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Rebekah Neumann's search for enlightenment fueled WeWork's collapse

108 points by danso 7y ago

stopads 7y ago
Calling it a "victimless grift" as this writer does is just naive and silly. The thousands of people who got laid off while Adam got billions in golden parachute funds is the very definition of the word victim. Just because we've grown accustomed to decades of golden parachutes and widening income inequality and excessive equity based compensation to dodge taxes at the high end doesn't mean any of this is normal or victimless. The victims are everyone who isn't an executive.
- corporateslave5 7y ago
  Adam Neumann played SoftBank and gave them what they had coming. We need people like Adam to keep the markets from bubbling too much. It’s part of the checks and balances in a healthy capitalist system.
  - jasonmp85 7y ago
    I love this comment which just straight-up comes out and says that lying sociopaths and narcissists are an integral part of a “healthy capitalist system”. Tankies couldn’t have written a better indictment.
    - corporateslave5 7y ago
      I’m not a psychopath, but it’s just part of human nature. And softbank just wanted to dump a shitty company on the public markets and rip off retail investors. Neither side is good here.
    - deleted 7y ago
      [deleted]
    - lotsofpulp 7y ago
      Lying sociopaths and narcissist are always going to be wrong. What keeps them in check are those who know this and value objective truths or measurable metrics rather than prose and charisma.
    - Mirioron 7y ago
      There's some truth to the comment. You can't have people become so complacent that they just trust people on their word. You need somebody to actually verify that what they're doing could actually work. Take Theranos for example. That whole thing is a huge case is scientific illiteracy. What they were suggesting was essentially impossible to achieve, yet people invested in it anyway. Nobody demanded to even see it working properly as a prototype. There are enormous kickstarter campaigns for things like "self-filling water bottles" or "solar roadways" and people fall for them.
      - lotsofpulp 7y ago
        > Nobody demanded to even see it working properly as a prototype. Quite a few people did and recognized the fraud that it was long before it was public. But there were quite a few vested interests in making sure the price the equity would sell at was more than what they purchased at.
  - Uhhrrr 7y ago
    There are plenty of businesses with more realistic goals and well-intentioned founders which go under. You don't need people like Adam.
- koolba 7y ago
  > The thousands of people who got laid off while Adam got billions in golden parachute funds is the very definition of the word victim. Not in my book. They got a few years of a cushy job and now move on to something else. Otherwise this sounds like calling the people who were evicted for not paying their mortgages “victims”. Sure they lost their homes, but they also got to live in the house for a while for free.
Barrin92 7y ago
The one thing I don't get about these companies is how all the employees, in particular higher ups and investors buy this stuff. I mean if you read these articles about Neumann and his wife, elevating the world's conciousness, smoking weed everywhere, buying artificial wave companies for no reason, he doesn't even sound like a real person, he sounds like a Silicon Valley tv show character. There's a lot of podcasts and articles about the famous people involved in this, but I just would like to hear what regular employees and managers think about this. How are you working at these companies for months and don't think you're in a cult? The same thing about Theranos, I read the John Carreyrou book and it just sounds insane. How are people at a company for months that sounds like a Kafka novel, I truly don't get it.
- deleted 7y ago
  [deleted]
- luckydata 7y ago
  The problem here is optics. Let's say you believe the stuff they tell you while they recruit you, you're happy to get a new job, higher salary etc... and join WeWork. Then you walk into the place and it's a total shitshow. Crap. Now you have to decide if you want to take a hit on salary and position to get a job somewhere else and charitably leave WeWork out of your resume, or you try to make it to 1-2 years of tenure when you can actually leave and hope nobody will ever ask too many questions. The funny thing about this is the incentives in the hiring market compound the problem tremendously, because most recruiters don't care to think about what situation you might be leaving, they only look at tenure and if too short they will immediately think you're a "problem employee".
  - pxue 7y ago
    Every company is a gradient scale of a "shit show". Some are just more deep in shit than others.
  - schmookeeg 7y ago
    I've lived your exact scenario. I left the shit show company and it is not listed on my CV. Actually, there are 5 jobs like that which are not on my resume. I'm fortunate that I freelance and have many things going at once, so was able to "smooth" the dates and avoid having to explain any gaps.
jiveturkey 7y ago
> Today, Rebekah and Adam Neumann are living in temporary social exile in Tel Aviv after starring in the most sensational corporate collapse probably ever. ha. but not financial exile. ($1.7bn parachute according to TFA.) billion with a `b'. let that sink in. interesting though that the financiers in this debacle haven't suffered the same fate. strong article. i do wish they'd talked more about adam.
- Mvandenbergh 7y ago
  It's basically the smarter version of what Elizabeth Holmes did. If you're going to grift, play by the rules. It is not illegal to do what the Neumanns did, take dumb money and use it to enrich yourself while the company collapses as long as you don't lie and follow the rules. If Holmes hadn't made the amateurish mistake of actually lying rather than just handwaving vaporware, and had managed to pull some liquidity out during later rounds into Theranos, she'd be rich and untouchable. Remember, it's not illegal to be bad at business or technology and it's not illegal to be ridiculously optimistic to the point of delusion about the future. What is illegal is being "optimistic" about events which have already occurred. As a result, they are smoking weed by the coast of the med and shopping for vineyards and Holmes is going to jail.
  - jiveturkey 7y ago
    yep. in the article they call it a collapse, but i wouldn't dispute it if they argued that it was a success.
KoftaBob 7y ago
What frustrates me to no end is that instead of those billions going towards capital intensive startups that are actual moonshots, it was funneled into some bullshit real estate ponzi scheme. There are so many big problems that need solving, and also require large up front capital to do so. Think vertically integrated healthcare/hospital systems that remove insurance from the equation, nuclear fusion, new models for higher education, cancer treatments, etc. Think of how many SpaceX and Tesla-esque startups didn't get off the ground because that money went to a damn coworking space company. Come on.
- toomuchtodo 7y ago
  Funny you write this comment, as I thought about exactly this the other day while out for a jog. These aren't VC problems, these are politics problems ("Think vertically integrated healthcare/hospital systems that remove insurance from the equation [1], nuclear fusion [2], new models for higher education [3], cancer treatments [4], etc."). I want my government funding these ideas, not some VC partner you have to pander to. Have a moonshot idea? DARPA/ARPA-E Tesla and SpaceX weren't government funded per se (kudos Elon), but they took advantage of US government subsidies/financing (Tesla) and NASA contracts (SpaceX), which I take no issue with. But those are the exceptions, not the rule. [1] Single payer Medicare For All, with a HHS (Health & Human Services) central EHR/EMR system [2] US ITER [3] Khan Academy, Coursea, Udemy (non-profits, not gov) [4] US NIH (who provided the vast majority of the resources researching treatments for HIV/AIDS)
  - KoftaBob 7y ago
    and it's great to encourage government initiatives to tackle those problems, but I'm not implying private startups should replace those initiatives, but rather complement them. The mighty NASA and Russia's space program hadn't (and still haven't) figured out how to build reusable self-landing rockets (for a # of reasons), and yet a company with startup-level resources like SpaceX did. Part of it is because startups have to succeed at their goal, or they die. Government entities don't die if they don't pull off medicare for all. In addition, startups don't have the slow and bulky bureaucracy of government in their way. Think of what those advantages can bring about in healthcare, energy, and other moonshot fields, if they just had the funding. Hence why it's so important for big funds like SoftBank to invest in those, not nonsense startups with nothing more than a cult leader.
ada1981 7y ago
I love how this tries to blame Adams wife. LoLz.
ArmandGrillet 7y ago
> [They were] buying assets WeWork would in turn lease back from them. But as Rebekah explained in an interview with Fast Company, “We don't have a line at all between work and life. It's not even a blurred line. There is no line.” There was also no line between business and theft.
- perl4ever 7y ago
  That must be hyperbole, I haven't paid much attention, but compare to Carlos Ghosn.
CommieBobDole 7y ago
I feel like the fact that everything they did made no financial sense, and that they embodied the old joke about losing money on every transaction and making it up with volume is probably the main driver of their collapse. The impact of any of the other bizarre stuff they were doing was probably minimal.
mrosett 7y ago
I love WeWork collapse porn as much as anyone, but the author of this piece is sloppy with the details. > All the while, its valuation (as calculated by Goldman Sachs) inflated to $90 billion. You don't get to count the numbers bankers put in an IPO pitch powerpoint as a "valuation". > [describing Adam] shamanic figure who wooed so many overconfident white guys in Silicon Valley Masayoshi Son isn't white and doesn't live in Silicon Valley.
dx7tnt 7y ago
I just love having a simple life where I don't have to have anything to do with spiritual, emotional or financial fraudsters like these. It's wonderful caring little for money and work and just watching nothing like this ever happen in my little world.
jariel 7y ago
The Yoga school sued for sexual harassment and shut down, the Kabbalah sued for illegal labour, parents life long con-artist ... 'never left the East Side bubble'. These are the same people that excessively promote woke ideals, and they believe their own egos to the core. It's not the message that's bad, it's the utter 'nice toxicity' of the messengers. These people are just as bad as Donald Trump, they're the other side of the coin, they deserve the same treatment. Why don't we see parodies of these people weekly SNL? I think the 'bubble' has a lot of influence and is protecting their own reputation by not spending a lot of time lingering on the issue.
jimkri 7y ago
Has anyone else noticed how deceptive the Paltrow family has been? 1. Bob Paltrow - Pleaded guilty to felony tax evasion over his liberal use of the junk mail company to finance his lifestyle. (was sentenced to six months in prison). In March 2019, roughly 700 employees of a company factory in Ciudad Juárez were told to take a three-day weekend, only to return to an empty warehouse 2. Gwyneth Paltrow - GOOP. 3. Rebekah - WeWork.
- apacheCamel 7y ago
  I find the whole web as a whole extremely fascinating. How it is all connected, how this group of society works and what they all do with their vast amounts of money and connections. It seriously just boggles my mind sometimes. A lot of good can come out of it all, and then you have GOOP. I'd really hope I would act differently but it is impossible to tell.
  - jimkri 7y ago
    I find it interesting too and really don't understand it. I really feel like they learned everything from Bob and the family. He sold junk mail and was able to pay for their great lifestyle. So the kids learned that they can sell junk, but were able to take that to the next level with strong marketing and design. GOOP is junk with great marketing and design. WeWork is similar, they market it as something that its not. The marketing idea made me think of the documentary: The Century of the self (https://www.youtube.com/watch?v=eJ3RzGoQC4s https://www.youtube.com/watch?v=eJ3RzGoQC4s)
- deleted 7y ago
  [deleted]
jdkee 7y ago
FTA: "giving her titles like “strategic thought partner” and a staff she charged with such inane tasks as disassembling her phone, painting all the pieces white, and reassembling it again." Boy, if that isn't a red flag, I don't know what is.
calvinbhai 7y ago
surprising that such a long writeup about the wework debacle doesn't mention Masayoshi Son holding founders at ransom to take his Softbank money. Why would anyone refuse such money? Not sure what's Rebekah got to do with the WeWork debacle. (good to know all the star kids connections. IMO, most rich white people in US can do any financial crime and get away with it)
e40 7y ago
Did WeWork collapse? They just took an entire new floor over in the building I work. They had 2 floors before. Now have a third. This is in Oakland, CA. In a very expensive, hip locale.
- astura 7y ago
  Collapse probably isn't the right word because they are still in business, but they certainly tripped. They were forced to cancel their IPO, sell their stake in all non-core business, oust their CEO/founder with a billion dollar golden parachute, and lay off like a quarter of its employees. What collapsed was the cult of personality around Adam Neumann.
luord 7y ago
This is the kind of story that gets weirder the more one reads it, and that's of course because all of it actually happened.

108 points by danso 7y ago

Calling it a "victimless grift" as this writer does is just naive and silly. The thousands of people who got laid off while Adam got billions in golden parachute funds is the very definition of the word victim. Just because we've grown accustomed to decades of golden parachutes and widening income inequality and excessive equity based compensation to dodge taxes at the high end doesn't mean any of this is normal or victimless. The victims are everyone who isn't an executive.

corporateslave5 7y ago
Adam Neumann played SoftBank and gave them what they had coming. We need people like Adam to keep the markets from bubbling too much. It’s part of the checks and balances in a healthy capitalist system.
- jasonmp85 7y ago
  I love this comment which just straight-up comes out and says that lying sociopaths and narcissists are an integral part of a “healthy capitalist system”. Tankies couldn’t have written a better indictment.
  - corporateslave5 7y ago
    I’m not a psychopath, but it’s just part of human nature. And softbank just wanted to dump a shitty company on the public markets and rip off retail investors. Neither side is good here.
  - deleted 7y ago
    [deleted]
  - lotsofpulp 7y ago
    Lying sociopaths and narcissist are always going to be wrong. What keeps them in check are those who know this and value objective truths or measurable metrics rather than prose and charisma.
  - Mirioron 7y ago
    There's some truth to the comment. You can't have people become so complacent that they just trust people on their word. You need somebody to actually verify that what they're doing could actually work. Take Theranos for example. That whole thing is a huge case is scientific illiteracy. What they were suggesting was essentially impossible to achieve, yet people invested in it anyway. Nobody demanded to even see it working properly as a prototype. There are enormous kickstarter campaigns for things like "self-filling water bottles" or "solar roadways" and people fall for them.
    - lotsofpulp 7y ago
      > Nobody demanded to even see it working properly as a prototype. Quite a few people did and recognized the fraud that it was long before it was public. But there were quite a few vested interests in making sure the price the equity would sell at was more than what they purchased at.
- Uhhrrr 7y ago
  There are plenty of businesses with more realistic goals and well-intentioned founders which go under. You don't need people like Adam.
koolba 7y ago
> The thousands of people who got laid off while Adam got billions in golden parachute funds is the very definition of the word victim. Not in my book. They got a few years of a cushy job and now move on to something else. Otherwise this sounds like calling the people who were evicted for not paying their mortgages “victims”. Sure they lost their homes, but they also got to live in the house for a while for free.

Barrin92 7y ago

The one thing I don't get about these companies is how all the employees, in particular higher ups and investors buy this stuff. I mean if you read these articles about Neumann and his wife, elevating the world's conciousness, smoking weed everywhere, buying artificial wave companies for no reason, he doesn't even sound like a real person, he sounds like a Silicon Valley tv show character. There's a lot of podcasts and articles about the famous people involved in this, but I just would like to hear what regular employees and managers think about this. How are you working at these companies for months and don't think you're in a cult? The same thing about Theranos, I read the John Carreyrou book and it just sounds insane. How are people at a company for months that sounds like a Kafka novel, I truly don't get it.

deleted 7y ago
[deleted]
luckydata 7y ago
The problem here is optics. Let's say you believe the stuff they tell you while they recruit you, you're happy to get a new job, higher salary etc... and join WeWork. Then you walk into the place and it's a total shitshow. Crap. Now you have to decide if you want to take a hit on salary and position to get a job somewhere else and charitably leave WeWork out of your resume, or you try to make it to 1-2 years of tenure when you can actually leave and hope nobody will ever ask too many questions. The funny thing about this is the incentives in the hiring market compound the problem tremendously, because most recruiters don't care to think about what situation you might be leaving, they only look at tenure and if too short they will immediately think you're a "problem employee".
- pxue 7y ago
  Every company is a gradient scale of a "shit show". Some are just more deep in shit than others.
- schmookeeg 7y ago
  I've lived your exact scenario. I left the shit show company and it is not listed on my CV. Actually, there are 5 jobs like that which are not on my resume. I'm fortunate that I freelance and have many things going at once, so was able to "smooth" the dates and avoid having to explain any gaps.

jiveturkey 7y ago

> Today, Rebekah and Adam Neumann are living in temporary social exile in Tel Aviv after starring in the most sensational corporate collapse probably ever. ha. but not financial exile. ($1.7bn parachute according to TFA.) billion with a `b'. let that sink in. interesting though that the financiers in this debacle haven't suffered the same fate. strong article. i do wish they'd talked more about adam.

Mvandenbergh 7y ago
It's basically the smarter version of what Elizabeth Holmes did. If you're going to grift, play by the rules. It is not illegal to do what the Neumanns did, take dumb money and use it to enrich yourself while the company collapses as long as you don't lie and follow the rules. If Holmes hadn't made the amateurish mistake of actually lying rather than just handwaving vaporware, and had managed to pull some liquidity out during later rounds into Theranos, she'd be rich and untouchable. Remember, it's not illegal to be bad at business or technology and it's not illegal to be ridiculously optimistic to the point of delusion about the future. What is illegal is being "optimistic" about events which have already occurred. As a result, they are smoking weed by the coast of the med and shopping for vineyards and Holmes is going to jail.
- jiveturkey 7y ago
  yep. in the article they call it a collapse, but i wouldn't dispute it if they argued that it was a success.

KoftaBob 7y ago

What frustrates me to no end is that instead of those billions going towards capital intensive startups that are actual moonshots, it was funneled into some bullshit real estate ponzi scheme. There are so many big problems that need solving, and also require large up front capital to do so. Think vertically integrated healthcare/hospital systems that remove insurance from the equation, nuclear fusion, new models for higher education, cancer treatments, etc. Think of how many SpaceX and Tesla-esque startups didn't get off the ground because that money went to a damn coworking space company. Come on.

toomuchtodo 7y ago
Funny you write this comment, as I thought about exactly this the other day while out for a jog. These aren't VC problems, these are politics problems ("Think vertically integrated healthcare/hospital systems that remove insurance from the equation [1], nuclear fusion [2], new models for higher education [3], cancer treatments [4], etc."). I want my government funding these ideas, not some VC partner you have to pander to. Have a moonshot idea? DARPA/ARPA-E Tesla and SpaceX weren't government funded per se (kudos Elon), but they took advantage of US government subsidies/financing (Tesla) and NASA contracts (SpaceX), which I take no issue with. But those are the exceptions, not the rule. [1] Single payer Medicare For All, with a HHS (Health & Human Services) central EHR/EMR system [2] US ITER [3] Khan Academy, Coursea, Udemy (non-profits, not gov) [4] US NIH (who provided the vast majority of the resources researching treatments for HIV/AIDS)
- KoftaBob 7y ago
  and it's great to encourage government initiatives to tackle those problems, but I'm not implying private startups should replace those initiatives, but rather complement them. The mighty NASA and Russia's space program hadn't (and still haven't) figured out how to build reusable self-landing rockets (for a # of reasons), and yet a company with startup-level resources like SpaceX did. Part of it is because startups have to succeed at their goal, or they die. Government entities don't die if they don't pull off medicare for all. In addition, startups don't have the slow and bulky bureaucracy of government in their way. Think of what those advantages can bring about in healthcare, energy, and other moonshot fields, if they just had the funding. Hence why it's so important for big funds like SoftBank to invest in those, not nonsense startups with nothing more than a cult leader.

ada1981 7y ago

I love how this tries to blame Adams wife. LoLz.

ArmandGrillet 7y ago

> [They were] buying assets WeWork would in turn lease back from them. But as Rebekah explained in an interview with Fast Company, “We don't have a line at all between work and life. It's not even a blurred line. There is no line.” There was also no line between business and theft.

perl4ever 7y ago
That must be hyperbole, I haven't paid much attention, but compare to Carlos Ghosn.

CommieBobDole 7y ago

I feel like the fact that everything they did made no financial sense, and that they embodied the old joke about losing money on every transaction and making it up with volume is probably the main driver of their collapse. The impact of any of the other bizarre stuff they were doing was probably minimal.

mrosett 7y ago

I love WeWork collapse porn as much as anyone, but the author of this piece is sloppy with the details. > All the while, its valuation (as calculated by Goldman Sachs) inflated to $90 billion. You don't get to count the numbers bankers put in an IPO pitch powerpoint as a "valuation". > [describing Adam] shamanic figure who wooed so many overconfident white guys in Silicon Valley Masayoshi Son isn't white and doesn't live in Silicon Valley.

dx7tnt 7y ago

I just love having a simple life where I don't have to have anything to do with spiritual, emotional or financial fraudsters like these. It's wonderful caring little for money and work and just watching nothing like this ever happen in my little world.

jariel 7y ago

The Yoga school sued for sexual harassment and shut down, the Kabbalah sued for illegal labour, parents life long con-artist ... 'never left the East Side bubble'. These are the same people that excessively promote woke ideals, and they believe their own egos to the core. It's not the message that's bad, it's the utter 'nice toxicity' of the messengers. These people are just as bad as Donald Trump, they're the other side of the coin, they deserve the same treatment. Why don't we see parodies of these people weekly SNL? I think the 'bubble' has a lot of influence and is protecting their own reputation by not spending a lot of time lingering on the issue.

jimkri 7y ago

Has anyone else noticed how deceptive the Paltrow family has been? 1. Bob Paltrow - Pleaded guilty to felony tax evasion over his liberal use of the junk mail company to finance his lifestyle. (was sentenced to six months in prison). In March 2019, roughly 700 employees of a company factory in Ciudad Juárez were told to take a three-day weekend, only to return to an empty warehouse 2. Gwyneth Paltrow - GOOP. 3. Rebekah - WeWork.

apacheCamel 7y ago
I find the whole web as a whole extremely fascinating. How it is all connected, how this group of society works and what they all do with their vast amounts of money and connections. It seriously just boggles my mind sometimes. A lot of good can come out of it all, and then you have GOOP. I'd really hope I would act differently but it is impossible to tell.
- jimkri 7y ago
  I find it interesting too and really don't understand it. I really feel like they learned everything from Bob and the family. He sold junk mail and was able to pay for their great lifestyle. So the kids learned that they can sell junk, but were able to take that to the next level with strong marketing and design. GOOP is junk with great marketing and design. WeWork is similar, they market it as something that its not. The marketing idea made me think of the documentary: The Century of the self (https://www.youtube.com/watch?v=eJ3RzGoQC4s https://www.youtube.com/watch?v=eJ3RzGoQC4s)
deleted 7y ago
[deleted]

jdkee 7y ago

FTA: "giving her titles like “strategic thought partner” and a staff she charged with such inane tasks as disassembling her phone, painting all the pieces white, and reassembling it again." Boy, if that isn't a red flag, I don't know what is.

calvinbhai 7y ago

surprising that such a long writeup about the wework debacle doesn't mention Masayoshi Son holding founders at ransom to take his Softbank money. Why would anyone refuse such money? Not sure what's Rebekah got to do with the WeWork debacle. (good to know all the star kids connections. IMO, most rich white people in US can do any financial crime and get away with it)

e40 7y ago

Did WeWork collapse? They just took an entire new floor over in the building I work. They had 2 floors before. Now have a third. This is in Oakland, CA. In a very expensive, hip locale.

astura 7y ago
Collapse probably isn't the right word because they are still in business, but they certainly tripped. They were forced to cancel their IPO, sell their stake in all non-core business, oust their CEO/founder with a billion dollar golden parachute, and lay off like a quarter of its employees. What collapsed was the cult of personality around Adam Neumann.

luord 7y ago

This is the kind of story that gets weirder the more one reads it, and that's of course because all of it actually happened.