The craziest moments of WeWork’s rise

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CNN
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WeWork officially filed for bankruptcy this week, a seemingly inevitable development for the coworking startup that once promised to revolutionize office work but has been slowly unraveling for years.

Co-founder Adam Neumann’s well-documented excesses during WeWork’s early days have already inspired a best-selling book and a star-studded miniseries. Endlessly charismatic, Neumann sold his vision of community building and old-fashioned office culture to investors, who invested billions in his company. assignment “raise the consciousness of the world”, as he often said. The startup rolled wave of the venture capital-backed free money era and saw its valuation peak at some $47 billion before it all collapsed.

Neumann was ultimately ousted in 2019, but walked away with a multimillion-dollar golden parachute and is now reportedly working to finance a new project. pseudo-real estate startup.

But other people were seriously hurt by the company’s collapse. Legendary SoftBank investor Masayoshi Son bled billions trying to prop up WeWork, all while suffering incalculable damage to his reputation. And many of WeWork’s early employees, who were working on lower wages because they had stock options, were left with nothing.

The American technology sector has been built on many myths over the years, including the idea that founders are visionary geniuses who can foresee key trends years in advance. The abrupt rise and fall of WeWork is the latest high-profile incident to shatter this myth.

Here’s a look at four of the craziest moments in WeWork’s rise, according to company statements and a best-selling book about the company.

Neumann had a penchant for pot, many former colleagues said, and seemed particularly fond of using marijuana while traveling on private jets.

In the summer of 2019, Neumann and his friends smoked weed as they crossed the Atlantic Ocean aboard a Gulfstream G650 private jet en route to Israel. After the group landed, the flight crew apparently found “a significant quantity of drugs in a cereal box for the flight home.” The Wall Street Journal reported: citing people familiar with the matter. The plane’s owner recalled the plane due to this discovery, concerned about the consequences of transporting marijuana across borders, leaving Neumann to find his own transportation back to New York.

Neumann and his entourage also left private planes covered in vomit, journalists Eliot Brown and Maureen Farrell wrote in their company column, “The Cult of Us: WeWork, Adam Neumann, and the Great Startup Illusion.” In one case where Neumann was piloting a private jet, the marijuana smoke was so thick that cabin crew members working aboard the plane had to put on their oxygen masks, according to the book.

Mixing layoffs and tequila

Neumann also had a taste for tequila and saw no problem soaking up the office. (Part of WeWork’s efforts to attract millennials included unlimited beer and open bars set up at its coworking outposts.)

But sometimes alcohol and partying were thoughtlessly mixed with work. A report said that just weeks after Neumann laid off about 7% of his staff in 2016, he addressed cost-cutting efforts in a somber all-hands meeting, saying it was difficult but necessary and that the business would be better off because of it. However, he then had employees enter the room carrying trays of plastic shot glasses filled with tequila and shortly after, Darryl McDaniels of the hip-hop group Run-DMC came out and played a set for the staff while some were still digesting the news.

WeGrow, WeLive and other aggressive side projects

WeWork also decided at one point to reinvent children’s education and the housing market.

The company launched an elementary school for children in kindergarten through fourth grade in the fall of 2018. The school, dubbed “WeGrow,” was led by Adam Neumann’s wife, Rebekah, and had as mission to “unleash the superpowers of every human”. the company said. The school’s tuition started at $36,000. In addition to the traditional curriculum, children also learned yoga, meditation and agriculture.

WeWork also launched a co-living experience in New York called “WeLive,” which rented out what were essentially hip dorms with lots of amenities to young professionals.

The company eventually closed the school and divested itself of its housing projects.

The beginning of the end may be traced back to WeWork’s first attempt to go public in 2019.

The company filed its Form S-1 (essentially a registration form for companies seeking to go public) in August 2019. Six weeks after filing, Neuman was ousted as chief executive officer.

The inner workings of the then-private company were revealed in this S-1 form. In addition to revealing larger-than-expected losses and raising major questions about WeWork’s path to profitability, the filing also shed light on some of the now-infamous potential conflicts of interest with Neumann’s management. (Neumann could argue that he acted as CEO and that everything he did was disclosed and approved by the board).

Perhaps one of the most egregious examples of this phenomenon is the revelation that Neumann and his founding partner registered a trademark on the use of the family’s “we” brands, then went back and charged the company nearly 6 million dollars for the commercial use of this brand. as part of its rebranding, although Neumann later changed his mind on the matter.

The post-Neumann era and the pandemic

In a statement earlier this week, Neumann called the news of WeWork’s bankruptcy “disappointing.” But he expressed hope for the company’s future, even after bankruptcy. “I believe that with the right strategy and team, a reorganization will allow WeWork to emerge successfully,” he said in a statement.

But even after Neumann left, it was difficult for WeWork to turn things around.

One of the main reasons for this is that the Covid-19 pandemic emerged just months after Neumann left the company, dealing another unexpected blow to WeWork’s core business of bringing people together in coworking spaces.

And even years after the pandemic began, many office workers have become accustomed to remote work and are reluctant to come into the office, leaving a glut of empty desks in major American cities.

Clarification: This story has been updated with more context surrounding Neumann’s potential conflicts of interest revealed in the S-1 filing.