Adam Neumann: The Cult of WeWork

    enSeptember 19, 2023

    Podcast Summary

    • The Risks and Rewards of Entrepreneurship: The Story of Adam NeumannEntrepreneurship comes with the risk of excessive spending and unrealistic goals, as shown by Adam Neumann's rise and fall from founding WeWork to a $1 billion settlement.

      Charisma and ambition can lead to significant wealth, but excessive spending and unrealistic goals can also lead to spectacular business failures. The story of Adam Neumann, the founder of WeWork, illustrates this. Raised in a self-sustaining community in Israel, Neumann had a strong sense of community but also an entitled upbringing as the child of doctors. He attended business school in New York and had early business ventures before founding WeWork in 2010. At its peak, WeWork was worth $47 billion, and Neumann lived a lavish lifestyle, spending extravagantly on private jets, office parties, and tequila. However, his aspirations to become a trillionaire and expand to Mars led to overspending and unrealistic business decisions, resulting in one of the most significant business failures in modern history. Despite this, Neumann still walked away with a $1 billion settlement. The story of Neumann's rise and fall and possible rise again highlights the risks and rewards of entrepreneurship and the importance of maintaining a balance between ambition and financial responsibility.

    • From failure to success: Neumann's unconventional partnership and timing lead to GreenDesk's successEven in failure, valuable connections and unique approaches can lead to future success. Unconventional partnerships and timing during challenging economic periods can also contribute to a business's success.

      Even in the face of failure, such as with Adam Neumann's first business venture, Krawlers, important connections and a unique approach can lead to success. During this time, Neumann met Miguel McKelvey, who became a key partner in his next venture, GreenDesk. The timing of GreenDesk's launch in 2008, during the financial crisis, also played a role in its success as many people were looking for affordable office space. The diverse range of tenants, including a fashion designer, media start-up, calligrapher, and private equity firm, added to the sense of camaraderie and appeal for those starting out on their own. Despite the initial failure of Krawlers, Neumann's unconventional background and ability to adapt to changing circumstances paved the way for his future success with WeWork.

    • Creating a compelling vision for the future of workspacesWeWork's success wasn't just about providing office space, but offering a cool and professional alternative to traditional work environments. Founders charmed investors with a compelling vision, attracting assets and growing the business.

      The success of GreenDesk and later WeWork was not just about providing office space, but offering a cool and professional alternative to traditional work environments. The founders, Miguel McKelvey and Adam Neumann, were able to attract investors like Joel Schreiber by presenting a compelling vision for the future of workspaces, despite having no assets at the time. Their ability to charm investors and create a desirable work culture contributed to the growth of their businesses, with the first WeWork opening in 2010 in SoHo and eventually expanding to other industries and locations. This era of WeWork was marked by its appeal to young workers in their twenties who were willing to endure less than ideal working conditions for the chance to be part of a vibrant and innovative work environment.

    • WeWork's early success and Neumann's charisma convinced investors to see it as a tech company worth billionsNeumann successfully rebranded WeWork as a tech company, securing investments from major players and fueling its growth

      WeWork's early days and Adam Neumann's rags-to-riches story struck a chord with investors due to the romantic notion of overcoming odds and the potential for limitless growth. Neumann leveraged this narrative, as well as his charisma, to convince investors that WeWork was worth billions, even though it was primarily a real estate company. He successfully rebranded it as a tech company, tapping into the lucrative market and the trend of skyrocketing valuations during that time. This strategic positioning helped WeWork secure significant investments from major players like JPMorgan Chase and Goldman Sachs, propelling its growth and cementing its status as a decacorn.

    • Tech hype leads to massive valuations for non-tech businessesDuring the late 2010s, tech companies were overvalued, leading Neumann to misrepresent WeWork as a tech firm and secure a $47B investment, but the unsustainable business model and Neumann's extravagant lifestyle led to its downfall.

      During the late 2010s, tech companies were valued much higher than traditional businesses due to their intangible assets, like user bases and intellectual property, leading to massive valuations and investor interest. Adam Neumann, the founder of WeWork, attempted to capitalize on this trend by positioning his company as a tech firm, even though it was essentially a real estate business. He failed to create a functional tech platform, but used the hype around the tech industry and his own ambitious comparisons to Steve Jobs to secure a massive investment from SoftBank's Vision Fund, valuing WeWork at $47 billion and making Neumann a billionaire. This spending spree fueled Neumann's growing ego and extravagant lifestyle, including buying multiple apartments in New York and throwing lavish parties for his employees. However, the unsustainable business model and Neumann's controversial leadership ultimately led to WeWork's downfall.

    • WeWork's IPO revealed financial instability due to excessive spending and lack of profitabilityWeWork's IPO was hindered by excessive spending, lack of profitability, and questionable business practices, leading to skepticism from investors and ultimately hindering the company's success in the public market.

      Adam Neumann's excessive spending and lack of focus on profitability led to significant issues when WeWork attempted to go public. During the late 2010s, there was a trend for companies to spend as much money as possible to appear innovative and growing. However, as profitability became a greater focus for investors, WeWork's financials came under scrutiny. To go public, the company had to file a prospectus, which revealed potential risks and financials. This document exposed WeWork's significant losses and questionable business practices, leading to skepticism from investors. WeWork's need to go public was driven by the desire for a big payday for investors and the ease of selling shares to the general public, but the lack of profitability and transparency ultimately hindered the company's success in the public market.

    • WeWork's Unconventional IPO and the Culture of Big DreamsThe fear of missing out and a culture that celebrates big dreams allowed WeWork to secure a massive valuation based on unconventional financial metrics, leading to significant financial losses when transparency was revealed.

      The WeWork IPO, led by Adam Neumann, was unlike any traditional corporate document. Neumann, with his unconventional methods and charismatic personality, managed to captivate investors despite raising suspicions. He introduced "community adjusted earnings," a new way of expressing income that added back expenses like marketing and development costs. However, this method was unfamiliar to Wall Street, and Neumann's excessive spending and lack of profitability went unchecked. The fear of missing out on the next big thing, combined with Neumann's mesmerizing vision, led to a valuation of $47 billion for WeWork as a private company. But when the curtain was pulled back, it was revealed that the company was worth only $7 billion. The question remains, why didn't investors demand more financial transparency before investing such massive amounts? Despite some warning signs, the culture of the time celebrated big dreams and the fear of missing out, leading to a significant financial loss.

    • The Flamboyant Founder's Fall from GraceDespite financial losses and questionable behavior, Adam Neumann received a large bailout and continues to invest, raising questions about the value of failure and investor judgment in Silicon Valley.

      Adam Neumann, the co-founder of WeWork, was known for his unconventional and flamboyant personality, but his behavior became increasingly detached from the reality of the business. Despite driving the company into financial trouble and causing significant losses for investors, Neumann was still given a large bailout package and continues to invest in new ventures. This raises questions about the value of failure and the judgment of investors in Silicon Valley. Neumann's wealth, though significant, pales in comparison to other tech billionaires, but he embraced the wealthy lifestyle and behaved like a tech titan. Ultimately, his style may have been appealing to investors, despite his lackluster substance, and his past failures may have been seen as assets rather than liabilities.

    • WeWork's Controversial Co-Founder Adam NeumannAdam Neumann, co-founder of WeWork, is known for questionable business ethics, murky moral compass, allegations of sexual assault and retaliation, heavy drinking, and a frat boy mentality, leaving a controversial and ethically ambiguous legacy.

      Adam Neumann, the co-founder of WeWork, is a complex figure who has been described as having questionable business ethics and a murky moral compass. He has been criticized for his behavior towards employees, including allegations of sexual assault and retaliation against victims. His wealth, which came from the sale of WeWork, has led some to label him a villain, while others see him as a failed prophet or an arrogant and greedy egotist. Despite his wealth, there is little evidence of significant philanthropic efforts on his part. His leadership style at WeWork was characterized by heavy drinking and a frat boy mentality, which some have linked to a misogynistic culture within the company. Overall, Neumann's legacy is one of controversy and ethical ambiguity.

    • Adam Neumann's Influence vs Chuck Feeney's LegacyAdam Neumann's charisma and influence over investors contrasted with Chuck Feeney's quiet giving away of his fortune, revealing two different types of power and legacy.

      Adam Neumann, the founder of WeWork, possessed a charismatic ability to convince investors of his ambitious claims, earning him a high score for influence. However, his power was largely empty in the real world, as his company's legacy has been questioned and diminished, particularly in the wake of the COVID-19 pandemic. Neumann's approach to work-life balance, which emphasized the workplace as a place for community and friendship, has been met with skepticism by younger generations. Despite raising over $1 billion, Neumann's actions were seen as arrogant and insensitive, and his reputation as a "bad billionaire" remains. In contrast, Chuck Feeney, another billionaire, quietly gave away his fortune without drawing attention to himself, demonstrating a different kind of power and legacy.

    Recent Episodes from Good Bad Billionaire

    Mark Zuckerberg: Move Fast and Get Rich

    Mark Zuckerberg: Move Fast and Get Rich

    How one social media site birthed an empire. The story of Mark Zuckerberg and Facebook.

    BBC business editor Simon Jack and journalist Zing Tsjeng take us from his childhood to joining the billionaires club soon after, at just 23, then on to his current status as one of the four richest people on the planet. He dropped out of Harvard to mix with other founders in Silicon Valley and still retains absolute control over his company, now called Meta.

    From buying up Instagram and WhatsApp, getting investments from Peter Thiel and Bill Gates, they trace Zuckerberg's spectacular rise. Plus discover what was true and what was made up in David Fincher's film about him, The Social Network.

    Richard Branson: Sky's the Limit

    Richard Branson: Sky's the Limit

    From The Exorcist to owning 400 companies, how music sent the Virgin entrepreneur into space. He's an island owning adventurer, but he's incredibly shy. He's the record label owner who doesn't even like music. Journalist Zing Tsjeng and BBC business editor Simon Jack try to understand a man of many paradoxes and ask whether he's good, bad, or just another billionaire?

    Jim Ratcliffe: Man U Mogul

    Jim Ratcliffe: Man U Mogul

    He's spent a billion on Manchester United, but how did Jim Ratcliffe become a billionaire?

    BBC business editor Simon Jack and journalist Zing Tsjeng learn how the Premier League club's new co-owner got rich via some daring investments and impressive acquisitions. They learn how he made his name in petrochemicals before founding one of the industry's biggest conglomerates.

    Simon and Zing also discover that he mortgaged his own house to fund a business, as well as uncovering his investments in cycling, sailing and, of course, football. Then they decide if he's good, bad, or just another billionaire.

    Bernie Ecclestone: Fast Money

    Bernie Ecclestone: Fast Money

    How the Formula One supremo won control of a sport, and how it all came crashing down. BBC business editor Simon Jack and journalist Zing Tsjeng trace Bernie Ecclestone's unique rise and fall. From modest beginnings selling second hand cars, he built Formula One into a one man empire worth billions. How did he go from the very top to tax fraud, and is good, bad, or just another billionaire?

    Gina Rinehart: The Other Iron Lady

    Gina Rinehart: The Other Iron Lady

    How mining magnate Gina Rinehart amassed a $30 billion fortune to become Australia's richest person and earn a reputation for being highly litigious.

    BBC business editor Simon Jack and journalist Zing Tsjeng uncover a woman who has taken legal action against her father's widow, her own biographer and the biggest mining company in the world, and who has been sued by her own children, twice.

    They follow Rinehart's story from her outspoken father's discovery of huge deposits of iron ore in Western Australia to inheriting the business and turning it into a multi-billion dollar powerhouse. It's a story that takes in secessionist politics, indigenous land rights and lots and lots of family feuds.

    Good Bad Billionaire Presents….Business Daily

    Good Bad Billionaire Presents….Business Daily

    In this special episode, Simon Jack and Zing Tseng bring you the Business Daily podcast, looking at the four sportspeople who’ve made it big enough in business to become billionaires. Listen as presenter Matt Lines finds out the secrets behind the fortunes of Tiger Woods, Michael Jordan, Lebron James and Magic Johnson. Listen to every episode of Business Daily on BBC Sounds.

    Charles Koch: Dark Money’s Slick Operator

    Charles Koch: Dark Money’s Slick Operator

    How oilman Charles Koch turned black gold into dark money. BBC business editor Simon Jack and journalist Zing Tsjeng investigate the feuding family that has shaped US politics for decades. The Koch family battles made “Dallas and Dynasty look like a playpen” with brother against brother, and even twin against twin. But Charles Koch succeeded as heir to the oil fortune, and spent the billions earnt from oil creating a right wing political network dubbed 'The Kochtopus'. So is he good, bad or just another billionaire?

    Warren Buffett: The Oracle of Omaha

    Warren Buffett: The Oracle of Omaha

    How Warren Buffett became the richest investor in history, amassing a fortune of over $120 billion, without moving from the Nebraska home he bought in 1958.

    BBC business editor Simon Jack and journalist Zing Tsjeng discover how Buffett earned his first money as a six year old, bought his first shares at 11 and filed his first tax return at 13. He went on to formulate his own investment philosophy on the way to becoming incredibly rich.

    Simon and Zing reveal Buffett's biggest deals and pithiest phrases from his decades if investing, as well as his unconventional love life. Then they decide if he's good, bad, or just another billionaire.

    NR Narayana Murthy: India's IT Innovator

    NR Narayana Murthy: India's IT Innovator

    How NR Narayana Murthy, now known as the father-in-law of UK Prime Minister Rishi Sunak, first became known as the father of India's IT boom.

    Journalist Zing Tsjeng and BBC business editor Simon Jack explain how Murthy made Infosys, the technology company he founded with six friends and some cash borrowed from his wife, a world leader in outsourcing.

    Simon and Zing reveal how 20th Century Indian politics, an early passion for computers, and a shocking experience behind the Iron Curtain all played a role in making Murthy spectacularly rich. Then they decide if he's good, bad, or just another billionaire.

    Related Episodes

    #286: The Man Who Taught Me How to Invest

    #286: The Man Who Taught Me How to Invest

    Mike Maples, Jr. (@m2jr) is the man who taught me how to invest. He's one of my favorite people and a personal mentor.

    He is a partner at Floodgate, a venture capital firm that specializes in micro-cap investments in startups. He has been on the Forbes Midas List since 2010 and named one of Fortune magazine's "8 Rising VC Stars." Before becoming a full-time investor, Mike was inolved as a founder and operating executive at back-to-back starup IPOs, including Tivoli Systems (acquired by IBM) and Motive (acquired by Alcatel-Lucent). Some of Mike's investments include Twitter, Twitch.tv. ngmoco, Weebly, Chegg, Bazaar-voice, Spiceworks, Okta, and Demandforce.


    This podcast is brought to you by ConvertKit. After trying the competition, this is the only email tool that has made email marketing intuitive for my team without sacrificing any of the features and benefits I need to run a profitable business. It's easy-to-use systems, split testing, resending technology, automation, targeted content, high rates of deliverability, integration with more than 70 services -- like WordPress, Shopify, and Sumo -- and excellent customer service are the reason I made it my go-to ESP.

    Whether you have a thousand subscribers or a million, whether you run a simple blog or a whole company, ConvertKit has a plan that's scaled to fit your budget and requirements. Go to ConvertKit.com/Tim to try it out and get your first month for free! Test the platform and make sure it works for you and your business.

    This podcast is also brought to you by WordPress, my go-to platform for 24/7-supported, zero downtime blogging, writing online, creating websites — everything! I love it to bits, and the lead developer, Matt Mullenweg, has appeared on this podcast many times.

    Whether for personal use or business, you’re in good company with WordPress — used by The New Yorker, Jay Z, FiveThirtyEight, TechCrunch, TED, CNN, and Time, just to name a few. A source at Google told me that WordPress offers “the best out-of-the-box SEO imaginable,” which is probably why it runs nearly 30% of the Internet. Go to WordPress.com/Tim to get 15% off your website today! 


    If you enjoy the podcast, would you please consider leaving a short review on Apple Podcasts/iTunes? It takes less than 60 seconds, and it really makes a difference in helping to convince hard-to-get guests. I also love reading the reviews!

    For show notes and past guests, please visit tim.blog/podcast.

    Sign up for Tim’s email newsletter (“5-Bullet Friday”) at tim.blog/friday.

    For transcripts of episodes, go to tim.blog/transcripts.

    Interested in sponsoring the podcast? Please fill out the form at tim.blog/sponsor.

    Discover Tim’s books: tim.blog/books.

    Follow Tim:

    Twitter: twitter.com/tferriss 

    Instagram: instagram.com/timferriss

    Facebook: facebook.com/timferriss 

    YouTube: youtube.com/timferriss

    Past guests on The Tim Ferriss Show include Jerry Seinfeld, Hugh Jackman, Dr. Jane Goodall, LeBron James, Kevin Hart, Doris Kearns Goodwin, Jamie Foxx, Matthew McConaughey, Esther Perel, Elizabeth Gilbert, Terry Crews, Sia, Yuval Noah Harari, Malcolm Gladwell, Madeleine Albright, Cheryl Strayed, Jim Collins, Mary Karr, Maria Popova, Sam Harris, Michael Phelps, Bob Iger, Edward Norton, Arnold Schwarzenegger, Neil Strauss, Ken Burns, Maria Sharapova, Marc Andreessen, Neil Gaiman, Neil de Grasse Tyson, Jocko Willink, Daniel Ek, Kelly Slater, Dr. Peter Attia, Seth Godin, Howard Marks, Dr. Brené Brown, Eric Schmidt, Michael Lewis, Joe Gebbia, Michael Pollan, Dr. Jordan Peterson, Vince Vaughn, Brian Koppelman, Ramit Sethi, Dax Shepard, Tony Robbins, Jim Dethmer, Dan Harris, Ray Dalio, Naval Ravikant, Vitalik Buterin, Elizabeth Lesser, Amanda Palmer, Katie Haun, Sir Richard Branson, Chuck Palahniuk, Arianna Huffington, Reid Hoffman, Bill Burr, Whitney Cummings, Rick Rubin, Dr. Vivek Murthy, Darren Aronofsky, and many more.

    See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

    Swimming to Success, with Fares Ksebati

    Swimming to Success, with Fares Ksebati
    Say Hello to Fares Ksebati! He's the Syrian-American founder of the performance and health app called My Swim Pro, which has over 1 million members in 180+ countries, and a business with a 7-figure revenue operated 100% remotely. A swimmer and entrepreneur, Ksebati made the Forbes 30 Under 30 List for 2020 in Consumer Technology. Enjoy!

    "Wefunder does not endorse, recommend, or advise investing in any company. "

    S2E11: Guest Paul Chen, CEO of Flourish Tech

    S2E11: Guest Paul Chen, CEO of Flourish Tech

    Paul Chen is CEO and cofounder of Flourish Tech, a company teaching skills to build flourishing, healthy relationships. In this episode, Paul tells the deeply personal story of what inspired him to start his company, shares how they’re repackaging time-tested psychology tools to make empathy resources understandable and accessible, and explores the huge impact Flourish could have on the mental wellbeing of families, friends, and colleagues everywhere - Flourish seeks to create peer to peer 1-on-1 coaching sessions to scale the impact of psychology experts.

    Techmeme Ride Home - The Metaverse! With @janineyorio

    Techmeme Ride Home - The Metaverse! With @janineyorio

    All things metaverse! Why is it on everybody's lips at the moment? When will it arrive? Is it already (kinda) here? With @janineyorio from Republic.co.


    Subscribe to the Techmeme Ride Home daily tech news podcast here

    See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.