> After the group landed in Israel and left the plane, the flight crew found a sizable chunk of the drug stuffed in a cereal box for the return flight, according to people familiar with the incident. The jet’s owner, upset and fearing repercussions of trans-border marijuana transport, recalled the plane, leaving Mr. Neumann to find his own way back to New York, these people said.
> Many former employees said they didn’t always know how seriously to take some of Mr. Neumann’s pronouncements. Early on, he would throw out seemingly random ideas, like adding a pool in the basement of the company’s headquarters or starting an airline.
> He told at least one person directly that his ambitions included becoming Israel’s prime minister. More recently, he said that if he ran for anything, it would be president of the world, according to another person who spoke with him.
> One day, he proposed, the company could “solve the problem of children without parents,” and from there go onto other causes such as eradicating world hunger.
> In a 2015 investment round, Mr. Neumann sold tens of millions of dollars of shares. Soon after, the company launched a buyback program offering to purchase employees’ shares too. But the company gave employees a different arrangement, giving them a payout per share worth substantially less than what Mr. Neumann was paid
> A few weeks after Mr. Neumann fired 7% of the staff in 2016, he somberly addressed the issue at an evening all-hands meeting at headquarters, telling attendees the move was tough but necessary to cut costs, and the company would be better because of it. Then employees carrying trays of plastic shot glasses filled with tequila came into the room, followed by toasts and drinks.
> Both Neumanns could be impulsive at times, former executives say. Ms. Neumann has ordered multiple employees fired after meeting them for just minutes, telling staff she didn’t like their energy.
Too bad TJ Miller went insane - next season would surely be We heavy. Now there probably won't even be another season - and I'm okay with that considering the last one.
>He previously has instructed staff to fire 20% of employees a year, bemoaning the number of “B” players hired amid rapid growth. Managers were unable to hit the target even when they included attrition.
This company is my cash cow,
Let's have some shots and hash now
We Work's my pitch, make me so rich
I'm Sketchy is the title, here we go
I'm Sketchy to buy a place, split up the space
Rent it out to tech Co.s
DJs, shots, parties w/ bros
I'm Sketchy, I'm Sketchy (Sketchy) Sketchy (Sketchy)
It's Sketchy to trademark "We"
Sell it back to my company
That's $6 mill in my bank account
I'm sketchy sketchy Sketchy Sketchy
I met this little girlie,
her cuz Gwyneth was kinda Goopy
Put her on my board
The VCs forced her out,
We had to transfer my voting shares real early
These VCs are really sleazy,
All they just say is please me with solid financials
Or spend some time to actually make some profit,
I said "It's not that easy"
We as a society have failed and I don't think we can recover. Every single one of our systems not only enables those with sociopathic/psychopathic tendencies, but literally promotes them.
Sounds like another Elizabeth Holmes to me.
What's surprising is that these snake oil sellers have made it so far? Are investors so stupid? Are they so detached from reality? Whatever happened to due financial diligence?
What happens when your hiring policy favors folks with little to no practical life experience?
A maniac surrounded by yes-men can be a terrifying thing. As leader of We Work he can only get up to so much mischief. Definitely wouldn't want him as 'President of the World'.
When you read the book about Theranos it’s mind boggling how unwilling these bigshot investors and board members are to question their own decisions even while seeing very clear warning signals. Instead they shoot the messenger. I remember similar stuff happening during Enron or the housing bubble in 2008. There were plenty of people with real concerns backed up by concrete data but they just got ignored and ridiculed. And then later “no one saw it coming”.
Anybody counting on investors or startup boards to exercise proper oversight of management is dreaming.
Short of the CEO being accused of sexual harassment or assault by an employee or being caught red-handed stealing from the company, they will keep the job -- especially if the company is growing revenue and continuing to raise money at ever high valuations that VCs/board members can use to mark-up their stock, take back to LPs and raise new funds to grow their assets under management that they can collect 2-3% on every year.
In fairness, there's a difference between fraud and investors just not doing due diligence and being swept off their feet by a charismatic and manic hard-partying founder. Investors do need to be responsible for their choices. My understanding (based on the HBO documentary) is that Theranos went so far as to present fake test results to investors.
To be fair, you can actually give money to WeWork and get some office space. They seem massively over-valued, and investors seem weirdly OK with Neumanns using self-dealing to feather his own nest, but its, like a real company with an actual business model, and so far as I can tell, they aren't really making objective lies to investors to get them to hand over crazy amounts of cash.
On the other hand, no could ever actually buy an "Edison" blood test machine from Theranos. They were purely a fraud.
I guess its sort of an interesting question about wheter it looks worse to lose money investing in a billion dollar product that would legitimately be worth billions but doesn't exist, or one that does exist but isn't worth billions.
> and investors seem weirdly OK with Neumanns using self-dealing to feather his own nest
Well, sort of. The fact that this IPO has apparently attracted so little interest that it's getting pushed back or canned entirely tells me investors aren't OK with it. It's more like "SoftBank seems weirdly OK with it", and this fiasco is going to cost them so much money that I have a feeling they won't be so lenient with the next set of founders.
I know the Vision Fund is massive but the fact that SoftBank was even considering having one fund make a $16 billion investment in one company is insanity to me.
SoftBank does not seem so smart to me, I just think between the two Vision funds - 200B, they have so much money to play with, they don't seem to give a shit. And Masayoshi Son, can just go back to the Saudis and get more money if he needs to.
Am not talking about the service that "WeWork" provides, unquestionably there is a market need for it and the success of the model shows. But all the red flags - with the self-serving CEO, I don't give a shit about his immaturity either, you have the money you can screw around plenty.
The snake oil is only necessary for companies who want to sell a vision of something that absolutely exists (co-working), but lacks the profitability threshold that investors would get excited about. So they have to turn this into a "it's Co-working...reimagined!" BS.
The investors are not stupid. (Except SoftBank maybe.) Most of them will make money once they figure out how to pay Goldman enough to dump this trash into America’s 401ks.
It sounds like another Facebook to me, where the business model does make sense but it’s just based on a big secret of selling user data. Here the users are startups, and small companies. It’s no accident that you have to use WeWork’s internet access, you cannot get your own internet unlike with a normal office rental company. It’s also no accident that every visitor needs to sign in to declare whom they are visiting, otherwise you can’t get through the barrier. We don’t have total transparency on who the bond holders are, but just like with Facebook’s early investors, I bet the money comes from people who want the data for themselves.
Imagine how much more valuable it is to see which startups are starting to gain traction. Deep pocketed competitors can swoop in and compete with their business at a vulnerable time. Or VC’s who are wooing a company can see if they are the only bidders or if other funds are emailing them (they probably only see metadata of internet traffic but still valuable). Or recruitment consultants can pay to see who is hiring using general visitor reports Etc.
I think the outrageous shenanigans of the CEO are essential deflections that make the magic show work.
One story probably sums the total of my knowledge on this: when John Templeton was in his 80s, a billionaire, had been crushing it for five decades, he was researching the effect of planetary cycles and horoscopes on the market.
I know a few people who managed money with him in Nassau at this time. He wasn't senile. So what was he doing? He was willing to test his beliefs...about everything. He could put aside everything he thought he knew even after five decades of success and ask one simple question: what works?
Now ask the 30-year old BSD "crushing it bro" dude with the CFA and name brand fund manager on his CV about horoscopes. He will tell you it doesn't work but he won't be able to tell you how he know this (in most cases, he won't even understand the distinction between his thoughts and reality).
Most people in the industry know all the facts. They act very professionally at all times when talking seriously with the peers about their many opinions (none of them tested). They don't look at history, they don't look at what works, they don't look at their own decisions (usually, some good funds impose this on managers), they can't think creatively about risk, and they don't know the one or two facts that are important in a big woodpile of information.
One answer that history suggests, in addition to the above, is that this always occurs. This has been happening for hundreds of years. But no-one cares. This time it is different, I am special, I am unique, I have been chosen, etc. (if anything, changes in attitudes have made this thinking even more pervasive...young people are even more individualistic and education institutions generally encourage an indulgent self-image).
Btw: I have (unfortunately) read most books about investment. I am aware of only one book aimed at investors that actually looks at this effect at large (i.e. what is the relationship between technology and markets? why actually works? what has happened in these situations before? etc.): Engines that Move Markets. One book. A million books about speculation and bubbles...but how many books about actual markets, actual technology, and actual investment...one.
The closest is possibly Capital Returns and Capital Account from Marathon...but this is really just a narrative account of two decades. In terms of a "big theory" historical view, there is only one book. That fact alone should demonstrate how utterly disinterested the industry is in anything approaching knowledge (so none of the questions that you pose really matter...no-one cares).
Can't say that this is surprising, given the startup types I have worked with in the past.
[EDIT]
I want to elaborate on this, actually. Rewards are good incentives until they become so large that they eclipse the value of the thing one is working on. At that point, you no longer attract people who want to accomplish things for their own sake or who even think they know how. With a large enough reward, what you attract are assholes who want rewards.
I hope we figure this problem out before people like this drive our whole civilization/planet off a cliff because they want to be rich. You'd think it would be obvious, and I think it is to many of us. But there are enough of these reward seekers and the rewards are big enough that they dominate the scene.
Further elaboration: a financial award is a great way to tempt an innovator out of their risk adverseness: it says, you can quit your job or whatever and not risk much if your innovation is valuable.
The ideal startup person is someone who already has the idea and knows its good but doesn't want to take the risk without some kind of reward to justify it.
But if the rewards get big enough, you get reward seekers without any fundamental idea who are just going to sit around trying to come up with them until they find one someone is going to bite on.
These two populations of people are totally different and only one of them actually cares about the product or making the world a better place.
I am actually pretty skeptical of financial rewards, I think after a certain point they are far better at attracting the wrong type of person.
Of course, that leaves us with the question of how to attract productive innovators. I don't know. I'd probably lean toward some combination of restrained capitalism + massive subsidies to talented technical people + prizes for innovation.
As crazy as it sounds, after having worked at a few high-profile startups/tech cos it's not as easy as it looks to find a co where the CEO/founder is not an eccentric billionaire or multi-millionaire.
For high-profile places, you're not wrong. And it isn't just tech (though I think tech has its own special set of eccentricities), finance, Hollywood, fashion, media, transportation, the restaurant industry, food and beverage -- the places that become high-profile (which is not the same thing as successful), are usually helmed early on or during that success by someone eccentric.
Most of the time, the person isn't even a millionaire or billionaire when the company starts/grows -- but even at the very early stages, there is something different and slightly batshit about them.
And speaking from personal experience as someone who has also worked at high-profile startups (some very early stage), that's kind of part of the appeal. An audacious leader can be charismatic and compelling. And then once you're "in it" you start to normalize the increasingly batshit stuff you see, writing it off as "that's just X being X" -- which can often be unhealthy because with no accountability, things can go from "eccentric/audacious but ultimately helpful" to "this is insanity and is harming more than it is helping."
It’s the same thing that causes people to follow cult leaders, we’re drawn to extreme people who display confidence and we project our own insecurities into them.
1. Ex ante, people who don't understand it think that just by being weird, they will have exceptional (weirdly good) results. So they are libertine or uncivil and that alone doesn't drive anything useful.
2. Ex post, people who achieved highly attribute the success to the weirdness, and take it as extra license to let the id flow free.
In fact, my belief is that a good bit of weirdness both causes and is the effect of some other qualities that in turn correlate with success: obsessive knowledge of a domain, obsessive levels of effort, single-mindedness, manic level charisma, inordinate confidence (itself charismatic), and willingness to be contrarian / unorthodox.
But man is it annoying when people are just assholes and wave it off blithely as coming with the territory.
This is why in a lot of writing names of organizations and publications often get contrasting style in the text. Name in italicized text is romanized, or the opposite.
eg:
> We now expects...
or
> We now expects...
Because... yes. It can produce some ridiculous results
You got me there. I'd put something like that in quotes!
I actually ran into that last week with a publication. Didn't have rights to a certain font's italics. Too much deliberation with design and edit. Solution ended up being single quotes. ex:
On the off chance that some WeWorkers are reading this. My #1 request is for 24/7 hot desk availability. The 9am-6pm hours aren't working for me. Something like one credit per six hour block would be ideal. Often I don't even get started on deep work until after five o'clock ;)
I love the culture. And anecdotally at least, the method clearly attracts talented designers and developers outside the pale. Concentrating creative folks together. Fomenting spontaneous frissons at the various bagel breakfasts. Or around the tap at quitting time. I find it a welcome antidote to pre-packaged and polished corporatism ;)
On the off-chance that some WeWorkers are reading this, the only way I could be persuaded to share a space with someone who foments spontaneous frissons at bagel breakfasts is if you also supply high-powered Nerf guns.
Might have something to do with the fact that you can get 1-year of WeWork included as part of the American Express Business Platinum card right now ($595 annual fee).
Would love to see the cost share agreement on that one.
Looks like this guy is the new Travis Kalanick. I don't know anything about WeWork or the CEO but its interesting that the personality of the CEO is what is causing grief for the company which the individual was instrumental in building.
> One day, he proposed, the company could “solve the problem of children without parents,” and from there go onto other causes such as eradicating world hunger.
>Mr. Neumann has told several people over the past two years that a personal goal is to become the world’s first trillionaire.
Am I the only person to think these two ambitions may be somewhat at odds? Or rather, they both seem to be egomaniacal in nature, and being an egomaniac doesn't seem to lend itself to solving nearly impossibly hard problems.
Maybe after he has his exit, he'll put his money with his mouth is and start working full time on a foundation like Bill Gates.
Maybe he wants to grind up all the orphans in the world and tirn their blood serum into an elixir of youth, thereby solving the problem of their existence
> (regular HNer here, posting anonymously for obvious reasons). I work for WeWork, and you don't know the half of it. In mid-August WeWork had their "Summer Camp" event, which was a three day all-hands company meeting in England. About 5500 of 7000 WeWork employees were flown into Heathrow and shipped out to a campground in Tunbridge Wells. Everyone was required to sleep in a tent, generally with four or five other tent mates, on air mattresses on the ground with thin mattresses.
Because of the vegetarianism thing, everyone was forced to eat WeWork-provided food, sans meat (though fish is okay!). This totally broke my ketogenic diet, which made me quite mad. See other comments about this being a form of group control.
For the first day and a half, we were subjected to a number of corporate "talks" which largely revolved around the cult of personalities of Adam Neumann and Miguel McKelvey. Adam Neumann particularly styles himself a televangelis or Jesus-wannabe and walks out into the audience, asking people about their deepest fears, delivering some ersatz corprorate sermon on the mount. There is no "me", only "we".
See also the time when Rebecca Neumann commands the gathered WeWorkers to hold hands, close their eyes, and pray.
Or the time that Deepak Chopra comes out and shows a disturbing video about childbirth (people were like, "is this an anti-abortion video?) and talks about how evolution and child development are intimately related, and how we should take our shoes off to let the ions flow, and leads a meditation session.
A fish rots from the head down, and this is one crazy fish.
"Both Neumanns could be impulsive at times, former executives say. Ms. Neumann has ordered multiple employees fired after meeting them for just minutes, telling staff she didn’t like their energy. She and Mr. Neumann have sent maintenance and IT staff to their homes to fix various items."
This really bothers me. I know that if I was at WeWork I would probably be fired for "bad energy" because it would be obvious that I was just working at a job and not part of the WeWork cult.
"In a videoconference with the whole company Tuesday, Mr. Neumann, dressed uncharacteristically in a gray suit and a white button-down shirt, told the staff it has “played the private market game to perfection,” listeners said."
> After the group landed in Israel and left the plane, the flight crew found a sizable chunk of the drug stuffed in a cereal box for the return flight, according to people familiar with the incident. The jet’s owner, upset and fearing repercussions of trans-border marijuana transport, recalled the plane, leaving Mr. Neumann to find his own way back to New York, these people said.
> Many former employees said they didn’t always know how seriously to take some of Mr. Neumann’s pronouncements. Early on, he would throw out seemingly random ideas, like adding a pool in the basement of the company’s headquarters or starting an airline.
> He told at least one person directly that his ambitions included becoming Israel’s prime minister. More recently, he said that if he ran for anything, it would be president of the world, according to another person who spoke with him.
> One day, he proposed, the company could “solve the problem of children without parents,” and from there go onto other causes such as eradicating world hunger.
> In a 2015 investment round, Mr. Neumann sold tens of millions of dollars of shares. Soon after, the company launched a buyback program offering to purchase employees’ shares too. But the company gave employees a different arrangement, giving them a payout per share worth substantially less than what Mr. Neumann was paid
> A few weeks after Mr. Neumann fired 7% of the staff in 2016, he somberly addressed the issue at an evening all-hands meeting at headquarters, telling attendees the move was tough but necessary to cut costs, and the company would be better because of it. Then employees carrying trays of plastic shot glasses filled with tequila came into the room, followed by toasts and drinks.
> Both Neumanns could be impulsive at times, former executives say. Ms. Neumann has ordered multiple employees fired after meeting them for just minutes, telling staff she didn’t like their energy.
reply