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Celebrity Charity: How WeWork Got Away With Spectacular Failure

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Celebrity Charity: How WeWork Got Away With Spectacular Failure

Celebrity Charity:

Over the summer, with the pandemic death toll well on its way to 200,000 and the economy in ruins, WeWork founder Adam Neumann—cut loose from the company the year before with a gargantuan golden parachute—sold a house in Westchester for over $3 million. That property (a sprawling five-bedroom colonial with a pool, tennis court, and outdoor kitchen) was far from the most expensive luxury home he owned. Even amid a once-in-a-generation economic collapse, Neumann’s personal net worth was estimated at $750 million. WeWork itself, meanwhile, wasn’t quite so solvent. The company had laid off nearly 6,000 employees in the preceding months and was being sued by former tenants who claimed that they were still being charged for rent even after New York City had ordered nonessential businesses to close.

Celebrity Charity:

Billion Dollar Loser: The Epic Rise and Spectacular Fall of Adam Neumann and WeWork

by Reeves Wiedeman

Little, Brown, 352 pp., $28.00

WeWork, the ill-fated co-working start-up “unicorn” that rose to prominence in the financial boom years after the Great Recession, is today most famous for two things: its swift collapse from a staggering peak valuation of $47 billion, and the outlandish behavior of founder and CEO Adam Neumann and his wife, Rebekah, who, among other roles, held the sinecure of “strategic thought partner” at the company. Neumann’s penchant for the excesses of start-up culture and his dubious business acumen have fixated the financial press for years, but the most astonishing part of the WeWork saga, of course, is how little any of it mattered in the end. Neumann and his investors squandered billions of dollars with few consequences for themselves other than some reputational damage (or free publicity, depending on your perspective).

While the WeWork story has emerged in various bits and pieces over the years, Billion Dollar Loser, a new book by journalist Reeves Wiedeman, assembles a definitive chronology of a company doomed not by one bad business strategy—or even Neumann’s outsize ego—but by the rot of a postrecession economy that nurtured a certain flavor of investor-class mania. Particularly after the 2020 Covid pandemic and a new economic recession, WeWork’s nightmarish if relatively short-lived reign hints at what one future nihilistic phase of capitalism could look like if market-fueled economic inequality is allowed to continue to grow unchecked.


WeWork began as a far more modest co-working space called Green Desk, which was premised on a kind of low-grade disaster capitalism shrouded in millennial aesthetics and the language of eco-consciousness and community. In 2008, Adam Neumann and his business partner, Miguel McKelvey, rented an empty floor of a Brooklyn building and divided it into glass-enclosed cubicles for rent, hoping to attract the business of creatives displaced by the financial crash. The plan worked: “Everyone who had been fired from their jobs came,” McKelvey told Wiedeman. “Everyone who didn’t want to be at home because they were depressed.” Neumann and McKelvey then began looking to replicate the success of the Green Desk model in Manhattan and San Francisco, where, as Wiedeman writes, “the tech world was rushing to replace Wall Street as the heart of American business ambition.” Within two years, Neumann and McKelvey had sold their shares of Green Desk to the building’s landlord and opened a new co-working space in SoHo—the very first WeWork.

Though the WeWork brand would eventually become synonymous with co-working office rentals, several other companies were also launching or expanding co-working setups. One firm, Regus, had even attempted the experiment a decade earlier, only to find itself facing bankruptcy when the dot-com bubble burst and office tenants canceled their monthly memberships. This flaw in the co-working business model—that is, holding long-term leases on expensive office spaces while offering short-term cubicle rentals to freelancers—hadn’t been resolved by the time Neumann and Mc­Kelvey opened WeWork, nor did they have any solutions of their own. But WeWork quickly took off, thanks to Neumann’s preternatural ability to charm flush investors and those same investors’ slavering to find the next Uber or Amazon.

From there, the company sprouted new and costly tentacles. Neumann, in thrall to the Silicon Valley boom, was soon preoccupied with the idea of turning WeWork into a tech giant, and experimented with a LinkedIn-style app for WeWork members that never quite took off. Before that tech component had gotten off the ground, he also started unfurling plans to launch WeLive—a dormitory-style co-living arrangement where two strangers could share a furnished studio apartment—and WeGrow, a private school run by his wife, Rebekah. (The school, which charged up to $42,000 in tuition, opened in 2018 and closed the following year.) All the while, WeWork itself was “blitzscaling”—acquiring office spaces in multiple cities at a clip so furious it all but ensured they would never be filled—thanks to a massive infusion of $8 billion from SoftBank, which would become the company’s largest (and most notorious) investor.

In retrospect, Neumann’s knack for amassing billions of dollars in venture capital with no viable business model was one of the greatest scams of the twenty-first century. Though the well-documented megalomania of Adam and Rebekah Neumann is now largely recognized as the stuff of nightmares, it worked wonders on investors with too much cash on their hands. The Neumanns—Kabbalah devotees whose social circle included celebrities (Ashton Kutcher) and celebrity villains (Jared Kushner)—famously injected the hand-waving language of New Age communitarianism into their business operations. Neumann once mused that he envisioned WeWork as a “capitalist kibbutz.” As numerous reports on the company’s culture have noted, he traipsed barefoot around the office, frat-boyishly cajoling others around him to join him in tequila shots or smoking weed; Rebekah once fired someone whose “energy” she deemed off. In order to impress investors, Neumann arranged for showy displays of start-up libertinism to take place in the office at a moment’s notice: “Community managers became experts at throwing impromptu parties that could be ‘activated’ in the precise ninety-second window Jamie Dimon or Bruce Dunlevie walked through a WeWork common area with Adam,” Wiedeman writes. If it was all largely a swindle, its most prominent victims were the ultra-wealthy.

The most enthusiastic of the self-satisfied WeWork backers was SoftBank founder Masayoshi Son, who, as Wiedeman tells it, was just as legitimately off the rails as Neumann, in whom he unsurprisingly saw a protégé of sorts. (Son, who has compared himself to Jesus and has one of the largest Twitter followings in Japan, once asked his followers to tweet the saddest thing that had happened in their lives, then mystifyingly pledged that SoftBank would somehow “strive to comfort people in their sorrow.”) Son had made a fortune investing early in Alibaba, China’s version of Amazon, among other ventures, and for a few days in 2000 before the market crashed, he claims, he surpassed Bill Gates as the richest man in the world. A person who prided himself on his intuition, he signed on as WeWork’s largest investor in 2017, after a mere 12-minute tour of the company’s headquarters and a brief car ride with Neumann.

It’s little wonder, then, that Son and other investors had ignored how disastrous WeWork’s business strategy and internal operations were—none of them had bothered to plumb past Neumann’s bloviating assurances. Meanwhile, even as money was rolling in, Neumann clung to a bizarre and unsustainable business model in which he penny-pinched on certain expenses (he directed staff to “Manage the Nickel,” or find small ways to save the company money, like turning off lights at night) while bleeding money elsewhere (buying, for instance, a $60 million private jet). The cumulative effect was, unsurprisingly, wide-scale burnout among employees and high turnover, to which Neumann was largely unsympathetic. When a group of employees asked for raises, Wiedeman writes, “Adam complained that he didn’t think he was getting what he paid for as it stood. He told one employee he could save money by getting a roommate.” Neumann thwarted a group of WeWork janitors’ efforts to unionize, and when one pointed out that he was a billionaire, he replied, “That has nothing to do with this.”

Just as WeWork successfully milked a stable of venture capitalists drunk on a tech-fueled bull market, Neumann’s terrible treatment of his employees was likewise enabled by the postrecession environment. When I first read accounts of the company’s office culture, I wondered why some of WeWork’s employees had stayed so long. (Were a few days of letting loose at the company’s notoriously hedonistic summer retreat really enough to make up for the punishingly long hours, below-market pay, and sexual harassment they endured during the rest of the year?) But then I remembered that, just as WeWork was getting off the ground in 2010, I myself was working for free as an unpaid intern at a small feminist book publisher (while, on my days off from there, paying bills by helping a rich Upper East Sider organize his office). WeWork, like so many other companies, benefited from an exploitable white-collar workforce made up of a cohort that had graduated into the height of a recession and was subsequently eager to prove themselves and find any kind of upward mobility. “I can hire a bunch of young people and pay them nothing,” Neumann once bragged.

But not even the expendable labor pool and near-unfettered access to venture capital would save WeWork from the lethal combination of the company’s inability to turn a profit and the Neumanns’ personal style of derangement. In the summer of 2019, after nearly 10 years of doing business, WeWork filed for an initial public offering and released “Wingspan,” an accompanying financial document that swiftly revealed the start-up’s deepest flaws. The report showed disturbing numbers, provided little actual information on WeWork’s business strategy, and was styled, at Rebekah’s direction, with superfluous glossy photos and inspirational quotes. The public, Wiedeman writes, “seemed to instantly recognize what Adam’s charisma had persuaded investors to look past: the chasm between how the company presented itself and what it actually did.” Hard-pressed to explain what, beyond extreme puffery, made WeWork different from its competitors, Neumann found himself the subject of a flurry of unflattering press and investor scrutiny, and the company eventually pulled the IPO. That fall, SoftBank would pay through the nose to bail out the floundering company and oust Adam Neumann.


WeWork’s is a story of start-up hubris inflated to nauseating extremes, but, even beyond that, it’s a stark example of how profoundly disconnected the fates of the rich and the rest became in the aftermath of the Great Recession. WeWork’s investors—and SoftBank in particular—lost billions on their ill-advised bets on Neumann, but in the grand scheme of what those venture capital firms are worth and what they spend regularly, the money they burned on WeWork is the equivalent of a regrettable night at a casino for you or me—an embarrassing and humbling loss, but a risk that comes with the territory. Neumann himself escaped with a handsome payout and moved his family to Tel Aviv, where he was born. “Nearly two decades after arriving in New York with a dream of getting rich and then going back home,” Wiedeman writes, “Adam was doing just that.”

The whole WeWork experiment—some 800 locations and 15,000 employees later—was in the end a ruling-class parlor game gone awry, with no significant consequences for any of the people who rolled the dice, only for the employees who got caught up in their hijinks. If the steel magnates, railroad robber barons, and other monsters of the first Gilded Age seemed to understand on some level that their profits would wither without their workers, the newer breed of financial capitalists that engineered the WeWork scandal made their fortunes in perhaps an even more antisocial way, which is to say, by speculating on a stock market that’s long ceased to benefit the majority of people in the United States.

The complete untethering of the stock market from the rest of the economy—a phenomenon in the making for decades but accelerating even more swiftly in the wake of the pandemic—portends the widening of an already vast gulf between the oligarchs (currently profiting obscenely from market rebounds) and everyone else. As it happens, this summer, SoftBank’s Masayoshi Son rallied the market almost single-handedly when he dropped around $4 billion on a package of tech stocks, not long after the humanitarian organization Oxfam predicted a coming wave of global hunger. A few months before, Son glumly announced that WeWork and a few other tech unicorns in the SoftBank stable had fallen into the “valley of the coronavirus.” But by the middle of August, SoftBank had recouped its losses, thanks to rising share prices of a few of its other investments, including Uber and Slack.

In other words, even if WeWork (which now appears to be on its last legs) and other erstwhile unicorns don’t survive the pandemic, their investors and top brass likely will. That’s by design; as economic inequality continues to surge out of control, and climate disaster looms on the horizon, the financial overlords have done all they can to extricate their fates from everyone else’s. Their thirst for innovation is perhaps most disturbing when it conveniently overlaps with a chance to simply leave behind the disasters they’ve had a hand in creating. Elon Musk’s fever dreams of colonizing Mars, for instance, represent an escape hatch for the rich from a world destroyed by capitalism. “If there’s something terrible that happens on Earth, either made by humans or natural, we want to have, like, life insurance for life as a whole,” Musk said recently. But he almost certainly meant only for those few who could afford it. SpaceX, whose current valuation of $46 billion is now poised to overtake WeWork’s at its height, wasn’t founded as a charity.

It’s little surprise that early on, Neumann took a liking to his fellow billionaire’s grandiose plans for settling (and monetizing) the rest of the solar system. In a 2014 interview with Forbes, Neumann said he was eager to get plans for WeWork Mars to Musk. After Musk broke open the path to the planet, Neumann said, WeWork would join him there to “build a community like there’s never been.” It didn’t need to be said, of course, that for all the language of collectivism, this was not an exercise in civics. For Neumann, “community”—even imagined on a cosmic scale—was always primarily an opportunity to make money.

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