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> Mr. Neumann, who has purchased more than 3,000 apartment units in Miami, Fort Lauderdale, Atlanta and Nashville, aims to rethink the rental housing market by

> Mr. Neumann, who has purchased more than 3,000 apartment units in Miami, Fort Lauderdale, Atlanta and Nashville, aims to rethink the rental housing market by creating a branded product with consistent service and community features. Flow will own and operate the properties Mr. Neumann had bought and also offer its services to new developments and other third parties. Exact details of the business plan could not be learned. > In the case of Flow, the business is effectively a service that landlords can team up with for their properties, somewhat similar to the way an owner of a hotel might contract with a branded hotel chain to operate the property. In other words, a Property Management Company. There are literally thousands of them out there. This is an industry that has existed forever. It's also largely non-scalable. But he's going to somehow remake the industry by offering consistent branding like paint colors, deco schemes, and coffee service. Why exactly is a tech-focused VC interested in this?

popcorncowboy 4y ago
Haha, I'm only laughing because if you swap "Property Management Company" with "Managed Office Space" in your sentence you could have been talking about WeWork.
- DebtDeflation 4y ago
  Didn't AN's wife have a side project in the WeWork days focused on residential? I know she had one focused on schools. Just looked it up. She did. It was called WeLive. The school one was WeGrow.
pclmulqdq 4y ago
Thinking about this from a good faith perspective, I would assume the VC wants to get some exposure to the property market while still pretending to be a "VC" fund. Alternatively, this might be a bailout of sorts after Adam Neumann's crypto-based carbon trading platform went bust (along with $70 million from AH). It's hard to look at this from a charitable perspective, though. Adam Neumann is basically Elizabeth Holmes, so I don't know why people keep giving him money.
- andreareina 4y ago
  Nah Neumann was 100% up-front about WeWork, including the self-dealing.
- rzwitserloot 4y ago
  From time to time you see the entire executive body of a large firm, or sometimes even _all_ executive bodies from all firms in a certain market segment, do something that makes you go: Hmm. Odd. Sure seems like they are oblivious morons from where I'm standing and I don't think I'm judging based on hindsight either. I usually assume that I must be missing something. But AH is making it real, real hard to figure this one out. What in the fuck has crept into your brain if you think this is a good idea? SV VCs love saying that it is about the person/team and their experience more than the idea. Okay. It's Adam Neumann, so, swing a dead cat anywhere on the planet and you'll hit someone more capable than that clown. The idea is also rather basic. So, what happened here? How's this good for AH? Some sort of harebrained scheme where by _them_ giving Adam Neumann money, it means AN can plausibly be called 'a successful businessperson', and thus it makes AH not look like a bunch of fucking idiots who got conned? Talk about throwing good money after bad.
  - rogerkirkness 4y ago
    VCs I've met feel Adam Neumann is one of the best at pitching of anyone they have ever met or are aware of, like the GOAT of fundraising. That has massive value, and in theory you could insulate them from operational things that need budgets.
    - pclmulqdq 4y ago
      In theory, theory and practice are the same. In practice, the people making the pitch have never been insulated from operations or technology. Either their egos get too big for a split to work or they actually start to believe their own bull. This is a fantasy that has never happened before, and while it would be nice, it is not real.
      - 4y ago
CPLX 4y ago
I will preface this by saying I am not a fan of this guy, like at all. I would never want to be in business with him. With that said it doesn’t actually seem as crazy as everyone is making out. It’s worth starting with the premise that WeWork is actually a pretty great product. Making office space flexible is in fact something that needed doing and yes some people were banging around on the edges of it but it used to be kind of miserable and now it’s different. I’m a current WeWork member and I use it constantly when I travel and it’s just a pretty well thought out and executed product that fills a need. The same issue still exists in the rental market. Getting an apartment is also a bit of a nightmare. Yes property managers exist but if I could go through some kind of centralized process or membership and then live in Miami for 4 months and then Los Angeles for 4 months or whatever I could see a lot of value in that. The proposition here seems pretty straightforward. Again I think the guy is a bullshit artist but it’s not like it’s impossible to see how this could be a favorable investment.
- mbg721 4y ago
  This feels like online businesses around 2000, where people have identified the problem and know the tech they can use to solve it, but the companies trying to do it aren't the ones that can make the business side stick.
  - CPLX 4y ago
    Exactly. I was around back then too. It is pretty hard to make a user experience seamless and there’s a lot of industries where the user experience is needlessly complex and inflexible. The fact that it hasn’t been fixed yet doesn’t really prove it’s impossible. The rental apartment market is just obviously one of those industries.
  - notahacker 4y ago
    Feels more like a classic late 2010s bubble "tech" business. A business model that's been around for years, is minimally affected by tech, the guy proposing to build a "tech company" out of it is a self-dealing conman and the VC's exit strategy is presumably to achieve rapid growth by selling below cost price before offloading to greater fools who think the advantage over incumbents is a tech moat, not VCs underwriting losses
onlyrealcuzzo 4y ago
Importantly, it seems the consensus is that Neumann ran WeWork pretty terribly, and also bordered on scammy the way he bought buildings himself and then leased then to WeWork. The interesting thing about VC investors is that they don't seem to care at all if a company can actually succeed. All they seem to care about is if the person their investing in can raise a larger round - which, somehow, Neumann probably can without problem.
rwmj 4y ago
Regus had been doing managed offices since at least the 1990s but that didn't stop his previous business from attracting vast amounts of money.
TradingPlaces 4y ago
> Why exactly is a tech-focused VC interested in this? My strong suspicion is that this involves tokenized rent payments on a blockchain, and that a16z is looking to make their money back on the tokens. Never underestimate is cynicism of a16z. Keep in mind that a16z participated in A-series on the Neumann Flowcarbon tokenized carbon credit scheme just in May. That is already dead https://businesscloud.co.uk/news/in-crypto-adam-neumanns-flowcarbon-project-paused-indefinitely/ https://businesscloud.co.uk/news/in-crypto-adam-neumanns-flo...
- TradingPlaces 4y ago
  Yup. https://www.forbes.com/sites/davidjeans/2022/08/17/adam-neumanns-flow-a16z-crypto/?sh=23d538b423a2 https://www.forbes.com/sites/davidjeans/2022/08/17/adam-neum...
nradov 4y ago
Flow will probably also have an app where residents can pay their rent, and complain that the dishwasher is broken. So there's the tech focus.
pwinnski 4y ago
There were tons of other REITs when WeWork launched, and most of those didn't burn more than $10B on fraud. Neumann will brand these apartments, and enough people will feel excited to be living in a "Flow" apartment to fill them up (it's not like the US has enough spare housing to let that many apartments sit empty at even unreasonable prices), and Neumann will convince a lot of people that he's doing something different than every other property management company out there, while people at competing property management companies scratch their heads and think no, he isn't. Then it will come crashing down as everybody slowly realizes that Neumann has been lining his own pockets and that in the end, this is just another property management company, worth no more than the properties they hold. There might be another movie or miniseries about the process, too. Because apparently people can't get enough of being conned by Neumann.

popcorncowboy 4y ago

Haha, I'm only laughing because if you swap "Property Management Company" with "Managed Office Space" in your sentence you could have been talking about WeWork.

DebtDeflation 4y ago
Didn't AN's wife have a side project in the WeWork days focused on residential? I know she had one focused on schools. Just looked it up. She did. It was called WeLive. The school one was WeGrow.

pclmulqdq 4y ago

Thinking about this from a good faith perspective, I would assume the VC wants to get some exposure to the property market while still pretending to be a "VC" fund. Alternatively, this might be a bailout of sorts after Adam Neumann's crypto-based carbon trading platform went bust (along with $70 million from AH). It's hard to look at this from a charitable perspective, though. Adam Neumann is basically Elizabeth Holmes, so I don't know why people keep giving him money.

andreareina 4y ago
Nah Neumann was 100% up-front about WeWork, including the self-dealing.
rzwitserloot 4y ago
From time to time you see the entire executive body of a large firm, or sometimes even _all_ executive bodies from all firms in a certain market segment, do something that makes you go: Hmm. Odd. Sure seems like they are oblivious morons from where I'm standing and I don't think I'm judging based on hindsight either. I usually assume that I must be missing something. But AH is making it real, real hard to figure this one out. What in the fuck has crept into your brain if you think this is a good idea? SV VCs love saying that it is about the person/team and their experience more than the idea. Okay. It's Adam Neumann, so, swing a dead cat anywhere on the planet and you'll hit someone more capable than that clown. The idea is also rather basic. So, what happened here? How's this good for AH? Some sort of harebrained scheme where by _them_ giving Adam Neumann money, it means AN can plausibly be called 'a successful businessperson', and thus it makes AH not look like a bunch of fucking idiots who got conned? Talk about throwing good money after bad.
- rogerkirkness 4y ago
  VCs I've met feel Adam Neumann is one of the best at pitching of anyone they have ever met or are aware of, like the GOAT of fundraising. That has massive value, and in theory you could insulate them from operational things that need budgets.
  - pclmulqdq 4y ago
    In theory, theory and practice are the same. In practice, the people making the pitch have never been insulated from operations or technology. Either their egos get too big for a split to work or they actually start to believe their own bull. This is a fantasy that has never happened before, and while it would be nice, it is not real.
    - 4y ago

CPLX 4y ago

I will preface this by saying I am not a fan of this guy, like at all. I would never want to be in business with him. With that said it doesn’t actually seem as crazy as everyone is making out. It’s worth starting with the premise that WeWork is actually a pretty great product. Making office space flexible is in fact something that needed doing and yes some people were banging around on the edges of it but it used to be kind of miserable and now it’s different. I’m a current WeWork member and I use it constantly when I travel and it’s just a pretty well thought out and executed product that fills a need. The same issue still exists in the rental market. Getting an apartment is also a bit of a nightmare. Yes property managers exist but if I could go through some kind of centralized process or membership and then live in Miami for 4 months and then Los Angeles for 4 months or whatever I could see a lot of value in that. The proposition here seems pretty straightforward. Again I think the guy is a bullshit artist but it’s not like it’s impossible to see how this could be a favorable investment.

mbg721 4y ago
This feels like online businesses around 2000, where people have identified the problem and know the tech they can use to solve it, but the companies trying to do it aren't the ones that can make the business side stick.
- CPLX 4y ago
  Exactly. I was around back then too. It is pretty hard to make a user experience seamless and there’s a lot of industries where the user experience is needlessly complex and inflexible. The fact that it hasn’t been fixed yet doesn’t really prove it’s impossible. The rental apartment market is just obviously one of those industries.
- notahacker 4y ago
  Feels more like a classic late 2010s bubble "tech" business. A business model that's been around for years, is minimally affected by tech, the guy proposing to build a "tech company" out of it is a self-dealing conman and the VC's exit strategy is presumably to achieve rapid growth by selling below cost price before offloading to greater fools who think the advantage over incumbents is a tech moat, not VCs underwriting losses

onlyrealcuzzo 4y ago

Importantly, it seems the consensus is that Neumann ran WeWork pretty terribly, and also bordered on scammy the way he bought buildings himself and then leased then to WeWork. The interesting thing about VC investors is that they don't seem to care at all if a company can actually succeed. All they seem to care about is if the person their investing in can raise a larger round - which, somehow, Neumann probably can without problem.

rwmj 4y ago

Regus had been doing managed offices since at least the 1990s but that didn't stop his previous business from attracting vast amounts of money.

TradingPlaces 4y ago

> Why exactly is a tech-focused VC interested in this? My strong suspicion is that this involves tokenized rent payments on a blockchain, and that a16z is looking to make their money back on the tokens. Never underestimate is cynicism of a16z. Keep in mind that a16z participated in A-series on the Neumann Flowcarbon tokenized carbon credit scheme just in May. That is already dead https://businesscloud.co.uk/news/in-crypto-adam-neumanns-flowcarbon-project-paused-indefinitely/ https://businesscloud.co.uk/news/in-crypto-adam-neumanns-flo...

TradingPlaces 4y ago
Yup. https://www.forbes.com/sites/davidjeans/2022/08/17/adam-neumanns-flow-a16z-crypto/?sh=23d538b423a2 https://www.forbes.com/sites/davidjeans/2022/08/17/adam-neum...

nradov 4y ago

Flow will probably also have an app where residents can pay their rent, and complain that the dishwasher is broken. So there's the tech focus.

pwinnski 4y ago

There were tons of other REITs when WeWork launched, and most of those didn't burn more than $10B on fraud. Neumann will brand these apartments, and enough people will feel excited to be living in a "Flow" apartment to fill them up (it's not like the US has enough spare housing to let that many apartments sit empty at even unreasonable prices), and Neumann will convince a lot of people that he's doing something different than every other property management company out there, while people at competing property management companies scratch their heads and think no, he isn't. Then it will come crashing down as everybody slowly realizes that Neumann has been lining his own pockets and that in the end, this is just another property management company, worth no more than the properties they hold. There might be another movie or miniseries about the process, too. Because apparently people can't get enough of being conned by Neumann.