Adam Neumann: History’s Greatest Bullshitter?
Let’s take a trip back to 2017—arguably the pinnacle of Adam Neumann’s career. That year, he graced the cover of Forbes magazine, under the bold and glitzy headline: “The $20 Billion Office Party.” It was the perfect tagline for Neumann, the charismatic and larger-than-life founder of WeWork. Over the prior seven years, he had transformed the business from an ambitious idea into a $20 billion juggernaut, all while cultivating an image of a fun-loving visionary who seemed to have cracked the code on blending work and community.
But, like many dazzling success stories, the question lingered: was it too good to be true?
On that Forbes cover, Neumann was quoted saying, “We’re doing amazing things that no one else is doing.” It was bold, confident, and brimming with the kind of hype that had become Neumann’s signature. The subheadline proclaimed that WeWork was “changing how and where the world does business.” But here’s the twist: they didn’t. They never did.
Despite all the lofty claims, the hype-filled presentations, and the aspirational talk of creating a global “physical social network,” WeWork’s real legacy isn’t in revolutionizing the way we work or live. Its impact boils down to the cautionary tale of its own meteoric rise and fall. At its core, WeWork wasn’t a tech company, a disruptor, or the spiritual movement it claimed to be in its infamous IPO filing that promised to “elevate the world’s consciousness.” No, WeWork was an office-sharing business—a concept that had existed long before Neumann came along.
What made WeWork extraordinary was less about the business itself and more about the cult of Adam Neumann. His passion, charisma, and sheer audacity captivated everyone in his orbit, including some of the savviest investors in the world. He convinced them that WeWork wasn’t just about renting office space—it was a movement, a revolution, something much greater. In reality, it was a well-marketed hustle that funneled billions of dollars into a business that could never quite live up to its promises.
In many ways, Adam Neumann didn’t just build a company. He built a myth—and sold it to anyone willing to listen.
The Beginnings of WeWork
The WeWork story begins with two founders, but you’d be forgiven for thinking it was a solo act. Miguel McKelvey, the quieter co-founder, often fades into the background of the narrative, overshadowed by the larger-than-life personality of Adam Neumann. Neumann wasn’t just the public face of WeWork—he was its cheerleader, its driving force, and, for better or worse, the embodiment of everything the company claimed to stand for.
Born in Israel in 1979 to a family of doctors, Neumann spent part of his childhood in a kibbutz, a communal living arrangement that would later serve as inspiration for WeWork. After completing his service in the Israeli army, he moved to New York City, chasing entrepreneurial success through ventures that were, frankly, just bad. These included women’s shoes with retractable heels and a baby clothing line called Egg Baby, which featured a standout product—"krawlers" with built-in kneepads—marketed with the memorable tagline: “Just because they don’t tell you, doesn’t mean they don’t hurt.” To Neumann’s credit, though, he was able to laugh at just how misguided these ideas were, often joking about them in interviews later in his career.
Even in those early days, Neumann stood out for his relentless drive to make money. Friends described him as “very, very, very focused” on success, a trait matched by his enthusiasm for socializing. His home was a revolving door of parties, filled with glamorous people and an energy that mirrored his own.
McKelvey was raised in a collective of single mothers in Oregon, and he later pursued a degree in architecture. Despite their vastly different personalities, the two bonded over their shared experience of growing up in tight-knit communities. This connection became the foundation of their business idea: a company that would rent office space, but with a communal twist.
Their first venture together was GreenDesk, an eco-friendly coworking space in Brooklyn. Neumann secured a lease on a floor in a Brooklyn building, divided it into semi-communal offices, and rented them out. GreenDesk was a hit. It launched just two years after the 2008 financial crash, at a time when real estate was cheap, and a wave of freelancers and small business owners were emerging from the wreckage of the downturn. Also, for many college graduates, self-employment and entrepreneurship had become viable—and often necessary—career paths. GreenDesk catered to this growing demand for flexible, month-to-month office space.
Recognizing a bigger opportunity and aiming to expand into Manhattan, the pair sold GreenDesk back to their landlord for $3 million. While their landlord wanted them to stay in Brooklyn and fill additional space he had, they saw a chance to pursue a larger vision—launching WeWork.
This time, the concept had a distinct spin: their offices wouldn’t just be places to work; they’d be vibrant communities. They envisioned WeWork as a “capitalist kibbutz,” blending community with commerce.
The duo began pitching Manhattan landlords on their vision. Among the first to buy in was Joel Schreiber, a Manhattan real estate investor. After a marathon three-hour conversation in 2010, Schreiber was sold. He agreed to invest $15 million for a 33% stake in WeWork. “I didn’t negotiate—I said yes,” Schreiber later recalled. “I loved Adam’s energy.”
But here’s where the origin story gets murky. During my research, I stumbled upon an article that delved into Schreiber’s real estate dealings, and it painted a picture of a man who ruffled more than a few feathers. Strangely, Schreiber claimed in the same piece that he only invested $1 to $2 million, not the full $15 million. It’s unclear whether he pledged the larger sum but failed to follow through, or if this was another example of Neumann’s tendency to stretch the truth for the sake of a good story. By the time WeWork was preparing for its IPO, Schreiber’s stake was reportedly around 1%.
This early spin on WeWork’s origin story underscores a key theme: Neumann’s willingness to bend reality to fit the narrative he wanted to tell. Whether it was about funding, community, or the revolutionary nature of their business, Neumann’s skill at selling the dream often blurred the line between fact and fiction.
The Business Model
WeWork’s business model was simple yet surprisingly effective—at least in the early days. They created spaces with an irresistible draw for their target market. Imagine an industrial-chic aesthetic: exposed brickwork, large open common areas filled with comfy couches, vibrant murals, and neon lighting. Add to that the magnetic pull of free-flowing beer (at least until 2019, when they limited it to a four-beer-per-member quota) and an atmosphere enhanced by piped-in pop music. It wasn’t just office space; it was an experience.
Membership started at just $45 a month for occasional access to a communal desk, $220 for a permanent desk and up to $22,000 a month for private offices that could accommodate 50 people. In later years larger corporations began leasing spaces for millions a year to house entire teams across multiple locations. But in the beginning, freelancers and startups were the core demographic—scrappy, ambitious individuals drawn to the promise of cool, flexible spaces and the sense of being part of something bigger.
In fairness, WeWork did bring something new to the office rental market. It offered an environment where dance classes could share hallways with tech startups, and artists could rub shoulders with architects. One tenant, an architect, captured the appeal perfectly:
"I have to say, the vibe there is magnetic. People are chatting in small groups, or having coffee and working on a laptop. It’s interesting because that’s what they were selling: this energy, this magnetic, productive buzz."
And for a while, it worked. Adam Neumann’s vision of transforming workspaces into lively, social hubs felt fresh and exciting. Sure, tech companies like Google had been creating playful, engaging office environments for years—think open spaces, artisanal coffee, even arcade games—but WeWork made it accessible to startups, freelancers, and small businesses.
Tenants liked being there. Employees enjoyed the energy. And while the idea wasn’t revolutionary—making work more enjoyable to improve productivity—it was solid.
But for all the magnetic charm and carefully curated aesthetics, WeWork wasn’t offering something that couldn’t be replicated by other landlords. The vibe, the buzz, the beer? All of it could—and eventually would—be copied by competitors. What made WeWork stand out was Neumann himself. He convinced people, including some of the world’s sharpest investors, that they weren’t just buying into an office rental company; they were investing in a revolution.
The Art of the Visionary Pitch
Neumann had a pitch for the ages. “How do you change the world?” he’d ask. His answer? “Bring people together. Where is the easiest big place to bring people together? In the work environment.” With this grand vision, he didn’t just sell office space—he sold a dream.
Sometimes, he framed WeWork as a tech company, a category beloved by VCs for its growth potential. Other times, he called it a "platform," a "physical social network," or even a "lifestyle company." He’d claim that WeWork was like an operating system for the physical world, capable of layering on additional revenue streams like selling insurance, software, or other services to its members.
Neumann had a way of describing the business that was infectious, and it rubbed off on those around him. His CFO at the time captured this spirit with a lofty characterization: “We frankly are our own category. We use real estate and services to empower our community.” The language was vague yet aspirational—and somehow, it worked.
Beneath the glittering pitch lay the realities of WeWork’s business model: to make a profit, the company had to charge members more than it paid landlords. The foundation of this plan depended on a thriving office rental market, which in turn relied on a strong economy. And as most people know, economies don’t stay in boom mode forever. The real estate sector, in particular, is highly cyclical.
So why did sophisticated investors pour billions into a business so vulnerable to market forces it couldn’t control?
A big part of the answer lies with Neumann himself. He was hard to ignore—both physically and personally. At 6’5”, with flowing brown hair, and a wardrobe of stylish sneakers and T-shirts, he looked every bit the typical tech founder. His charisma was magnetic and his energy seemingly boundless. He told his young workforce they weren’t just renting desks; they were changing the world by fostering community and connection.
And it wasn’t just financiers who fell for his charm. Walter Isaacson, the renowned biographer of Steve Jobs, once compared Neumann to the Apple co-founder, saying, “Like Steve Jobs and other great entrepreneurs, he knows how to connect the humanities with business and technology.”
Neumann’s vision was always outsized, often bordering on absurd. In 2015, he announced, “WeWork Mars is in our pipeline.” He even claimed to have met with Elon Musk to offer WeWork’s services for future Mars colonization missions—though, according to Neumann, Musk declined.
The Madness of Fundraising: Vision Over Substance
In the early days, Neumann secured $7 million from wealthy friends and connections. It’s worth noting that his wife, Rebekah Paltrow Neumann, is Gwyneth Paltrow’s first cousin, which gave him access to an affluent and influential network. But WeWork, at its core a real estate company, required enormous amounts of capital to grow. So Neumann turned to venture capitalists.
When Benchmark Capital became the first venture capital firm to back WeWork, it wasn’t because they saw the next big real estate play—Benchmark didn’t invest in real estate companies. It was because Neumann somehow convinced them that WeWork was so much more than that. He didn’t just sell them a vision; he made them believe he was the one to bring it to life. Bruce Dunlevie, the Benchmark partner behind the deal, summed it up succinctly: “Let’s give him some money and he’ll figure it out.”
In 2012, Benchmark led a $17 million funding round that valued WeWork at $100 million—a staggering number for a company that, at the time, operated just three buildings- and remember, they didn’t own these buildings, they simply leased them.
When Dunlevie pointed out that WeWork had only three properties, Neumann brushed it off, saying, “What do you mean? I have hundreds of buildings. They’re just not built yet.”
This boundless confidence—or audacity, depending on your perspective—kept drawing in investors. In 2014, JPMorgan put in $150 million, valuing WeWork at $1.5 billion. By 2016, a Chinese VC firm injected $430 million, pushing the valuation to $16 billion.
Selling a Dream, Not a Reality
Neumann’s pitch fit seamlessly into the tech startup playbook: grow as fast as possible, acquire as many users (or tenants) as you can, and worry about profitability later. It’s a model that works brilliantly for software companies with low overhead and scalable network effects. But WeWork wasn’t a software company—it was in real estate, a high-cost, cyclical industry deeply tied to economic conditions.
Despite this, Neumann successfully reframed WeWork as a "tech play." Jamie Dimon of JPMorgan described it as a “hybrid hospitality-and-tech company that’s entirely different from anything in real estate.” Investors bought into the narrative. They weren’t just funding office rentals; they were backing what they thought was a disruptor.
But what exactly was being disrupted? A true disruptor challenges norms, breaks barriers, and revolutionizes industries. Did WeWork do that? The short answer is no. At its core, it was still just office space—albeit trendy office space with free beer and couches.
For all of Neumann’s talk about changing the world and creating a unique “We” community, there was a calculated element of fabrication behind the scenes. When potential investors toured WeWork spaces, Neumann instructed employees to “activate the space.” This meant staging impromptu parties in the lobby with pizza, ice cream, or margaritas to manufacture an atmosphere of constant energy and collaboration. Neumann would nonchalantly assure investors, “This is just a typical day at WeWork,” presenting the buzz as an organic part of the culture. In reality, it was all carefully orchestrated to sell the vision. These deliberate fabrications revealed that Neumann knew exactly how much of the WeWork experience was an illusion—and how far he was willing to go to sustain it.
The Rise of Private Investment
Neumann’s ability to sell a dream wasn’t the only factor fueling WeWork’s unchecked growth. Broader shifts in startup funding also played a crucial role. In the early 2000s, companies like Amazon raised just 1 or sometimes 2 rounds of private investment before going public. By the 2010s, that landscape had changed, with companies like Facebook normalizing six or more rounds of private funding before an IPO.
The aftermath of the 2008 financial crisis further amplified this trend. Low interest rates made borrowing cheap, while a sluggish stock market and new regulations made IPOs less appealing. As a result, enormous amounts of private capital flowed into startups, empowering cash-hungry companies like Uber, WeWork, and even Wag to scale rapidly.
This frenzy led to irrational valuations, with investors applying tech-like multiples to businesses that weren’t remotely tech-driven. Take Casper, the mattress company, once valued at over $1 billion, only to see its market cap plummet to $260 million by 2024. Or Wag, the dog-walking app, which raised $300 million, only to end up with a 2024 market cap of just $10 million.
The “techification” of everyday services was fueled by private investors and ambitious venture capitalists chasing the next big thing. They funneled billions into startups promising explosive growth—even if those startups had no clear path to profitability. Among this wave of overhyped companies, WeWork stood out as a crown jewel. And Neumann, with his infectious charisma and grand vision, embodied the archetype of the visionary founder that investors couldn’t resist.
The Cult of Neumann
Inside WeWork, Neumann’s personality and leadership style inspired fierce loyalty among employees. People worked grueling hours for relatively low pay, believing they were part of something transformative. “He’s a very charismatic, compelling person,” Dunlevie of Benchmark said.
Employees told stories of late-night meetings that started at 11 p.m. and stretched into the early hours, with Neumann showing no signs of fatigue. Those who traveled with him reported sleepless nights and relentless work schedules. “I don’t think he ever sleeps,” one colleague observed.
The Myth of WeWork as a Tech Company
Despite being valued and treated like a tech startup, WeWork was anything but. Real estate is inherently capital-intensive, with massive upfront costs and limited scalability. Unlike software, where a new user costs are low, every new WeWork building required significant investment.
When you hear names like Walter Isaacson and Jamie Dimon praising WeWork’s "technology," it raises expectations. But when you dig into what WeWork was actually doing with technology, the reality didn’t live up to the hype.
WeWork’s pitch for its tech revolved around statements like this one: “Landlords just sell aluminum. We make iPhones.”
The 2017 Forbes puff piece lauded WeWork’s “complex technology and logistics system,” which supposedly optimized every inch of space. The company used 3D scanners to measure floor plans and virtual-reality models to design layouts before construction began. These tools were aimed at squeezing the maximum revenue from each building. While it sounds impressive, this type of efficiency wasn’t exactly groundbreaking—companies like IWG (formerly Regus) had been refining space optimization strategies for years.
Then there were the gadgets: laptops and touchscreens wired to doors, height-adjustable desks activated by swipe cards, and even soundproof phone booths where users could adjust lighting and temperature. It all sounded futuristic, but really, it was little more than shiny window dressing.
WeWork also made grand claims about its ability to collect and analyze data. For example, they monitored how conference rooms were used and analyzed seating preferences to inform space design. One manager excitedly shared a revelation: customers liked desks near windows. It was a “breakthrough” insight he believed, though one that seemed painfully obvious.
They even attempted to launch an internal social network to connect members, but it flopped—no one used it.
The Harvard Business Review wrote an incisive critique of what makes a company a true tech business and why WeWork most definitely wasn’t one. Criteria include network effects, low capital requirements, low customer acquisition costs, and the ability to scale quickly. WeWork failed to check any of these boxes.
Investors may have bought into the hype, but whether they truly believed WeWork was a tech company or simply used the label to boost valuations is an open question.
The Culture: Charisma, Tequila, and Contradictions
Neumann loved to say that “Culture is our intellectual property”, the company’s secret sauce. This idea was central to WeWork’s identity, reinforced by their aspirational slogan: “Make a Life, Not Just a Living.” Neumann didn’t just promote this culture internally; he used it as a selling point for potential tenants, wrapping it into the mystique of WeWork’s so-called “We Operating System” (WeOS). He claimed that WeWork didn’t just optimize office spaces—it optimized company culture.
But like much of Neumann’s rhetoric, it didn’t hold up to scrutiny. Yes, WeWork had a culture, but to call it unique or revolutionary was another example of Neumann’s exceptional marketing spin.
A Culture Soaked in Tequila
A defining feature of WeWork’s culture—perhaps its real intellectual property—was alcohol. Beer was on tap for tenants, and tequila seemed to fuel Neumann’s leadership style. He was known for his love of Don Julio 1942, a premium Tequila (€200-€300 per bottle), and small victories often turned into rounds of celebratory shots with landlords, business partners and employees.
Every Monday evening, the team gathered for a mandatory session called “Thank God It’s Monday.” This team-building event often stretched on for hours, featuring speeches from Neumann followed by employees circulating with trays of tequila shots.
Posters on the walls encouraged employees to meet up for drinks, wine tastings were a staple, and alcohol was a recurring presence throughout the WeWork story. The company even promoted “tequila tasting happy hours with the whole community” as one of its website amenities.
Summer Camp: The Cult-Like Apex
The culture Neumann cultivated reached its peak at WeWork’s annual Summer Camp. What began in 2012 as a gathering of 300 employees and customers evolved into a sprawling, alcohol-fueled festival. In 2017, WeWork flew 2,000 employees from 15 countries to the English countryside for three days of music, crafts, meditation, and company presentations. Big-name performers like The Chainsmokers and The Weeknd entertained the crowd.
On the surface, it was a massive bonding exercise. But beneath the glamour, there were cracks. Employees were required to attend, and organizers used tracking bracelets to ensure everyone showed up to Neumann’s lengthy speeches. Those presentations, often rambling and spiritual, veered into absurdity. On stage Neumann and his wife Rebekah talked about the success of their marriage, or tackling global issues like hunger and orphanages, with Neumann once declaring his ambitions to become “President of the World.”
For some employees, this over-the-top rhetoric, combined with the forced attendance, felt cult-like. While younger staff may have been swept up in the energy, others found the experience alienating, especially those uncomfortable with the alcohol-heavy environment.
The Reality of Working at WeWork
Behind the glossy exterior, WeWork’s work culture was grueling. Employees reported working 60- to 70-hour weeks, often for lower pay than they could earn elsewhere. Turnover was high, with many burning out or leaving in frustration. Neumann himself reportedly wanted to cut 20% of the workforce each year, and as the IPO approached, chaotic restructuring led to further instability.
A former executive summed it up: “When you’re at WeWork, there’s a certain lack of culture, which is ironic for a company selling culture. If there is a culture, it is that of a revolving door.”
While startups often struggle to maintain their culture as they scale, WeWork’s efforts were particularly hollow. Mandatory Monday night events and tequila shots don’t make up for a lack of meaningful workplace values. And while employees believed in the mission at first, the disorganization and unrealistic expectations wore them down.
The Growth: From Real Estate Darling to Unicorn Superstar
By 2017, WeWork had expanded to 163 locations across 52 cities worldwide, managing 10 million square feet of office space for 150,000 members. However, while revenue in 2017 soared to $886 million, losses were nearly identical at $883 million. Despite these financial red flags, WeWork was considered one of the hottest startups around. Neumann, ever the showman, kept touting the company as a transformative tech business, knowing that this framing would attract higher valuations and deeper pockets.
Enter Masayoshi Son: Venture Capital’s Biggest Risk-Taker
At this critical juncture in WeWork’s journey, Masayoshi Son entered the picture. Known simply as “Masa,” Son was no ordinary investor. As the founder of SoftBank, he was a transformative figure in global tech investment, willing to place astronomical bets on companies he believed had the potential to reshape entire industries.
A Brief History of Masa
Born into poverty in Japan, Masa moved to California at 16 and eventually struck gold with SoftBank, a software distribution company that diversified into other businesses including technology publication. By 1994, SoftBank had gone public with a valuation of $3 billion.
What sets Masa apart isn’t genius but his unmatched willingness to make massive, high-stakes investments. In 1995, he participated in Yahoo’s Series B funding round, contributing more than half of the $5 million raised. Just four months later, he proposed an extraordinary $100 million investment for a 30% stake, valuing Yahoo at $300 million—an eightfold increase in just 4 months. At the time, this was the largest venture capital investment in Silicon Valley history for a minority position.
When Yahoo’s founder Jerry Yang hesitated, Masa asked Yang to list Yahoo’s competitors, which at that time were Excite and Lycos, and famously declared: “If I don’t invest in Yahoo, I’ll invest in Excite and I’ll kill you.” This audacious approach worked, and Yahoo accepted his offer.
At its height, Yahoo was valued at $110 billion, valuing SoftBanks investment at $33 billion.
Over the next few years, Masa’s SoftBank poured $1.7 billion into over 100 internet companies, underscoring his bold and unconventional strategy: bet big, bet early, and let founders run the show.
This hands-off approach was a stark departure from traditional VC models, where lead investors often demanded stringent oversight or even replaced founders with professional managers. Masa believed that eccentric, driven visionaries were the key to transformative success and that interference could stifle the very qualities that made these founders unique. His philosophy helped fuel an era where entrepreneurs like Mark Zuckerberg and Google founders Larry Page and Serge Brin retained outsized control over their companies, even when their personal equity stakes were relatively small.
Masa’s strategy had a ripple effect in the venture capital world. Investors like Peter Thiel, founder of Founders Fund, embraced a similar approach. Thiel argued that the real "home run" investments came from complete outliers—companies led by founders who were so unique and so unconventional that any interference from investors would do more harm than good, cementing the idea that backing bold founders could lead to extraordinary results.
However, the sweet spot likely lies somewhere in the middle, but it’s a delicate balance. While leaving the founder in charge preserves their vision, pairing them with strong managers and a capable board can provide the structure and support needed for sustainable growth. This balanced approach proved successful for companies like Google and Facebook. At Google, the founders brought in Eric Schmidt as CEO to help scale the company, while at Facebook, Mark Zuckerberg leaned on Sheryl Sandberg’s leadership to complement his vision and drive the business forward.
SoftBank’s massive stakes in hot internet stocks briefly made Masa the richest person in the world. However, the dot-com crash wiped out 90% of his fortune.
But Masa rebounded, his recovery helped in no small part by a $20 million investment in Alibaba just before the crash. That investment secured SoftBank a 24% stake in the company.
Only in 2023 did SoftBank sell the remainder of its Alibaba shares, but that initial $20 million investment generated a staggering return, estimated at $72 billion.
Over the next 15 years, up until 2016, SoftBank continued to make investments across a diverse range of industries. While internet companies remained a focus, they also ventured into everything from baseball teams to robotics. They even acquired Vodafone Japan and launched their own line of mobile phones.
Then, in 2016, SoftBank launched the Vision Fund, the largest technology investment fund in history, with a staggering $100 billion war chest- $45 billion came from the Saudi Arabian government, $28 billion from Softbank, $15 billion from the UAE wealth fund and an assortment of other investors including Apple.
The Vision Fund’s strategy was audacious: bet big on the most promising, and what they believed to be, disruptive tech companies and use what critics call “blitzscaling” to grow them into market-dominating giants, often without immediate regard for profitability while also, for the most part, giving founders unprecedented control.
The Vision Fund backed Uber, Slack, DoorDash, and dozens of other startups, reshaping industries with a flood of capital.
In short, Masa’s investment approach can be described as bold—he bets bigger than anyone else in the tech world. This strategy has led to some massive wins, but it’s also resulted in a series of significant missteps. History shows he often gets caught up in the hype. During the dot-com bubble, he lost most of his fortune by making scattershot investments, most of which failed to deliver.
Fast forward to the Vision Fund, and a similar pattern of missteps emerges. SoftBank poured $300 million into Wag, now valued at just $10 million, $380 million into car rental company GetAround, now worth a mere $4 million, and $1.1 billion into View Inc., a smart glass manufacturer currently valued at less than $1 million. But the mismanagement wasn’t limited to bad investments—it also included poorly timed divestments. In 2019, SoftBank sold its shares in Nvidia for $3.6 billion. Had they held onto those shares, they would now be worth an astonishing $160 billion. By 2023, the Vision Fund reported a staggering $32 billion loss. Yet its most infamous investment—and by far its biggest failure—was WeWork.
Masa Meets Neumann: The 12-Minute Pitch
By the time Masa set his sights on Adam Neumann, WeWork was already one of the most talked-about startups. But SoftBank’s endorsement—and more importantly, its cash—would take both Neumann’s company and his ego to new heights.
Masa arrived 90 minutes late for their meeting and could spare only 12 minutes with Neumann. But those 12 minutes were transformative. Masa believed he’d found something special in WeWork and in Neuman. He told Neumann:
“In a fight, who wins—the smart guy or the crazy guy?”
Neumann answered, “Crazy guy.”
Masa smiled and said, “You are correct. But you and Miguel are not crazy enough.”
Masa encouraged Neumann to think even bigger. “Make it 10 times bigger than your original plan,” he urged. “If you think in that manner, the valuation is cheap. It can be worth a few hundred billion dollars.”
Sure- if you want to think and project without any reasoning, you can put any vision and any value on any company.
That same day, Masa committed to investing $4.5 billion into WeWork, valuing the company at $20 billion and setting a record for the largest single VC investment of all time. He gave Neumann virtually no guidance on how the money should be spent, other than earmarking $1.4 billion for international expansion into Japan, China, and the Pacific region.
A Valuation That Defied Logic
The deal raised eyebrows across the business world. With SoftBank’s infusion, WeWork’s combined investment total reached $6.9 billion and WeWork’s $20 billion valuation left many scratching their heads.
Real estate experts pointed to IWG (formerly Regus), a global leader in office rentals with a far more extensive footprint.
IWG: A Mirror to WeWork’s Rise and a Cautionary Tale It Overlooked
While IWG (formerly Regus) eventually served as a grounded counterpoint to WeWork’s meteoric rise, its early story and explosive growth during the dot-com bubble mirrored WeWork’s trajectory in 2017. Both companies sought to redefine office space, captured media attention, and expanded rapidly, fueled by soaring expectations.
Regus was a trailblazer in short-term office rentals, much like WeWork would later claim to be. During the 1990s, it became a star of the dot-com boom, celebrated for its innovative approach. A glowing Fast Company article even crowned Regus the “Office of the Future,” highlighting its efforts to foster “community” in the workplace—a sentiment strikingly similar to WeWork’s narrative decades later.
But when the dot-com bubble burst, Regus’s fortunes crumbled. Demand for its spaces evaporated, leaving the company saddled with high fixed lease costs and plummeting rents. By 2003, its U.S. business filed for bankruptcy protection. Mark Dixon, Regus’s founder, weathered the crisis and emerged with a cautious approach to growth. Reflecting on that turbulent period, he remarked:
"If you expand too rapidly at any one point in the market, that can catch you."
It was a hard-won lesson in sustainable scaling—one that WeWork, despite its parallels with IWG’s history and business model, failed to learn.
IWG vs. WeWork: The Numbers Don’t Lie
By 2017, IWG (renamed from Regus in 2016) had rebounded and was thriving.
Here’s a side-by-side breakdown:
Locations:
IWG: 3,000 locations
WeWork: 163 locations (a number that grew throughout 2017 as WeWork aggressively expanded)
Customers:
IWG: 2.5 million customers/tenants
WeWork: 150,000 customers (a number that grew throughout 2017 as WeWork aggressively expanded)
Valuation Per Desk:
Both companies generated about $8,000 annually per customer.IWG: Valued at $5,600 per desk
WeWork: Valued at an astonishing $135,000 per desk
Revenue:
IWG: $2.8 billion in revenue, with $185 million in profits, and a $3.7 billion valuation
WeWork: $886 million in revenue, with $883 million in losses and a $20 billion valuation
Business Fundamentals:
IWG: Owned many of its buildings, ensuring long-term stability.
WeWork: Relied on long-term lease commitments while offering clients short-term rental agreements—a risky and unsustainable mismatch.
These comparisons reveal just how stark the differences were between IWG’s measured, sustainable approach and WeWork’s high-risk, hype-driven model.
Real estate executives and analysts were baffled by the valuation disparity. As one real estate executive put it: “WeWork is nothing but Regus with a paint job—it’s newer, cooler.”
Valuation Based on Energy and Spirituality
So why was WeWork valued so much higher?
The answer is twofold and lies in how Neuman and Son framed the company.
First, unlike IWG, which was seen as a straightforward real estate business, Neumann insisted that WeWork was a “tech company” with massive growth potential. Masa’s Vision Fund reinforced this narrative, driving the valuation to astronomical heights despite the company’s mounting losses.
And second, Neumann wasn’t valuing WeWork using conventional metrics like revenue or profit. Instead, he leaned heavily into his vision, famously declaring:
"Our valuation and size today are much more based on our energy and spirituality than it is on a multiple of revenue."
This quote perfectly captures the essence of the WeWork saga—a belief that they could redefine how businesses are valued. But when you read a statement like that, so full of fluff and, let’s be honest, outright bullshit, you have to wonder: what was really happening here? It was a classic case of “the emperor’s new clothes.” Except, in this instance, there wasn’t just one voice calling it out—many in the media had been sounding the alarm for years.
The Media’s Role
While media outlets were often criticized for amplifying the hype around WeWork, many in the business press voiced skepticism about its valuation from the start.
The Wall Street Journal consistently questioned WeWork’s viability, publishing articles that dissected its financials and business model.
For example an article titled “A $20 Billion Startup Fueled by Silicon Valley Pixie Dust” captured the skepticism:
"How can an infrastructure-dependent real estate venture scale like a low-overhead software startup? How can a company that signs 15-year leases—but sells monthly memberships—expect to survive a downturn?"
BuzzFeed ran a 2015 piece asking why a company offering short-term office rentals was being valued like a tech startup.
And it wasn’t just these publications. During my research, I found that nearly every article touched on the fact that WeWork was, at its core, an office rental business whose client base was dominated by startups—many of which wouldn’t survive long enough to fulfill even short-term leases.
Even the most glowing puff pieces that celebrated the company’s so-called technology elements couldn’t entirely avoid acknowledging the underlying reality: this was a real estate play, no matter how it was dressed up.
Yet, despite these warnings, the sheer force of the hype—driven by Neumann’s charismatic vision and SoftBank’s massive investments—overwhelmed these critical voices, leaving them largely drowned out in the noise.
Go Crazy
Masa’s directive to “go crazy” became Neumann’s green light to pursue WeWork’s expansion at a reckless, unsustainable pace. The company began opening locations at an alarming speed, burning through billions on real estate deals, renovations, international ventures, and dubious new business ideas.
The We Company: poorly conceived diversification
In 2019, Neumann rebranded WeWork as The We Company, with three distinct divisions:
WeWork (coworking spaces).
WeLive (co-living spaces, aimed at creating residential communities).
WeGrow (an educational venture focused on “conscious entrepreneurial education”).
The company’s new mission statement was: “To elevate the world’s consciousness.”
WeLive: Solving Loneliness Through Real Estate
WeLive was WeWork’s attempt to translate its coworking success into co-living spaces loftily presented as communal living designed to foster connection and combat loneliness. The first WeLive location, a 200-unit complex, offered fully furnished apartments with perks like:
Hot tubs on the terrace.
Arcade games and a pool table in the laundry room.
A communal chef’s kitchen and dining room.
A bar where free wine flowed during happy hour.
WeLive quickly ran into problems. The operational challenges of managing residential buildings—legal regulations, tenant relationships, and long-term leases—were far more complex than managing office spaces. Neumann boldly predicted that WeLive would become a bigger business than WeWork, but by 2018, the company had only opened two locations, far short of the 69 it had projected.
WeGrow: Education, Spirituality, and Entrepreneurship
If WeLive was ambitious, WeGrow was Neumann’s most personal and chaotic project. The brainchild of Neuaman’s wife, Rebekah, WeGrow was pitched as a “conscious entrepreneurial school” designed to “unleash every child’s superpowers.” It offered a curriculum for children as young as three, blending:
Farming and meditation.
Coding and entrepreneurship.
Spirituality and holistic education.
Tuition was steep:
$36,000 annually for preschool-aged children.
$42,000 annually for kids up to age 11.
WeGrow ultimately flopped—a predictable outcome, given that Rebekah Neumann had no background in education and the chaotic, almost frantic pace of WeWork’s expansion at the time. That said, to its credit, the parents who sent their children to the school had overwhelmingly positive things to say about their experience.
Rebekah Neumann: Co-Founder or Liability?
By this point, Rebekah Neumann was being referred to as a “co-founder” of WeWork, a title that underscored the complete lack of corporate governance that had come to define the company’s leadership structure.
Rebekah’s spiritualism and overall quirkiness often made her a target of ridicule. She once claimed on a podcast that eating “sad animals” could make you sad because you absorb their energy. At a WeWork event, she made employees uncomfortable by declaring that “a big part of being a woman is to help men manifest their calling in life.”
As a result, she often came under harsh—and at times undeserved—criticism. Her eccentricity, attachment to spirituality, and persona made her an easy target. But the real issue wasn’t her personality or beliefs—it was her unwarranted position of power. Rebekah should never have been near the top of the company, and her involvement symbolized the nepotism and lack of corporate oversight that plagued WeWork’s leadership.
Rise with We, Wave Pools, and Beyond
WeLive and WeGrow were just the tip of the iceberg. Neumann’s appetite for expansion led to a slew of other ventures:
Rise with We: A chain of gyms managed by Neumann’s brother-in-law, a former professional soccer player.
Wave Pools: Plans to create giant inland surfing pools.
WeSail: A floating version of WeWork.
WeBank: A financial services branch.
Desperation in the Real Estate Market
Neumann often touted WeWork’s economies of scale, claiming that their ability to renovate and furnish spaces in bulk allowed them to operate at a fraction of the cost that other companies might spend. While this was partially true, the reality was that WeWork’s aggressive growth goals left them vulnerable to inflated costs and desperate decisions.
As WeWork gained notoriety for raising massive sums of money, landlords began holding out for higher rents, knowing the company could pay inflated prices. Meanwhile, WeWork’s expansion required a constant pipeline of new spaces, forcing them to accept unfavorable deals simply to maintain their momentum.
Buying Tenants and Brokers
To fill these new locations, WeWork became increasingly aggressive:
Broker Commissions: They doubled the standard commission for brokers to 20% of a year’s rent—twice the industry average.
Poaching Tenants: WeWork sent emails to tenants in competitor buildings, offering to buy them out of their leases and give them up to a year of free rent in WeWork spaces.
Savvy renters quickly gamed the system. Some moved into one WeWork location to take advantage of free rent, only to jump to another new location offering similar incentives.
Extravagance and Ego
Neumann’s spending habits became emblematic of WeWork’s unchecked culture of excess.
Private Jet: He purchased a $63 million Gulfstream jet, further fueling his image as a rockstar CEO.
Lavish Properties: Neumann splurged on luxury homes
Massive Parties: WeWork threw extravagant events, including a party at Madison Square Garden where Neumann took the stage wearing a T-shirt reading “High on We.”
At that event they hosted a Shark Tank-style competition, giving away $1 million to two winning startups. These grand gestures may have boosted morale and PR temporarily, but they did little to address the company’s mounting operational challenges.
Burning Cash at Breakneck Speed
Fueled by SoftBank’s billions, WeWork doubled in size in 2017, opening 100 coworking spaces globally.
By 2018, the company was hemorrhaging money at an unprecedented rate. A leak to the Financial Times revealed that WeWork lost $1.9 billion that year—on $1.8 billion in revenue, although in their IPO filings the loss was $1.6 billion.
By 2019, WeWork had become the largest leaser of office space in New York City, a milestone that underscored its rapid rise but also highlighted its precarious strategy. The company was taking on enormous long-term lease obligations while relying on short-term tenant agreements.
Inside the company, the atmosphere was just as chaotic as its external growth. As one former employee put it: "It wasn’t just hypergrowth—it was chaos growth."
Valuation Hits Absurd Heights
Despite the staggering losses, investors continued to buy into the hype. By 2019, WeWork was valued at an eye-watering $47 billion. The company was now the second most valuable startup in the world, trailing only Uber.
Pushback and the Lack of Oversight
Not everyone at WeWork was on board with Neumann’s diversification frenzy. Bruce Dunlevie, a WeWork board member and partner at Benchmark, voiced concerns about the company straying too far from its core business. But as he admitted:
“Great entrepreneurs like Adam don’t listen to guys like me.”
The Christmas Eve Call: A Turning Point for WeWork
In October 2018, SoftBank had committed another $3 billion to WeWork and was discussing plans to pour an additional $16 billion into the company in 2019 to take a majority stake. This kind of cash infusion was essential because WeWork was burning money at an astonishing rate, hemorrhaging $100 million every week.
But then came the bombshell. On Christmas Eve 2018, Masa phoned Neumann with devastating news: SoftBank’s grand plan to invest $16 billion into WeWork was off the table. The reason? The stock market had taken a nosedive, and investors in the Vision Fund, including Saudi Arabia, were skittish about committing more money to a risky real estate play.
Ultimately, SoftBank scaled back its plans, investing only an additional $1 billion into WeWork and purchasing another $1 billion worth of stock from employees and other investors. It was a far cry from the massive takeover originally envisioned, marking a pivotal moment in WeWork's turbulent journey.
The Damning IPO Filing: A House of Cards Exposed
WeWork had delayed going public for years. Why? Salesforce CEO Marc Benioff offered a telling insight into why companies often try to avoid an IPO:
"It causes everything that's bad in your company to come out because the governance processes take hold: Sarbanes-Oxley, SEC, GAAP accounting, auditing—all of these, because you're taking other people's money."
But when SoftBank pulled its massive $16 billion investment and WeWork’s cash burn showed no signs of slowing, the company was left with little choice. In 2019, it finally turned to the public markets out of necessity.
The release of WeWork’s S-1 filing in August 2019 was the beginning of the end for Neumann and his overhyped empire. For years, media outlets and critics had raised questions about the company’s business model, governance, and valuation. But with the S-1, these scattered concerns were laid bare in one glaring document, delivering a reality check that couldn't be ignored.
Before we even dive into the substance of WeWork’s S-1 filing, the document’s design sparked widespread criticism—and disbelief. Remember, an S-1 is an official document meant to outline a company’s financial position, projections, and business strategy. It’s supposed to be data-driven and packed with the hard numbers investors rely on to make informed decisions.
But Rebekah Neumann felt the filing was too focused on numbers and “business speak”—you know, the things that actually matter when a company is going public. Instead, she insisted on spending hundreds of thousands of dollars to include 37 pages of fashion-style photographs in the document, turning a critical financial report into something that looked more like a glossy magazine.
The Labyrinthine Ownership Scheme
One of the most striking revelations in WeWork’s IPO filing was the extent of Neumann’s control. The document exposed a complex ownership structure that granted him over half of the company’s voting power. While similar arrangements exist at tech giants like Meta and Google, those companies were in a league of their own. Investors were willing to accept such imbalances in voting rights because these companies had massive potential: network effects, genuine disruption, and highly scalable business models.
WeWork, as the IPO process made abundantly clear, lacked those same advantages. Its business model didn’t inspire nearly the same confidence, and public markets quickly rejected Neumann’s attempt to position WeWork alongside tech industry powerhouses.
Self-Dealing and Conflicts of Interest
The S-1 highlighted Neumann’s blatant conflicts of interest:
The “We” Trademark Deal: Neumann had personally trademarked the word “We” and charged WeWork $5.9 million for its usage. This payment, which he had approved himself as CEO, caused public outrage. Under pressure, Neumann later returned the money, but the damage was done.
Stock Sales: Neumann had sold $700 million in stock ahead of the IPO—a staggering amount for any founder, especially for a loss-making company. This raised serious concerns about his faith in the business.
Leasing to WeWork: Neumann leased properties he partially owned back to WeWork, a move that would have earned him $235 million in future payments. This obvious self-dealing further undermined investor confidence.
Ludicrous Projections and Startling Losses
The heart of the S-1’s problems lay in its financial disclosures and market projections. The numbers painted a grim picture of a business on shaky ground:
Losses Outpaced Revenue: WeWork reported $1.8 billion in revenue but $1.6 billion in losses—a sign of a deeply unsustainable business model.
Long-Term Risk Exposure: WeWork was on the hook for $47 billion in long-term lease obligations, but its tenant commitments totaled only $4 billion. The company’s model of signing 15-year leases while offering tenants month-to-month agreements left it dangerously exposed to any economic downturn.
Market Size Inflation: The company claimed a potential market size of $3 trillion by counting anyone with an office job in cities where WeWork had locations as a potential customer. This wildly unrealistic projection drew widespread ridicule.
The S-1 even included a startling admission:
"We have a history of losses, and especially if we continue to grow at an accelerated rate, we may be unable to achieve profitability for the foreseeable future."
This statement confirmed what many already suspected: WeWork had no clear path to profitability.
The Technology Myth
WeWork’s pitch as a “tech company” quickly unraveled under scrutiny. The word “technology” appeared 110 times in its S-1 filing, but the substance was glaringly thin. The IPO process brought this reality into sharp focus as investors began valuing WeWork like a traditional real estate company rather than a high-growth tech startup.
Neumann had often touted WeWork as an operating system for physical office spaces, promising additional revenue streams from services like selling insurance, software, or other offerings to its members. But these auxiliary ventures ultimately fell flat. By 2019, they contributed a mere 5% of the company’s total revenue, barely making a dent in its bottom line despite the lofty claims.
The Stories That Emerged
In the weeks following the S-1 filing, damaging stories about Neumann’s behavior began to leak to the press, further eroding public confidence:
The Hotbox Incident: Neumann and his friends reportedly turned a private jet into a "hotbox," smoking so much marijuana on a flight to Israel that the crew had to wear oxygen masks. The pilots refused to fly them back.
Rebekah’s Firings: Reports surfaced that Rebekah had demanded employees be fired based on her personal whims, such as perceiving their energy as "off."
Family and Friends in High Places: Neumann’s wife, Rebekah, her extended family as well Neuman's own family and friends held senior positions in the company, often without qualifications to match.
Weak Oversight: The absence of a strong, independent board allowed Neumann to act with impunity, enabling the reckless decisions and extravagance that defined WeWork’s culture.
The steady drip of embarrassing revelations painted a picture of a dysfunctional, self-indulgent leadership team.
A Rapid Decline
The backlash was swift. WeWork’s valuation, once pegged at $47 billion, plummeted:
September 2019: Valuation dropped to $20 billion.
November 2019: Valuation cratered to just $7 billion, and the IPO was officially withdrawn.
SoftBank and WeWork’s other investors faced a difficult paradox. Neumann was the one who had convinced investors to pour money into WeWork by selling a vision far grander than a real estate company. Without him, raising additional funds would be significantly harder. But with him, the company had no credibility in the public markets.
Ultimately, Neumann was ousted as CEO in September 2019, and SoftBank stepped in to salvage what was left, pumping billions more into the company to prevent bankruptcy.
The End of Neumann and the WeWork Juggernaut
Adam Neumann once envisioned himself as the world’s first trillionaire, riding high on his 22% stake in WeWork, valued at $10.3 billion at its peak. Despite the implosion, Neumann walked away with a staggering payout. Reports vary, but estimates place his exit package at between $1.7 billion and $2 billion, including:
$1 billion for his shares.
A $185 million consulting fee.
Other cash incentives.
The $700 million he had cashed out before the IPO
This jaw-dropping payoff stood in stark contrast to the plight of thousands of employees laid off in the wake of WeWork’s failed IPO. For all of Neumann’s rhetoric about “we,” community, and the importance of being there for one another, there’s no evidence in my research that he used any of his enormous payout to support those who lost their jobs. To be fair, most CEOs wouldn’t be expected to step in and help laid-off employees personally. But then again, most CEOs don’t preach about shared sacrifice, togetherness, and the value of community the way Neumann did—making the disparity all the more glaring.
A New Chapter: WeWork’s Reinvention
After Neumann’s departure, WeWork brought in a seasoned real estate executive to lead the company. This CEO acknowledged the reality that WeWork was a real estate business, not a tech disruptor, and implemented measures to stabilize the company:
Cost Cutting: Renegotiating or exiting long-term leases to reduce liabilities.
Restructuring: Scaling back from 500 locations to 330, focusing on markets with sustainable demand.
Pragmatic Goals: Moving away from the mission of “elevating the world’s consciousness” to a straightforward office space rental model.
WeWork eventually went public in October 2021, achieving a $9 billion market cap. While this was a far cry from its $47 billion peak valuation, it was still considered inflated, especially given the ongoing impact of the pandemic on office space demand.
By 2023, the company filed for bankruptcy, buckling under $10 billion in lease obligations and another $15 billion due by 2028.
The Rebirth of WeWork
During bankruptcy proceedings, Adam Neumann emerged as a potential buyer, offering $500 million to reacquire the company. His bid was declined. Instead, real estate software company Yardi purchased WeWork for $450 million, striking a deal with its lenders.
As of December 2024, WeWork had a market cap of $41 million—far below its peak but arguably undervalued given its restructured operations and reduced liabilities.
In total Softbank lost $10 billion on its WeWork investment, with other investors losing about $4 billion.
The Phoenix Rises: Adam Neumann’s Next Act
After WeWork’s collapse, Adam Neumann has returned with Flow, a new venture aiming to reshape residential housing. Backed by $350 million from Andreessen Horowitz in 2022, Flow was valued at $1 billion. Neumann describes it as a radical rethinking of apartment living:
"What if we use technology to operate the systems better, bring people who are all about hospitality...and run an apartment building the way you’d expect the Four Seasons to run, with that level of hospitality?"
Ironically, the Four Seasons—and similar brands—already offer precisely this type of model with their branded residences. Critics argue that Flow’s supposed “innovation,” including an app for tasks like buzzing in guests or requesting maintenance, hardly justifies the hype.
Early Moves
Flow’s initial expansions include:
Apartment Acquisitions: Spending nearly $1 billion on over 4,000 units in Fort Lauderdale and Miami in 2024.
Riyadh Expansion: Launching 1,000 units in Saudi Arabia, supported by Neumann’s ties to Saudi investors.
While Flow might find success as a niche luxury brand, it lacks the groundbreaking potential Neumann suggests. His ability to secure major backing highlights venture capital’s focus on personality over substance, leaving the future of Flow uncertain.
WeWork: A Lesson in Startup Mania
WeWork’s rise and fall epitomized the excesses of a funding environment driven by FOMO (fear of missing out) and unsustainable growth. In their rush to back the “next big thing,” investors ignored fundamental flaws.
The company’s story will forever be a cautionary tale of:
Unchecked Ambition: Neumann’s charisma and vision blinded investors to the realities of WeWork’s business model.
Investor Enabling: SoftBank and others poured billions into a company without imposing meaningful oversight.
Valuation Hype: A real estate company masquerading as a tech disruptor duped the market—temporarily.
Today, WeWork stands as a leaner, more humble version of its former self. Its story reminds us that while vision is essential, reality ultimately prevails.
The Hollow Promise of Neumann’s Community
Adam Neumann sold WeWork as more than a company—it was a mission, a movement, a community designed to “elevate the world’s consciousness.” He often spoke about leading by example, once proclaiming, “We want to be a company that sets an example that lives by our own words.” Thousands of employees and members believed in this lofty vision, united by the promise of shared purpose and mutual support.
But when WeWork’s implosion cost thousands their jobs, Neumann walked away with a $2 billion exit package, leaving his grand ideals in the dust. The community he had preached didn’t extend to helping those who had sacrificed to build his empire. Instead, his actions stood in stark contrast to his words, showing that the promise of togetherness was little more than a tool to inspire loyalty while serving his own interests.