How WeWork Vaporized Billions of Investor Wealth
Reeves Wiedeman, a New York Magazine contributing editor, has turned out a rollicking yarn, Billion Dollar Loser, centered on the evolving WeWork disaster, a bottomless money pit that has consumed billions upon billions of investor capital built largely on the spellbinding charisma of Adam Neumann, an Israeli entrepreneur.
Neumann, an easygoing six-foot-five Adonis who could sell sand to a Saudi, convinced investors that his stone-simple real estate model – rent office space long term, then carve it up into postage stamps rented to operations ranging from one-person start-ups to large corporations temporarily in need of extra space – somehow represented the dawn of a millennium of human work.
He did so with ludicrously lofty rhetoric. Neumann didn’t just have a business plan, but rather, in his words “Instead thinking of it as WeWorld, let’s just think of Powered by We. Think of it as what we call internally WeOs. An operating system that makes work better, living better.” In short, “We are here in order to change the world. Nothing less than that interests me.”
Unfortunately, his ground level real estate nous did not match his charisma and eloquence. The nuts and bolts of building maintenance, accounting, and IT escaped him; WeWork’s supposedly digitally connected offices were chronically plagued by non-functioning WIFI.
Neumann’s evolving megalomania was compounded by that of his wife, Rebekah, the cousin of Gwyneth Paltrow. Rebekah was an aspiring actress herself whose lifestyle choices grew exponentially with the cash flow supplied by investors under the spell of her husband’s charisma. Before long the couple was flying thousands of employees to “summer camps” in the U.S. and England, while they themselves circled the globe in the world’s then-priciest bizjet, the company’s lavishly outfitted Gulfstream G650.