Books

Millennial prophet with a failed vision

Chitra Narayanan | Updated on December 27, 2020

Title: Billion Dollar Loser: The epic rise and fall of Adam Neumann and WeWork Author: Reeves Wiedeman Publisher: Hodder & Stoughton Price: ₹699

A gripping account of WeWork founder Adam Neumann’s meteoric rise and precipitous crash

Around three years ago a free browser-based game called The Founder had caught the eye of those tracking Silicon Valley. The business simulator game was a deeply cynical commentary on the start-up culture. You begin playing by naming your start-up, picking a co-founder and choosing a location to set up your business.

The objective is to make millions even as you build world-changing products. The player has to keep building products, expand either into new verticals or geographies even as investors track progress. Their happiness level indicates whether you remain in the game or get ousted. It was a game that exposed the absurdity as well as the dark side of the start-up world.

Reading the Billion Dollar Loser, the story of WeWork, the hyped up co-working enterprise funded by SoftBank, and its quixotic long-haired founder Adam Neumann, I was reminded of the game. WeWork — or rather Neumann’s — epic fall from grace is a story that exposes the dystopian craziness of some of the hyped up unicorns.

Reeves Wiedeman, who spent 18 months researching this book, has written a riveting story. And it is a balanced tale, unlike many of the articles that solely blame Neumann’s lunacy for WeWork’s plummet from skyscraper summits. Wiedeman’s is a dispassionate telling that exposes the deep chinks in the whole start-up ecosystem — whether it is investors who are happy to look the other way even when there are signs of madness or employees and co-founders who refuse to speak up at the right time. Of course, Neumann is to blame. The prologue itself establishes the paradox of this telegenic Israel born glib-talking entrepreneur who could charm the birds off their perches. Even as he packed more and more people into small cramped work spaces, his own office grew to palatial levels.

All through the book, the contrast between Neumann’s public philosophies and private lifestyle emerge. Even as Adam and his wife Rebekah, actress Gwyneth Paltrow’s cousin, spoke about embracing the shared economy and asset light lifestyle, they bought four apartments for $35 million in a single building, combining three into a mega penthouse.

Early life

Wiedeman begins his story from Israel, giving us a picture of Neumann’s early jagged life. The son of two doctors who shuttled Neumann and his sister around various desert towns, and divorced when he was nine, he grew up confused, friendless and struggling emotionally. His grandmother discovers he is dyslexic. Only for a brief while when he lived along with his mom and sister in a kibbutz in Nir Am did he adjust though he notes the inequalities even there. The whole notion of the ‘Power of We’ and the community ethos of WeWork actually comes from that time living there. Indeed, WeWork is planned as a capitalist kibbutz.

Neumann pretty much floats into adulthood aimlessly until his sister Adi becomes a supermodel and moves to New York. He follows her and gets into the partying scene until a chance remark from a visiting friend from Israel on whether this is what he wants to do with his life sets him thinking.

Then begins Neumann’s series of business ventures, all inspired from observing the friends of his model sister. First, a collapsible high heels venture, which goes nowhere. Then baby clothes with knee pads, so that crawling babies don’t hurt their knees. While people are sceptical about the need for such a product given the short stage that a baby crawls really, it speaks a lot about Neumann’s ability to sell a pitch that he actually sews up partnerships.

His first date with Rebekah is the transformation point for Neumann’s jump into the big league. Rebekah tells him to his face that every word he utters is fake. But although she sees him as a big talker with little to show for it, she sees potential in him. In a short while, they get engaged, he leaves baby clothes behind and gets into the real estate hustle.

Interestingly, when Neumann first moves to New York, he asks his sister why people in her building don’t just walk into other people’s homes casually for a coffee and she points out things are different from Israel. The two then play a little game to see who would be able to walk into more homes in the building and make friends. Adi wins. But that incident was the first community building experience of Neumann.

WeWork’s journey

The timing of WeWork’s launch, which Neumann founded with his friend Miguel, was propitious — America was emerging from recession and companies cutting costs.

Shared office spaces made business sense. WeWork with its cool designs, happy hours, flexibility, people connections resonated and Neumann with his millennial prophet image became the darling of investors, who loved his “physical social network pitch”.

From the $7 million he raised in 2012, he catapulted to the super league in 2017 when he convinced Softbank’s Masayoshi Son, to fork out $4.4 billion. More funding followed and by 2019 WeWork’s valuation zoomed to $47 billion.

But it was as he prepared for the IPO that things unravelled — the mismanagement at WeWork became apparent. Stories started coming out about the brash “I’ in WeWork. Masa Son admits he may have created a monster.

The story ends with Neumann being eased out. His friend, Miguel, who co-founded WeWork, and was actually the person who did the grubby task of unfurling Neumann’s grand vision putting the construction and culture in place, stays on a bit but quits too. The investors take over the running of WeWork, but the pandemic arrives and the physical distancing norms leaves the company staring at a bleak future. Meanwhile, Neumann — who really is not a loser if you count the wealth he accumulated — is back in Israel, litigating with Son.

Wiedeman tells a very nuanced, engrossing story — it’s rich fodder for a film or a web series. Neumann’s real life lines would certainly make the scriptwriter’s life easy.

Published on December 27, 2020

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