WeWork is back with an unapologetic disaster
WeWork’s CEO is making a comeback but it has all the ingredients of another doomed startup and failed unicorn.
When WeWork launched in 2010, it was seen as the future of workspaces, catering to freelancers, startup founders, and mobile entrepreneurs. Instead of coffee-shop sessions, these professionals could operate from trendy co-working spaces, offering flexible desk rentals, networking opportunities, and perks like free beer on tap.
At its peak, WeWork had a global presence and was valued at $47 billion, with plans to expand into residential living, fitness centers, and even education. Yet, by the end of 2019, the company was on the brink of collapse, and its charismatic CEO, Adam Neumann, was forced to resign.
The story behind WeWork's rise and fall is stranger than fiction, and Neumann's surprising comeback is even more astonishing.
WeWork was co-founded in 2010 by Adam Neumann and Miguel McKelvey. The idea was inspired by the aftermath of the 2008 financial crisis, which left many office spaces empty and created a wave of freelancers and startups. Neumann and McKelvey saw an opportunity to create workspaces where people could rent desks flexibly while connecting with like-minded professionals.
By 2014, WeWork had grown exponentially, with 51 locations across the U.S., Israel, and Europe, and plans to expand globally by 2017. By 2016, WeWork was valued at $10 billion and hailed as one of the most innovative companies in the world. Investors were eager to get in on the action, and by the end of 2016, the company had raised over $1.7 billion in private capital.
However, the hype that fueled WeWork's rise also contributed to its downfall.
Despite marketing itself as a tech company, WeWork was fundamentally a commercial real estate business. Neumann pitched WeWork as a cultural revolution, hosting extravagant events and fostering a work-hard, party-hard culture. He became a near-mythical figure within the company, further fueling its cult-like atmosphere.
Behind the scenes, Neumann's erratic behavior and questionable decisions began to alarm investors. He reportedly smoked marijuana at work, held marathon meetings, and made outlandish claims about wanting to live forever and put a WeWork on Mars.
By September 2019, SoftBank, WeWork's largest investor, had lost faith in Neumann's leadership and pressured him to step down as CEO.
The reality of WeWork's business model—a basic real estate company with high expenses—became clear during its IPO process. Initially valued at $47 billion, WeWork's valuation plummeted to $10 billion after thorough financial scrutiny. In just six weeks, the company went from being a high-flying unicorn to near bankruptcy. Multiple lawsuits related to sexual harassment, and discrimination further damaged its reputation.
After stepping down, Neumann sold his private jet, and WeWork underwent significant restructuring, including layoffs and leadership changes. By the end of 2019, Neumann was ousted from the company.
But Neumann wasn't done yet. In 2022, he announced a new real estate startup called Flow. The company aims to offer concierge services and management for both Neumann's properties and third-party landlords. Flow has already received a $350 million investment from venture capital firm Andreessen Horowitz, and the company employs over 150 people.
Only time will tell if Neumann's new venture will succeed where WeWork failed, or if it will become yet another chapter in his tumultuous career.
0:00 Overview
0:49 WeWork’s Rise
2:12 WeWork’s Fall
6:58 What Happened Next
