.
  - JohnFen 7y ago
    > It’s not as though he hurt anybody. He didn't? He didn't hurt his employees, his investors, his contractors, and so forth? He didn't hurt the the tech space (WeWork is not a tech company, but they're widely perceived to be) by reducing even further what little trust it still has?
    - buboard 7y ago
      did they lay off people? I dont give a toss about investors who don't even know what they 're investing in.
      - AlexandrB 7y ago
        > did they lay people off? They will as soon as they have enough cash to pay severance: https://techcrunch.com/2019/10/03/wework-layoffs/ https://techcrunch.com/2019/10/03/wework-layoffs/
    - bilbo0s 7y ago
      I think what simonh is saying is that the employees knew what WeWork was. (They were the ones who created the spreadsheets and charts that outlined what was going on and presented it all to the investors in several separate acts of galling transparency.) The investors knew what WeWork was. All of that data was, again, transparent to the point of insult. Contractors may not have known, but certainly had access to the same information everyone else had and could have known had they actually reviewed the information. I think the guy is a piece of excrement, probably simonh thinks he's a piece of excrement as well. However, he did what he did out in the open. He just did it with jaw dropping temerity. No one participating in this whole affair can claim to have been victimized. He asked for all of them to consent to the insane, and they gave him what he wanted, hearty consent. It's a cautionary tale to me, of how greed can blind what are normally relatively intelligent people. Don't let greed blind you when evaluating startups.
- goatinaboat 7y ago
  Consequences are for people who don't have a billion dollars. This really hinges on how much he has upset MbS who will shortly have a trillion dollars if the Aramco IPO happens. He is a man with a ruthless reputation.
- buboard 7y ago
  I don't really understand the hate. He didn't steal it from an old lady behind her back. If that was the case, i can understand the feelings of empathy that it would evoke to people. But capitalizing on some uber-rich person's mistakes? Cry me a river, do you think Mr Softbank cares? Yeah he might drink one cocktail more, but who cares. What if Adam now becomes a great angel investor? Life is like that , all twists and turns , and the ToS says it's not guaranteed to be fair.
  - AlexandrB 7y ago
    > He didn't steal it from an old lady behind her back. He tried to. Had the IPO gone through it would have fleeced billions from "institutional investors" (i.e. pensions and 401ks).
    - buboard 7y ago
      that's not the same, you have to consider the intermediaries who have a ton of responsibility for investing that money. They're not absolved from responsibility , and technically Neumann didn't lie, at all.
  - bilbo0s 7y ago
    Not sure I would trust Adam as an angel, that could easily be the first step to an HN post about how your small startup exited at 93 million and you got nothing.
    - buboard 7y ago
      Well, at least his fundraising ability is unparalleled
mbesto 7y ago
I like Matt Levine's take on this: (re: Adam Neumann) If you want, you can imagine him as a diabolical genius who explicitly set out to short the unicorn bubble and then walked away barefoot with a jaunty whistle and $700 million of SoftBank’s money, but that does not strike me as necessary or accurate. My model doesn’t require you to think that your startup is dumb! You don’t need to worry about Neumann’s personal beliefs and motivations at all, really. You can just think of him as a product of the invisible hand of the market. A lot of money was pouring into startups, there was a lot of demand, and the demand called forth supply, and the people who supplied the supply got rich; it is elemental and straightforward and has very little to do with questions like “is this a good business model?”[0] “Capitalism occasionally makes huge mistakes,” is part of the story, but the other part is that there are rich rewards for those who spot the mistakes and bet against them. This is a lesson specifically of financial capitalism: In most businesses you can notice a competitor doing a dumb thing and create value by doing a better thing, but the financial markets are special because you can notice a competitor doing a dumb thing and get rich by taking the other side, without creating value or doing a better thing. If you notice that people are buying dumb unicorn shares for too much money, you don’t have to invent a better way of doing business or of funding companies. You can just sell them as many as possible of the dumbest possible unicorn shares; when the bubble bursts, you collect your winnings. This sort of thing—getting rich by being smarter than your counterparties, making markets more efficient by being on the right side of bets—is a classic path to wealth creation in the financial business. Tech, traditionally, has a different ethos, one of getting rich by changing the world. But sometimes there are crossovers, and anyway maybe WeWork was never really a tech company.[1] [0] - https://www.bloomberg.com/opinion/articles/2019-10-02/the-trades-will-be-free-now https://www.bloomberg.com/opinion/articles/2019-10-02/the-tr... [1] - https://www.bloomberg.com/opinion/articles/2019-10-23/how-do-you-like-we-now https://www.bloomberg.com/opinion/articles/2019-10-23/how-do...
- asdfman123 7y ago
  I mean, maybe he was a genius fraudster, but maybe he convinced himself to believe in what he was selling -- which made him all the better of a salesman.
  - 7y ago
yawaramin 7y ago
Wow, this really drives home how absurd the whole WeWork thing was. And even until recently people were talking about how apparently Masayoshi San was playing some kind of three-dimensional chess and would come out the winner from WeWork. A fool and his money are soon parted, I guess. Also, the post title is a nice nod to an Audrey Hepburn/Peter O'Toole movie dripping with '60s cool: https://www.imdb.com/title/tt0060522/ https://www.imdb.com/title/tt0060522/
- djmips 7y ago
  Masayoshi San I assume is not a fool but I also know that people have weak spots and can be manipulated.
- travisoneill1 7y ago
  To statistically show skill in investment it takes a whole lot more data than the human mind assumes, so this is a common occurrence in the world of finance. John Paulson, who became famous as one of the fund managers to make a killing shorting mortgage backed securities, lost 50% in a year (much of it to Sino Forrest, a Chinese fraud) a couple years later.
  - hermitdev 7y ago
    Yes, it is very difficult to actually judge skill versus just survivor-ship bias. I worked for a hedge fund that had around $20B under management, lost 60% in 2008, then made all of that back in 18-24 months. Now, they're worth 50% more than loss. Are they skilled? I don't know.
- dadarepublic 7y ago
  Love the reference you point out :) Even the wisest can be a fool sometimes. And a fool can sometimes spout wisdom. We are only human after all.
CptFribble 7y ago
That's the funny thing about Billions-with-a-b: normal thinking about money and value just doesn't work IMO. The Vision Fund is going to lose ~$19 billion. But Masa Son still controls over $80 billion. That's more wealth and power than almost any human being will ever have in history, ever. At that point the numbers don't even matter. Maybe Neumann took Masa Son for $50 billion. Who cares? A person can live in the USA for their whole lives without working on as little as $3-5 million. Throwing billions around like this, especially when it's digital/paper money in the form of stocks and big corporate deals, really puts the absurdity sprinkles on top of this whole turd bowl. It's this kind of thing that makes people lose confidence in the system. Most people out here are sweating medical bills in the low $10,000's, while the news is talking about billions being gained and lost in the span of a few weeks - so fast it makes you wonder if that amount of wealth really even existed in the first place. How much has to be "lost" between digital transactions before the numbers become completely meaningless? A trillion? A quadrillion?
- fnord77 7y ago
  not to mention the amount of political influence billions can buy. billionaires are incompatible with democracy
- Invictus0 7y ago
  Gates, Arnault, and Bezos each have had more than 100B, although not liquid.
  - neffy 7y ago
    Not really. Adding up all the shares that they own, and saying that they have that much money, is completely incorrect. If any of them tried to liquidate even a small part of their shareholding the price would go swiftly to zero.
    - ahakki 7y ago
      They can borrow money with their stock as collateral (explicit or implicit). They only need the liquidity to cover interest. btw take a look at Gates' portfolio. He's as liquid as it get's at that level.
hashberry 7y ago
WeWork/Uber/Airbnb... it's interesting how WeWork is classified as tech IPO next to these (e.g. Softbank used its "technology fund" to invest in WeWork). How did this happen? Isn't it an obvious real estate company? Is it because WeWork appealed to tech startups and remote workers?
- JohnFen 7y ago
  According to Masayoshi, they're a tech company because they use the internet.
- 0xffff2 7y ago
  Isn't Uber an obvious transportation company? Isn't AirBnB an obvious hospitality company?
  - UserIsUnused 7y ago
    Uber is not buying cars and transporting people, Uber is a technologic middle man, a tech tool. AirBnB is not buying houses to rent, it's a web middleman. Amazon does sell stuff directly, so it's retail not tech. All these 3 companies are well categorized, WeWork is not, WeWork buys properties to rent, it's just that, nothing that Regus isn't.
  - 6gvONxR4sf7o 7y ago
    It's an interesting point. If drivers are employees, I'd call them a transportation company. If they aren't, I'd call them a tech company. Analogous logic for Airbnb. But it seems like too subtle a distinction to be reasonable. More likely, "tech company" just isn't a super useful label anymore, with the grey area growing and growing.
    - bcrosby95 7y ago
      I tend to view tech companies as companies that consider custom tech a competitive advantage and attempt to maintain in-house competency. If you're a grocery chain and you contract out most of your technical needs then you aren't a tech company. But if you're a grocery chain and you hire and maintain a large technical team to provide you with various custom pieces of technology, you're both a grocery chain and a tech company. This could be any piece of tech: from custom software to custom refrigeration systems.
travisoneill1 7y ago
I object to the word "steal" being used to describe Adam Neumann's actions. He did not take anything by force or deception (as far as I know). If I take a piece of dog shit, spray paint it gold and sell it as a bar of gold, you could argue that is "stealing" (or at least fraud). If I say "this is a piece of dog shit that I spray painted gold but I am selling it for the price of gold" and an adult of otherwise sound mind accepts the deal, that is not stealing. What Neumann did is more like the latter scenario.
- ph0rque 7y ago
  Ah, but nowhere in the description of the product being sold did you discuss unlocking superpowers and elevating global consciousness. That's the deception alluded to in the OP, as far as I can tell.
- basch 7y ago
  That's slightly underselling where he was going. Ive said before, there is some genius to his strategic acquisitions. It was looking like he was building an "Office 365 / Adobe Creative Cloud of Building Management Systems." But, they are giving up, and venture capital is reducing the company to the value of its parts, not its potential, before that Building Management Suite gets assembled. There is a future where their software stack becomes the de facto standard for all building management, the Outlook/Excel of owning property. WeWork could pivot from a real estate company to a property ownership enablement company. Thats not so much spray painted shit as "im using free cash flow from real estate to build this grand well defined vision, (with a coat of hippie mysticism paint) do you want to come along for the ride, for better or worse?" Because he is an executive, talking to executives, his pitch always came off as vague. But the actions of the company, and the parts they were assembling, paint a much more strategically sound and intelligent portrait.
- ninv 7y ago
  What Neumann did was unethical. He stole from We Work employees.
  - travisoneill1 7y ago
buboard 7y ago
fraud and stealing are different things
- AlexandrB 7y ago
  Correct. ~$2 billion dollar fraud - collective shrug. Stealing a $7 toothbrush (while being the wrong color) - prison.
cryptica 7y ago
>> He saw an excess of capital in Silicon Valley and a raw, unsatisfied ambition in SoftBank’s Masayoshi Son and his $100 billion Vision Fund It doesn't take a genius to see this opportunity but it does take an incredibly lucky person to be in a position to exploit it. If Adam Neumann doesn't end up in jail after all this, then I will concede that he is not an idiot.
- dano 7y ago
  Adam was/is a promoter extraordinaire. He promoted a utopian future ideal state to his investors and created an investment frenzy though build outs of cool, edgy office space. He created a show and the investors came in droves. He negotiated the investment rounds well and benefited from demand for his product that caused the investors to let their guard down so as to not miss out. The Fear of Missing out (FOMO) is a terribly strong force in the VC community. Adam has set himself and his family up for generations and its all likely legal.
  - cryptica 7y ago
    It says more about investor stupidity than it says about Adam Neumann. IMO, most investors are pretty stupid. Like herd animals.
zackmorris 7y ago
I'm more concerned about the discrimination in finance/lending, which is thoroughly entrenched at this point. Anyone can borrow $50,000 for a new car, $500,000 for a new home, or $5,000,000 in venture capital if they are connected enough. But there is simply no money available for anything outside of mainstream status quo thinking. That's why the Ubers and Airbnbs and WeWorks in these times are founded on hustling and even skirting laws in some cases. That's great and everything (I guess?), but I am personally tired of the hustling/hacking mentality. I'd like to see real progress in the standard of living for everyone in the world. That's founded on the idea of self-actualization, that everyone has the modest resources needed to start their own business or invent the things that help themselves and their communities. How many people here have been on verge of financial ruin trying to get their ideas off the ground? I've been up, I've been down, but overall I've basically been running on empty for over 20 years. I'm tired of it. I didn't expect my career to turn out this way. And I'm deeply concerned about a looming recession forcing otherwise capable, intelligent people to scrape by underemployed, doing menial work to make rent because there isn't enough capital flowing. Because it's all locked up in a few wealthy peoples' hands, who have a very Laissez-faire view of economics. All of the above is why I'm almost certain now that hard times are coming as early as next year. I've already been through it twice with the dot com bust and housing bubble popping, and we're overdue for the next downturn. ^^^ Note that this wasn't always the case. There were protections in place like the Glass-Steagall Act that lessened these boom-bust cycles, which were overturned by the Gramm–Leach–Bliley Act and others. What we've been going through with this vast increase in wealth inequality is by design. I was born in 1977 so I remember when it wasn't this way. But many of you reading this now were born after the corruption was instated and might not realize how honestly affluent middle class Americans felt in the 1980s and 1990s. It can be that way again, but please, look beyond private sector solutions to these problems. The government is We the People, not some specter out to get us. I know that many of you live in Silicon Valley and other big cities that suffer from high taxes or government micromanagement, but I live in Idaho and have seen how the lack of government can lead to widespread poverty and environmental degradation. Laws can change and movements do happen, which is why I'm optimistic that reforms are also coming and that we might finally see some relief in the 2020s.
thedangler 7y ago
So how do I get money from this Billionaire for my company? Not even looking for a lot maybe 100k a year for 4 years.
- oblio 7y ago
  I think you're thinking too small :-) To actually get anything, you should ask for 10-15 million in seed capital.

118 points by cjbest 7y ago

I'd like to think that Adam Neumann will see some manner of ill effect for paying himself $1 billion of other people's money, while delivering negative value, but then reality comes crashing in to remind me that no, he won't. Consequences are for people who don't have a billion dollars.

mmazing 7y ago
"I need this billion dollars to avoid the consequences of taking this billion dollars."
the-dude 7y ago
"If you owe the bank $100 that's your problem. If you owe the bank $100 million, that's the bank's problem." ( J. Paul Getty ) https://www.brainyquote.com/quotes/j_paul_getty_129274 https://www.brainyquote.com/quotes/j_paul_getty_129274
asdfman123 7y ago
I'm going to bet that he has several months of hard reflection about life and maybe write a book about it. Maybe he'll try to pull a Steve Jobs and try a few new companies to redeem himself. But you know, the next few years of his life are going to be mildly unpleasant, and we shouldn't forget about the emotional impact about that. Maybe he'll have a very public come-to-Jesus moment that will be cathartic for everyone involved, or maybe he'll disappear from public life forever with his vast WeWork wealth and live on some estate in an exotic locale. But either way, this failure isn't going to be easy for him. He's going to feel several emotions and not all of them will be pleasant.
- lordnacho 7y ago
  I think this is overly optimistic, what you're saying. What's he gonna lose? Friends who invested with him? He can buy new ones. Feel bad? You can literally hire a whole team of therapists for life. He can sit in his mansions and not be in the public eye forever, it's not like being in the public eye is some sort of requirement for living. Heck, he might even find a new following among people who want to emulate how he grabbed all that money.
  - asdfman123 7y ago
    I'm intentionally being tongue in cheek. Unless he's a total sociopath (which I don't think he is) he's probably going to suffer mild blowback, the kind of blowback and shitty feelings us mortals feel when we've been ousted from a job. But it's the kind of disappointment and anger that you get over in a few months. The only difference is he'll have a billion dollars and the ability to do whatever in life he wants. If you were in his shoes, would you go back and do things any differently?
    - JohnFen 7y ago
      > If you were in his shoes, would you go back and do things any differently? I wouldn't have been in his shoes, because I have a shred of decency.
    - lordnacho 7y ago
      > If you were in his shoes, would you go back and do things any differently? Maybe not hire a famous DJ for the announcement of layoffs.
      - asdfman123 7y ago
        Oh man, that's awful, have a link for that? If this were reddit I would link to /r/aboringdystopia.
        lordnacho 7y ago
        https://www.businessinsider.com/wework-ceo-adam-neumann-layoffs-firing-tequila-shots-run-dmc-2019-9?r=US&IR=T https://www.businessinsider.com/wework-ceo-adam-neumann-layo...
- _jal 7y ago
  Empathy is essential. And his con was a truly remarkable con during a run of remarkable cons, which attracts attention. But I have trouble sparing much sympathy for someone who has 10 digits to tide them over while they figure out what's next. If you're having trouble finding sympathetic targets in this fiasco, mayhap spare a thought to the several emotions employees whose options are underwater felt when they heard about their Superhero CEO's cash out.
- logfromblammo 7y ago
  Not everyone experiences conscience in the same way. He might not even have one to torment him in his moments of solitude. And when you say "mildly unpleasant", I can only assume you mean that for the rest of his life, his sole source of genuine unpleasantness will be from his own psyche. Because he'll be worth a billion dollars. And while money can't buy happiness, it can remove every last speck of annoyance, peeve, and inferior market option. This failure will be easier for him than for most other people who fail far less spectacularly. Even if a thousand people make it their life's mission to persecute him at every moment of the day, he still has approximately a billion dollars more than all of them put together. All he really has to worry about is avoiding Saudi-controlled buildings and territories for the rest of his life.
- ergothus 7y ago
  > But either way, this failure isn't going to be easy for him. He's going to feel several emotions and not all of them will be pleasant. Honest question: do you think it will be harder for him than for the rest of us that have to deal with failure and yet have to chase jobs and deal with the pressures that come from not being wealthy? Given the level of sociopathy likely required to get where he is at, I sincerely doubt it. I cant assume he feels as I would in thus situation because I literally couldn't GET into his situation.
- JohnFen 7y ago
  > I'm going to bet that he has several months of hard reflection about life I really, seriously doubt this. He's laughing all the way to the bank.
simonh 7y ago
The thing to remember is, this all happened in the open. The people paying him all this money knew exactly what they were doing, know exactly what he was doing and even encouraged him in doing it. I for one will not be shedding any tears for Softbank's losses. Neumann may be a bit of a jerk, if the stories about him are true, but good luck to the guy. It’s not as though he hurt anybody.
- JohnFen 7y ago
  > It’s not as though he hurt anybody. He didn't? He didn't hurt his employees, his investors, his contractors, and so forth? He didn't hurt the the tech space (WeWork is not a tech company, but they're widely perceived to be) by reducing even further what little trust it still has?
  - buboard 7y ago
    did they lay off people? I dont give a toss about investors who don't even know what they 're investing in.
    - AlexandrB 7y ago
      > did they lay people off? They will as soon as they have enough cash to pay severance: https://techcrunch.com/2019/10/03/wework-layoffs/ https://techcrunch.com/2019/10/03/wework-layoffs/
  - bilbo0s 7y ago
    I think what simonh is saying is that the employees knew what WeWork was. (They were the ones who created the spreadsheets and charts that outlined what was going on and presented it all to the investors in several separate acts of galling transparency.) The investors knew what WeWork was. All of that data was, again, transparent to the point of insult. Contractors may not have known, but certainly had access to the same information everyone else had and could have known had they actually reviewed the information. I think the guy is a piece of excrement, probably simonh thinks he's a piece of excrement as well. However, he did what he did out in the open. He just did it with jaw dropping temerity. No one participating in this whole affair can claim to have been victimized. He asked for all of them to consent to the insane, and they gave him what he wanted, hearty consent. It's a cautionary tale to me, of how greed can blind what are normally relatively intelligent people. Don't let greed blind you when evaluating startups.
goatinaboat 7y ago
Consequences are for people who don't have a billion dollars. This really hinges on how much he has upset MbS who will shortly have a trillion dollars if the Aramco IPO happens. He is a man with a ruthless reputation.
buboard 7y ago
I don't really understand the hate. He didn't steal it from an old lady behind her back. If that was the case, i can understand the feelings of empathy that it would evoke to people. But capitalizing on some uber-rich person's mistakes? Cry me a river, do you think Mr Softbank cares? Yeah he might drink one cocktail more, but who cares. What if Adam now becomes a great angel investor? Life is like that , all twists and turns , and the ToS says it's not guaranteed to be fair.
- AlexandrB 7y ago
  > He didn't steal it from an old lady behind her back. He tried to. Had the IPO gone through it would have fleeced billions from "institutional investors" (i.e. pensions and 401ks).
  - buboard 7y ago
    that's not the same, you have to consider the intermediaries who have a ton of responsibility for investing that money. They're not absolved from responsibility , and technically Neumann didn't lie, at all.
- bilbo0s 7y ago
  Not sure I would trust Adam as an angel, that could easily be the first step to an HN post about how your small startup exited at 93 million and you got nothing.
  - buboard 7y ago
    Well, at least his fundraising ability is unparalleled

mbesto 7y ago

I like Matt Levine's take on this: (re: Adam Neumann) If you want, you can imagine him as a diabolical genius who explicitly set out to short the unicorn bubble and then walked away barefoot with a jaunty whistle and $700 million of SoftBank’s money, but that does not strike me as necessary or accurate. My model doesn’t require you to think that your startup is dumb! You don’t need to worry about Neumann’s personal beliefs and motivations at all, really. You can just think of him as a product of the invisible hand of the market. A lot of money was pouring into startups, there was a lot of demand, and the demand called forth supply, and the people who supplied the supply got rich; it is elemental and straightforward and has very little to do with questions like “is this a good business model?”[0] “Capitalism occasionally makes huge mistakes,” is part of the story, but the other part is that there are rich rewards for those who spot the mistakes and bet against them. This is a lesson specifically of financial capitalism: In most businesses you can notice a competitor doing a dumb thing and create value by doing a better thing, but the financial markets are special because you can notice a competitor doing a dumb thing and get rich by taking the other side, without creating value or doing a better thing. If you notice that people are buying dumb unicorn shares for too much money, you don’t have to invent a better way of doing business or of funding companies. You can just sell them as many as possible of the dumbest possible unicorn shares; when the bubble bursts, you collect your winnings. This sort of thing—getting rich by being smarter than your counterparties, making markets more efficient by being on the right side of bets—is a classic path to wealth creation in the financial business. Tech, traditionally, has a different ethos, one of getting rich by changing the world. But sometimes there are crossovers, and anyway maybe WeWork was never really a tech company.[1] [0] - https://www.bloomberg.com/opinion/articles/2019-10-02/the-trades-will-be-free-now https://www.bloomberg.com/opinion/articles/2019-10-02/the-tr... [1] - https://www.bloomberg.com/opinion/articles/2019-10-23/how-do-you-like-we-now https://www.bloomberg.com/opinion/articles/2019-10-23/how-do...

asdfman123 7y ago
I mean, maybe he was a genius fraudster, but maybe he convinced himself to believe in what he was selling -- which made him all the better of a salesman.
- 7y ago

yawaramin 7y ago

Wow, this really drives home how absurd the whole WeWork thing was. And even until recently people were talking about how apparently Masayoshi San was playing some kind of three-dimensional chess and would come out the winner from WeWork. A fool and his money are soon parted, I guess. Also, the post title is a nice nod to an Audrey Hepburn/Peter O'Toole movie dripping with '60s cool: https://www.imdb.com/title/tt0060522/ https://www.imdb.com/title/tt0060522/

djmips 7y ago
Masayoshi San I assume is not a fool but I also know that people have weak spots and can be manipulated.
travisoneill1 7y ago
To statistically show skill in investment it takes a whole lot more data than the human mind assumes, so this is a common occurrence in the world of finance. John Paulson, who became famous as one of the fund managers to make a killing shorting mortgage backed securities, lost 50% in a year (much of it to Sino Forrest, a Chinese fraud) a couple years later.
- hermitdev 7y ago
  Yes, it is very difficult to actually judge skill versus just survivor-ship bias. I worked for a hedge fund that had around $20B under management, lost 60% in 2008, then made all of that back in 18-24 months. Now, they're worth 50% more than loss. Are they skilled? I don't know.
dadarepublic 7y ago
Love the reference you point out :) Even the wisest can be a fool sometimes. And a fool can sometimes spout wisdom. We are only human after all.

CptFribble 7y ago

That's the funny thing about Billions-with-a-b: normal thinking about money and value just doesn't work IMO. The Vision Fund is going to lose ~$19 billion. But Masa Son still controls over $80 billion. That's more wealth and power than almost any human being will ever have in history, ever. At that point the numbers don't even matter. Maybe Neumann took Masa Son for $50 billion. Who cares? A person can live in the USA for their whole lives without working on as little as $3-5 million. Throwing billions around like this, especially when it's digital/paper money in the form of stocks and big corporate deals, really puts the absurdity sprinkles on top of this whole turd bowl. It's this kind of thing that makes people lose confidence in the system. Most people out here are sweating medical bills in the low $10,000's, while the news is talking about billions being gained and lost in the span of a few weeks - so fast it makes you wonder if that amount of wealth really even existed in the first place. How much has to be "lost" between digital transactions before the numbers become completely meaningless? A trillion? A quadrillion?

fnord77 7y ago
not to mention the amount of political influence billions can buy. billionaires are incompatible with democracy
Invictus0 7y ago
Gates, Arnault, and Bezos each have had more than 100B, although not liquid.
- neffy 7y ago
  Not really. Adding up all the shares that they own, and saying that they have that much money, is completely incorrect. If any of them tried to liquidate even a small part of their shareholding the price would go swiftly to zero.
  - ahakki 7y ago
    They can borrow money with their stock as collateral (explicit or implicit). They only need the liquidity to cover interest. btw take a look at Gates' portfolio. He's as liquid as it get's at that level.

hashberry 7y ago

WeWork/Uber/Airbnb... it's interesting how WeWork is classified as tech IPO next to these (e.g. Softbank used its "technology fund" to invest in WeWork). How did this happen? Isn't it an obvious real estate company? Is it because WeWork appealed to tech startups and remote workers?

JohnFen 7y ago
According to Masayoshi, they're a tech company because they use the internet.
0xffff2 7y ago
Isn't Uber an obvious transportation company? Isn't AirBnB an obvious hospitality company?
- UserIsUnused 7y ago
  Uber is not buying cars and transporting people, Uber is a technologic middle man, a tech tool. AirBnB is not buying houses to rent, it's a web middleman. Amazon does sell stuff directly, so it's retail not tech. All these 3 companies are well categorized, WeWork is not, WeWork buys properties to rent, it's just that, nothing that Regus isn't.
- 6gvONxR4sf7o 7y ago
  It's an interesting point. If drivers are employees, I'd call them a transportation company. If they aren't, I'd call them a tech company. Analogous logic for Airbnb. But it seems like too subtle a distinction to be reasonable. More likely, "tech company" just isn't a super useful label anymore, with the grey area growing and growing.
  - bcrosby95 7y ago
    I tend to view tech companies as companies that consider custom tech a competitive advantage and attempt to maintain in-house competency. If you're a grocery chain and you contract out most of your technical needs then you aren't a tech company. But if you're a grocery chain and you hire and maintain a large technical team to provide you with various custom pieces of technology, you're both a grocery chain and a tech company. This could be any piece of tech: from custom software to custom refrigeration systems.

travisoneill1 7y ago

I object to the word "steal" being used to describe Adam Neumann's actions. He did not take anything by force or deception (as far as I know). If I take a piece of dog shit, spray paint it gold and sell it as a bar of gold, you could argue that is "stealing" (or at least fraud). If I say "this is a piece of dog shit that I spray painted gold but I am selling it for the price of gold" and an adult of otherwise sound mind accepts the deal, that is not stealing. What Neumann did is more like the latter scenario.

ph0rque 7y ago
Ah, but nowhere in the description of the product being sold did you discuss unlocking superpowers and elevating global consciousness. That's the deception alluded to in the OP, as far as I can tell.
basch 7y ago
That's slightly underselling where he was going. Ive said before, there is some genius to his strategic acquisitions. It was looking like he was building an "Office 365 / Adobe Creative Cloud of Building Management Systems." But, they are giving up, and venture capital is reducing the company to the value of its parts, not its potential, before that Building Management Suite gets assembled. There is a future where their software stack becomes the de facto standard for all building management, the Outlook/Excel of owning property. WeWork could pivot from a real estate company to a property ownership enablement company. Thats not so much spray painted shit as "im using free cash flow from real estate to build this grand well defined vision, (with a coat of hippie mysticism paint) do you want to come along for the ride, for better or worse?" Because he is an executive, talking to executives, his pitch always came off as vague. But the actions of the company, and the parts they were assembling, paint a much more strategically sound and intelligent portrait.
ninv 7y ago
What Neumann did was unethical. He stole from We Work employees.
- travisoneill1 7y ago

buboard 7y ago

fraud and stealing are different things

AlexandrB 7y ago
Correct. ~$2 billion dollar fraud - collective shrug. Stealing a $7 toothbrush (while being the wrong color) - prison.

cryptica 7y ago

>> He saw an excess of capital in Silicon Valley and a raw, unsatisfied ambition in SoftBank’s Masayoshi Son and his $100 billion Vision Fund It doesn't take a genius to see this opportunity but it does take an incredibly lucky person to be in a position to exploit it. If Adam Neumann doesn't end up in jail after all this, then I will concede that he is not an idiot.

dano 7y ago
Adam was/is a promoter extraordinaire. He promoted a utopian future ideal state to his investors and created an investment frenzy though build outs of cool, edgy office space. He created a show and the investors came in droves. He negotiated the investment rounds well and benefited from demand for his product that caused the investors to let their guard down so as to not miss out. The Fear of Missing out (FOMO) is a terribly strong force in the VC community. Adam has set himself and his family up for generations and its all likely legal.
- cryptica 7y ago
  It says more about investor stupidity than it says about Adam Neumann. IMO, most investors are pretty stupid. Like herd animals.

zackmorris 7y ago

I'm more concerned about the discrimination in finance/lending, which is thoroughly entrenched at this point. Anyone can borrow $50,000 for a new car, $500,000 for a new home, or $5,000,000 in venture capital if they are connected enough. But there is simply no money available for anything outside of mainstream status quo thinking. That's why the Ubers and Airbnbs and WeWorks in these times are founded on hustling and even skirting laws in some cases. That's great and everything (I guess?), but I am personally tired of the hustling/hacking mentality. I'd like to see real progress in the standard of living for everyone in the world. That's founded on the idea of self-actualization, that everyone has the modest resources needed to start their own business or invent the things that help themselves and their communities. How many people here have been on verge of financial ruin trying to get their ideas off the ground? I've been up, I've been down, but overall I've basically been running on empty for over 20 years. I'm tired of it. I didn't expect my career to turn out this way. And I'm deeply concerned about a looming recession forcing otherwise capable, intelligent people to scrape by underemployed, doing menial work to make rent because there isn't enough capital flowing. Because it's all locked up in a few wealthy peoples' hands, who have a very Laissez-faire view of economics. All of the above is why I'm almost certain now that hard times are coming as early as next year. I've already been through it twice with the dot com bust and housing bubble popping, and we're overdue for the next downturn. ^^^ Note that this wasn't always the case. There were protections in place like the Glass-Steagall Act that lessened these boom-bust cycles, which were overturned by the Gramm–Leach–Bliley Act and others. What we've been going through with this vast increase in wealth inequality is by design. I was born in 1977 so I remember when it wasn't this way. But many of you reading this now were born after the corruption was instated and might not realize how honestly affluent middle class Americans felt in the 1980s and 1990s. It can be that way again, but please, look beyond private sector solutions to these problems. The government is We the People, not some specter out to get us. I know that many of you live in Silicon Valley and other big cities that suffer from high taxes or government micromanagement, but I live in Idaho and have seen how the lack of government can lead to widespread poverty and environmental degradation. Laws can change and movements do happen, which is why I'm optimistic that reforms are also coming and that we might finally see some relief in the 2020s.

thedangler 7y ago

So how do I get money from this Billionaire for my company? Not even looking for a lot maybe 100k a year for 4 years.

oblio 7y ago
I think you're thinking too small :-) To actually get anything, you should ask for 10-15 million in seed capital.