Original subtitles

Mikey, is there any reason you wanted the teleprompter

behind the camera so I'm looking straight at you, or you don't care?

- No, I think it's okay. - Okay.

We're in a good spot.

'Cause my eyes are a little shooting to the right.

- That's okay, though. - Are you sure?

Mm-hmm. Okay.

So you wanna start from the top?

Yes.

I'm just gonna do each point.

- Ready? - I am born ready.

Welcome. And thank you for coming.

Real estate is going through a fundamental shift,

from a "fixed cost per seat" commodity

to an experiential-differentiated...

Real estate is going through a fundamental shift,

from a must-have...

It's a mouthful.

Fromm a "fixed cost per seat" commodity

to a must-have experiential...

I can do it, I can do it, I can do it.

Real estate...

Guys, I need no sounds.

If you're moving and making a sound and I'm speaking, freeze.

Real estate is going through a fundamental shift,

from a "fixed cost per seat" com...

Ehhh! We'll clean it up.

I think we're great, and I think we're preparing for the roadshow right now.

Sorry.

The universe had to release it.

Shh! You guys gotta flow with me. After I do the...

Shh! Just let the air out.

WeWork is garnering questions about its business model.

There are all kinds of things that just pop out as red flags in this.

It feels like it's valued as a tech company,

but this is a real estate company.

The founder wanted total, complete control for life.

The company went from a $47 billion valuation

to near bankruptcy in just six weeks.

The future of the company very uncertain at this point.

If you tell a 30-something male

that he's Jesus Christ,

he's inclined to believe you.

- Start from the top. I'm gonna get this.

Okay, I got it.

Social media companies promised us

that technology will bring us together.

Well, I gotta tell you, I've been observing a little bit what's happening

around the world right now and I actually feel like a lot of times

technology is pulling us apart.

And the secret of success in our opinion, is it's about real connection.

It's about treating other people the way you wanna be treated.

It's about being part of something greater than yourself.

I want us to never forget that the future,

while leveraging technology, lies in ourselves.

It is us who will blaze the path forward,

paved not with algorithms, not with software,

but with values, with friendship,

with common goals, and most importantly, with humanity.

The next revolution is going to be the We revolution.

And it will restore in each one of us a sense of dignity and community

without which greatness cannot be achieved.

Not in generations has Wall Street absorbed

the number of body blows it took today.

The American financial system

is rocked to its foundation,

as top Wall Street institutions topple under a mountain of debt.

- After 2008, 2009, you had this really interesting period in U. S. economics

where the economy itself was in a recession

and we were looking for some way to get out of it, we were looking for hope.

And hope was found in technology.

And people were like, "That's the future. Tech is the future.

It's going to be the lifeline that pulls us out of these doldrums."

And at the time, you had a lot of sort of tech boosterism and techno-optimism.

The idea was not just that these companies were going to become valuable,

but that they represented something really fundamental and beautiful

about the future of human civilization.

It was a period where you were rewarded

if you could articulate a vision of your company

that wasn't just going to make money.

It was going to change the world.

What is your business built on?

- We. - You...

I need you to tell me that. "My business..."

- Are we starting? Yeah, we'll just start and then I'll get official.

- Okay, you got it, you'll get... He's not in your picture?

- Now, don't worry about... - He's not in your frame?

We got you covered, you got us covered.

- WeWork is a community...

Wait, who do you want me to look at, you or the...? Okay.

So they're taking this side.

This is, we go to the details here.

- You look fantastic. - We focus on a lot of details here.

Adam arrived in New York like many immigrants,

ready to hustle, full of ideas.

And, uh, like many who've come to New York before him,

uh, they didn't really work.

He had this idea called Krawlers,

which was for babies so they could have padded knees.

You know, babies have been doing fine for millions of years without padded knees.

Our tagline was, "Just because they don't tell you

doesn't meant they don't hurt."

He's couch-surfing with his sister,

who's had some success as a model.

- What you see is what you get.

And I think Adam really loves

the New York lifestyle, the nightlife.

But professionally, he's kind of a dilettante.

I'm working in Dumbo, Brooklyn,

and in the building there's an architect whose name is Miguel McKelvey.

And me and Miguel are talking about different ideas of real estate businesses.

- I was attracted and interested in him because

he was bringing energy to the room,

and perhaps for him I could be a calming element

and take in some of that energy that he had

and reflect it back at him in an interesting way.

And we went out to build a business

that's going to change the way people work,

that's based on community and redefined success.

And from minute one with their partnership,

it was Miguel who was Mr. Inside

and Adam was Mr. Outside.

The world has shifted.

It used to be an "I" world. Right?

IPhone, iMac, all about me, me, me.

If you take the "me" and you flip it and you get the "we,"

you understand that we're about to change the way people work

and the way people live, but more importantly, change the world.

The kibbutz.

A working collective in a free society.

Invented, unique,

contemporary.

The most important social experiment of the last hundred years.

Every great business

has a founding story and WeWork's is excellent.

You have Adam and Miguel, uh, two children of communes.

Literally grew up in communes

and, you know, one in Oregon and one in Israel in a kibbutz.

And they wind up together with this idea that they're gonna create a work commune.

When we thought of WeWork,

one of the thoughts that I had in my head is,

we need a capitalistic kibbutz.

On the one hand, let's create a sharing economy where everybody shares.

On the other hand, if you choose to work harder than others,

you should also be compensated more.

Like any narrative,

it gets boiled down and distilled.

And as the company evolves, the founding story evolves.

But their founding narrative actually really did translate

to a lot of their early business success.

- I mean, co-working, as we think of it now,

didn't really exist at the time.

Before WeWork, the real big player was Regus.

- Welcome to Regus, the new way to work.

A global workstyle solution for today's rapidly changing face of business.

As corporate and institutional as you could get,

with cubicles and dull colors.

And walking into a Regus

was like walking into the back of a dentist's office.

We started by taking buildings.

We cut them up to small spaces.

We built everything from glass. It was very communal.

It's very see-through and transparent.

We put in common spaces, and we basically created

a community of small businesses, entrepreneurs and freelancers.

And in that community, people are almost forced to help other people.

And when you have a business community that's built

on these kind of moral standards, everybody becomes more successful.

- In January 2010,

I went in to lead a networking meeting at 7 a. m.,

and that day the guest of a guest

was Adam Neumann, the founder of WeWork.

When the meeting ended,

we ended up standing next to each other, talking,

and he said, "Oh, I might need a mortgage."

I said, "Well, I'm opening the mortgage seat.

I'm gonna go do something else."

He said, "What are you gonna do?" I said, "I don't know.

I want to do something that lights me up and makes me feel excited."

And he said, "Well, I just took this building down in Soho.

"I'm launching this concept called WeWork.

You should come and take a look."

Three days later on Monday morning, I started as their second employee.

I still have this email that Adam sent to me

at one o'clock in the morning the night before my first morning.

I woke up at 8 a. m. to an email that said, "Good morning, period.

Let's build the largest networking community on the planet"

And not even a period at the end.

I showed up and we were three weeks before our opening day,

where we opened the first half of one of the floors in our first building,

which was 17 offices,

and when I started on that first day, Adam said,

"I want to open in three weeks and I want to be full with a wait list."

And we were off to the races from the very beginning.

- I want to talk to the investors. I don't know who they are

and where they're at, but they're looking at this.

I want them to feel that I'm talking to them.

- At them. - At them. To them.

This is a story that I'm telling them.

- Okay, then, go right to the camera. - Okay.

Perfect. I'm ready. - Okay.

Action. - Hey, guys.

This is WeWork, the world's first physical social network.

Our mission is to empower the world through collaboration.

We know that the future of the world

is in small business, not in corporate America.

So we're building a community that's transparent and that's accountable.

That is WeWork.

Hey, guys, Patrick here and I wanted to give you

a quick tour of my WeWork office.

I moved into a new office space called WeWork.

What I do like about WeWork, we can, like, work wherever,

and it's just like a good environment to be in.

There's a saying that companies in Silicon Valley

are founded in garages.

In New York City, they're founded in kitchens.

There it is. That's my new space.

Yeah.

The thing that made WeWork more special

or more attractive was just its marketing, right?

- This says, "Do what you love."

- Our friends who were doing their tech startups,

they all worked in WeWorks.

We didn't even consider any other co-working space.

The thinking was, if you have a tech startup

and you want it to be successful,

you start it at a WeWork.

- I love co-working spaces so much.

So let's start over here at the snacks area.

We have the snack area.

Coffee, lemon water.

"Do what you love."

I love drinking coffee, so... I'm gonna do that.

Everyone wanted to be an entrepreneur.

We all want to raise $10 million.

- I'm the founder of BrunchCritic.com.

- Our company is SmileBack.

- Co-founder of UPlanMe.

- Scroll Kit. - Consumer.

- Handshake. - MyThing.

- Spindows. - Scruff.

- Yoink. - RoomHints.

- The company is Beer to Buds.

WeWork embodied an optimism

and this millennial excitement about how to work

and how to do things together, do things flexibly

and rebel against the office culture set by the '80s and '90s.

It was almost like somehow being a member of a club,

beyond just where your office building is.

The world is changing, the way people work is changing.

If you're 22 today and you're out of college, you can't go and work

for corporate America in the old way and you need a new solution.

We're sharing the same space, we're doing different businesses.

And we understand that, through helping each other, we can become more successful.

- How fast are you growing? - Very.

What kind of numbers are we talking about?

We're talking about probably one of the fastest

physical expansions that has been seen for the past 10 years.

- When I got introduced to Adam through a friend,

uh, I came in.

I didn't even know the company WeWork ever existed.

He went right to the point. He's like, "Look, we don't have a lot of time.

"I have a campground upstate. I want to host an event.

I need you to help me. I believe that you can help me."

And then he told me the budget, and I said, "Well...

"you know, your budget's not too great.

"I don't know how I'm, uh, you know, gonna really pull this off

and make a couple dollars."

He said, "Don't worry, you know, we're gonna grow.

"We're gonna be big. You're gonna stay with us.

You're gonna do a lot of work with us. You'll see, you'll see, you'll see."

- It's exciting, it's gonna get bigger.

Something about him stood out.

I couldn't put my finger on it, but Adam's a very convincing guy.

He's... He's got a big personality and...

I walked out of that meeting, I said, "Okay, I'll make it happen."

We pulled every favor...

from equipment to performers.

And within a couple weeks, produced what's now become

WeWork Summer Camp.

Hello, WeWorld.

Thanks to you, things have been going very well.

And in gratitude, we decided to throw a 72-hour weekend...

...rager!

WeWork Summer Camp was Fyre Festival gone right.

Do it, do it!

It's this mini festival for members at WeWork,

and all the employees

going to this remote children's summer camp

in the middle of nowhere.

The most rad activity?

Oh, my gosh, there has been so much fun stuff to do.

Honestly, these obstacle ropes really challenged me.

I was contemplating life up there.

- Whoaaaa! - I think they're trying to kill us.

- I was just wakeboarding. - Waterskiing and tubing.

Hit my head really hard

and then had to lay down and drink coconut water afterwards.

- We almost tipped over like four times and I had to ask the lifeguards

to come get me, 'cause I was so scared.

I went to the survival skills thing and that was really fun.

- Oh, the balloon things where

you're like in the bubble and like you run into people.

WeWork Summer Camp, I think, really kicked off

the entire event side of the company,

which became one of the most well-known, you know, elements

of what WeWork was.

- I think I was probably, I don't wanna misstate it,

like the tenth lawyer at WeWork.

Um, and it was just an amazing, amazing culture.

You know, the people were great.

Uh, I think they shared the same values I did, right?

They basically had, it was like a "work hard, play hard" environment.

But it's totally different from that at a white-shoe law firm.

And that's because of these company events.

I mean, it is, it is legitimately

the craziest work experience you'll ever have in your life.

I think at four o'clock, they start serving alcohol.

And when I say they're serving alcohol,

they are serving alcohol.

Like every 50 yards, there's like a bar set up.

And it's unlimited.

Like, if you wanted to drink till the end of time,

you could drink till the end of time.

- Come on, Neumann. Gimme some more, gimme some more!

At all these events,

during the day you listen to presentations, speeches.

There was always like some famous people there.

And then, you know, at night, you do the WeWork thing,

which is kind of just party.

Adam grew up in Israel, only had one TV channel.

And he saw a lot of movies like Animal House ...

- Thanks, I needed that.

And The Gong Show.

So, in a lot of the WeWork space, there was a gong.

At a lot of big events, somebody hit a gong.

And all WeWork spaces, everybody knows, there was kegs of beer.

You know, it's beautiful young people.

Coworkers got along there amazingly.

Like, you met people from all over the world.

I think people really liked the coolness of it.

And that's kind of what was being sold.

- I am, I am so happy to have all of you here tonight.

Like, this is unbelievable.

Who was here last year?

Raise your hand if you were here last year!

We were very worried that we couldn't do better than last year,

and I said to everybody, "There must be a way."

I said, "Well, what if we add one more day,

"do twice as many people, five times as much alcohol?

Then we could do this again!"

Alcohol!

I think the thing that all of us know is,

if you wanna succeed in this world,

you have to build something that has intention.

And what puts us together, all of us here, is because we wanna do something

that actually makes the world a better place,

and we wanna make money doing it.

It's okay.

- I moved to New York in my early 20s,

and I got off of a plane with two suitcases.

And I was going to live with my sister's friend.

I remember taking a cab over there,

and it was at night and just looking at the city

and being in awe.

Like I truly could not believe I was there.

My first job was at a hedge fund,

and I was an executive assistant there.

Like I had moved to New York to "find my dreams."

And here I was really, really kind of lost.

The friend reached out to me and said, "I have a friend who has a startup

and he's looking for an assistant. Are you interested?"

And I got connected to Adam.

I walked in and Adam was super casual,

very laid-back, very charismatic from the moment I saw him.

And he's very tall.

And so he has a like very commanding presence.

Um, and he's also really, really...

he's really friendly.

- Hello, how are you? - This is our founder, Adam Neumann.

- Hi. - Hey, how are you, Esther?

- Nice to meet you. - Joseph, why is your office the messiest one?

Shake my hand, it's good for the movie.

Don't be shy, look at the camera.

That's good. - Hello.

- And he was giving me a tour of the space,

and I was interviewing at the same time,

and we were just talking about their dream of what WeWork would become.

- You gotta put something that we can grow into.

We need to think...

half a year forward if not a year.

This is not just about changing the way people work.

We're gonna change, ultimately,

every facet of the way that people interact.

It just really spoke to me.

And I felt like, I felt changed from that moment.

- Hey.

It's embarrassing, though, with the camera in my face.

Millennials don't just want a job.

And they don't just want a career.

They want a calling.

And I will give Adam Neumann credit here.

He assumed that everybody

was achieving their calling by participating in WeWork.

He'll go down as one of the most incredible salesmen in the world

because he can get anyone to do

whatever it is that he wants them to do and what he sees in the vision.

- I lived in 13 different places until I moved to the U. S. when I was 23.

And I had to go through many different communities,

and every time you go to a new school as a kid, it's not an easy thing.

Adam's world view was heavily shaped

by this kind of nomadic childhood

and a desire to belong.

What he always wanted was to kind of be part of this

"sum is greater than the parts" collective

where he still is kind of the center of attention.

- When I say "We," you say...

Work! - We!

Work! - We!

- Work! - We!

At all these company events,

Adam comes out, the lights are down,

the strobe lights are going, the crazy graphics are going.

Please welcome WeWork co-founder and CEO, Adam Neumann.

- Thank you so much for coming tonight, and I can't wait to get started.

- I've kind of equated Adam to like, you know,

one of these, you know, spiritual or religious people...

- Lord God...

...who think they can cure like the plague by touching your head.

Oh, Jesus!

- Like he literally had people bought in

and he grabs in a room like that...

- You're a creator, and you're a creator, and I know you're a creator.

And the reason we are all creators

is because we do something that's greater than ourselves.

- When I speak to somebody who's so passionate about something,

it's really difficult to not

let that soak over me.

You could not help but drink in what he was saying,

and it became your dream, too.

If we know how to treat each other...

You know, it's a lot of younger people who've never really worked before.

They were working like around the clock, and they really, really believe in this.

I was in my mid-20s looking for purpose

and here's this person selling this dream,

and... I was an easy target for that.

I definitely wanted the world he was telling me about.

- I sometimes feel that every single person in this room

is me having a different experience.

And imagine...

If you're a 25-year-old and it's your first job,

going to orientation and chanting, "WeWork, WeWork, WeWork!"

you know, may seem normal.

All right, so now, go on, Sherman.

If you're 45 and you've worked at law firms and whatever,

you're like, "Okay, this is different."

But, you know, you're into it, you're there.

You get down with what people are doing.

My experience with WeWork, it was like living in another world.

It was living in a world where people were just happy.

Right? They were happy to be around each other.

What WeWork created was this environment of present existence

and celebrating life with, with meaning.

The world is a dark place, and this little cave of WeWork

was my happy spot.

- The only thing that stands in the way of achieving anything you want

is just you.

You know the most amazing thing...

At one of these events, I was sitting towards the back,

and there was an older usher there.

And it was an African-American guy.

And he just started asking me some questions.

And he was like, you know, "What's the company about?

What do you do there?"

And, you know, I'm answering his questions.

We're going on and on, and he just kind of changed his tone of voice

and he kind of looked down on me a little bit

and he was like, "Brother, can I ask you a serious question?"

I was like, "Yeah. Sure, ask me the question."

He says, "Is this some kind of cult?"

I had been to a couple of the summer camps,

and I saw how much fun everybody was having

within the We community.

So then a friend of mine who worked for WeWork

called me up and said, "Look...

"WeWork is doing this new thing.

"I can't tell you anything about it right now.

"Um, it's going to be for the coolest people in New York,

"and I promise you are going to want to be a part of it.

Are you willing to break your lease to do this new WeWork venture?"

Like... "Can I have a couple days?"

And she said, "No, you can't have a couple days.

I need to know right now, are you willing to break your lease for this?"

Uh, and I said, "I guess...

Yeah."

Reluctantly. I said, "Yeah, I will do it."

So a couple of weeks later, I got this invitation

for what looked like Eyes Wide Shut , that Tom Cruise movie.

Like, non-informational whatsoever.

A time, a place, a date, and that's it, you know.

"I'll see you there," basically. So I was like, "Jesus, okay."

So I show up and Adam Neumann was there at this initial thing,

and there was maybe 500 people in this room,

and they revealed what was going on.

WeWork is starting WeLive,

that is all about this new way of living.

And we had a very distinct opportunity to be the first people in there.

I believed every word that came out of Adam's mouth.

- The success of this will be if you guys feel like this is your home.

He seemed like he was talking

like a man on a mission.

So I signed the thing

and they got back to me and asked me to write

a very sort of generic "why you should live here."

"Why should we pick you?"

Like I didn't know anything about WeLive,

so I was essentially writing a book report for a book that I hadn't read.

It's one of those things where you're like,

all I have to say is, "Wow!"

So, you know, I wrote way too long of an essay than I needed to.

And, uh, shortly after that, I was... accepted.

This was supposed to be a space where it's move-in ready.

You don't need anything.

So I packed a bag, just one big bag,

like a drifter, and walked into the space.

And it was...

stunning, it was beautiful.

You know, you walked in and everything was perfect.

I was the first designer at WeLive.

I moved into WeLive,

because I was one of the first members to be a beta tester.

And that meant that, for the first six months,

there was a drastically reduced price.

I had designed the space with my colleagues,

and I couldn't pass up the opportunity,

and it was really cool because you were living

in this brand-new living situation.

The Murphy bed was built into the couch.

There was a little desk tucked into a corner

that you could put your computer on.

The whole thing may have been 200 square feet.

Might have been 200 square feet. Like on a good day.

But it was all about community.

I think the initial group of people definitely fit a certain criteria.

I mean, beyond being young with no actual responsibilities.

- A lot of single people. Everybody was single.

We actually had a saying that everything had to be designed

to hold the weight of two people.

Guess what all those people had in common

was the ability to pause their personal lives to try out this new thing.

They appealed to the same WeWork generation of millennials.

A lot of people worked at WeWork who lived at WeLive at the time.

A very, very small percentage of us were outsiders,

I guess you could say.

The first six months, it was weird if someone left the building.

If someone were like, "Hey, I'm going to a friend's birthday party,"

and the very common next question is,

"Oh, which floor is it on?"

That's one of the benefits of co-living is,

you move in, you get friends automatically, you spend time with them.

So it becomes your whole social circle.

It all felt like everybody was really dedicated

to making this idea work,

this sort of utopian...

society of living situations,

without really thinking

of the consequences of that.

WeWork wanted to become a unicorn.

A unicorn is a company valued at $1 billion.

That one beautiful unicorn

that can return a hundred times your investment,

that's how you're gonna make a lot of money as a venture capitalist.

So the entire world of venture capital basically

is on a unicorn hunt.

Finding the next Uber,

finding the next Facebook, finding the next Google,

that's going to make you a billionaire

just by picking and betting on the right horse,

or in this case, the right unicorn.

When WeWork was in its major New York growth period,

there were a lot of big players who saw the potential.

Venture capital firms saw this

as a really great growth play but they had to move fast.

- I liked him immediately.

Adam's just a charming, charismatic person

who is very persuasive to a lot of people.

In many ways for investors,

WeWork was the future of work.

It became this poster child for this growing trend

of flexible offices, um, kind of digital nomads.

Another thing that drove these investors was FOMO,

fear of missing out.

They had seen what venture capital firms had reaped

with all these startups, and they wanted to get in the action.

For many people, WeWork was that next big thing.

WeWork was basically getting interest from seed investors

who were thinking, "Oh, this is a small company.

I'm gonna get in on the ground with a small check."

And yet they had quietly already reached a billion-dollar valuation,

i.e., one of New York's very few tech unicorns,

and yet people didn't know this because they hadn't announced it.

I'm like, wait a second.

There's a billion-dollar startup in New York

that everybody wants to be a part of

and nobody has a sense of how big it is yet.

And so that's when I started spending a lot of time with Adam,

to try to understand the company.

- New York real estate is one of the most interesting markets

of any kind in the world,

because you have to go back to the days of John Jacob Astor,

the famous saying, "Nobody ever got poor with New York City real estate."

But there's a caveat to that,

which is you have to have incredibly sharp elbows

and you have to play for keeps.

It is male-dominated.

Businesses, portfolios.

A lot of familial wealth in the city.

It is a shark-eat-shark industry.

The Roses and the LeFraks and the Kushners and even the Trumps.

It's not really about entrepreneurs per se,

but it's about families, it's about dynasties.

It's generally the kind of business that once you're in

and you establish a beachhead, uh, you're in.

- So it's almost like you're a real estate company wrapped

in this sort of, in this tech sheen.

- We're definitely not a real estate company.

We are a community of creators.

We create environment for entrepreneurs and freelancers.

We leverage technology to connect people. And it's a new way of working.

And just like Uber is the sharing economy for cars

- and Citi Bike for bicycle... - Right.

...we're the sharing economy for space.

Do you buy the properties?

So we definitely do not buy the property.

That again would make us a real estate company. Exactly.

We create long-term leases with landlords,

and then we take the space and we break it up and we create the community

and the connections that happen between our members.

I saw what he was doing.

I made a judgment as to this man's leadership capabilities,

which are truly extraordinary, okay?

It's phenomenal, and it's a great concept, and it's continuing to explode.

- Taking these distressed buildings and flipping them in a new way,

that was an insight that no one else had.

And, you know, they're validated by the smartest people in real estate

being like, "Wow! That was a really interesting idea.

It may be really risky, but it's an interesting idea."

Pretty quickly, the Kushner family,

the Rudin family, and Boston Properties

were all onboard with this idea.

It was validating to the establishment

and it was also validating to Wall Street.

You know, JP Morgan leads a large investment in WeWork.

- Adam loved to namedrop to people.

And, I mean, Jamie Dimon is the world's...

top banker,

and he would tell people he was his personal banker.

They started to consume everything.

They were renting as many office spaces

in as many neighborhoods as possible.

It became a literal land grab.

All of a sudden, WeWork became

the largest lessee of office space in all of New York City.

Good afternoon, all of you.

When we sat down at the beginning of this year

to decide the agenda,

the first name we put on the list and circled

was Adam Neumann of WeWork, and you're about to see why.

But by the way, having lunch next to Adam

and having him coach me

on how we did the seating all wrong here was...

I mean, three or four times, he was very...

- But it bothers me because the center of energy in this room is right here

and no one's sitting there, and it's right in front of us.

And it's these little details that we pay attention to,

and this is why, this is how you bring people together,

and we have people sitting there facing the wrong direction,

and there's enough room for all of us to get closer.

- The last...

- I remember in the very beginning walking into the office

and seeing Rebekah and looking at her and saying,

"Your husband has an incredible vision."

And she said, "I know. It's why I married him."

- Are you okay?

Oh, fuck, are you on drugs?

- No. - Are you?

- No! - What are you on right now?

- I'm not on anything, Robin.

Fuck.

Rebekah was Adam's wife,

and she had an office with us because she was a filmmaker, an actress.

She is, uh, a cousin of Gwyneth Paltrow.

You can't go far hearing about Rebekah

or talking to Rebekah without that kind of coming up.

I went to a screening of a film that she created.

We all went to the screening.

- This is your entire life story?

- That is my entire story. - No, it isn't.

- It was interesting.

She's around from the beginning of WeWork,

helping in unofficial ways.

I meet my wife, I was 28.

This was 10 years ago, and she looks at me

and she goes, literally within five minutes,

"You have a lot of potential, but right now you're full of shit."

"You have potential, but you're full of shit."

"You, my friend, are full of shit."

"You have a lot of potential, but you're full of shit."

She said, "Find your passion.

"Do something that actually changes the world.

"Bring those two together, I promise you,

you'll have the best business you ever imagined."

I have to say I did all of that and, Rebekah, I just want to say thank you.

- Adam, my love. - I'd be nothing without you.

Well put. - Thank you.

I would go to interview Adam.

Rebekah was there for a lot of the interviews.

Sweetie, can I just say something?

How do I pause this? You don't need this.

- She was, um, grilling me about my intentions with the story.

- Really by putting 400,000 square feet of room...

You're saying WeWork is gonna make the neighborhood cool?

- It's gonna make it work.

It's gonna make the neighborhood, period.

WeWork is gonna make the Lower East Side the new Silicon Valley.

Clearly she had a lot of authority,

but she was not considered at the time a co-founder.

It's pretty clear that Rebekah's trying to sort of shape Adam,

or help him become this world leader type

that, you know, he aspires to be and that she likes.

Working at WeWork, we all felt like, "Oh, wow.

"This is such a special place to be at a special time,

because as it grows, they're gonna need, they're gonna need us."

You're a hard-driving CEO.

We've seen with other hard-driving CEOs and companies with a lot of hours

that, that the culture can crumble.

I was watching a video of yours where

the typical Monday was described

as arriving at 7 a. m. And going home at 3 a. m.

- This Monday, I finished at 2 a. m., not at 3.

It was a good, it was a good Monday.

- I thought I was going to work at WeWork for the rest of my life.

I really thought that this was my lifetime career

and I would just grow with the company.

- If you build an amazing culture, one that people can give you feedback,

one that works hard but also has a great time,

then you will deal with the tough times when they come.

And that's, that's what's really important, and if you do it right...

By the way, working hard is fulfilling.

We would hustle so hard.

And though we would hit the mark,

there was always a way that Adam grew the vision,

so that everyone could see that we could do more, hustle harder, hustle faster.

When somebody tells you they're changing the world

and you are helping them do that, it feels special.

It feels really special.

Everybody was just on it, ready to be a part of this company,

to be part of WeWork, to be a part of the dream.

At that time, we were also being told like...

Adam told me I was gonna be a millionaire.

Most people agreed to salaries less than

they would make at somewhere else in a regular field or whatnot,

because you were given a salary and a certain value of stock options.

- When your business has a mission, and that mission is world changing,

and people can buy into the mission, then they're gonna come in.

Then they need the culture that they're going to enjoy.

To create that culture, you got to put employees first.

We've given every one of our employees equity,

so everyone is a partner in this business, from the porter that cleans

to the community manager,

to the CFO and COO of the company.

Everyone is a partner.

So the idea was, people get super rich off of stock options, right?

You hear about the guy who went to work at Amazon.

He worked in the warehouse.

He was like the 40th person in. He became a multi-gazillionaire.

So that's what was being sold.

But the way the stock options worked

was that's not really like what would happen.

"Equity" was kind of a buzzword.

Adam would talk about it all the time.

"You all have equity in the company."

Which I don't think is quite true.

If you have stock options, you don't actually own equity in the company.

You own a security that gives you an option to buy equity in the company.

I would see that people didn't understand

about that you're taking in what you're getting.

It's so exciting...

to feel like you own something that is so famous

and so talked about.

So that they can say like, "Oh, I have equity."

But if somebody actually did the math, maybe their equity's worth like $2,000.

You might think that the possibility of getting a million-dollar payout

is far higher than it actually is in reality.

There's a lot of room.

You can sit next to the gong. Don't be shy.

WeWork onboarding meetings

were on Monday mornings.

And everybody would come in and then a presentation would begin.

And the presentation was the mythology of WeWork.

Like Adam walking through a kibbutz in Israel.

Like his hands grazing over lavender,

as he thinks to himself with a narration

about community and support and loving one another.

Then we get Miguel like walking through his compound in Oregon.

They didn't do that; that's what they should have done. They should have hired me for that.

But anyway, um, you know, kind of this...

But it's definitely like a couple of slides about WeWork

and then lots of slides about every single person at the C level.

At some point, they changed the organizational structure

to have like mini CEOs in different regions.

And they call them C-We-Os.

So...

I'm not kidding, you know, and I was like, "Look

"I'm not referring to anybody as a C-We-O

for my entire life."

And they made some weird videos.

Everything about the videos

was propaganda.

Everything about it was propaganda.

The tone-deafness and lack of awareness to show these videos,

it was incredible.

Basically, you had the CEO, you had all the C-We-Os,

and you really didn't see any minorities up in the higher echelons.

There wasn't proper diversity at WeWork, period, hard stop.

The C-We-Os are people

who just want to talk about their awesomeness.

They have that very much in common with Adam.

It was almost like you needed to know who was at the top

so when they came past, you could bow down to them.

The events themselves really were meant

to kind of like engender a loyalty to WeWork.

There would be like 50 to 70 people starting every Monday,

and you'd be sitting in your office, and all of a sudden

you hear chanting throughout the entire building.

While we're all trying to do our work.

It's deafening. The music and everybody screaming.

They were willing to spend any amount of money to make themselves feel good

and look good to their employees.

The offices were, to put it mildly, they were cramped.

The mantra we got from on top, and I specifically remember

an all-company meeting where we were kind of told

that we would be quadrupling up, quintupling up, sixing up.

"You don't need the corner office anymore.

"You don't need the house on the hill anymore.

It's all about energy, togetherness, working with your fellow humans."

And then meanwhile, you know, I slide by Adam's office

and he's got a veritable palace in there.

There's a little bit of hypocrisy to all this.

You know, I remember at some old company speech,

it was about, you know, taking some small steps to make sure

that we saved a million dollars on the operating budget every year.

And then Adam just bought a $60 million private jet, right?

So, you know, you hear these and you're kind of wondering like,

what is the message that's being told and how are people really living?

There was definitely a lot of chaos

and lack of organization at WeWork.

Multiple times, I end up doing other people's jobs.

Because they're not working fast enough.

So then eventually my supervisor

writes his password on a Post-It and he hands it to me.

I used his log-in for everything.

I was logging in and out so often

that more than once, I would click on his Gmail icon

and end up opening his email, only to realize it's his email

and then have to log back out of everything and have to log back in.

And, you know, one day

a title of an email caught my eye.

And then sort of the rest, as they say, is history.

So I click on it, of course,

and it's a list of people that he's gonna fire.

And I'm on the list.

But when you read further down in it,

you realize that it's a mandate to cut 7% of their employees.

Because WeWork was just flushing cash down the toilet.

Just hemorrhaging, hemorrhaging money, so we had to cut jobs.

He wrote something like,

"Ha! Bitches, I cut more than 7% of my team,"

'cause everybody was supposed to cut 7%.

And I was like, "What?"

After I saw that email, I thought,

well, he gave me his password, and so I went digging

because I thought, okay,

I know we're running out of money.

Now they're laying people off. What's going wrong?

When I go back in, one of the documents that I find,

it was obviously, the information was not meant to be disseminated,

but it showed that

we had to adjust our revenue down

by something like 80%.

I didn't know if they were not gonna tell investors.

They certainly were lying to every time they put out something in the media.

- Are you actually turning a profit in the business?

We are definitely turning a profit.

I'm bored of the businesses that don't turn a profit. I don't believe in them.

I need a cash flow-positive business.

And so I thought, well, I'll just give it

to somebody in the media and then it will go to the right place

and then they will be taken to task for it.

When I went to try to report on this leak,

you know, we get this statement from WeWork

that the person has broken the law and that they're going to pursue this,

and they kind of were trying to come off a bit as a victim

in the leak.

They kind of said, "Okay, well, some buildings have been delayed,

but we can sort of paint the overall narrative that things will still be fine."

And they had these really powerful backers

who have pumped them with money, and so I think at that time

it was hard to say...

are they faking it till they make it a bit and things are gonna work out?

Will they grow up and kind of figure out these problems?

Or is this a runaway train?

And then all that gets kind of tossed out the window

when just a few months later, SoftBank enters the picture.

- How's that? - That's good.

Much better. Yeah.

Okay, you guys have 60 seconds left

'cause I hear the money counting.

- Masayoshi Son is the founder and CEO of SoftBank,

a large holding company based out of Japan.

Known as Masa.

He is one of the richest people in Japan.

In 2017, Masa

raised the largest venture capital fund of all time.

It's called the Vision Fund.

The size of the Vision Fund was unlike anything

anyone had ever seen before.

It was $100 billion.

That essentially equated to several years' worth

of every U. S. venture capital fund.

You put them all together and it's around that size.

So when you told people

you were gonna raise a hundred-billion-dollar fund,

what was the vision that you actually gave them?

- So, one vision, which is singularity.

Singularity is the concept

that in 30 years, computers, artificial intelligence,

they will be smarter than us.

That's my belief.

The singularity has a lot of implications

for how technology will be used by society,

and I think it also represents this massive existential threat

where someday our creations will outstrip us and not need us,

and we will be living lives dictated by machines.

- So we are investing a hundred billion dollars

just on one thing, AI.

The Vision Fund could basically play king,

and Masa was going around looking for markets

that he thought could be really high growth

and companies with a potential to morph into something

to fit his vision of the future of the singularity.

And Adam wanted WeWork to be part of this huge vision.

- Adam Neumann and Masa Son had met many times.

However, Masa had always thought that WeWork was overvalued

and it would be too easy to replicate.

- The sharing economy's the future.

If I treat you the way that I wanna be treated,

then we can actually make a difference and be successful.

But because of Adam Neumann's charisma,

Masa Son arranged to meet with Adam

for this big two-hour tour of headquarters.

Adam has been preparing for this for weeks.

And he's pacing around, pacing around, watching his clock.

Fifteen minutes goes by, no Masa.

Half an hour goes by, no Masa.

A full hour goes by and he's still looking at his clock.

Finally, Masa shows up, and he says,

"Adam, I'm so sorry, I'm late, but we only have 12 minutes."

And they're going through WeWork and he's giving him the super-speed tour.

At exactly 12 minutes, Masa Son looks at his watch

and he says, "Adam, I'm so sorry, but I have to go.

But," Masa said, "if you'd like, you can ride with me to my next meeting."

So Adam grabs his iPad with the whole WeWork SoftBank pitch,

and they jump in the car.

Adam pulls up his WeWork pitch,

and Masa says, "I don't need the pitch deck. Let's just talk."

Masa turns to Adam and he says, "Adam, let me ask you a question.

In a fight, who wins, the smart guy or the crazy guy?"

And Adam says, "The crazy guy."

And he goes, "You're right, but you're not crazy enough.

"You gotta be the crazy one.

"You need to think bigger.

You need to think 10 times bigger."

And Masa begins, you know, doodling his vision for WeWork,

this grand plan to take WeWork global.

So basically Masa Son gave Adam Neumann

a check for $4 billion and said, "Go crazy."

And that changes everything.

The Wall Street Journal is reporting that SoftBank,

the Japanese investment firm, is considering putting

$4 billion in your company.

Is that accurate?

- There is nothing I can say on that topic,

but that sounds like a big number.

That would be nice, wouldn't it?

- Sounds big.

- I don't remember the exact moment

I first heard about the SoftBank investment.

You would hear rumors.

And to me it just seemed normal, you know.

They were raising money every year.

Their growth expectations were really high.

I didn't think it would be...

as transformative as it ended up being.

With the SoftBank money, WeWork is able

to massively accelerate global expansion plans.

SoftBank unlocks Asia in a new way.

You know, this meets Adam's big ambitions.

I mean, the growth was insane.

In the two and a half years I was at WeWork, I negotiated more deals

and spoke to more lawyers than I probably will the rest of my life.

Typically on a project you wanna make sure it's photography-ready.

You want it to look perfectly staged. You wanna have a good first impression.

You go to a WeWork opening "day of,"

they'd still be painting, there'd be ladders everywhere.

People would be installing lights.

The AC wouldn't be working.

Because of the speed of everything,

nothing was finished when it should have been.

And the major goal, from what I could tell, was just,

how many offices could open and how much you could say the offices were filled

and how many people were in them.

It's almost like at car dealerships

in craziness with getting the cars sold at the end of the month.

You know, sales guy comes to me, it's the last day of the month,

and, you know, "I really have to do this deal.

It's 800 desks. It's gonna help us to get to the goal."

And, you know, I look at the deal and it's like,

you know, "First eight months free,

and WeWork's building custom space."

And the response was, you know, "Get 'em in.

They love it, they'll grow."

And, you know, I come to find out

that the small company that can't afford to pay

for the 800 seats for eight months is Microsoft.

They stopped being those savvy deal makers

and the edge that they might have been bringing to negotiations is gone.

Plus, of course, everyone talks, and so

if everyone knows that SoftBank has given these guys a ton of money,

are you really gonna let them cry "poor" or drive a really hard bargain?

You're gonna say, "No," you know.

"You guys have billions of dollars, you know, let us in."

The ship of state, all the employees,

all the tenants and the customers, all the partners,

were leaning on Adam.

Again, even Miguel, who's co-founder,

slowly... was shunted aside.

Adam wanted the spotlight.

Then he wanted Rebekah to share the spotlight.

She became a bigger executive at WeWork.

And it speaks to kind of her power with Adam

and with the company that, over time, it's kind of like,

"Oh, now there are three co-founders,

there's Adam, Miguel, and Rebekah."

Adam felt that she had pulled him out of whatever spiral that he was in.

And he gave her a lot of credence for that,

and he really felt like she was the backbone of their family.

That doesn't mean she belongs in a corporate environment.

- She had the sort of like New Age vibe

and she starts guiding a huge amount of decisions at WeWork

about the way they spent their money.

Adam's and Rebekah's spiritual advisor

would speak to executives on a weekly basis,

and this constant dose of spiritualism was due to Rebekah.

Hello, New York.

Hello, WeWork.

Hello, global citizens of this Earth.

You know what a global citizen of this Earth is?

It's a member of the We generation,

and a member of the We generation does not discriminate

with age, race, gender, or religion.

If you're a member of the We generation, make some noise!

- WeWork is also expanding

its kind of diverse and sometimes confusing portfolio.

It makes a bunch of acquisitions of other startups.

We had this idea of,

why don't we just invest money in companies that make impact?

All the employees will wanna work for them,

everybody wanna be part of it, and it's just gonna work out in an amazing way.

And I looked at our team and everybody looked at each other.

They said, "Of course, Adam,

that makes a lot of sense, but who's gonna pay for that?"

And we said, "Well...

Masa might..." No.

We said, "Well..."

That was a private joke.

- I went back to meet with Adam

at sort of the new-and-improved headquarters.

I get sort of the quick version of the tour

and now WeWork has its own barista.

So I say, "Okay, I want a cappuccino,"

and Adam orders a latte.

And I reach for my coffee,

and Adam's like, "Oh, no, no, that's mine."

And I was like, "No... Hold on, you know.

I got the cappuccino. Like that's a cappuccino."

And Adam just looks really confused and upset.

And one of the staff is like, "Oh, I'm sorry.

We actually call those lattes and those cappuccinos here,"

pointing at the opposite one.

It stood out to me as just like a strange, gratuitous

reality-distortion moment around Adam because he was ordering lattes

but wants cappuccinos.

And rather than try to explain to him that he's wrong,

they're just gonna change the meaning of that word.

The money got insane.

And they shifted from this little idea...

Then it was, "Okay, we're now going to tell you how to live, WeLive.

And now we're gonna redefine how you live."

And that wasn't good enough. "WeGrow.

We're gonna educate your kids better."

- When my eldest daughter was in kindergarten,

as we started to look around for schools

in both New York and the west coast,

I wasn't finding a place that was gonna nurture her spirit and her soul

as much as her mind.

You know, at some point

Rebekah was talking to the company about WeGrow,

and she's talking in front of a cross-section of 700 employees,

and is basically saying that,

New York City private schools aren't good enough for our children.

And then meanwhile, you're gonna start a school that has

like a 35, 40 grand tuition fee per elementary school kid.

That school is exclusionary to a lot of people, right?

That's just a prototypical person who's grown up in certain circles

and doesn't realize there's other people in the world.

The idea that you're gonna reinvent work

is incredibly audacious unto itself.

To say, "While we're doing that, we're also gonna reinvent education..."

which people have been trying to do for centuries,

that's the kind of decision tree that you see in a company

where you start to believe your own BS.

All right, welcome, everyone, to The School of Greatness podcast.

We've got Rebekah Neumann in the house.

- Thanks for having me. - Yeah, this is fun.

What is the mission of WeGrow, just so I understand clearly?

- The mission of WeGrow, and quite honestly the collective "we"

that we're all living under,

is to elevate the world's consciousness.

- Hmm. - At WeGrow, specifically,

through unleashing every human's superpowers

and expanding happiness.

- Okay, and it's...

And WeGrow is starting as a school? - Yes.

- But it's going to be evolving into much more, I'm assuming, right?

- It's kind of a practice and a new approach to life.

We have started with children, but we're...

as soon as next week starting to pilot some of the curriculum

on our WeGrownups.

- Really? - Uh-huh.

- Is that what you call us? - Just for the moment.

- For fun, yeah. - Yeah, why not?

I was working in WeWork

and living in WeLive.

My entire life...

was being propped up by the We community.

Every time a friend outside of the We community would come over,

they would only come over that one time.

Because they would walk out with this strange impression of what it is.

And pretty quickly I had

alienated most of my friends outside of the building.

- When Adam had an investor coming through,

we would know ahead of time or 10 minutes before,

and we were being told, "Go into the space.

Just hang out, be casual. Bring your laptop."

And we would go there and activate the space.

They were like, "Everybody should come,"

just so there's pockets of folks that are

living the WeLive life so Adam can come and sort of show it off.

And they'd put on "Juicy" by Biggie Smalls,

and they'd be playing a loop over and over again,

waiting for that one moment when the investor came

so that when they walked the space, we were there

just to fill it up and make it look good.

Adam showed up with this investor

and with every drink, he had another vision of what WeWork could be,

like the We community could be, what it was growing into.

And...

at a certain point, you're like, "Dude, just shut the fuck up, man.

"Like, we are just having a good time.

"Can we just... can we just hang out

and have this drink and just talk about anything else?"

It got really draining and really exhausting,

to constantly...

be a part of... this...

thing.

The initial clients of WeWork

thought that they were members.

But they were actually a resource

from which WeWork could extract a reputation

and then they could sort of slingshot that reputation

to get big corporations to think,

"We need to ask WeWork

"how to attract the best and brightest

of this up-and-coming generation."

I eventually, I was promoted to operations manager,

and so I was getting a little more distant from Adam.

His excitement isn't so close to me that I...

am breathing it in and, like, intoxicated by it.

And I'm able to start seeing more clearly that he was manipulative.

He had ways of using psychology

to maneuver through people's flaws

and to use that to his benefit.

Adam was giving me a review.

We were in one of the glass conference rooms.

He was telling me I was doing a great job.

And then another employee walked by

who was very peppy and very pretty,

and he said, "But you're not her."

And he pointed out her and said, "You could be,

but you don't have the confidence that she has."

I went home and thought, "What do I need to do

to become a better employee here and become like her?"

You're constantly in this fear of, "somebody else is gonna take my job.

I have to fight to stay here."

Like, I felt constantly like I couldn't just breathe.

Adam would state, "I could fire all of you and do this by myself."

That's a bold statement to say to people who are working their ass off for you.

- Good morning. - Shalom.

- Shalom. Um...

I'm sure that there are lots of people here

who know what WeWork is, who maybe have worked

in one or several WeWorks...

So I met Adam in Washington, D.C. for an event.

My friends who worked at WeWork told me about him.

And they just said this was

one of the most charismatic...

one of the most visionary

and ingenious leaders

of any tech company in the world.

He just sounded like a mythical figure.

And I was just really curious, like,

what does he understand about leasing real estate and subdividing it?

Like, we're talking about

one of the most boring business models in the world,

and I was really curious to know what was behind it.

It's fascinating to me about WeWork because

lots of people here who have been there,

they've seen how lovely the interior decoration is.

But there are lots of companies that make beautiful spaces.

Um, but they're not worth $20 billion,

which is WeWork's most recent valuation.

So I wonder what do you consider to be your special sauce?

- So, first of all, excellent question.

From the first day that we started WeWork, it was about bringing people together.

As our mission, and our mission always...

- And his answer was everything that we've heard in the last few years,

it's that they were doing something special with the culture,

that their special sauce couldn't be found in earnings

or cash flow or revenue.

It was a... a spirit of We

that was the truly distinguishing part of this company.

- And the one thing, you say, "Are you a co-working space?"

We're as much a co-working space as Amazon is a book-selling store.

Anybody who thought that Amazon was there just to sell books

just didn't understand the vision, and you just need to look now and see

how much greater the vision is.

You know, I wish I'd pressed him harder on it.

But I didn't because

I had no idea what the company actually was.

And I think in the case of Adam Neumann,

there were a lot of people who were impressed by his live charisma,

who privately harbored doubts about exactly how all of this worked.

I was one of them, I suppose, you know?

I didn't say in that interview,

"I think that this company is just, you know, a lot of smoke and mirrors."

I didn't, I didn't know for sure.

I just privately harbored this doubt that said that

this was all kind of a magic show.

- So our first mission was, create the world where people make a life.

That was for WeWork. WeLive is helping you live and not just exist.

And now we have a WeOS,

which is our operating system for physical spaces.

And it's growing very fast and it's everything from your entry system

when you enter the building, but then how do you book a conference room

and how do you attend an event and who's signed in the building...?

Real estate usually is a very dependable, predictable business.

It doesn't grow that much, but it's steady.

You can kind of map out these returns.

But WeWork was growing so fast that it was being valued

by investors as an ultrafast growth,

low-overhead technology company.

They created this sort of Facebook-type platform for members

where you could get people connected through technology.

WeWork has what's like its internal LinkedIn, I call it, right?

It's called the WeWork Member Network.

You know, you have your profile page.

- Adam was often saying,

"Oh, and people are posting job opportunities

and connecting with each other on the platform."

They had acquired a bunch of interesting technologies

and were stitching together what might have been by far

the most comprehensive tool for how people work.

We use beacon technology but a lot of other aspects.

We're using our video cameras to actually see where interactions are happening.

And our entire process is built to make our members more successful.

The cynical read, of course, is,

well, those intentions are all great, but what you still do is office space

and you are a real estate company.

But I think that, you know, when companies are private,

it's hard for us to know what's happening behind the scenes.

- My business is called Thinknum Alternative Data.

And we index and crawl public information from the Web.

Our bots just happened to add WeWork into our list of companies,

and then our bots found something astonishing about WeWork.

WeWork painted themselves as this company that was growing extremely fast,

and once people joined they don't really leave.

But using data on the public Web,

we actually plotted the churn rate,

which is how many people join and then leave.

And we did see that the churn rate had increased

and this was accelerating.

The other trend we found was

no one ever used their internal social network.

When you call yourselves a technology company,

and when you actually build a social network to help further paint that picture,

if no one uses it, then you're not a technology company.

Our next instinct was, let's write a blog post

and, you know, just share our findings.

It really started taking off there.

Then, about three hours later, WeWork sent us an email

asking if we could take down the blog post.

Our first instinct was to just ignore it.

And then the community manager stopped by to our office.

And she says,

"You've violated our membership happiness clause,"

and the kicker was, she said, "You have 30 minutes to leave."

In the wake of our blog post and publication,

WeWork kept raising more money.

I first read about WeWork when they raised money on SoftBank,

at a $20 billion valuation.

And at that point they had about 200 locations.

I went through and looked at the buildings

that they actually had their facilities in.

And I determined at that valuation

that the 200 buildings were each worth less

than that WeWork office was being valued at.

And I said that WeWork was the most overvalued private company in the world.

Adam Neumann told us repeatedly that WeWork was profitable.

We've since found out

that how Neumann and WeWork were considering themselves profitable

was a stretch at best.

Are you profitable?

So we are... as per choice.

Because when you have a 40% business, when you have a margin,

you can actually choose when to be profitable. Right.

- We like to hover around an EBITDA, a break even,

and then we can choose when we wanna move, where we wanna move.

Right now we're in a very high-growth stage of our business,

and we don't see that stopping anytime soon.

- So EBITDA...

Earnings before interest, tax, depreciation and amortization...

Is sort of this accepted metric for how profitable a company might be.

But WeWork started inventing their own financial metrics

to enter into this consensual hallucination,

and they used this term "community adjusted EBITDA."

Basically it was an attempt to say,

"we want to pretend to be profitable by ignoring these expenses."

They adjusted for things

that were ridiculous to strip out and say you're profitable.

So suddenly they went from a loss-making company

to a profitable company,

just by financial engineering and gimmickry.

Every year WeWork would project profits,

would fail to make any profits

and actually their losses would get larger and larger.

Yet investors in the private markets kept on bidding up the price of WeWork.

It kept on getting higher and higher and higher.

It's sort of mind-boggling that that happened.

And I mean that more than anything else speaks to the gifts of Adam Neumann.

- It is my honor and pleasure to introduce to you right now

our co-founders, Miguel McKelvey and Adam Neumann.

Help me welcome them to the stage!

- Shalom!

I was proud to see the events continue to grow.

But I saw the change in Adam.

I think it was money blindness.

There's so much money behind us that nothing can happen, right?

We'd become untouchable, in a sense.

It started to feel like it was more just about the business

and not about this community that I grew to love over those many years.

I think that's where I started to lose my creative juices for the company.

After my first summer camp,

I tried to get out of entering the second year.

I sat down with one of the executives and explained to her that,

"Last year I went, I didn't enjoy myself.

It's not for everybody, and please don't make me go again."

And she kindly said, "I see your point,

but it's a mandatory event, as most company outings are."

- The "We" is, I think, the really big thing in

the mission of what we're doing.

So let's just close our eyes for one second.

Close eyes, hold hands.

The way these events worked was that you would go

hear presentations for like almost eight hours a day

for maybe two or three days.

And to make sure that people were actually attending...

we had tracking bracelets on.

Just think about a reality in which

the energy that we're feeling right now with one another

is an energy of unity, an energy where I am you and you are me

and we all are we.

They would address the crowd,

uh, talking about whatever word of the day that was...

like "authenticity."

And as we're sitting in the mud, I'm thinking,

"Well, you forced me to come to this summer camp and sit in the mud.

Nothing about this to me seems authentic."

If we do the work right and we find a way

to become a real family in this community and company,

we could wake up one day and say,

"We want to solve the problem of children without parents in this world."

We can win... and do it. And children who are in abusive situations.

And then children in abusive situations.

And from that we can go to world hunger,

and there's so many topics that we could take one by one,

and we will be able to tackle anything that we set our minds to.

He would talk about being president of the world.

He would say things like that and people would say,

"Eh, is he serious?"

It seemed really wild and crazy,

but it was hard to make sense of what made sense in unicorn land.

I wanted to talk a little bit about the past and where we came from.

We're not here by mistake.

This was thought about and planned 10 years ago.

And the funniest thing about it, from the day we moved to Brooklyn,

Miguel and I were meeting regularly, just like that picture,

planning for the future.

We knew that...

whatever it is we're looking for

must be greater than ourselves.

Moving forward the "We" company.

SoftBank had bet on Adam as an entrepreneur.

They knew that the valuation was high.

But they thought that, you know, a winner-take-all in this market,

like they had seen in other markets,

would be so big that they could, you know, tolerate

that, that valuation.

But when there's sort of a critical mass of doubt

coming back to SoftBank,

what are the sovereign wealth funds,

who are the biggest investors in SoftBank's Vision Fund,

what are they saying?

When you're raising $100 billion,

you're going to the biggest deep-pocket sources,

so, of course, where does Masa go

but he goes to the kingdom of Saudi Arabia

and they became his biggest backers.

- The Saudis put dumb money into Masa Son's Vision Fund,

because he says, "I'll get you in on the ground floor

"of the next generation of great tech companies

"that are gonna rule the world.

Give me $45 billion, and I'll make you a trillion dollars."

They wanna get out of the oil business

and get into as many other businesses as possible.

Because they're sitting on a dwindling asset.

And so what better business to diversify than technology

and what better way than with the most renowned tech investor in the world

who wants to play on the scale that you can play on?

- The problem, however, is that you can't really get in on the ground floor

at Facebook or Google or Amazon or Netflix.

It's way too late.

So you have Masa Son investing all this money in companies

he's telling the world are tech companies but aren't real tech companies.

And that's a lot of pressure to put on a team,

to say, "Pretty soon this company better be worth $100 billion,"

and at some point you have to have the numbers to back up that valuation.

- You and me...

And that meant that they had to show growth

at any cost.

And that's a problem.

- Show them your heart, show them your truth.

Never give up!

Work until you drop!

It's Christmas Eve 2018,

Adam is with his family in Hawaii.

Surfing, you know, relaxing. It's vacation time.

Masa and Adam were working on a plan

that they were calling internally Project Fortitude.

And it was essentially a plan for SoftBank

to spend about $20 billion

and become a majority owner of WeWork.

Because of SoftBank's money

and a lot of what Masa pushed Adam to do,

they were spending as if they were gonna have this deal done

and bring so much capital to keep growing.

There was this hole, this future hole coming,

that they were gonna need a lot more capital to fill it.

This was a company that was burning,

at one point, $100 million a week.

Think about this, you could buy two Bombardier Global Expresses

at $50 million each, crash both into a mountain,

and that was the burn every week of this company.

And so kind of everything was working towards this goal

of this SoftBank partnership.

- There's something called the Nantucket Sleigh Ride,

which is, when you harpoon a whale,

you're supposed to bring him to the ship, but occasionally a Nantucket Sleigh Ride

is when the whale takes you out to sea and you're stuck.

You gotta ride that whale out even if that whale takes you to Greenland.

Adam clearly thought he was taking Masa on a Nantucket Sleigh Ride,

and that SoftBank had already committed so much money,

they were already in, that they were kind of stuck.

And so the way Adam was running the company,

it was the assumption that

he had an infinite supply of billions to keep growing.

- Adam had been convinced earlier in the month

that this was gonna happen

and the people doing the deal were essentially done.

It was pencils down on sort of December 24 at WeWork.

Everyone expected it was gonna happen.

And then Adam

gets a call from Masa on Christmas Eve,

basically telling him, "Sorry, I can't go through with it.

"The market's working against me. Investors don't like it.

We just can't make it work right now."

When Masa decides he's not gonna put that money in,

Adam Neumann had a problem, because he had nowhere else to go.

Nobody else is gonna write him a check because

everyone knows SoftBank has the money.

So if SoftBank's not putting in more money, there must be a problem.

Like it or not,

they're going to need more money somehow.

- It's really funny, I've been looking,

I've been watching the press around this last fundraise

and I actually think it's hilarious

because for some reason there was an expectation

that there was gonna be like a $20 billion or $16 billion raise.

It's a $6 billion raise.

It's the second largest venture capital investment of all time.

I'm an investor in Uber so I know what the first largest one was.

It's the second largest of all time.

It's SoftBank coming into this company.

Now they have $10 billion invested in this company.

So the notion that anybody is projecting

that they don't have confidence in the company I think is crazy.

I have confidence in the company.

- First of all, thank you, Ashton, it's amazing.

After the collapse of the deal,

they're out there trying to put this really good face on.

He brings along Ashton Kutcher as this pump-up guy.

And it was really disingenuous.

- It's above and beyond what we need to fund the company for the next...

- Okay. - ...four to five years.

Adam was saying things that were completely false.

WeWork was currently a bonfire of cash

and was gonna run out of money by the end of the year.

- The interesting thing about the investment,

there's a lot of rumors and there's what happened.

The most important thing is, when Masa called me and said,

"You know, this has happened and that happened

and the world is changing,"

the first thing he said is, "I'm calling you to share this as a partner.

And I just wanted to come up with a solution together."

- Because that deal didn't happen, does that change your thoughts

on an IPO timeline?

- Just so we... we keep saying "did not happen," just so we're clear.

We never signed the deal.

It's not that we signed the deal and something happened.

We were trying to figure out the best way to do it.

But, no, regarding an IPO, it's always been an option.

We are ready for an IPO.

- You are ready? - WeWork is always ready for an IPO.

We will choose the right time to do it

when it's correct for the mission of the company.

- What are you looking for?

- I want to elevate the world's consciousness.

- Okay, so when you do that, then you can go public?

- It's not one or the other.

When I feel that to achieve that mission,

going public will help it, that will be the day.

Were you anticipating

WeWork's S1 when it came out?

- No. I remember I was on vacation, it was in August,

and I remember telling my family

when someone sent me a link to it,

and I started reading the first few pages,

I said, "I apologize. I'm out for the weekend,"

because this was just too good and I needed to read through this.

It felt more like a, uh...

a novel written by someone who was shrooming

than an S1.

An S1 is a form you have to fill out

that's a precursor to going public.

It's a first introduction to your company, to the world,

where you're representing that these are the facts.

But that means you've gotta come clean, and there are a lot of details in there,

and in WeWork's case, the devil was in the details.

- So the first red flag was on page one.

It says, "We dedicate this to the energy of We...

Greater than any one of us but inside each of us."

I mean, for God sakes, they're renting fucking desks.

I was actually on vacation in the middle of Austria,

hiking with some friends,

and then I get to a place where there's a little service.

I just start getting these texts and emails,

and it's like "WTF."

And like, "Oh, my God!"

And I was like, "I think I know what happened."

Almost everyone you talked to

had a different item that horrified them.

So like one by one, they would say,

"I cannot believe his wife is choosing his successor,"

or, "So egregious that he would have these 20-1 voting shares."

Or, "I can't believe the company is paying him $6 million

for the trademark to the word 'we' in the company name."

He was buying buildings,

and then asking WeWork

to lease those buildings from him.

And then he took $700 million out of this company

at the very time he was asking the public to put money in the company.

- With many of these unicorn IPOs,

the CO is mentioned anywhere between 12 and 40 times.

In the case of Adam Neumann, it was 170 times.

If you tell a 30-something male

that he's Jesus Christ, he's inclined to believe you.

Rebekah is very involved

in the part of the document that people laughed at,

and they were spending a lot of time in the Hamptons.

And they had this sort of constant string of WeWork employees

who would get a seaplane or helicopter to go out to the Hamptons

just to meet with them on some IPO stuff.

You just keep reading it and be like,

"Oh, my God, did anyone pr... Like, look at this

and tell them what it was gonna look like?"

The reality is that, like, people had been telling Adam that for a while

but he didn't care; he thought that people would look past it

or he wanted to enrich himself

and thought that it wouldn't be a big deal.

Meanwhile, he was around WeWork less.

He went on a month-long birthday celebration

where he went to the Maldives to surf.

You know, I think generally he was seen

as more erratic and nervous and...

in hindsight, he probably had a view

that maybe this has gone too far.

Him going surfing was a way of avoiding reality...

and keeping the high life going as much as he could.

This company has just been savaged after its S1 came out.

The price has come down and down and down.

$47 billion dropped down to 10 to 15.

Every day now they're trying to come up

with something to salvage this IPO, and I don't know if they're gonna do it.

- We'll clean it up. I think we're great,

and I think we're preparing for the roadshow right now.

Just hope my hair is good.

- Your hair looks great. - Okay.

This is harder than 20-foot waves.

- I get it. - You know why?

'Cause I control the 20-foot waves.

I'll take a 20-foot wave...

every day for the next 10 days.

I'm scared of drowning just thinking about it.

- All right.

Real estate is going through a fundamental shift.

From a "fixed cost per seat" commodity...

The world was kind of up in arms

about how egregious this company was.

But Adam had to go public anyway.

- ...have a 12-year headstart.

- There's a two-week period you start

marketing your shares officially to investors.

It's called a roadshow.

Kind of like a central part of the roadshow

is a video that goes along with it.

So, they had filmed portions of it already.

So theoretically he was just gonna do his part of it,

they can edit it in.

- Fixed cost commodity, fixed cost commodity.

Fixed cost commodity...

Adam kept delaying,

and even literally would leave rooms full of people

waiting, set up for him to come.

They spent hundreds of thousand dollars on shoots that Adam didn't go to.

That one sounded great.

- Thank you.

It seems kind of, like, it's procrastination,

but, you know, was there something deeper,

I don't know, of why you don't show up to film this thing?

Finally they start filming him, but that day he was just off.

- Just a second.

Zack, you need the sentences to be full for me.

So whenever you have a dead space like this,

put that up there.

- In general, he's an incredible speaker if you see him,

but he can't really read off a teleprompter.

He struggles with that.

- Yeah, the reason it's a little hard for me is,

I'm not a guy who reads from a script, that's the thing.

To do it totally free, though, I need to, I can't...

I'm doing word-for-word so I'm gonna need to loosen it up a little bit.

And I think as the day wore on,

it just went on and on and on and on.

And he seemed more frazzled

and wasn't getting through it and wasn't making sense.

- Based on our savor...

Agh! Ugh! Let's go.

It became somewhat like a party.

It just almost like devolved the whole night.

- The employees of all companies all need the same thing.

Wellness, food.

He just didn't do a good job by everyone there.

And I think a lot of people who were there were quite stressed.

They're like, "This has to get done. We're supposed to do this tomorrow."

It's almost like, this is your worst nightmare.

- This is who I am. This is what I do.

I tackle something until it's right.

I will not stop.

This is what no one's understanding right now,

but it's okay because we'll make sure they learn.

And then the next morning,

they decide... "No, it's just not gonna happen.

We need to call it off."

Adam came in to WeWork's office.

He comes in, he's more dressed up than usual.

And gives an all-hands talk.

And there he basically told all the staff,

"This doesn't mean the IPO's off.

"Like, we're gonna come back and this is gonna be amazing

and, um, we will do an IPO later this year."

But like everything behind the scenes was beginning to happen

to start to oust him.

At the time, it was less known

that Adam was this totally erratic CEO

that had sort of messianic statements

and was doing things in a way that a lot of people would call crazy.

Uh, and so we basically laid that out in a story.

The signature anecdote to the thing that probably got the most attention

was about how he took a plane trip with friends to Israel,

and they were smoking pot on the plane,

and then in Israel they didn't finish all the pot

and so they stuffed some in a cereal box.

The crew on the plane finds it and is sort of incensed.

And so they recall the plane.

Uh, and so then Adam has to find his own way back from Israel.

When you can land

two rockets concurrently on barges and you smoke pot,

you're seen as quirky and likable.

When you don't go public and your investors lose money,

all of a sudden they decide that smoking pot is a criminal activity.

Once Eliot's article came out,

he became pretty much untouchable on Wall Street.

And so, he made the decision to step down

at, like, the urging of a lot of different people.

- Adam Neumann is expected to step down as...

The company went from a $47 billion valuation

to near bankruptcy in just six weeks.

- The future of the company very uncertain at this point.

When I first heard about WeWork's financial collapse,

I honestly did feel really, really sad

for Adam.

Because it felt like he believed in what he was doing

with every fiber of his being.

WeWork now is suddenly in decline,

the office-sharing company's new financial lifeline

giving its controversial co-founder Adam Neumann

a $1.7 billion payout to step down

while the troubled company's reportedly planning massive layoffs.

When I started to learn a little bit more about it,

um...

that sadness

turned to anger pretty quickly.

Because...

now all of a sudden, it felt like this person

lied to me, lied to a bunch of people,

about this beautiful way of working

and this beautiful way of living.

I felt angry at him

for doing that, but also felt angry at me

for, like, buying the bullshit.

And when they started laying people off, the anger switched to rage.

It seemed like WeThis, WeGrow, WeLive, WeWork.

We-we-we-we-we.

You know, it's gotta be we, not me.

It was we for everybody, except for Adam.

He got a golden parachute worth $1.7 billion.

The idea that there would be all this money given to Adam

was demoralizing.

Y ou know, that kind of sticks in your craw a little bit,

particularly when you've been preached at about, "It's all about we."

If that's your deal and you're sitting on all this money

and you really believe in what you were saying the whole time,

you should give some of the money back to help the employees who got screwed.

I think what's frustrating about all of that

is that, when you focus the story on Adam,

you miss how many people worked really, really hard

to bring this impossible vision to life,

who got nothing.

They cared about WeWork a lot.

They were invested in its success.

They were invested in the community.

And they were hurt financially.

Reputationally.

Suddenly this company that they spent years on

is a laughingstock.

- My mind was warped in such a way at WeWork

that I felt, when I left, I had to unwarp it.

They don't care about you.

You know, like that really, really messed with me,

because I thought, "Who is telling me the truth?"

I have done a lot of therapy to like navigate through

what happened there.

Why was I so devastated when it ended?

Why did it feel like, not that I lost a job,

but like I lost my purpose?

Some mind trick has been played on a lot of us.

You know, it just... ...I think of myself as this...

younger girl, and I wanna say to her,

"You didn't do anything wrong."

Like, "You're valuable

and that company is not your worth."

But because I felt like, how am I gonna change the world now?

Like, I needed that.

When I look back on my time spent

in the We community...

I see all the friends that I made.

Um, all the relationships that I still have.

All the people that I deeply care about.

The people that I wouldn't have met outside of the We community.

Those are the people that I choose to remember.

Not...

the asshole that wrecked it.

You know, people will see in Adam Neumann

what they wanna see.

That may not be the most fulfilling answer for a lot of people,

but I do think that he can represent a lot more

than what he really is.

And I think that, you know,

the reason that maybe he resonates with people

is because it felt like he was close.

Clearly there was something about WeWork and something about Adam

where maybe he could have pulled it off.

It could have come together into something beautiful.

But, unfortunately he set an example

which maybe is harmful for other entrepreneurs to follow,

or he's embodied the American dream in a way that worries us

because it was so attractive and it was so intoxicating

and yet had this disastrous result,

that that bothers us more than if he had just been

a failure with WeWork.

There's a lot of really special elements about WeWork

that...

I hope continue to last.

Like especially as we sit in this time of COVID

and we're, you know, people are working from home,

and, you know, I, myself, have been inside,

mostly inside for, you know, months and months.

And it is on the days that I get to interact with other people

that I come home and I'm like, "Wow, that was a fulfilling day."

Community, I think, has been...

taken piece by piece from our world

for quite a while, like very slowly,

and then now here we are sitting literally in... in a pandemic

of lack of interaction and I would give anything to like...

be consumed with people again.

The vision of us working together,

to be better together, is lacking today.

I think we need that.

We go back in time to the Greek town squares.

It has existed forever.

Community has existed forever.

Because it's crucial to our survival as human beings.

What are we if we don't have each other?

>>>>oakislandtk www.opensubtitles.org