The Wild, Over-The-Top Story Of WeWork: The Once-Heralded Unicorn Is Now Under The Microscope
WeWork took the boring, shared-office-space concept, added kombucha on tap and the allure of working in a cool, hip, aesthetically pleasing environment and became one of the most highly valued unicorn companies, reaching a reported peak valuation of $47 billion.
The company has had a great run of success, quickly opening new locations all over the world. Investment bankers vigorously competed to bring the company public. This thrust WeWork into the limelight, consequently revealing large cracks in its facade. The issues-once disclosed-crushed the sky-high $47 billion valuation to about $20 billion today.
Larry Ellison, the multibillionaire CEO of Oracle, lambasted the entire crop of unicorns-those similar to WeWork that have gone public, like Uber. According to Barron's, Ellison is not a fan of their business models. "They have nothing," Ellison said. "No technology. And no loyalty."
He derides WeWork self-positioning itself as a sophisticated technology company. He points out that the emperor has no clothes and sees WeWork as a basic, boring business. "WeWork rents a building from me, and breaks it up, and then rents it," Ellison said. "They say, 'We're a technology company, and we want a tech multiple.' It's bizarre."
WeWork was eager to go public and reap billions of dollars. Once the IPO documents went public, it revealed a scary pattern of financial self-dealing. The IPO was put on hold due to the negative backlash. It was reported that WeWork cofounder and CEO Adam Neumann changed the company's official name to the We Company. Conveniently, he previously trademarked the name and charged his own company about $9 million for using it. The company burned through $1.6 billion in 2018 and analysts believe it will lose over $1 billion this year. Neumann "cashed out more than $700 million from the company ahead of its initial public offering through a mix of stock sales and debt," according to a July Wall Street Journalreport. Meanwhile, rank and file employees were not afforded the opportunity to sell their shares to lock in profits.
Neumann is reported to have engaged in over-the-top, questionable behavior. He reportedly left a cereal box filled with weed on a private jet. When crewmembers found it, they called the plane's owner. Worried about this being some sort of global drug-trafficking ring, the owner demanded that the plane be returned, which left Neumann stranded in another country.
Neumann has told reporters that he'd like to become leader of the world, live forever and amass more than $1 trillion in wealth. His wife and WeWork cofounder, Rebekah Neumann-a cousin of Gwyeneth Paltrow-has her own idiosyncrasies. According to reports, she had a number of employees abruptly fired because "she didn't like their energy" after briefly meeting them.
A Wall Street Journal profile of Neumann revealed the bizarre way he fired about 7% of the company's employees in 2016. At an all-hands meeting at WeWork's home office, Neumann was "telling attendees the move was tough, but necessary to cut costs and the company would be better because of it" and then things took a weird turn. Shot glasses filled with tequila were brought out to the assembled employees. Then, Darryl McDaniels of the old-school rap group, Run-D.M.C, started to perform their 1980s hit, "It's Tricky."
There is some good news. On Glassdoor, employees rank Adam Neumann highly as a CEO with a 62% approval rating. The employees also offer positive accolades:
- "VERY cool HQ-beer, fruit water, and other treats on tap, free breakfast, amazing decor, lots of events and cool trendy vendors who bring free stuff-if you like to humblebrag via Insta, you'll love this place. Some cool people-celebrities come in and out, your colleagues are generally very attractive folks, there's a sense of excitement and true commitment to the work (borderline evangelism) depending on who you work with and what you do. Name recognition and valuation-company is a rising star and it's worth having on your résumé. A cool mission on the surface-bringing community together, helping people do what they love (making work a passion rather than a chore) through connection."
- "Great mission. Inspiring leadership. Socially conscious organization. Lots of incredible challenges to solve. You're working on a product that you use, and talk to customers every single day. Collaborative culture."
- "Beautiful HQ offices, global access, barista coffee bar, lots of events, résumé builder."
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