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A16Z is betting big on Adam Neumann's new real estate startup

5 points by amrrs 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.
- catchnear4321 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. So if he’s building on past successes and learning from mistakes, more hype, more money. He’s a billionaire after that fiasco. Will he climb higher after the next one? Andreessen seems to think so. Data collection would make sense, for internal purposes and/or external buyers. But that presumes the need for more than raw hype to make a billion or two. Whatever it is, it smells funny.
WheelsAtLarge 4y ago
I would too. Neumann is a BSer but most successful entrepreneurs are too. He knows how to play the game. I think he's commune theme has potential in the rental market. I'd be interested in seeing how it works out.

5 points by amrrs 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.

catchnear4321 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. So if he’s building on past successes and learning from mistakes, more hype, more money. He’s a billionaire after that fiasco. Will he climb higher after the next one? Andreessen seems to think so. Data collection would make sense, for internal purposes and/or external buyers. But that presumes the need for more than raw hype to make a billion or two. Whatever it is, it smells funny.

WheelsAtLarge 4y ago

I would too. Neumann is a BSer but most successful entrepreneurs are too. He knows how to play the game. I think he's commune theme has potential in the rental market. I'd be interested in seeing how it works out.