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How did he destroy billions in value? He created the company and spun it up very effectively before being done in by run away valuations -- thank Masayoshi Son

How did he destroy billions in value? He created the company and spun it up very effectively before being done in by run away valuations -- thank Masayoshi Son who is also a bit of a cowboy. The hostage tactics went both ways.. > same as the new-agey BS that permeated WeWork. The thing is, this worked great for WeWork. Neumann successfully hyped it up into a global brand. The company still exists. People still enjoy using it. Some people like new-agey community vibes apparently, why is that bad? Apple wouldn't be Apple without some Steve Jobs mystique to capture the popular imagination either. These are lifestyle brands. You could just work from a crummy McDonalds or your bedroom, nobody really needs a coworking space. Vibes are actually worth something. > I think I might even be at the very least impressed if Neumann manages to destroy a ton of a16z's money and still pocket tens of millions or so. I like how there are lots of stories on HN about founders who assume disproportionate risk getting completely screwed by investors and end up with nothing -- yet a guy who is a little bit more savvy is so easily painted as a villain. Ha.

benjaminwootton 4y ago
If it was Adam’s personality and approach that bought them down, it was the same thing that built a $multi-billion company in the first place. He deserved to be paid rather than it all falling into investors hands.
- deleted 4y ago
  [deleted]
bolanyo 4y ago
> How did he destroy billions in value? He turned around $25bn in cash into a company worth about $4bn, how else would you describe this?
- recuter 4y ago
  Same way I would describe Uber. SoftBank trying to muscle their way into ownership stakes by playing games with valuations and squeezing out the founder. The greater fool theory seems to apply. Masayoshi knew all the numbers, he thought Neumann was a good hype man to unload WeWork unto less sophisticated investors -- when that didn't pan out he tried to make him the fall guy and ended up holding the hot potato. Uber and WeWork are real companies, still around, providing actual services to actual customers. Both of their founders walked away billionaires, so what? SoftBank might have to write down their imaginary valuations as the public markets didn't bite into their attempted flip. The companies might survive long into the future as viable businesses with more realistic market caps.
  - SilverBirch 4y ago
    Firstly, it's not just a totally neutral act to hatch a plan to juice the numbers to a ridiculous extent and try and dump it onto public markets before it explodes. That's literally an attempt to scam you out of your pension fund. Secondly, you know that phrase "don't break the law while breaking the law", Adam wasn't just building this massive ponzi, he was self-dealing left and right, buying artificial surf beaches, selling his own trade mark back to himself, getting wework to rent offices that he owned, getting Softbanks other entities to rent huge amounts of Wework space to massively juice the numbers in Japan. The only reason WeWork was kind of acceptable is because he was mainly burning Saudi billionaire money, but make no mistake, the entire plan was that he'd become a billionaire whilst everyone else's pensions would take the hit, and even having failed he walks away a billionaire.
    - recuter 4y ago
      > Firstly, it's not just a totally neutral act to hatch a plan to juice the numbers to a ridiculous extent and try and dump it onto public markets before it explodes. That's literally an attempt to scam you out of your pension fund. Sadly that is the entire premise of the Softbank Vision Fund and many others like it. Masayoshi Son is now personally on the hook for about $5.1 billion on side deals he set up at SoftBank Group Corp. ..As SoftBank grew into a global investor, Son argued the company couldn’t keep talent unless executives were allowed to cut side deals that tied compensation to the company’s performance. That’s exposed him further to the current market downturn. -- https://www.bloomberg.com/news/articles/2023-02-08/masayoshi-son-now-owes-softbank-5-1-billion-on-side-deals https://www.bloomberg.com/news/articles/2023-02-08/masayoshi... > the entire plan was that he'd become a billionaire whilst everyone else's pensions would take the hit, and even having failed he walks away a billionaire. Is that so? When do you imagine Adam Neumann hatched this scheme? At the very conception of WeWork in 2010 when nobody would invest? Truly a supervillain. Or perhaps four years later when WeWork was "the fastest-growing lessee of new office space in New York" and was on track to become "the fastest-growing lessee of new space in America." By which point everybody was calling him a genius visionary? I don't recall anybody complaining at that point that this company is doomed to fail or anything like that. It appeared to be on an upwards trajectory. Perhaps he turned to the dark side when SoftBank showed up and demanded they grow the company even faster by throwing money at them? And what was Masayoshi's plan when he invested? > and even having failed he walks away a billionaire. What did he fail at specifically? Masayoshi tried to squeeze him out of his own company and Adam called his bluff. So Masayoshi got the press to drag him through the mud and trashed the valuation further in the process. Then covid happened. Had Masayoshi succeeded nothing would change except SoftBank owning a larger percentage. I don't see why you favor one party over the other. My pension was never invested in any of this and neither was yours. This is as you noted, Saudis, Chinese, Koreans, and JPMorgan attempting to simply buy their way into what seemed at the time a very promising market with their overwhelming cash firepower. Why you should feel sorry for them is beyond my comprehension.
LarsDu88 4y ago
I think a lot of folks undervalue the power of "cult-like" behavior when it comes to successful companies. Steve Jobs learned directly from the Hare Krishna's how to get a bunch of people working hard and moving in the same direction for basically no money. We see the same thing in We work. The cult of crypto and even the cult of Elon are really not that far removed...
breck 4y ago
100% agree. WeWork is great. It does suck for anyone who overpaid for shares, but I was buying FitBit at $40 a share. Sometimes you overpay. Live and learn.

benjaminwootton 4y ago

If it was Adam’s personality and approach that bought them down, it was the same thing that built a $multi-billion company in the first place. He deserved to be paid rather than it all falling into investors hands.

deleted 4y ago
[deleted]

bolanyo 4y ago

> How did he destroy billions in value? He turned around $25bn in cash into a company worth about $4bn, how else would you describe this?

recuter 4y ago
Same way I would describe Uber. SoftBank trying to muscle their way into ownership stakes by playing games with valuations and squeezing out the founder. The greater fool theory seems to apply. Masayoshi knew all the numbers, he thought Neumann was a good hype man to unload WeWork unto less sophisticated investors -- when that didn't pan out he tried to make him the fall guy and ended up holding the hot potato. Uber and WeWork are real companies, still around, providing actual services to actual customers. Both of their founders walked away billionaires, so what? SoftBank might have to write down their imaginary valuations as the public markets didn't bite into their attempted flip. The companies might survive long into the future as viable businesses with more realistic market caps.
- SilverBirch 4y ago
  Firstly, it's not just a totally neutral act to hatch a plan to juice the numbers to a ridiculous extent and try and dump it onto public markets before it explodes. That's literally an attempt to scam you out of your pension fund. Secondly, you know that phrase "don't break the law while breaking the law", Adam wasn't just building this massive ponzi, he was self-dealing left and right, buying artificial surf beaches, selling his own trade mark back to himself, getting wework to rent offices that he owned, getting Softbanks other entities to rent huge amounts of Wework space to massively juice the numbers in Japan. The only reason WeWork was kind of acceptable is because he was mainly burning Saudi billionaire money, but make no mistake, the entire plan was that he'd become a billionaire whilst everyone else's pensions would take the hit, and even having failed he walks away a billionaire.
  - recuter 4y ago
    > Firstly, it's not just a totally neutral act to hatch a plan to juice the numbers to a ridiculous extent and try and dump it onto public markets before it explodes. That's literally an attempt to scam you out of your pension fund. Sadly that is the entire premise of the Softbank Vision Fund and many others like it. Masayoshi Son is now personally on the hook for about $5.1 billion on side deals he set up at SoftBank Group Corp. ..As SoftBank grew into a global investor, Son argued the company couldn’t keep talent unless executives were allowed to cut side deals that tied compensation to the company’s performance. That’s exposed him further to the current market downturn. -- https://www.bloomberg.com/news/articles/2023-02-08/masayoshi-son-now-owes-softbank-5-1-billion-on-side-deals https://www.bloomberg.com/news/articles/2023-02-08/masayoshi... > the entire plan was that he'd become a billionaire whilst everyone else's pensions would take the hit, and even having failed he walks away a billionaire. Is that so? When do you imagine Adam Neumann hatched this scheme? At the very conception of WeWork in 2010 when nobody would invest? Truly a supervillain. Or perhaps four years later when WeWork was "the fastest-growing lessee of new office space in New York" and was on track to become "the fastest-growing lessee of new space in America." By which point everybody was calling him a genius visionary? I don't recall anybody complaining at that point that this company is doomed to fail or anything like that. It appeared to be on an upwards trajectory. Perhaps he turned to the dark side when SoftBank showed up and demanded they grow the company even faster by throwing money at them? And what was Masayoshi's plan when he invested? > and even having failed he walks away a billionaire. What did he fail at specifically? Masayoshi tried to squeeze him out of his own company and Adam called his bluff. So Masayoshi got the press to drag him through the mud and trashed the valuation further in the process. Then covid happened. Had Masayoshi succeeded nothing would change except SoftBank owning a larger percentage. I don't see why you favor one party over the other. My pension was never invested in any of this and neither was yours. This is as you noted, Saudis, Chinese, Koreans, and JPMorgan attempting to simply buy their way into what seemed at the time a very promising market with their overwhelming cash firepower. Why you should feel sorry for them is beyond my comprehension.

LarsDu88 4y ago

I think a lot of folks undervalue the power of "cult-like" behavior when it comes to successful companies. Steve Jobs learned directly from the Hare Krishna's how to get a bunch of people working hard and moving in the same direction for basically no money. We see the same thing in We work. The cult of crypto and even the cult of Elon are really not that far removed...

breck 4y ago

100% agree. WeWork is great. It does suck for anyone who overpaid for shares, but I was buying FitBit at $40 a share. Sometimes you overpay. Live and learn.