
Adam Neumann and the Art of Failing Up - pseudolus
https://www.nytimes.com/2019/11/02/business/adam-neumann-wework-exit-package.html
======
neom
"Mr. Neumann would talk eloquently about creating the first “physical social
network,” a place where members could talk about jobs, family, love. “It was
like, wait, you mean life. What you’re talking about is just regular life,”
Mr. Weber said. But as Mr. Neumann framed things, it sounded revolutionary. "

"And some came to wonder if Mr. Neumann had been wise to share, during a 2017
speech at Baruch College, a story from his first date with Rebekah. “She
looked me straight in the eye and she said, ‘You, my friend, are full of”
crap, Mr. Neumann recalled. “‘She then said, ‘Every single word that comes out
of your mouth is fake.’”

mmhmmmm...

~~~
jerrytsai
It _feels_ wholesome and healthy to point to WeWork as a thinly-veiled re-
packaging of office space and an illustrative example of what's _not_ a "tech"
company. With the collapse of their IPO, people are piling on heaps of
schadenfreude.

But I can't help but wonder: how much of this is envy? Who wouldn't want to be
perceived as inspirational and forward-thinking when seeking support for a pet
business endeavor?

The choice of _which_ words to use to market your idea, the value of being
able to recruit people to fulfill the idea, the ability to persuade people to
fund your idea. Isn't there _some_ value provided by inspirational leadership?

Neumann may have duped a credulous Son, but he put WeWork in the position
where it received Son's consideration.

I'm not excusing the grifting and self-enriching.

At the same time, I've seen situations where the charisma and the resolute
determination of a leader makes a huge difference in how the team executes.
WeWork may be a glaring example of what _not_ to do, but it's also an example
of the value of politicking-- of agilely positioning your endeavor to receive
investment, both monetary and emotional.

~~~
phillipcarter
You betcha I'm envious of being able to sucker a bank out of a billion bucks.
I'd love to pull off a con like that and then spend the rest of my life doing
OSS software and traveling the world to do amazing things.

But I think it just goes to show how little merit has to do in this kind of
economic system.

~~~
fuzzfactor
Sometimes you sucker the bank, sometimes the bank suckers you, depends on
which scale beyond your own resources you can talk them into letting you
operate, and where you are on a capitalistic continuum ranging from investors
to consumers.

Where does it say merit or even sensibility is supposed to be a factor?

------
icsllaf
The old adage of "If you owe the bank 1000 dollars that's your problem, if you
owe the bank 10,000,000 dollars, that's the bank's problem."

The "Art of Failing Up" only requires getting an exorbitant amount of money
from someone who is giving away money like candy.

------
bespoke_engnr
From one of my absolute favorite articles about this, and about finance in
general. The most entertaining thing I've read this month: Matt Levine's "How
do you like We now?"

[https://www.bloomberg.com/opinion/articles/2019-10-23/how-
do...](https://www.bloomberg.com/opinion/articles/2019-10-23/how-do-you-like-
we-now)

    
    
        Masayoshi Son: What does your company do?
    
        Neumann: We lease office buildings, spruce up the space and sublet it in small chunks.
    
        Son: Hmm I invest in visionary tech stuff, this doesn’t really sound like my thing.
    
        Neumann: Did I mention we are a state of consciousness. A generation of interconnected emotionally intelligent entrepreneurs.
    
        Son: Okay yeah that’s more like—
    
        Neumann: The world’s first physical social network. We encompass all aspects of people’s lives, in both physical and digital worlds.
    
        Son: You’re crazy! I love it! But could you be, say, ten times crazier?
    
        Neumann: You’re going to invest $10 billion in my company, which I will use as kindling to light the whole edifice on fire, and then when we are both standing in the ashes you will pay me another billion dollars to walk away while I laugh at you.
    
        Son: All my life I have dreamed of meeting someone as crazy as you, but I never really believed this day would come. 
    
        Neumann: I’m gonna use your money to buy a mansion with a room shaped like a guitar, where I will play the world’s tiniest violin after all your money is gone. 
    
        Son: YES PUNCH ME IN THE FACE.
    
        Neumann: Also I’ll rename the company “We” and charge it $6 million for the name.
    
        Son: RUN ME OVER WITH A TRUCK.

~~~
didgeoridoo
> Masayoshi Son: What does your company do?

> Neumann: We lease office buildings, spruce up the space and sublet it in
> small chunks.

> Son: Hmm I invest in visionary tech stuff, this doesn’t really sound like my
> thing.

> Neumann: Did I mention we are a state of consciousness. A generation of
> interconnected emotionally intelligent entrepreneurs.

> Son: Okay yeah that’s more like—

> Neumann: The world’s first physical social network. We encompass all aspects
> of people’s lives, in both physical and digital worlds.

> Son: You’re crazy! I love it! But could you be, say, ten times crazier?

> Neumann: You’re going to invest $10 billion in my company, which I will use
> as kindling to light the whole edifice on fire, and then when we are both
> standing in the ashes you will pay me another billion dollars to walk away
> while I laugh at you.

> Son: All my life I have dreamed of meeting someone as crazy as you, but I
> never really believed this day would come.

> Neumann: I’m gonna use your money to buy a mansion with a room shaped like a
> guitar, where I will play the world’s tiniest violin after all your money is
> gone.

> Son: YES PUNCH ME IN THE FACE.

> Neumann: Also I’ll rename the company “We” and charge it $6 million for the
> name.

> Son: RUN ME OVER WITH A TRUCK.

------
brenden2
It definitely makes me sad to see people like this rewarded so much. Not only
did he become a billionaire, but he continues to get media attention which
only raises his profile further.

I've worked with people like this in the past, who've done bad things and got
rewarded for it. It does make me wonder if you can be a good person and also
be successful, or if the rewards only go to those who are willing to achieve
success at any means necessary.

~~~
dharmon
It's even worse. He'll use his billion dollars to buy himself cachet in SF,
NYC, and LA (and the universities, museums, etc., will all be too glad to take
his money and give him board seats), so he'll never personally feel any
repercussions for the damage he has done.

Sure, us plebes will despise him, but he'll move around in circles with people
like him, not us, those who have gotten rich by making the world a worse
place, and then bought themselves an esteemed position in "society", where
they congratulate each other on how brilliant they all are.

~~~
hn_throwaway_99
What frustrates me to no end is that the one thing he _is_ praised for is his
"charisma" and ability to motivate people. Perhaps it has to do with the fact
that I have some level of Asperger's-ness (e.g. I never really understood
rooting for a particular sports team), but I've never found people like this
motivational. I've met these types before, and they just sound like smarmy
used car salesmen or televangelists to me, and I have a visceral negative
reaction to it. Yet I often look around and see other smart people pumped up
and excited to act. It's an aspect of human behavior I just don't understand
very well.

------
john37386
I'm a consultant and I rented some space at WeWork Montreal.

When I visit my clients in their office, which are not IT related, I often
notice how grey or dark brown'ish are the walls. The vibe is kind of
depressing in some old style offices in Montreal.

I must say that I really enjoyed going back to my shared office at WeWork. The
light was nice, the vibe and I was connecting with people with similar
mindset. I can't vouch for M. neumann, but I can say that my time at WeWork
was really awesome. I would often invite my clients to WeWork so that we don't
need to meet in their super depressive dark'ish offices. My clients were
always amazed and impress by the WeWork offices in Mtl.

I quit, not because of the latest issue, but for personnal reason.

I miss WeWork and I will definitely renew my subscription later if they still
offer thata amazing experience.

~~~
xphilter
You’re missing the point. Those clients you visited had old offices because
they acted rationally and paid an appropriate amount for them (and didn’t
receive subsidies). You were paying under market for a cool, new place. I bet
you and those others with similar mindsets would be priced out if WeWork tried
making a profit.

~~~
johnchristopher
Isn't there a middle ground between grey and old brown'ish offices and wework
though ?

~~~
tomnipotent
Yes, it's called Google-level profit margins and a willingness to spend it on
things like this.

------
ericmay
I liked the article, but didn’t find anything particularly new to me that
hasn’t been said in previous articles by the WSJ, Atlantic, NYT, and others.
There wasn’t anything “failing up”. Just a rehash of the same stuff.

~~~
achow
FWIW this was new.. hadn't read it before:

 _Landlords sell aluminium, we sell iPhones_ \- Dave Fano

[Edit] Quote attribution correction

~~~
kevsim
But it wasn't Adam Neumann who said it. The article attributes it to Dave
Fano, the company’s chief growth officer (whatever that is).

~~~
achow
Thanks. Made amends

------
tim333
You can understand the madness slightly better I think if you watch a bit of
the interview with Mrs Neumann who in some ways seems to have been the brains
behind the operation but who is a little woo woo. (about 2 min in
[https://www.youtube.com/watch?v=nAQR-
NVPX6o&feature=youtu.be...](https://www.youtube.com/watch?v=nAQR-
NVPX6o&feature=youtu.be&t=163))

~~~
dehrmann
She's the one who allegedly had people fired because she didn't like their
"energy," right? Energy isn't a protected class, so I guess this is legal.

~~~
edoceo
"Energy" is the new "Culture Fit"

------
bigred100
I wonder why we as a society valorize advancement at any cost. Surely it’s
much more respectable to reach a level that fits your personal abilities,
needs, and aptitudes, and then be a generally sane, trustworthy, competent
person.

~~~
choppaface
How damaging is Neumann’s excess, actually?

The evidence and vibes in the article demonstrate a lot of greed, but not a
ton of dominance. In comparison, Travis Kalanick greyballed the government,
vilified competitors, and literally brewed a culture of stepping on toes. It
seems Neumann wanted to start a religion, but not necessarily one centered on
dominance. Neumann was evidently pretty mean to his chief of staff, but this
article makes him look like an delusional angel (in many metrics) compared to
TK.

I personally find Neumann’s excess revolting, but it appears that the collapse
of WeWork will mainly impact investor capital (primarily Softbank) versus the
livelihoods and civil rights of tens of thousands of people. Or perhaps
there’s more to the story?

~~~
travisoneill1
> Travis Kalanick greyballed the government, vilified competitors, and
> literally brewed a culture of stepping on toes

And I'm glad he did. Do you want to go back to the misery of taxis?

~~~
joyeuse6701
False dichotomy? Could we not have had some of that but not all of it?

------
fortran77
There will always be charismatic snake-oil salesmen, who may even be a little
psychopathic.

The real problem is the people who follow them, validate them, and throw money
at them. Big names who sit on their boards, etc.

At least in Neumann's case, the only thing that happened was some rich people
lost their money. There were probably no pension funds, etc, investing in him.
And their product didn't hurt anyone.

It's easy to quickly think that "if you're a 6'5" good looking man with great
hair you can get away with anything", but people also wanted to believe in
Elizabeth Holmes.

To me Elizabeth's Holmes case was even scarier: Investors wanted to believe in
a "female Steve Jobs" so much that people were getting bogus medical tests.
"Real people" \-- not just wealthy investors who should be prepared to lose
money -- got hurt.

And unlike the NY Times editors, it doesn't bother me that Adam Neumann walked
away with $1 Billion. It doesn't hurt me at all, and it certainly doesn't
occur to me that this money should somehow be redistributed to more "worthy"
people. It's odd for an uninvolved spectator to feel bitter about this.

Notice that the Times was gushing about Theranos until the Wall Street Journal
called them out, but they were skeptical about WeWork from the beginning. One
played into their preferred narrative, one didn't.

~~~
awinder
It’s entirely possible that pensions had some dollars wrapped up in WeWork but
I don’t have inside knowledge or anything, they just have a decent backplane
of institutional investors. But you can’t take this view that every failed
investment “hurt” people. Some investments outperform expectations, some you
nail, and some are big dumpster fires. A lot of this seems tied up in the myth
that everyone knows what they’re doing: they don’t, grand majority of people
are winging it to various degrees most of the time.

~~~
isoskeles
Can/do pension funds invest in private companies? Seriously asking.

Edit: I don't understand why this would get downvoted, and I am endlessly
amazed by how weird or sensitive people are on HN. Just to downvote without
even answering a simple fucking question in earnest.

~~~
SpicyLemonZest
I think "seriously asking" actually ends up making your comment seem ruder
rather than nicer. The phrase has taken the same loop as "literally",
unfortunately.

To answer the question, they do. Many pension funds manage billions of
dollars, so they're at the scale where complex investments like that start to
make sense. Even when they don't directly do it, very large private companies
like WeWork often start getting included in mutual funds.

~~~
isoskeles
Fair enough, might have been better to leave out those words completely.

I also thought about writing an entire sentence on it, such as, _" I am asking
this in earnest, not trying to make some point in a debate with a rhetorical
question."_ But then I thought it would be too much.

~~~
SpicyLemonZest
It's definitely a hard balance to strike.

------
east2west
I feel that this debacle would not have happened if it had been subjected to
the scrutiny of public market much earlier. One can make public financial
market more efficient by spotting bubbles and bet on the other side, and
thereby making a killing financially and arguably counterbalance prevailing
insanity somewhat. How does one do it in private markets? Not only is there
much less transparency, but also murky and less liquid markets. Therefore are
private markets less efficient?

------
imgabe
> His great-grandchildren will be prominent philanthropists with their names
> on museums and universities, the strange origin of their fortunes long
> forgotten.

Maybe the archival nature of the Internet will preserve this article and
instead they'll be shunned from all the fanciest regattas and dressage
competitions. It's maybe the only justice we can hope for.

------
raverbashing
The business model of WeWork as "AWS for Real Estate" has finally dawned on
me, and it's a shame it's connected to such a toxic person.

There are very few things as bad as real estate negotiations (in the context
of procuring a new office for a growing company), depending on the city they
can take multiple months, require you to deal with all the
furniture/decoration and require very long commitments. While tech is in the
XXI century real estate contracts are still in the XX century, _if you 're
lucky_. Residential usually sucks less but it's still complicated as well.

~~~
freddie_mercury
> There are very few things as bad as real estate negotiations

I can think of, literally, thousands of things. And I've negotiated commercial
and residential real estate several times.

Child sex abuse, human trafficking, the death of a spouse, or child, or
parent, genocide, murder, negotiating a contract when you are a startup and
your customer is a Forbes 50 company that insists on Net 120 terms, war
crimes, wage theft by multinationals, cannibalism, pointless Hollywood
reboots, HackerNews posters bragging about how they never enable JavaScript in
their browser, etc, etc.

Is it really necessary to exaggerate to the point of being ridiculous to make
the simple point that there's room for improvement in commercial real estate
negotiation in the US?

It's not just this post: Americans seem to need to turn everything into "worst
ever" or "best ever".

~~~
journalctl
I’m like 85% sure “There are very few things as bad as...” is just an
expression, and not literally suggesting that real estate negotiations are, on
the spectrum of evil, the worst possible thing ever.

------
chrisgd
If SoftBank hadn’t provided that exit package, they would probably have been
crammed down by the JPMorgan proposal and lost every dollar. With this offer,
they might be able to get 50% of their investment back.

I imagine things like this have gone on at thousands of companies before and
now the rich ex-founders are heralded as geniuses. Neumann will Be in that
camp in 20 years, giving Ted talks and writing VC posts

------
situational87
Business schools are going to study WeWork and Adam in the same chapter as
Bernie Madoff and MCI Worldcom. This has been one of the most successful scams
of all time.

The fact that it was all legal is just mind-boggling.

~~~
puranjay
Its a perfectly legitimate business that brings in billions of dollars and may
even be profitable with some optimization. To call it a scam a la a Ponzi
scheme is a little too harsh.

~~~
0xffff2
WeWork isn't the scam. The way Neumann managed to cash out is the scam.

------
austincheney
What ever happened to companies turning a profit?

~~~
edoceo
We're here. But largely ignored.

