
The Fall of WeWork - heshiebee
https://www.vanityfair.com/news/2019/11/inside-the-fall-of-wework
======
seibelj
This Adam Neumann guy is a living legend. The inevitable HBO miniseries will
have an A-list actor and associates will tell tales of his exploits for
decades. $1 billion parachute and public investors never got burned. I feel
most bad for the employees, but that’s the free market for you. Bernie Madoff
represented the worst of the financial crisis villains, and Adam Neumann is
the millennial con artist for the unicorn era. A man of the times.

I keep eating up these stories, as I’m sure most of us here are as they keep
getting upvoted to the front page. Fascinating

~~~
Waterluvian
I have two live-action soap operas that I follow closely as my guilty
pleasures. The main one is the Trump saga and related stories, anchored by Ken
White and Josh Barro's phenomenal podcast, "All The President's Lawyers."

The second is the swamp called Silicon Valley: Theranos, Wework, etc. But I
don't have a good anchoring podcast for it, I only get it piecemeal via HN and
such. So recommendations appreciated!

~~~
jessedhillon
Pivot by Kara Swisher and Scott Galloway

~~~
Waterluvian
Going to check that out. Thanks for sharing!

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tracer4201
Not sure how accurate this article is, but having no background on Neumann nor
WeWork, it sounds like a cult that brainwashed a lot of hard working people.
Adam sounds delusional at best and a predatory conman at worst, at least from
the conclusions one can draw from the article, and Wall Streets delusion on
profitability was nothing more than a loaded gun given to a toddler.

I’m not sure what conclusions to draw from this - in my own experience, I’ve
met managers, directors, and executives who can be very charming and
flattering. These are people who I seemed to instantly like... in hindsight,
they have some common traits (their ability to sell, 1:1s where the people
just talk on and on and on about themselves, their achievements, or their
vision without asking about my ideas, vision, concerns, motivations, etc)

These are the people you have to be extremely cautious of. In my experience,
they are deluding themselves and others, or they are purposely giving that
pitch because they see you as a useful pawn for some agenda. I’ve learned this
lesson a few times now. I don’t mean to sound cynical but that’s reality.

~~~
nprz
I feel like I also know the type. Confident and charismatic. Rarely
apologetic. Rarely empathetic. Can easily build out many relationships. Only
concerned about other people insofar that they can help accomplish the
predators end goals. Not fun to work with this kind of person.

------
Animats
The real question is, why is the Saudi Arabia sovereign wealth fund such a
huge source of dumb money? They propped up WeWork. They propped up Uber. To
some end, or just through sheer dumbness?

None of this could happen without a huge source of dumb money.

~~~
seibelj
Investing $10 billion responsibly across a lot of private companies is hard
work. Gotta find the companies, negotiate, join the board, monitor them, be
apprised of the goings-ons. Then you find a company that can plausibly take
$10billion in one go and return the same as any other tech company, plus by
giving them so much capital they can destroy the competition.

It really comes down to easy-money policies of central bankers combined with
the laziness of investors. So much money to invest and doing hard work is for
suckers who don’t have the connections to get the capital to invest.

~~~
skybrian
Okay, but why not do something simple like buying the S&P 500? Is that
unavailable at scale?

~~~
ubercow13
Vanguard does that at that scale, so I guess yes?

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empath75
> In another meeting, Neumann said three people were going to save the world:
> bin Salman, Jared Kushner, and Neumann. Shortly after the news broke in
> October 2018 that Saudi agents tortured dissident and Washington Post
> columnist Jamal Khashoggi and carved his body with a bone saw, likely on
> order from the crown prince himself, Neumann told George W. Bush’s former
> national security adviser Stephen Hadley that everything could be worked out
> if bin Salman had the right mentor. Confused, Hadley asked who that person
> might be, according to a source familiar with the meeting. Neumann paused
> for a moment and said: “Me.”

~~~
harry8
Look I want to put the boot into silicon valley snake oil salesmen and
billionaire assholes as much if not more than most here but this troubles me a
little.

None of this kind of story before his fall from grace and now here it all is.
So I guess we don't get it reported if his snakeoil IPO'd for a squillion
dollars? Or maybe is it exaggerated now it publically failed to IPO so putting
the boot in is allowed.

It seems like there is a fair amount of reporting where those working on it
are desperate to knife the subject but only occasionally allowed to be let off
the leash to do the hatchet job.

Maybe it has some baring on how such an asshole as Neumann has failed upwards
to become a billionaire.

Failed upwards to become a billionaire. Does he care what we think of him in
any way?

~~~
yalogin
That is a wrong way to look at it. Journalists dig into stories that pop up or
give them a reason to look into. Without this fall from grace and outed as a
cheat, he is just another success story, a valley billionaire so nothing
really to look at. They have limited time and will try to invest in stories
that they feel are important.

~~~
josefrichter
The reason of $42 billion borderline fraud with red flags all over is not
newsworthy?

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davesque
Reading this article, I can't help but feel like an economic reckoning is on
the horizon like none seen before.

~~~
hos234
There is a lot of cash still floating around. It's not all bad.

~~~
tarsinge
Is there an ELI5 of why all this cash doesn’t find its way to the economy (and
that we get housing and companies valuation bubbles instead of inflation, with
salaries stagnating for more than a decade)?

~~~
eru
The Fed's interest on excess reserves (IOER) keeps a lot of money there. The
graph
[https://fred.stlouisfed.org/graph/?g=pB2X](https://fred.stlouisfed.org/graph/?g=pB2X)
shows that the IOER was regularly above the effective federal funds rate.

That means, banks made more money parking their money at the Fed, effectively
removing it from circulation; than they could make holding bonds.

When a bank holds a government bond, someone else in the economy has to do
something with the money they paid for the bond.

In contrast, excess reserves might as well not exist as far as the rest of the
economy is concerned.

[https://fred.stlouisfed.org/graph/?g=pB2X](https://fred.stlouisfed.org/graph/?g=pB2X)
shows the absolute amount of excess reserves.

IOER explains a big part of the puzzle you found without invoking any
conspiracy theories or sly remarks about 'trickle down economics'.

See [https://www.cato.org/publications/working-paper/floored-
how-...](https://www.cato.org/publications/working-paper/floored-how-
misguided-fed-experiment-deepened-prolonged-great-recession) for a broader
discussion.

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josefrichter
Fascinating. A lot of the stuff they did still makes sense. Even having a
hyperenergetic lunatic as a company face might work. But how on Earth did the
investors refuse to address the red flags, that's criminal.

~~~
rchaud
Because there are only a few investors, and they are all in on the scam. Even
admitting the existence of red flags would have tanked the S-1, so they just
hoped that the public markets wouldn't ask too many questions and buy shares
at the desired IPO price.

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KKKKkkkk1
> In the wake of the Journal exposé, investor Michael Eisenberg and WeWork CFO
> Artie Minson held a conference call with WeWork’s directors and argued that
> Neumann had to step down, two people briefed on the call said.

So Minson went to the board behind Neumann's back and suggested that Neumann
should be fired. Ultimately, Neumann was fired and Minson became co-CEO. The
human dimension here is interesting.

------
barce
All the firing of brilliant coders at WeWork makes sense now, after reading
that Adam is dyslexic. These coders were asked to make something awesome.
Given that vague direction, some of the probably did TDD, and tried to show
kanban or project management burn lists or something like that. These coders
would say the awesome was in the code, and the summary of features for product
spec. He should just _read_ it. That probably triggered Adam to no end. And
that's why in the end he just bought Meetup.com, but even that didn't work. He
ran into the same problems again. Reading about Adam is like reading about
Hitler. The German high command was suckered into thinking a hateful person
who couldn't stand people more brilliant than him knew it all.

~~~
goatinaboat
_All the firing of brilliant coders at WeWork makes sense now_

It makes sense because WeWork was not a tech company, had no need of
“brilliant coders”, and besides, they were not brilliant anyway and produced
basically nothing beyond a website and perpetually broken wifi and printing.

~~~
barce
What a missed opportunity for developing new tech with all that capital!
Brilliance should always be needed and welcomed.

