Over the holiday, I finished reading Billion Dollar Loser: The Epic Rise and Spectacular Fall of Adam Neumann and WeWork. I’ve read stories here and there about the WeWork saga, but it was good to get a chronological account with more details. Here are a few takeaways:
- Pitch – Adam wasn’t good at a lot of things (he didn’t even manage his own emails), but he was a great storyteller and pitchman. WeWork wasn’t a tech company, but venture capital funds specializing in tech invested in Adam. Their thinking was that he was the best salesperson they’d ever met, so they wanted to bet on him. They wanted to be along for the ride, wherever it took them.
- Softbank – Adam and Masayoshi Son bonded over their shared ability to think bigger and be more ambitious than everyone else. That bond served them well at first, and Softbank invested a gargantuan amount of money (almost $17 billion in debt and equity) at eye-popping valuations. Ultimately, WeWork became detached from reality. The relationship changed when WeWork came crashing back to earth after its IPO failed and it was in danger of running out of cash.
- Profitability – WeWork escaped having to be a profitable company for many years, but when the day of reckoning came, it wasn’t pretty. Companies can’t be unprofitable forever.
- Culture – The tone is set at the top. WeWork had a bad culture that began with Adam. It was a Game of Thrones environment where people burned out after 18 months or so.
- Husband/wife – This story is a cautionary tale of what can go wrong when there are no clear boundaries between spouses at work.
- Accountability – Adam’s accountability was minimal, which enabled him to do many of the things he did.
- Hypergrowth – The company was focused on growth and tried to achieve it at all costs. The end result was a ridiculous amount of capital burned to fuel expansion.
This was a great read. It’s such a crazy story that it’s hard to believe it’s true—but it is. It’s a cautionary tale of what can go wrong when too much capital is put in the wrong hands. WeWork is now a public company. I’m curious to see how the company will progress with its new CEO.