IIn 2010, self-proclaimed “serial entrepreneur” Adam Neumann and architect Miguel McKelvey founded the shared workspace company WeWork. It appeared they had found a profitable way to capitalize on two major trends: the surplus of relatively inexpensive office space left vacant after the 2008 financial crisis and a rising number of workers turning to freelance work or their own Start a business -UPS. The company grew rapidly from its first location in New York’s SoHo neighborhood and within a few years was being described by the coveted name that investors gave to each startup valued at over $1 billion. WeWork was a unicorn.
That was just the beginning. As WeWork grew, so did the scale and grandiosity of Neumann’s ambitions. They quickly opened hundreds of new locations in North America, Europe and Israel and expanded into luxury gyms (Rise by We), private schools (WeGrow) and residential communities (WeLive). Neumann presented his company to enthusiastic investors as more than just a real estate company. WeWork, he claimed, is actually more of a tech start-up and offers an opportunity to invest in a “physical social network.” As of January 2019, the company had reached a valuation of $47 billion, making it the third highest valued privately held company in the world, right behind Uber and Airbnb.
In September 2019, this rating collapsed almost overnight. WeWork prepared for its initial public offering (IPO) when it would begin offering shares on the stock exchange and transitioning from private to public ownership. It also meant that the company had to make its internal finances public for the first time. They weren’t good. WeWork lost $219,000 for every hour of operation, leaving it in a position where it was too broke to lay off employees because it couldn’t afford to pay their severance pay. At least one job loss was guaranteed by these revelations: On September 24, 2019, Adam Neumann had to resign as CEO of WeWork.
The saga of WeWork’s dramatic rise and fall has been told in documentary form, first in a Wondery podcast and then in the 2021 film WeWork: Or the Making and Destruction of a $47 Billion Unicorn. Now the story gets the glossy drama treatment as We crashed on Apple+, starring Oscar winners Jared Leto and Anne Hathaway as Adam Neumann and his wife Rebekah Paltrow – Gwyneth’s first cousin. The show that uses the We crashed Podcast as source material, co-created by Good boys writer and The office alum Lee Eisenberg and Drew Crevello, a writer and former Fox exec who helped develop films like Dead Pool and X-Men: First Class.
While infusing the series with a tongue-in-cheek comic sensibility, the writers say what really drew them to WeWork’s story was the love story at its heart. “We both love rise and fall stories and find them just as tasty and enticing as a lot of people do,” Eisenberg says via video call from Los Angeles. “What separated this story for us was Adam and Rebekah. That love story at the center was something we had never seen before. To tell the story of WeWork, you have to tell the story of Adam and Rebekah. One is fully connected to the other. There is no WeWork without Adam and there is no WeWork without Rebekah.”
One of the things that set WeWork apart from other shared workspace companies was a freewheeling corporate culture created by the Neumanns, fueled by copious amounts of tequila and cannabis, and justified on the basis that they were creating something more powerful than a real estate company: a real one community. This manifested itself in extravagant corporate summer camps that Eisenberg says bore a striking resemblance to those run with much more nefarious intent by Keith Raniere’s support group, turned sex-trafficking cult, NXIVM. “When you see them on stage, there was definitely something iconic about WeWork,” he says. “It looked like NXIVM. These people were so enticed by Adam’s speeches. The prospect of making lots of money and changing the world is very tempting.”
But what sets WeWork apart from stories like NXIVM, or even Elizabeth Holmes’ failed medical start-up Theranos, is that their core product was a dead good one. “With Theranos, it’s bullsh**, isn’t it?” says Eisenberg. “She created something, it doesn’t work, she lied, she cheated people, and people died. This is criminal. WeWork worked! I attended a meeting at WeWork in New York and it was freaking awesome. It was wonderful. It was well designed. Adam was a great seller with a great product. So what did he do wrong? Well, I think it grew too fast and flew too close to the sun.” When Neumann flew too close to the sun, it was WeWork’s wealthy private investors who slapped his wings of feathers and wax. By consistently pouring money into the company, which rested on little more than Neumann’s reputation and promises of untold returns, they set the stage for what the New York Times called “an implosion like no other in startup history.” designated.
Because of this, Eisenberg and Crevello say they wanted to avoid a simplistic narrative that would portray the Neumanns as the play’s villains. “Adam and Rebekah Neumann don’t exist in a vacuum,” Crevello points out. “As intrigued as we were by them, we were really trying to show that there was a bigger story to be told here about investors and the state of venture capital, certainly in America. It has to do with the Silicon Valley culture, this relentless search for unicorns and the mythologization of founders. Investors are FOMO like everyone else, afraid of missing out. All of these forces, the fake it till you make it culture, are coming together to create these bubbles and create stories like WeWork.”
A perfect example of this came in 2017 when Masayoshi Son, the billionaire CEO of Japanese holding company SoftBank, agreed to fund WeWork with $4.4 billion. Son previously had massive returns after becoming an early investor in e-commerce site Alibaba, the “Amazon of China,” but Eisenberg describes the moment he decided to invest in WeWork as “that Worst thing that could ever happen,” for Neumann, because it pushed the company’s valuation to a level it could never justify or enforce. “These investors want their returns to be that high,” Eisenberg explains. “If you invest $100 in a company and get $200 back, everyone says, ‘Well, that was a failure.’ You invest $100 and get back $100,000. So when Masa invests $4.4 billion, he thinks, “Oh, I want this to be the next Alibaba.” That’s incredibly dangerous, and for someone like Adam who always feels like he just wants the next, he always wants more and more, you pour fuel on the fire by giving him the money.”
We crashedSo isn’t just the story of a well-connected, eccentric, and greedy couple who turned a small fortune into an obscene one, often at the expense of their own employees. It’s also an indictment of a venture capital model that continues to prioritize huge returns for investors over building sustainable companies. “For people looking for an Adam and Rebekah takedown, that would actually leave a lot of other people off the hook,” says Crevello. “In terms of where we are as a culture, in terms of venture capitalism, I think it’s more provocative and raises more questions to not just say, ‘Let’s do these two,’ but instead let’s look at how these things come about.” The WeWork story serves as a timely reminder of a fact any schoolchild could tell you: unicorns don’t exist.
WeCrashed will be available on Apple+ on March 18th
https://www.independent.co.uk/arts-entertainment/tv/features/wecrashed-wework-anne-hathaway-jared-leto-b2038690.html The creators of WeCrashed on producing a drama about the scandalous rise and fall of a $47 billion tech startup