4 ms·

Why Is Anyone Still Betting on Adam Neumann?

33 points by laurex 4y ago

quantified 4y ago
> we love seeing repeat-founders build on past successes by growing from lessons learned," Andreessen wrote. Neumann's success was really developing a hype machine and getting money from investors into his pockets. Color me extremely dubious that this will end up being a good deal for the renters, unless they're the very high end ones. To generate VC-worthy returns, there needs to be a significant cash extraction from the renters. VCs will care about value when the company goes public or gets acquired, the valuation could total fluff to that point but there needs to be a better profit for this venture over traditional real estate or it's not particularly attractive. The delta between reality-distortion valuation and real-reality valuation is what got Adam his platinum parachute the first time around. I suspect the innovations are about monitoring the denizens and monetizing the data. But, open mind, there may be innovations around how apartment buildings get tied to infrastructure, to the other resources of the city, to maintenance, energy, disposal services that provide efficiency without acting like a landlord.
- mandeepj 4y ago
  > we love seeing repeat-founders build on past successes by growing from lessons learned I guess Andreessen definition of success is different than how rest of the world saw unfolding of WeWork into a collapse.
  - smabie 4y ago
    I mean WeWork still exists and is still a unicorn so I don't think it's fair to call it a "collapse." Certainly Adam is good at something as he pretty much willed WeWork into existence from nothing.
    - papito 4y ago
      WeWork is not a unicorn. It's just an office space real estate company. It always has been. It's a profitable space, for sure, but there is going to be no "40x" nonsense.
googlryas 4y ago
If you're rich, it's easy to convince rich people to give you their money, and you can keep some. So it's smart to be one of the first people to give a rich person money. The rich person will then go get even more money, at which point the original investors can cash out with big returns, leaving the last person to give the rich person holding the bag. Hope you learned your lesson, Masayoshi Son.
- papito 4y ago
  You just described a pyramid scheme, but for the ultra-rich.
ALittleLight 4y ago
I'm imagining a cycle where Flow raises a bunch of money, lights the money on fire to gain market share, then either dies because of bad unit economics or goes on to dominate its space. If so, I think there may be a chance to profit in the second stage, or at least enjoy the sweet smell of burning money. Will they be selling/renting condos at a steep discount heavily subsidized by VC money? Can I potentially get in at a good time? Obviously, given the scam nature of this thing you'd need to be careful - but there is no real profit without risk...
deleted 4y ago
[deleted]
thorncorona 4y ago
Flow, Neumann's new play backed by A16Z and other high profile VCs: > It’s possible this is a rent-to-own play, which would put it in a segment of the real-estate business that’s notoriously predatory, one the Federal Trade Commission has warned is full of high fees and catches that end up burning would-be owners. All is new in the world, and yet all is the same.
- UncleMeat 4y ago
  What has been will be again, what has been done will be done again; there is nothing new under the sun.
peter303 4y ago
FLOW sounds like an an adult college dormitory. Tenants would rent/buy a private bedroom & bathroom. Living room, kitchen, offices, recreation would be common facilities. This probably wouldnt work for adults who wish to raise families.
- floatinglotus 4y ago
  That’s not it at all. You don’t know what it is so stop making things up.
- rchaud 4y ago
  It doesn't have to work. It just has to show enough signups in the short term so they can have a rationale for going public. This is subprime entrepreneurship. No profits, no problem.
- papito 4y ago
  Because a kibbutz in a highly individualistic society like the United States is a great idea. These people need to get off the sauce.
floatinglotus 4y ago
It’s not rent to own. You get credits for the rent you pay, you can move to a different rental and add to those credits. At some point in the future you have some capital value in the program itself, not in any particular property. This allows you to move as much as you want (to other flow properties). Your credits accumulate and you can use that to either cash out or (more desirable) to create your own flow enabled properties with access to great terms via flow. You will never own the properties themselves, just credits in a company that holds all the real estate.
- UncleMeat 4y ago
  Sounds like a timeshare.
  - floatinglotus 4y ago
    It’s not a timeshare. You can keep renting as long as the property owner allows it. When your life changes (flow) you can move to another property and keep the credits you accumulated. As with most Adam Neumann stuff it laces messianic ideas with Ponzi economics.
    - FooBarBizBazz 4y ago
      You can keep renting money (with a mortgage) as long as the bank allows it (i.e., as long as you keep paying). When your life changes (flow) you can move to another property and keep the credits (USD) you accumulated. The difference is that (a) in my version a realtor gets a 6% commission at each step, (b) the credits are 1:1 exchangeable for USD, and (c) the credits last as long as the US government does, as opposed to for the life of a company. Probably mine is less-Ponzi, but it isn't great either.
    - deleted 4y ago
      [deleted]
- tehwebguy 4y ago
  This is genius, it will be like a frequent flyer program but without any significant possibility of customer loyalty People will justify paying higher rents than they would since they're getting some of it back as these credits. Flow will incentivize holding them & eventually they'll shut down and everyone's credits will just disappear into thin air! Better than a web3 pump & dump, no need to hire expensive crypto engineers.

33 points by laurex 4y ago

> we love seeing repeat-founders build on past successes by growing from lessons learned," Andreessen wrote. Neumann's success was really developing a hype machine and getting money from investors into his pockets. Color me extremely dubious that this will end up being a good deal for the renters, unless they're the very high end ones. To generate VC-worthy returns, there needs to be a significant cash extraction from the renters. VCs will care about value when the company goes public or gets acquired, the valuation could total fluff to that point but there needs to be a better profit for this venture over traditional real estate or it's not particularly attractive. The delta between reality-distortion valuation and real-reality valuation is what got Adam his platinum parachute the first time around. I suspect the innovations are about monitoring the denizens and monetizing the data. But, open mind, there may be innovations around how apartment buildings get tied to infrastructure, to the other resources of the city, to maintenance, energy, disposal services that provide efficiency without acting like a landlord.

mandeepj 4y ago
> we love seeing repeat-founders build on past successes by growing from lessons learned I guess Andreessen definition of success is different than how rest of the world saw unfolding of WeWork into a collapse.
- smabie 4y ago
  I mean WeWork still exists and is still a unicorn so I don't think it's fair to call it a "collapse." Certainly Adam is good at something as he pretty much willed WeWork into existence from nothing.
  - papito 4y ago
    WeWork is not a unicorn. It's just an office space real estate company. It always has been. It's a profitable space, for sure, but there is going to be no "40x" nonsense.

googlryas 4y ago

If you're rich, it's easy to convince rich people to give you their money, and you can keep some. So it's smart to be one of the first people to give a rich person money. The rich person will then go get even more money, at which point the original investors can cash out with big returns, leaving the last person to give the rich person holding the bag. Hope you learned your lesson, Masayoshi Son.

papito 4y ago
You just described a pyramid scheme, but for the ultra-rich.

ALittleLight 4y ago

I'm imagining a cycle where Flow raises a bunch of money, lights the money on fire to gain market share, then either dies because of bad unit economics or goes on to dominate its space. If so, I think there may be a chance to profit in the second stage, or at least enjoy the sweet smell of burning money. Will they be selling/renting condos at a steep discount heavily subsidized by VC money? Can I potentially get in at a good time? Obviously, given the scam nature of this thing you'd need to be careful - but there is no real profit without risk...

deleted 4y ago

[deleted]

thorncorona 4y ago

Flow, Neumann's new play backed by A16Z and other high profile VCs: > It’s possible this is a rent-to-own play, which would put it in a segment of the real-estate business that’s notoriously predatory, one the Federal Trade Commission has warned is full of high fees and catches that end up burning would-be owners. All is new in the world, and yet all is the same.

UncleMeat 4y ago
What has been will be again, what has been done will be done again; there is nothing new under the sun.

peter303 4y ago

FLOW sounds like an an adult college dormitory. Tenants would rent/buy a private bedroom & bathroom. Living room, kitchen, offices, recreation would be common facilities. This probably wouldnt work for adults who wish to raise families.

floatinglotus 4y ago
That’s not it at all. You don’t know what it is so stop making things up.
rchaud 4y ago
It doesn't have to work. It just has to show enough signups in the short term so they can have a rationale for going public. This is subprime entrepreneurship. No profits, no problem.
papito 4y ago
Because a kibbutz in a highly individualistic society like the United States is a great idea. These people need to get off the sauce.

floatinglotus 4y ago

It’s not rent to own. You get credits for the rent you pay, you can move to a different rental and add to those credits. At some point in the future you have some capital value in the program itself, not in any particular property. This allows you to move as much as you want (to other flow properties). Your credits accumulate and you can use that to either cash out or (more desirable) to create your own flow enabled properties with access to great terms via flow. You will never own the properties themselves, just credits in a company that holds all the real estate.

UncleMeat 4y ago
Sounds like a timeshare.
- floatinglotus 4y ago
  It’s not a timeshare. You can keep renting as long as the property owner allows it. When your life changes (flow) you can move to another property and keep the credits you accumulated. As with most Adam Neumann stuff it laces messianic ideas with Ponzi economics.
  - FooBarBizBazz 4y ago
    You can keep renting money (with a mortgage) as long as the bank allows it (i.e., as long as you keep paying). When your life changes (flow) you can move to another property and keep the credits (USD) you accumulated. The difference is that (a) in my version a realtor gets a 6% commission at each step, (b) the credits are 1:1 exchangeable for USD, and (c) the credits last as long as the US government does, as opposed to for the life of a company. Probably mine is less-Ponzi, but it isn't great either.
  - deleted 4y ago
    [deleted]
tehwebguy 4y ago
This is genius, it will be like a frequent flyer program but without any significant possibility of customer loyalty People will justify paying higher rents than they would since they're getting some of it back as these credits. Flow will incentivize holding them & eventually they'll shut down and everyone's credits will just disappear into thin air! Better than a web3 pump & dump, no need to hire expensive crypto engineers.