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The Fall of WeWork
- empath75 7y ago> In another meeting, Neumann said three people were going to save the world: bin Salman, Jared Kushner, and Neumann. Shortly after the news broke in October 2018 that Saudi agents tortured dissident and Washington Post columnist Jamal Khashoggi and carved his body with a bone saw, likely on order from the crown prince himself, Neumann told George W. Bush’s former national security adviser Stephen Hadley that everything could be worked out if bin Salman had the right mentor. Confused, Hadley asked who that person might be, according to a source familiar with the meeting. Neumann paused for a moment and said: “Me.”
- harry8 7y agoLook I want to put the boot into silicon valley snake oil salesmen and billionaire assholes as much if not more than most here but this troubles me a little. None of this kind of story before his fall from grace and now here it all is. So I guess we don't get it reported if his snakeoil IPO'd for a squillion dollars? Or maybe is it exaggerated now it publically failed to IPO so putting the boot in is allowed. It seems like there is a fair amount of reporting where those working on it are desperate to knife the subject but only occasionally allowed to be let off the leash to do the hatchet job. Maybe it has some baring on how such an asshole as Neumann has failed upwards to become a billionaire. Failed upwards to become a billionaire. Does he care what we think of him in any way?
- skybrian 7y agoMaybe it has something to do with availability of sources? People at the company are more willing to talk now than before, when they were hoping to get rich from the IPO. And he's no longer the boss so it's less risky to talk about him.
- yalogin 7y agoThat is a wrong way to look at it. Journalists dig into stories that pop up or give them a reason to look into. Without this fall from grace and outed as a cheat, he is just another success story, a valley billionaire so nothing really to look at. They have limited time and will try to invest in stories that they feel are important.
- josefrichter 7y agoThe reason of $42 billion borderline fraud with red flags all over is not newsworthy?
- Traster 7y agoAll sorts of stories were out in the wild about Neumann before the failed IPO. It's one of the reasons IPO failed. I remember on Hacker News people talking about WeWork's acquisition of a surfing company years ago and there was a notable post about them evicting a customer for a negative blog. The thing is though, a founder/CEO of a private company isn't subject to public pressure, and it's not unusual for Tech Bros to be total douchebags (see also: Jack Dorsey - Biohacker Extra-ordinare, Mark Zuckerberg - The 21st Century's answer to Nero, Musk - Pedofinder General). What changed isn't the failure of reporters, it's the fact that suddenly the guy had actual public accountability.
- rchaud 7y agoSkepticism of WeWork has existed for years. Just check the comments on pre-2018 HN links related to WW. > Does he care what we think of him in any way? Is that what you're getting out of this? That the media are revelling in taking down a fraud? What I get out of this is the scale of the disconnect between academic theories around capital investment, and the bullshit upon which those decisions are actually based. Anybody who claims MBS and Jared Kushner are going to save the world is a sociopath and a liar willing to say whatever it takes to get pen to paper on another billion dollar funding round.
- rajacombinator 7y agoSo epic. This guy is the ultimate “real world” hacker.
- seibelj 7y agoThis Adam Neumann guy is a living legend. The inevitable HBO miniseries will have an A-list actor and associates will tell tales of his exploits for decades. $1 billion parachute and public investors never got burned. I feel most bad for the employees, but that’s the free market for you. Bernie Madoff represented the worst of the financial crisis villains, and Adam Neumann is the millennial con artist for the unicorn era. A man of the times. I keep eating up these stories, as I’m sure most of us here are as they keep getting upvoted to the front page. Fascinating
- Waterluvian 7y agoI have two live-action soap operas that I follow closely as my guilty pleasures. The main one is the Trump saga and related stories, anchored by Ken White and Josh Barro's phenomenal podcast, "All The President's Lawyers." The second is the swamp called Silicon Valley: Theranos, Wework, etc. But I don't have a good anchoring podcast for it, I only get it piecemeal via HN and such. So recommendations appreciated!
- jessedhillon 7y agoPivot by Kara Swisher and Scott Galloway
- Waterluvian 7y agoGoing to check that out. Thanks for sharing!
- systemdtrigger 7y agoThe Trump one is totally badly written and really stands out as fictitious. One side excites it's base by making wild promises but when it seems that they would lose they make up fake collusion dossier and used the full power of their owned govt and bought media apparatus. And then 2 years later when turned out everybody lied and their was no collusion, not a single person batted an eye? Come on, that doesn't happen in reality.
- josefrichter 7y ago
- barce 7y agoAll the firing of brilliant coders at WeWork makes sense now, after reading that Adam is dyslexic. These coders were asked to make something awesome. Given that vague direction, some of the probably did TDD, and tried to show kanban or project management burn lists or something like that. These coders would say the awesome was in the code, and the summary of features for product spec. He should just read it. That probably triggered Adam to no end. And that's why in the end he just bought Meetup.com, but even that didn't work. He ran into the same problems again. Reading about Adam is like reading about Hitler. The German high command was suckered into thinking a hateful person who couldn't stand people more brilliant than him knew it all.
- goatinaboat 7y agoAll the firing of brilliant coders at WeWork makes sense now It makes sense because WeWork was not a tech company, had no need of “brilliant coders”, and besides, they were not brilliant anyway and produced basically nothing beyond a website and perpetually broken wifi and printing.
- barce 7y agoWhat a missed opportunity for developing new tech with all that capital! Brilliance should always be needed and welcomed.
- Animats 7y agoThe real question is, why is the Saudi Arabia sovereign wealth fund such a huge source of dumb money? They propped up WeWork. They propped up Uber. To some end, or just through sheer dumbness? None of this could happen without a huge source of dumb money.
- seibelj 7y agoInvesting $10 billion responsibly across a lot of private companies is hard work. Gotta find the companies, negotiate, join the board, monitor them, be apprised of the goings-ons. Then you find a company that can plausibly take $10billion in one go and return the same as any other tech company, plus by giving them so much capital they can destroy the competition. It really comes down to easy-money policies of central bankers combined with the laziness of investors. So much money to invest and doing hard work is for suckers who don’t have the connections to get the capital to invest.
- skybrian 7y agoOkay, but why not do something simple like buying the S&P 500? Is that unavailable at scale?
- tracer4201 7y agoDiversification. I don’t mean to generalize, but there’s a aspect to Saudi culture where they look at down upon people who work - regardless of whether you’re a doctor or a rocket scientist - they look down upon folks who work for a living as if they’re lesser people. In that micro culture, you cannot rely on your own population for economic output. You rely on foreigners or you directly invest in foreign companies and hope to find the next Amazon, Microsoft, or something like that. Source - I married right after high school and my first husband (15 years older) worked in Saudi Arabia. I went there to live with him. We lived together there for 3 years. I eventually left him because I didn’t want to be in a cage (at least that’s what it was like to live there as a female) and wanted to go to school and have my own career and freedom.
- tracer4201 7y agoNot sure how accurate this article is, but having no background on Neumann nor WeWork, it sounds like a cult that brainwashed a lot of hard working people. Adam sounds delusional at best and a predatory conman at worst, at least from the conclusions one can draw from the article, and Wall Streets delusion on profitability was nothing more than a loaded gun given to a toddler. I’m not sure what conclusions to draw from this - in my own experience, I’ve met managers, directors, and executives who can be very charming and flattering. These are people who I seemed to instantly like... in hindsight, they have some common traits (their ability to sell, 1:1s where the people just talk on and on and on about themselves, their achievements, or their vision without asking about my ideas, vision, concerns, motivations, etc) These are the people you have to be extremely cautious of. In my experience, they are deluding themselves and others, or they are purposely giving that pitch because they see you as a useful pawn for some agenda. I’ve learned this lesson a few times now. I don’t mean to sound cynical but that’s reality.
- nprz 7y agoI feel like I also know the type. Confident and charismatic. Rarely apologetic. Rarely empathetic. Can easily build out many relationships. Only concerned about other people insofar that they can help accomplish the predators end goals. Not fun to work with this kind of person.
- hef19898 7y agoCrossed more of this manager type in my life I care for. As you mentioned, common traits are selling, self-promoting, vision not grounded in reality. At one point I kind of learned to see through it, and the sheer amount of people like that is mind blowing. That only a rare few of those have any qualification to speak of only makes matters worth. I just don't know how many of them I didn't see or even fall for in the early days of my career.
- davesque 7y agoReading this article, I can't help but feel like an economic reckoning is on the horizon like none seen before.
- hos234 7y agoThere is a lot of cash still floating around. It's not all bad.
- czechdeveloper 7y agoI think issues is that it's artificial cash. A lot of people expected inflation with newly printed money (central banks poured ridiculous amount new money in economy after 2008), but it never arrived. Because that money never found a way from investment to consumer goods, so for normal people the inflation is pretty standard. Except of prices of housing, which is also an investment asset. Inflation in investment assets is quite larger and we consider it "economic growth".
- hef19898 7y agoThe amount of free floating cash is the problem if you ask me. All that money wants to go somewhere, so it is creating bubbles and going into stuff like WeWork.
- randomsearch 7y agoCould this be a consequence of inequality? Perhaps an individual can now hold a large proportion of the wealth, but without the quality/volume of ideas or capacity to use that wealth.
- KKKKkkkk1 7y ago> In the wake of the Journal exposé, investor Michael Eisenberg and WeWork CFO Artie Minson held a conference call with WeWork’s directors and argued that Neumann had to step down, two people briefed on the call said. So Minson went to the board behind Neumann's back and suggested that Neumann should be fired. Ultimately, Neumann was fired and Minson became co-CEO. The human dimension here is interesting.
- josefrichter 7y agoFascinating. A lot of the stuff they did still makes sense. Even having a hyperenergetic lunatic as a company face might work. But how on Earth did the investors refuse to address the red flags, that's criminal.
- rchaud 7y agoBecause there are only a few investors, and they are all in on the scam. Even admitting the existence of red flags would have tanked the S-1, so they just hoped that the public markets wouldn't ask too many questions and buy shares at the desired IPO price.
- deleted 7y ago[deleted]