Steven Bartlett asks Adam Neumann about WeWork, which was valued at around $47 billion before its 2019 S1 showed losses, and Neumann says he went from 13,000 employees to three in one week.
Neumann traces his drive to a difficult childhood and to Rebecca, who told him chasing money would never make him happy and pushed him toward a spiritual practice and a mission bigger than himself.
He describes how Green Desk, sold for 1.5 million, led to WeWork in February 2010, and how mission, speed and first-principles thinking such as cutting a 30 to 45,000 floor quote to 12,000 drove growth to two buildings a day.
In 2016, after his board agreed to raise 300 to 400 million and slow growth, Masa of SoftBank offered $4.2 billion in a 28 to 36 minute meeting and car ride, and Neumann says that on the walk back his ego took over.
He says Mark Benioff advised him to refuse and take WeWork public at 5 billion, that signing long leases against short commitments was the core mistake, and that falling matters less than how you get up.
Brief overview
Adam Neumann says WeWork fell because the business grew faster than he did and ego replaced the mission.
Growth that outpaces the founder ends badlyNeumann says when a company grows faster than its founder, it either crashes or the founder is unfulfilled.
Ask why before taking the bigger numberOffered $3 billion the day after planning to raise 300 million, he says founders should pause and check their intention.
Belief is measured when things are crashingHis teacher reminded him that the darkest moment of the night is a second before dawn.
Questions this recording answers
4 questions, each answered where it is said
Why does Adam Neumann say WeWork failed?
He says the business grew faster than he could grow. After SoftBank's investment his ego took over and it became about the money; when he lost it, everybody lost it. He also names signing long-term leases against short-term commitments as the mistake, rather than management deals.
How did the SoftBank investment in WeWork happen?
In 2016 Masa had only 12 minutes before meeting President Trump, so they talked in his car. Neumann had planned to raise 300 to 400 million; Masa pushed for a global business and they agreed on $4.2 billion across WeWork, China, Japan and Southeast Asia, signed on an iPad in the car.
What advice did Mark Benioff give Neumann?
Benioff told him to fly to Japan, say no to Masa, take WeWork public at 5 billion and sell 20% for a billion, learning to be a public CEO. He predicted investors would rush in and the valuation would grow. Neumann says he did not listen because they had not known each other long.
How did WeWork start?
Neumann and Miguel McKelvey launched Green Desk in May 2008 by splitting a landlord's empty building into small spaces; it was 92% full within a week. They sold it for 1.5 million, and the $300,000 they had kept was exactly the check the landlord required for the first WeWork building in 2010.
Key Quote
“I went from 13,000 employees to three employees in one week.”
— Adam Neumann, WeWork's Rise and Fall, at 0:00▶ watch at 0:00
Key Quote
“In WeWork, the business grew faster than I could grow. That's where everything went wrong.”
— Adam Neumann, WeWork's Rise and Fall, at 43:56▶ watch at 43:56
Key Quote
“remember that power comes from influence, not control.”
— Adam Neumann, WeWork's Rise and Fall, at 55:06▶ watch at 55:06
“WeWork's Rise and Fall.” https://www.youtube.com/watch?v=IQ4JVWdj4Q0. Transcript summary by WhipScribe, https://whipscribe.com/transcript-pages/wework-s-rise-and-fall.html.