
WeWork’s Adam Neumann Steps Down as CEO - mudil
https://www.wsj.com/articles/neumann-expected-to-step-down-as-we-ceo-11569343912?mod=rsswn
======
ngngngng
I'm so glad I read hacker news. I almost took a job at WeWork just 2 months
ago with a recruiter working very hard to convince me I'd be rich when they
IPO. Now I'm at a much smaller startup called Weave which is a really
phenomenal place to work. I didn't discover until recently that it's also a
YCombinator company.

edit: to clarify, hacker news has been extremely skeptical of WeWork for some
time, due to this, I was extremely wary of their offer and leaned towards (and
eventually chose) other options.

~~~
88840-8855
I must say, I am jealous. It seems a bit unfair to me how computer engineers
are getting hired and paid so well, while my economics degree is useless and I
have to fight like crazy to get a job that pays WAY less than engineers get.
Honestly, I studied economics because I wanted a job that pays well - that was
one of the key criteria - and now I am standing with little money and a job I
hate. It sucks.

~~~
syedkarim
What originally led you to believe that an economics degree would result in
well-paying jobs?

~~~
ngngngng
Seems ironic to me that the study of wealth production, consumption, and
transfer wouldn't lead to making money.

~~~
goobynight
Doesn't seem ironic to me. It's easier to be the play by play guy/sports
analyst than to get into the field/cage/arena/whatever and make something
happen.

------
cgearhart
I had concerns earlier this year when I interviewed at WeWork—which was the
worst interview experience I’ve ever had. I applied for a data science role.
The first two hours of the on-site were painful—they seemed to be asking
questions tailored to be outside my experience. The third interviewer came
into the room and said, “I, uh, just looked at your resume and I have to ask,
why do you want to be a backend engineer?” :facepalm: I showed him my
application for a DS role, so he left and came back with a DS guy who made up
an interview on the spot. I (fortunately?) didn’t get a call back.

~~~
metalliqaz
WeWork is basically a real estate company. Why would they need a data science
engineer?

~~~
likpok
Real estate is a data play: figuring out which locations are going to be
valuable. McDonalds famously does _tons_ of research on locations, so much so
that "be mcdonalds-adjacent" is an acceptable strategy.

I'm not entirely sure what a data science engineer does, but somewhere between
"making it easier for the DS team to find what they need to find" and
"figuring out where we should buy/lease next".

~~~
notfromhere
Burger King's strategy for the longest time used to be 'just build across the
street from McDonald's'

~~~
bengale
Sounds smart, let maccers do the research.

------
john_moscow
Well, corporate governance was one of the main factors why the market refused
to accept anything close to their last private valuation, so this makes sense.
Note that they desperately need the public money before the end of December in
order to avoid running out of cash [0].

My bet is that they will now try to remarket We as a shareholder-controlled
company, will maybe even eliminate the multi-class stock structure in order to
get included into the passive funds. I am still not sure they will ever become
profitable through. The only way to disrupt the incumbents in an established
market like this one would be to spot a new opportunity in the market and
capitalize on it faster than the slow 30-year-old companies like Regus. Except
the only market opportunity We has successfully exploited by now are the
desperate investors ready to shove billions in your hands if you pretend to be
a cool techy thing they don't fully understand.

[0] [https://www.reuters.com/article/wework-loan/clock-ticking-
do...](https://www.reuters.com/article/wework-loan/clock-ticking-down-on-
weworks-us6bn-loan-after-ipo-delayed-idUSL2N26A0VF)

~~~
rwmurrayVT
I just don't see them wrestling control away from the deranged, cult leader.
He truly believes he is destined to be president of the world and
revolutionize.. well every thing. There best bet would be to drop the multi-
class structure to get into passive funds.

It needs $8.1b market cap to get into S&P500.

~~~
YPCrumble
Is this part of the business model of these large, unprofitable VC-backed
companies? Build a valuation to meet the 8.1bn threshold, then sell the shares
to passive investors in S&P 500 index funds?

~~~
mruts
No. The S&P 500 is selected by committe. And it's 6.1bn, not 8.1bn. Mabye
that's the plan for the Russell 3000, though.

But it doesn't really matter except when the stock gets added to the index.
The index funds and ETFs are going to rebalance their positions based on
market cap and will not affect the price. These funds could affect the
volatility though, since it's conceivable that with a lot of the shares locked
up, these stocks are going to be more thinly traded than they would have
otherwise been. This could create price instability, though I'm not sure
there's any proof that it's true.

~~~
rwmurrayVT
Not true. [0]

>...Unadjusted company market capitalizations of US$8.2 billion or more for
the S&P 500..... are required.

[0]
[https://us.spindices.com/documents/methodologies/methodology...](https://us.spindices.com/documents/methodologies/methodology-
sp-us-indices.pdf)

~~~
mruts
Hmm. I guess it just changed this year. My bad!

~~~
rwmurrayVT
I saw $6.1b first as a Google given answer. It said different on Wikipedia so
I investigated the source. I knew my high school teachers were wrong about
Wikipedia!

------
conroy
From "We Wants a New Boss"[0], written yesterday in Money Stuff:

> ...it’s terrible for SoftBank! The message from SoftBank is pretty much
> “your [Neumann's] job was to extract billions of dollars out of us, and you
> succeeded at it admirably; now that you’ve served that purpose, we should
> replace you with a real-estate CEO to salvage the value of your investment
> and ours.”

[0] [https://www.bloomberg.com/opinion/articles/2019-09-23/we-
wan...](https://www.bloomberg.com/opinion/articles/2019-09-23/we-wants-a-new-
boss)

~~~
rwmurrayVT
There was another good segment on it today.

From "WeKeepGoingWithThisHuh"[0]

>...Or I guess maybe the IPO bankers leaked it because they want Neumann gone,
to make the IPO easier, and want to commit Son to it by leaking. Or because
they love messy drama maybe? It’s not their company.

The even funnier part of the segment is when he gets into what some of the
banks actually put out as a reasonable IPO valuation.

>...JPMorgan told WeWork executives the company could be worth between $46bn
and $63bn in the listing. Goldman pegged the equity at between $61bn and
$96bn. Morgan Stanley estimated WeWork’s valuation at between $43bn and $104bn
in a presentation in 2018, though a pitch for the IPO set it at a more modest
$18bn-$52bn.

[0][https://www.bloomberg.com/opinion/articles/2019-09-24/don-t-...](https://www.bloomberg.com/opinion/articles/2019-09-24/don-
t-steal-the-payrolls)

~~~
human20190310
At what point do these deranged estimates start damaging the credibility of
the estimators?

~~~
rwmurrayVT
It would seem like never. Matt Levine had another interesting take on that as
well. [0]

>... Well, I just got through saying that there’s not really any reward for
being pessimistic and right about valuation when you are pitching an IPO. Your
optimistic competitors will get the mandate, and then spend some time walking
the company back

...

On the other hand it is a repeat game and there are occasionally penalties for
getting it wrong:

...

it will be rough for Morgan Stanley if winning the biggest IPO prize [Uber] of
the unicorn era loses it the biggest IPO prize of all time [Saudi Aramco]

[0][https://www.bloomberg.com/opinion/articles/2019-09-09/we-
mig...](https://www.bloomberg.com/opinion/articles/2019-09-09/we-mig..).

~~~
Judgmentality
Your link is 404'd for me. Googled and couldn't find it either.

------
joshpadnick
I'm sure I'll get downvoted for this, but I actually just signed up to be a
(thankfully month-to-month) WeWork customer for a HotDesk today in Phoenix,
and it's actually been a pretty great experience: Great space, nice people,
reasonable IT, I was up and running and working within 30 minutes of doing my
tour. And yes I've had a cup of the famous We Kombucha.

This particular location just opened 3 weeks ago and is apparently already at
70% capacity with a mix of enterprises and startups. Even my Hotdesk
membership can't start officially until Oct 1 because they're apparently sold
out (though walking around there's plenty of space).

Based on these surface observations, the core business at least seems
"plausibly profitable". But all the crazy side businesses like co-living just
seems like overexpansion to me.

I'll politely decline as an investor, but I'm happy to sign up as a lowest-
tier, month-to-month customer.

~~~
vegannet
The reason WeWork is great is because investors are subsidising our
memberships, just like Uber is cheap because investors are shovelling in cash.
WeWork has the potential for profitability if you take away the ridiculousness
but the ridiculousness _is_ WeWork: co-working spaces have existed for years,
companies like IWG (Regus) offer the same as WeWork and they're profitable...
because they don't have a full time bar staff, a live DJ and a skateboard ramp
in their lobby. Yes, the new flagship WeWork in London has a skateboard ramp
and live DJ in the lobby. When WeWork fails (and their spaces are scooped up
by the mature players in the market) the ridiculousness will disappear and
we'll be left the same space that has been available all along.

I like WeWork, WeWork has value, but ping-pong and baristas don't make for 10x
valuations.

~~~
SirensOfTitan
The superfluous perks are a red herring, they’re not why WeWork doesn’t work.
Regus filed for bankruptcy after the dotcom collapse for similar reasons
WeWork is struggling: taking a bunch of long term leases and re-leasing them
out as short term leases to economically vulnerable businesses is a recipe for
disaster.

~~~
silasdavis
Why is it? If there is a steady supply of economically vulnerable businesses
and you charge a relative markup?

~~~
doomrobo
Because they have long-term liabilities with short-term income agreements. If
there's market downturn, all those companies that were their customers
disappear. But the bank doesn't disappear and We still owes them their monthly
mortgage payment.

------
DebtDeflation
CNBC reporting his Class B and C shares will be further reduced from 10:1 to
3:1 voting rights, so he no longer will control the majority of votes.

[https://www.cnbc.com/2019/09/24/wework-ceo-adam-neumann-
is-e...](https://www.cnbc.com/2019/09/24/wework-ceo-adam-neumann-is-expected-
to-step-down-amid-controversy-and-retain-chair-role-wsj-reports.html)

~~~
609venezia
Wow. That's a surprise. I wonder what kind of stick they had to beat him into
that?

~~~
rossdavidh
Well, if he leaves now, it's not as if he's going off to a terrible fate. He's
been pretty well-paid. If he gets an IPO out of it someday, he'll get even
more money, but if he doesn't, he gets to step off the burning ship.

Or, to put it another way, he doesn't have to go through firing all of those
people that he hired when he was pumping the company up to ginormous size. I
think perhaps the fun part of running WeWork was behind him, regardless of how
it turns out.

~~~
paxys
Exactly. If they have a successful IPO and become a profitable company - he
gets very rich. If they don't - he still stays rich and gets to gloat about
it.

------
whoisjuan
This is some dense shit. I can't imagine how working for WeWork feels like,
right now. I have worked for companies where all the employees were eagerly
waiting for the day the company will go public. It was seen as a pivotal
moment both financially and professionally.

In any rational world that's a landmark moment. A significant milestone for
founders, investors and early employees. For WeWork it has been the complete
opposite. They filed to go public and everything is going south since then.
Must be surreal that what seemed to be the start of a bright future may be
very well the start of a dark end.

~~~
jonknee
WeWork has been an obvious fuckup to even casual observers for years, if
people inside the company couldn't see this I really don't know what to say.

~~~
brianpgordon
All the more reason for employees to be excited about the opportunity to
finally see liquidity for their shares.

~~~
ghaff
A lot of people convinced themselves that if they could just make it to the
IPO at least they’d have a lucrative way off the shipwreck. Oops.

------
DebtDeflation
I'm guessing the "Non-Executive Chairman" position will just be a temporary
one until they can come to agreement on how much money they need to pay him to
go away.

Professor Galloway called this the other day. His next prediction is that We
will sell off all the bullshit vanity projects like WeLive and WeGrow along
with the other nonsense Adam bought (like the wave pool company so he can
practice surfing at work). Then they will fire all non-core employees. The
clock is ticking if they want to save this company.

~~~
paggle
I don't think they will shut down WeLive. The entire premise of WeWork, and
WeLive, is that they can sell you more than real estate -- they can sell you a
"tribe." There are so many reports in recent years about growing social
isolation and loneliness, that if something can be successfully packaged into
a simulacrum of a community, it will be a hot item indeed. That's the only way
WeWork can justify its stratospheric investments, and it is the market they
will aim to dominate.

~~~
DebtDeflation
I'm sorry, but while there is some logic to the co-working idea, I don't see
any serious demand for co-living. Quite frankly, I find the idea of having on-
premise yoga instruction, cafes, bars, shared hot tubs, shared kitchens, etc.
so you never have to leave your apartment building (except, presumably, to go
to WeWork) to be absurd.

~~~
opportune
I personally see value in it and could even see myself as a customer, at least
to try it for 6-12 months and see what it's like. Sounds like a good way to
meet other young people with a bent towards tech

That said, I don't know the details of the program so can't speak to its
practicality in this instance. But considering it's wework, there's
opportunity for a good vertical there. At its face it seems like sound
corporate strategy

~~~
goatinaboat
Living in a company town earning company scrip to spend in the company store
is an old business model and one that had never, ever gone well for the
resident-workers. There’s even a word for it: serfdom.

~~~
opportune
Except you’re not employed by them, you’re just renting office space and
potentially living space from them. You don’t have to do it if you don’t want
to; I am interested in it for the social aspect of it and the 0 commute

------
postit
I work in one of the companies WeWork acquired. The first time I heard Adan in
a townhall I kept wondering, what kind of hell is happening to the world so
that guy was sitting in a massive pile of money thanks to VCs. His nonsense
and lack of business mindset were evident in every interaction and
announcement. So IMHO he deserves that.

The issue is that now we have +10k people wondering about their future because
they have bills to pay and a hard path ahead. Meanwhile, Galloway brags about
how he was right during all this time and suggest massive layouts to save
"investors."

I'm getting tired of this.

------
jamestimmins
I get the impression that SoftBank learned the wrong lesson from Uber. While
Uber also raised billions of dollars and had a CEO get forced out by
investors, it was broadly understood that his sin was creating a toxic/sexist
culture. It wasn't related to business fundamentals, per se.

WeWork's sins were less of rampant sexism, and more closely related to an
unreasonable valuation and a business that wasn't prepared for the current IPO
climate. In other words, they were things for which the investors are also
culpable.

I'm not a founder, but I'd be very hesitant to raise from SoftBank if I was
(and very nervous if I had already raised from them). With Benchmark (and
Uber's other investors), I'd only be worried if the toxic culture I created
was putting their investment seriously at risk.

~~~
hobofan
> it was broadly understood that his sin was creating a toxic/sexist culture.
> It wasn't related to business fundamentals, per se.

So it had nothing to do with:

\- General disregard for regulation

\- Blocking regulators from the plaform via Greyball

\- Corporate espionage - Waymo vs. Uber

From my impression at the time he was forced out primarily because of actions
like those last two (only few of many), because they have the potential to
cost Uber serious money (sexism sadly not so much).

------
byeadam
People work for people. Not the company. That said, I've spoken to lots of
WeWork employees in the past. If you had a simple job, Adam wanted to know how
you could do it faster, or automate it (with you out of work). If you worked
on the tech side which seemed to be Ruby on Rails with Bootstrap, well, you
were in New York at first, but then Adam would accuse techies of not thinking
big enough, or not delivering 5 points worth of features in the time it took
1, and where's the mobile app? The guy knew absolutely nothing about
technology, and when he outsourced the reservation system to India, then I
knew it really had nothing to do with innovation. What's worse is lots of
folks worked there expecting six figures before the outsourcing, but got
nickel'd & dimed to something way under six figures. All without a PIP.

Edit: removed exact salary amounts because my sources said it would out them.

------
jchallis
WeWork's Bond Prices are falling rapidly.These are the only financial
instruments that measure market appetite. Someone thinks they might not be
paying back the money they are borrowing.

[https://www.reuters.com/article/us-wework-ipo-debt/wework-
bo...](https://www.reuters.com/article/us-wework-ipo-debt/wework-bond-prices-
falls-after-softbank-questions-ceo-marketaxess-idUSKBN1W81J0)

~~~
freddie_mercury
You added the editorial "rapidly", which doesn't appear anywhere in the
article linked because the fall _isn 't_ rapid.

It fell 1.1%, which is not rapid, especially for something that was already
rated a junk bond.

And without any data on the bond's previous price volatility it isn't
impossible to say whether 1.1% is worse than it had, say, the week before.

------
WhompingWindows
WeWork's business model is convincing investors they are a tech company with a
dozens-of-billions valuation. I am glad HN, amongst others, have torn down
this real-estate company wearing a tech-unicorn-mask.

~~~
rolltiide
> WeWork's business model is convincing investors they are a tech company with
> a dozens-of-billions valuation

That's their recruiting model too. These cults have people married to them
their whole career and don't even know they are a laughing stock. They have
conversations with their friends like "well joining a tech company has been
very different from my old cubicle farm!"

------
artsyca
There are a lot of large and small ironies at play, but the one that irks me
the most is the interrelation between `investment` in the financial sense and
`investment` in the dress sense, for the word has its root in the word
`vestment` which means `clothing`
([https://www.etymonline.com/search?q=investment](https://www.etymonline.com/search?q=investment))

I keep asking myself how startup culture has gone so far off the rails in
terms of professional business tropes, even while they court traditional
financial backing to the point where the emperor's new clothes scenario is
playing out in front of us and we barely even notice? One word: entitlement

Could this fellow have stood a chance if he wasn't so nonchalant with his
appearance opting for the messianic playboy look rather than the modest preppy
techie?

I'm sure this comment will get downvoted to oblivion but what are imaginary
internet points for if not spending on counterculture opinions?

I say the reason this all fell apart is because the guy is simply unlikeable
and his shitty entitled-looking Keith Raniere-esque stage presence did nothing
to help

~~~
dropit_sphere
"but what are imaginary internet points for if not spending on counterculture
opinions?"

Hear hear!

------
jedberg
So he gets to keep all the leases that his company made against his properties
that are collateralized by the value of his company?

Essentially they solved the self-dealing issue by removing the self instead of
removing the deals?

~~~
cbanek
Interesting point. Although if they broke the leases, I'm sure that would also
line his pockets (from early termination fees) without necessarily getting
anything out of it?

------
mataug
I can just imagine Prof Galloway taking victory laps and talking about how the
big dog is awesome !

[https://www.profgalloway.com/wewtf-part-
deux](https://www.profgalloway.com/wewtf-part-deux)
[https://twitter.com/JordanBitterman/status/11765494016213483...](https://twitter.com/JordanBitterman/status/1176549401621348352)

~~~
avs733
It never occurred to me just how pretentious/bad the name 'We' is until
reading that article...

>We will now need additional capital from the private markets, who are no
longer under the influence

>We has gone from unicorn to distressed asset in 30 days.

>In just seven days, We lost more value than the three biggest losers in the
S&P 500 have lost in the last year combined: Macy's, Nektar Therapeutics, and
Kraft Heinz.

I have to pause each time and re-engage my brain to realize he is talking
about the company and not himself.

I'm significantly enjoying the level to which this fiasco has made investors
look like dolts. One can only hope that it does something to pierce the
narrative about the possession of capital making people visionary

~~~
mrguyorama
>Kraft Heinz

Super off topic but why the heck is Heinz losing so much value?

~~~
kgbdrop1
You got me curious as well.
[https://www.nytimes.com/2019/09/24/business/kraft-heinz-
food...](https://www.nytimes.com/2019/09/24/business/kraft-heinz-
food-3g-capital-management.html) lists a boatload of issues.

~~~
spookthesunset
That is just sad. Both of those were staples of childhood...

td;lr - Both kraft & heinz were slammed together by a company that bought them
both out and then forced them to cut a ton of costs. As it turns out, you
can't just cut costs and expect to grow and prosper as the market changes
around you.

PS - in the article they mention they took away the free office snacks. Taking
away perks like that is always a sign that you should head for the exits...

------
buboard
Doesn't that ... devalue the company? they re now a real estate company
without a spiritual leader

~~~
rtkwe
They were always a real estate company, they just didn't get to IPO under the
SV hype because as it got closer people looked closer at the company and
realized the valuation was ridiculous and the CEO was lining his own pockets
acting as landlord to his own company. Now that that's happened and it's all
come out he has to step down.

~~~
openmosix
Why "SV" hype? WeWork was founded and HQd in New York.

~~~
dredmorbius
Synecdoche:

[https://www.merriam-webster.com/dictionary/synecdoche](https://www.merriam-
webster.com/dictionary/synecdoche)

See also: Hollywood. Nashville. Foggy Bottom. Quantico. Denim.

------
bombas
My interview with WeWork was for a dev role.. Recruiter emailed me a
'homework' assignment. This homework assignment was basically work they needed
to get done and offed it on candidates to finish.. I noped out of that pretty
quick.

~~~
byeadam
Some people are actually ok with this as long as it's not really _the_ work,
but similar to the work being done. Good for you that you noped out pretty
quick.

------
thewarrior
Could this be a turning point in the current tech bubble ? Might be a good
opportunity to bring valuations back to sane levels before things get too
extreme and damage lots of livelihoods.

~~~
maxlamb
Except that WeWork is not a tech company

------
whoisjuan
This is some dense shit. I can't imagine how working for WeWork feels like,
right now.

I have worked for companies where all the employees were eagerly waiting for
the day the company will go public. It was seen as a pivotal moment both
financially and professionally.

In any rational world that's a landmark moment. A significant milestone for
founders, investors and early employees. For WeWork it has been the complete
opposite. They filed to go public and everything is going south since then.
Must be surreal that what seemed to be the start of a bright future may be
very well the start of a dark end.

~~~
rwmurrayVT
I imagine it feels like you just lost 50%+ of your net worth. If there's no
liquidity then you never know when you could get screwed!

------
DebtDeflation
[https://www.cnbc.com/2019/09/24/softbank-has-a-multi-
million...](https://www.cnbc.com/2019/09/24/softbank-has-a-multi-million-
dollar-protection-in-weworks-ipo.html)

"But because SoftBank’s latest round was so large and the possible down-round
was looking to be less than half of that, the provision was expected to result
in the world’s largest IPO ratchet."

Relative to Softbank's total investment, it's not a huge percentage, but
relative to the amount expected to be raised in an IPO it certainly is.

------
xivzgrev
Wow I am floored. Given how he had structured the company so favorably toward
him, I’m surprised he could put his ego in check for this. Their back must be
really against a wall if they don’t raise that $3 billion

~~~
drevil-v2
I read an article that Adam Neumann has a $700 million line of credit against
his WeWork shares and has already drawn down around $550 million of that (to
purchase real estate and lease back to We).

After the IPO valuation downgrade the banks are now questioning the value of
his collateral WeWork shares and could force a margin call.

I think this might be driving it.

~~~
mruts
Also he took out credit against his shares to buy even more shares! I guess I
can't fault him for believing but it sounds like an unwise move to me.

------
rahkiin
And what about the buildings he leases to We? Or what about his wife?

~~~
onlyrealcuzzo
I'm interested about the buildings. A lot of people bullish on WeWork say --
"Oh, they'll just walk away from the leases. Each lease is owned by a
different subsidiary. That subsidiary will just file bankruptcy. Problem
solved. They'll just cut the losers, and turn up the dial on the profitable
buildings."

Adam got a $750M loan from WeWork, right? I'm assuming he used that loan to
secure more loans to buy the buildings he then rents back to WeWork (at a
profit). I wonder what happens to him if WeWork walks away from his buildings.
I doubt he has the cash to hold onto those buildings for more than a few
months without a client -- especially if WeWork is still private. If they go
public before they "walk away" from his buildings, he'll have to sell massive
amounts of stock to cover his losses.

Unless we get to negative interest rates, I don't see a future that looks good
for WeWork.

~~~
kerkeslager
> "Oh, they'll just walk away from the leases. Each lease is owned by a
> different subsidiary. That subsidiary will just file bankruptcy. Problem
> solved. They'll just cut the losers, and turn up the dial on the profitable
> buildings."

Ugh. What an awful culture we live in where this is considered perfectly
normal behavior.

~~~
woah
Limited liability is a great concept which allows businesses to be run by
people who don’t have the personal capital to absorb all possible losses of
the business. Our society would be more unequal without limited liability.
There are also many legal safeguards in place to prevent it being used for
fraud, negligence, etc.

Are you really worried for big commercial landlords who know exactly what they
are dealing with and how corporations work? Commercial landlords are not
typically thought of as especially trusting and vulnerable entities who need
special protection.

~~~
kerkeslager
> There are also many legal safeguards in place to prevent it being used for
> fraud, negligence, etc.

You're doing a thing which is quite frequent on HN, which is where you say
that unethical behaviors are prevented because some narrow definition of those
unethical behaviors is illegal. But the bit I quoted above is an unethical
behavior which is clearly _not_ prevented by the law.

> Are you really worried for big commercial landlords who know exactly what
> they are dealing with and how corporations work? Commercial landlords are
> not typically thought of as especially trusting and vulnerable entities who
> need special protection.

"The victims are tough enough to handle it" is a pretty poor justification for
sleazy behavior.

------
avs733
Honestly, this was inevitable. What it makes me wonder long term is who else
will be impacted, how it will spread. I can't help but wonder if Musk is
next...[0]

[0][https://arstechnica.com/tech-policy/2019/09/solarcity-was-
in...](https://arstechnica.com/tech-policy/2019/09/solarcity-was-insolvent-
when-tesla-paid-2-6-billion-to-buy-it-lawsuit-says/)

------
rconti
The latest Slate Money podcast had a great segment savaging Neumann.

[https://slate.com/podcasts/slate-money/2019/09/slate-
money-o...](https://slate.com/podcasts/slate-money/2019/09/slate-money-on-
uber-and-wework)

~~~
ryanwaggoner
Their criticism of just about anything rings hollow since two of the hosts
basically hate just about everything associated with money and capitalism,
despite their staggering ignorance of many corners of it. Their guests and
Anna Szymanski are the only non-embarrassing parts of the show for me, but I
still eventually just gave up and stopped listening.

~~~
eclecticsceptic
I think you've got that backwards. Anna is an unabashed capitalist who refuses
to criticise even the shadiest goings-on in finance, start-ups etc. Felix and
Emily seem to have a good nose for nonsense, like wework.

~~~
rconti
Well, it looks like we've covered both sides of the arguments :)

I guess my take is somewhere between these two comments. I sometimes hate the
way it feels like Anna plays a "contrarian character" no matter what, and yes,
Felix and Emily can sometimes be a bit too.. "NPR do-gooder, feel-gooder" for
my taste. But I really enjoy the show regardless. It's a saturday morning
long-run staple for me.

------
jld
He flew too close to the valuation sun.

~~~
misterkgb
Too close to the Son?

------
okhumans
OK faith in humanity restored. Glad the "we'll we didn't hide any of the adam
neumann transgressions from you! Look at the s-1!" didn't work out..

------
nytesky
I assume he still retains the gobs or cash extracted through all his
shenanigans and controlling shares?

And thus could reinstate himself after IPO?

~~~
knd775
They loaned him a lot of the money that he used to buy the properties. It
remains to be seen how the loans are structured, but it's possible that the
company can call in their loans and put him in a position that he needs to
sell properties.

~~~
anaphor
Wouldn't he still be making money on the sale, unless the loans gain the same
amount of interest as the amount the properties have appreciated by?

------
ram_rar
I am soo glad, that I cancelled my interview with WeWork. I feel bad who
bought into the hype recently and joined the company.

------
SamAbrika
Everything stinks in this ponzi scheme company. For those who haven't read it:
[https://medium.com/@henry.hawksberry/is-we-work-a-
fraud-5b78...](https://medium.com/@henry.hawksberry/is-we-work-a-
fraud-5b78987d3e61)

------
alexnewman
Every 20 years another company takes out long term debts when credit is cheap.
It always crashes and it always brings its business partners with them. This
should be unlawful and we need gov't organizations to never allow this type of
risk to be taken.

------
antoniuschan99
From the article lol:

Further undercutting his position: eccentric behavior that was detailed in a
Journal articlelast week, such as a party-heavy lifestyle that included
marijuana use in an airplane and unpredictable management decisions.

------
perseusprime11
It still does not make it a tech company and does not justify the valuation.
The business at the very core is not healthy and needs cash to even survive.
Institutional investors will not take the bait with no upside.

------
mharroun
Wow does a day not go by that we get new news of wework falling apart?

~~~
brink
WeWork is an easy target. It's like no matter what they do, they're getting
shot at.

~~~
short_sells_poo
Let's be honest, in your analogy, WeWork painted a giant target on their own
back, put on a shit eating grin, raised a placard saying "I crapped on your
lawn and fondled your wife" and started parading through the target end of the
All National Homecoming Machinegun and Automatic Weapons Competition range,
all the while their CEO handed out 1000 round ammo cans at the entry.

To say that "they were asking for it" would be a huge understatement. The
night shift janitor of the building two blocks down from their offices would
have called this.

------
finphil
Not surprised. IMO WeWork is not bad concept, they have built brand-awareness
and a solid real-estate portfolio BUT some actors often magnify what the
company actually is ...TBC

------
jfb
Those deck chairs aren't going to rearrange themselves!

------
jcims
Can anyone explain why we're seeing so much WeWork content in the news? Is it
because they have so many customers in the tech industry?

~~~
twic
I think it's because it's a totally crazy story. WeWork is the Florida Man of
startups.

------
qaq
Too bad they did not get a chance to start WeInsure and subsidize medical
insurance for a lot of people.

------
banglaman
Appending ?mod=rsswn to the URL is not bypassing the pay wall anymore

------
Ericson2314
What pressure is this with the crazy different classes of stocks?

------
duxup
Does it change the financials, not sure what this does for them?

~~~
formercoder
Corporate governance is just as important as financials. There is no point
investing in something that is out of control.

------
tibbydudeza
Up next .. Softbank and their "Vision" fund.

------
anigbrowl
As with Theranos, I told you early on it was a scam. If there's one thing a
grouch knows well, it's how to spot trash.

~~~
rurban
Totally different scam than Theranos. WeWork is a cult (like Apple), and has a
poor business model, but it at least works. It just doesn't generate enough
money, like with the Texas shale oil boom. Everybody thinks it's great, but
it's not, they are loosing money and no turnaround in sight.

Theranos never worked.

~~~
anigbrowl
It's a different sort of scam for sure - I should have made clear that I was
basing this on my read of the star CEO rather than the business.

I have a similar enough personality type to such folks that they're easy for
me to spot. Rather than taking claims in good faith and doing extensive due
diligence to assess their business-worthiness, if I read someone as a fake (an
almost purely intuitive thing) and then look at their project with that
working assumptions, the holes in their pitch are magnified into yawning
chasms.

It's not perfect, of course. I've been taken in by other sociopaths several
times, but in personal or employment contexts where it was a 1:1 relationship.
I'm not money-oriented so sociopathic entrepreneurs stand out like a sore
thumb because I don't have any feeling of excitement about an investment
opportunity to get in the way. It's like being able to spot a good or bad
athlete in a sport you don't play, if that makes sense.

------
dbancajas
what does 'pressure' actually mean? How is it exerted by outside investors?

------
gregjw
Timber.

------
CzarnyZiutek
why WeWork is a constant source of `NEWS` on HC?

------
rcardo11
Sorry for my ignorance on this, but recently I find that top hacker news
articles need a paid subscription. Do you have a trick for accessing them or
just everyone here has a paid subscription?

~~~
Traster
On NYT in particular, load the page, when the text loads hit escape and the
subscription nag simply doesn't load. It's not particularly ethical, but on
the other hand maybe NYT should get serious about the software that's meant to
protect its business model.

~~~
rocqua
"If they don't want me to steal, they should have better locks." Would not be
a good defense to allow theft.

That is not to say piracy is theft. Only that 'they should protect themselves
better' is not a justification.

~~~
deckar01
They aren't withholding the content on page load or requiring authentication,
because they need search engines to be able to read it freely to get SEO
benefits. They are tricking the search engines and to think they are giving
content away to everyone for free unconditionally. They gave you the article
for free, then added a bunch of CSS to make it difficult to consume. Modifying
the content they already gave you for free is not stealing.

------
Jaygles
You've got to wonder what kind of a person is it that can get so far in
building a successful behemoth like this but at the same time is able to
seriously put forward ideas like becoming President of the world or asking
management to cut 20% of the workforce yearly

~~~
duxup
I wonder if there is some lingering idea inside their own head that what
they're doing is nonsense ... so more nonsense seems pretty logical.

~~~
Jaygles
Yeah my curiosity is how one can get so many things right when the same
logical processes can spit out completely bonkers ideas at the same time. Is
it insane luck that they hit the mark so often?

~~~
throwaway_law
>Is it insane luck that they hit the mark so often?

No, its money.

All these "tech unicorns" backed by VC money are the same.

Spend Billions to obtain "growth metrics" until such time as the spending can
no longer be maintained and you have grown your "valuation" to a point no
VC/private investor will save your ass, then dump the company on the public.

The marketing doesn't even change just the company, "at any time we can turn
off the spending and growth, and make pure profit."

------
alephnan
Given a choice, would founder/CEOs with big personalities prefer being
powerful or rich?

~~~
OatMilkLatte
Given that you can't really have power without being rich, I question the
assertion that this is a choice :)

~~~
brianwawok
Many previous presidents of the US were "very well off" but not Rich in the
warren buffet sense (Obama comes to mind). Possibly the most powerful position
in the world.

Many generals of the US army are not "rich".

I suspect there are some cabinet positions that don't pay a lot, but offer a
lot of power...

~~~
jriot
Ulysses S Grant comes to mind.

------
rolltiide
another open position
[https://www.indeed.com/viewjob?jk=cf0378114e63aeb4&from=tp-s...](https://www.indeed.com/viewjob?jk=cf0378114e63aeb4&from=tp-
serp&tk=1dld0iag1430g802)

------
nacs
Dupe:
[https://news.ycombinator.com/item?id=21062260](https://news.ycombinator.com/item?id=21062260)

@dang

~~~
jimmyvalmer
"How I Built This Episode WeWork: Miguel McKelvey" (June 19, 2017)

Host: Do you think all of this could just collapse one day?

McKelvey: You know it's a great question. One of the things we're holding onto
very tightly is the feeling that we're still figuring it out every day...
We'll have that learning curve forever which is what make it awesome.

I guess "awesome" is one way of putting it.

------
doctorpangloss
Not to generalize, but if you relied on Hacker News for recruiting you could
wind up in all sorts of wonky, dubious or failed companies. Like people were
such sweethearts for Juul and Alt Schools. They’re also really skeptical of
Google, which for all its faults is, without a doubt, the single best deal for
employees in the history of the world, at least since the time that anyone was
legally or culturally allowed to take such jobs in this country. That’s coming
from a noted skeptic!

Personally I’ve always found that libertarian ethos in support of crappy
things, like shitty schools and tobacco, and opposed to nice things, like
healthy kids, frustrating. Like on the one hand there’s a kind of engineer who
finds the most abstract IT infrastructure so stimulating, something totally
removed from actual concrete stuff with even an iota of moral, emotional or
socioeconomic consequence. But then when the schadenfreude gets going, an
emotion that these supposedly stoic people seem to have in spades, they have
opinions about fucking everything. And then when it comes to hills to die on,
they finally choose to die on the Hill of Nicotine.

So like sure, say no to some recruiter. But if you trust the aggregate
opinions of people on this board, with its profound adverse selection, get
ready to be disappointed.

~~~
LeanderK
this reads like a rant but I am not sure what it's ranting about. I've read it
three times but I am still not sure whats going on. People having opinions? I
read a lot of great advice (also about recruting) on HN and I don't really get
why I should be concerned. Also starts with "Not to generalize" but then has a
really wonky generalization.

~~~
wolco
It's more don't follow the opinions here like it's religion because you will
learn tech no one uses in the real world and miss out on great companies like
google.

I get the impression google is seen as the best employer at least paywise
mosly from comments on here. Go figure.

------
hendzen
I guess he has more time now to focus on his campaign for president of the
world.

~~~
dang
Maybe so, but please don't post unsubstantive comments here.

------
jiveturkey
> recruiter working very hard to convince me I'd be rich when they IPO

recruiters still do that? so unethical.

~~~
tudelo
Even FANG companies try to play this game (our stock will appreciate more, our
company is more volatile the upside is way higher, etc...)

~~~
ryandrake
I’ve heard the opposite pitch from FANG recruiters: Our stock is pretty stable
and/or appreciates modestly. But if you don’t believe me we are a public
company so you can sell on day one. Unlike those startups that are just
offering pieces of paper with promises of riches on them.

Maybe they’re just good at tailoring their messages. They look at me and see
an old guy so they bring out the “stable liquidity” pitch.

~~~
tudelo
This could be the case, I figured they were trying to spin some sort of
message to me given my age.

------
arkj
Comedy!!!

~~~
dang
Please don't post unsubstantive comments here.

------
jiveturkey
wow! that was quick. surprising to say the least.

these kind of people tend to be driven by ego, so this must have hurt.

looks like he'll still be chairman though.

~~~
easytiger
My assumption has been he will step aside, wait for an inevitable
restructuring post IPO markdown (and blame the markdown on his being pushed
out) then swoop in and take the credit for getting it back on track

------
tw1010
Could someone explain to me why this is happening? Is it a metoo situation?

~~~
moate
Here's a good read: [https://www.vox.com/recode/2019/9/23/20879656/wework-
mess-ex...](https://www.vox.com/recode/2019/9/23/20879656/wework-mess-
explained-ipo-softbank)

Short answer: No, it's not a sexual assault thing. It's a "shady self-dealing
business" thing

~~~
josefresco
Sort of true ...there was an allegation made and lawsuit:
[https://www.vox.com/2018/10/12/17968668/wework-employee-
sexu...](https://www.vox.com/2018/10/12/17968668/wework-employee-sexual-
assaults-lawsuit)

~~~
moate
Him allowing a toxic culture in which shitty people were hired and allowed to
behave poorly is very bad and likely helped push him out.

However, those allegations aren't against Neumann, so I personally don't think
this quite qualifies as a #MeToo strike against him specifically, but maybe
I'm applying that concept too stringently?

