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I presume that by all the people who helped him you mean the WeWork employees and not investors like SoftBank. Well, these employees aren't walking away empty h

by Strom 7y ago

I presume that by all the people who helped him you mean the WeWork employees and not investors like SoftBank. Well, these employees aren't walking away empty handed either. They've been getting paid all these years and most of them will probably continue getting paid for some time. That's also a fruit of Neumann's scheming. These people didn't have to fight for jobs in a real business, they are benefiting from the WeWork illusion of grandeur and bringing in paychecks month after month.

dickeytk 7y ago
They’re not destitute, no. But their employees were heavily compensated with options that are now worthless. Of course options are a risk, but they didn’t work there if they didn’t think those options would be at least worth something in the future.
- Strom 7y ago
  Options in a startup are always a lottery ticket. I would argue that no rational person assigns any significant value to them, because even career investors aren't able to pick winners and instead earn money by betting on a lot of different startups.
  - dickeytk 7y ago
    Big difference between a startup and a massive valuation that everyone assumes is about to IPO. WeWork deflated more than any company in HISTORY. You’re technically correct but people are irrational and I’m sure they were being lied to their face in all hands about how great the future would be. At that stage as an employee you’re counting on those to be able to put down a down payment or do a much needed renovation, or hopefully not payback debt.
    - nopriorarrests 7y ago
      >WeWork deflated more than any company in HISTORY. Cisco went from 77$ per share in 2000 to $10 per share in 2002, while being public (so the value was much more real than WeWork, you could hit the 'sell' button to make it real money in 5 minutes, unlike WeWork equity). IIRC it was valued around 500 billions in 2000, so it was much larger destruction in value. It still hasn't recovered, with $45 per share right now, never reaching its 2000 peak during these 19 years.
  - Frondo 7y ago
    People aren't and will never be rational economic actors -- homo economicus -- and while we can chide them for making mistakes a rational person wouldn't, I feel like there must be a way to structure the world that doesn't set up this expectation no one will ever live up to. (edit to fix a typo)
  - dclowd9901 7y ago
    Right, so how did the fucking guy running the ship win the lottery on the backs of everyone who didn't?
    - solveit 7y ago
      The reason he made bank is because Softbank decided it would be a good idea to let Neumann burn money, gave Neumann a shit ton of money without actually buying control of Wework from Neumann, found that nobody else thought burning money was a good idea and so WeWork couldn't IPO, decided that burning money wasn't a great idea after all, found that Neumann liked burning money and would continue to run WeWork into the ground burning money every step of the way, found that they couldn't do shit because WeWork still belonged to Neumann, couldn't walk away because they were billions in the hole, and so decided to give Neumann even more money so they could actually control the company this time. The employees pretty much got the typical outcome of working at a startup (startup runs along for a couple years, then fails). The fact that Adam Neumann made bank is rankling, but Rich People Burning Money and Also Accidentally Giving Some Away to Undeserving People Because They Did Incredibly Stupid Things isn't exactly something we can or should stop. You can't make it illegal to be stupid.
- compiler-guy 7y ago
  Options are a risk you take, and every analysis out there says that one should discount them almost to zero, especially for startups. It does suck for those employees that their risk didn't work out, but for most of them it was a conscious decision to take on the risk, presumably for a high potential upside. And if you accept the risk, then its unfortunate that it didn't work out, but that is what risk is.
ygjb 7y ago
> These people didn't have to fight for jobs in a real business, they are benefiting from the WeWork illusion of grandeur and bringing in paychecks month after month. Yikes. I have worked in two different startups that imploded quickly, largely due to an inability to find an effective sales and growth strategy. The fact that I was sold on the vision and that vision wasn't realized doesn't make the work I was doing any less challenging, nor did it make the job or business any less real.
- Strom 7y ago
  The jobs are definitely real and I was careful to not make any claims otherwise. I've worked in failed startups myself, so I certainly know. As far as WeWork not being a real business, I think this was fairly well documented during the IPO attempt. However, more generally, when I say real business I mean a business that can survive without getting most of its funds from an unrelated source, i.e. investors. All evidence points towards WeWork not being able to continue without continued burning of investor money and there's no path to profitability on the horizon even.

by Strom 7y ago

dickeytk 7y ago

They’re not destitute, no. But their employees were heavily compensated with options that are now worthless. Of course options are a risk, but they didn’t work there if they didn’t think those options would be at least worth something in the future.

Strom 7y ago
Options in a startup are always a lottery ticket. I would argue that no rational person assigns any significant value to them, because even career investors aren't able to pick winners and instead earn money by betting on a lot of different startups.
- dickeytk 7y ago
  Big difference between a startup and a massive valuation that everyone assumes is about to IPO. WeWork deflated more than any company in HISTORY. You’re technically correct but people are irrational and I’m sure they were being lied to their face in all hands about how great the future would be. At that stage as an employee you’re counting on those to be able to put down a down payment or do a much needed renovation, or hopefully not payback debt.
  - nopriorarrests 7y ago
    >WeWork deflated more than any company in HISTORY. Cisco went from 77$ per share in 2000 to $10 per share in 2002, while being public (so the value was much more real than WeWork, you could hit the 'sell' button to make it real money in 5 minutes, unlike WeWork equity). IIRC it was valued around 500 billions in 2000, so it was much larger destruction in value. It still hasn't recovered, with $45 per share right now, never reaching its 2000 peak during these 19 years.
- Frondo 7y ago
  People aren't and will never be rational economic actors -- homo economicus -- and while we can chide them for making mistakes a rational person wouldn't, I feel like there must be a way to structure the world that doesn't set up this expectation no one will ever live up to. (edit to fix a typo)
- dclowd9901 7y ago
  Right, so how did the fucking guy running the ship win the lottery on the backs of everyone who didn't?
  - solveit 7y ago
    The reason he made bank is because Softbank decided it would be a good idea to let Neumann burn money, gave Neumann a shit ton of money without actually buying control of Wework from Neumann, found that nobody else thought burning money was a good idea and so WeWork couldn't IPO, decided that burning money wasn't a great idea after all, found that Neumann liked burning money and would continue to run WeWork into the ground burning money every step of the way, found that they couldn't do shit because WeWork still belonged to Neumann, couldn't walk away because they were billions in the hole, and so decided to give Neumann even more money so they could actually control the company this time. The employees pretty much got the typical outcome of working at a startup (startup runs along for a couple years, then fails). The fact that Adam Neumann made bank is rankling, but Rich People Burning Money and Also Accidentally Giving Some Away to Undeserving People Because They Did Incredibly Stupid Things isn't exactly something we can or should stop. You can't make it illegal to be stupid.
compiler-guy 7y ago
Options are a risk you take, and every analysis out there says that one should discount them almost to zero, especially for startups. It does suck for those employees that their risk didn't work out, but for most of them it was a conscious decision to take on the risk, presumably for a high potential upside. And if you accept the risk, then its unfortunate that it didn't work out, but that is what risk is.

ygjb 7y ago

> These people didn't have to fight for jobs in a real business, they are benefiting from the WeWork illusion of grandeur and bringing in paychecks month after month. Yikes. I have worked in two different startups that imploded quickly, largely due to an inability to find an effective sales and growth strategy. The fact that I was sold on the vision and that vision wasn't realized doesn't make the work I was doing any less challenging, nor did it make the job or business any less real.

Strom 7y ago
The jobs are definitely real and I was careful to not make any claims otherwise. I've worked in failed startups myself, so I certainly know. As far as WeWork not being a real business, I think this was fairly well documented during the IPO attempt. However, more generally, when I say real business I mean a business that can survive without getting most of its funds from an unrelated source, i.e. investors. All evidence points towards WeWork not being able to continue without continued burning of investor money and there's no path to profitability on the horizon even.