For me it is fine assuming he did not obtain it through fraud. This video alone shows in less than 20 minutes that it is not a viable business. Still Softbank put billions in it. Apparently Adam is a really good salesman and Softbank and others are really stupid investors.
@@richardbloemenkamp8532 Adam Neumann lied about their growth prospects and entire business plan. He duped investors by selling them on false projections. You have to be kind of dumb/naive to trust the SEC to always make correct judgements/charges.
@@arthurkosakowski1098 What makes you think I forgot about that? Also, he did return that money, but it’s still scummy. Go reply to a different thread, lmao.
Just shows how stupid the elites are and how broken the system is. Adam Numale has never contributed anything to the economy except fraud... he is a fast-talking parasite, a useless eater, the exact kind of person other billionaires complain about welfare going to. He didn't create jobs or grow the economy or innovate or create anything. Yet he's a billionaire... because he convinced people to throw their money at him. Disgusting stuff.
When I first heard of WeWork my immediate thought was, "Why are people treating this like a tech unicorn when they are an office space rental company?" Pre-furnished office space and, to varying degrees, co-work spaces already existed, so what is the big innovation at WeWork's core -- free beer?!
Same. I said these are executive suites with beer. That's innovation? I do wonder what if Covid didn't happen would they have been successful in their IPO. I don't count the SPAC. More retail investors would eventually have been pummeled.
@@afh001 Uber is a very different case, though, because it actually had a core innovation that wasn't even possible until smartphones with GPS became widespread. How successful ride-hailing companies will be as a whole (regardless of whether Uber in specific fails) will depend entirely on, in my opinion, government regulation. If they get regulated as heavily as taxi companies, then they will either fail or co-exist with taxis at similar levels of size. If regulation continues to be light (e.g., letting them consider drivers as independent contractors rather than employees), then they will be in a category higher in terms of size and power.
By the way, Regus did the same job for decades and makes profits. WeWork is the perfect exemple of stupid startups selling a story rather than a really new product.
Yeah 100%. Again another startup way over valued and fuelled by Silicon Valley greed. The sad thing is, those at the top end up still making money but those in the middle etc end up the worst, how on earth are companies allowed to raise funds but allowed to take massive salaries and buy private jets. There should be some regulation brought in.
Every company that’s making money today was a startup once. Venture capitalists take risk, they win some & loose some. If people don’t take risks then we wouldn’t have so many companies we have today.
I love the herd mentality "there's a lot of heavyweights involved..." all of which assumed someone else was doing the due diligence so they didn't have to 🙈
This is actually the same reason why politicians are always being seen dealing with dodgy People. If you're a billionaire or look like one, people assume you're vetted by someone.
The banking situation is a reminder that Fed hikes are having an effect, even if the economy has held up so far,” It’s precisely at times like these that investors need to be on guard against the next certainty. First SVB, then signature bank and now first republic bank, these are all the signs of yet another 2008 market crash 2.0
Sincerely it's best to seek an advisor right now, unless you're canny yourself. As a business owner in both the service industry and eBay reseller of all product categories, I can tell you we’re in a deep recession and everyone is running out of money.
Very true, people downplay advisors role, until burnt by their mistakes. I remember just after my layoff early 2020 amidst covid outbreak, I needed to stay afloat, hence researched for license advisors. Thankfully, I came across someone of practical knowledge, and decades of experience, my stagnant reserve of $325K has yielded nearly $1m after subsequent investments so far.
Yes, a Fidelity financial advisor named "Julie Anne Hoover" put an end to my fears about investing, and after making more investments, I was able to reach the high six-figure mark in less than 3 years. A licensing advisor satisfies the necessary security criteria; hence, reimbursement is guaranteed if I'm dissatisfied with the service, so I'm much better off hiring one.
Kudos for not going the cheap way like most other wework videos and focusing mostly on Adam Neuman’s antics but focusing on the company’s lifecycle as a whole.
Before the pandemic I worked in a wework office on the east coast for a large national bank. The decor was nice but the only amenity was tea and coffee. They did cram us into rooms "like sardines."
Same. I was in a wework in Australia and for $30k/mo. We were stacked like totem poles into a tiny private office and while the decor was nice and all there was minimal kitchen facilities and a few pool tables and whatnot that people didn’t use.
You may as well have been working at the bank's own Op Center, with the checks rattling through the proof machines to your left and the overdraft clerk stamping "NSF" on more checks to your right.
This is a really funny video because I just saw a WeWork sign and wondered when they were going bankrupt. To be fair, I thought they were bankrupt long ago tho
Man, I thought that they were already bankrupt when I drove past an office space of theirs recently. I guess I probably won't be seeing that space soon anyway
This story has been documented by several and is one of many sad stories of super egotistical people who have a fluffy idea and no real functional or working business. They walk away with billions and the investors and employees are left with nothing.
The employees are left with their salary. It's the investors who get the wrong end of the stick but that's on them. It's their job to make smart decisions. If they are unable to do that there are vacancies at toilet cleaning companies, lol.
Haha, imagine being abootlicker for rich people and highearning silicon Valley types who make more in a year than you do in 10. Get a grip on reality mate, they don't give two f's about you, and no one cares about them, except you...
@@viharsarok While true that employees get a salary, it still hurts their career prospects as they could have been getting internal promotions at other companies instead of being laid off. Not to mention finding a job is really difficult and costly for the employees.
I am pretty sure the Japanese guy, and thus the Saudi guy, did, in fact, break even when WeWork IPOed via SPAC. It was retail that was left holding the bag!
Most people would probably like being fired the way Adam was. For a company that had never made a profit & wasnt even breaking even i think we can agree he did rather well. The payoff & stock etc 😶
Adam was very smart. He actually could NOT be fired. Technically, they had to BUY him to leave. He protected himself at every step, as the founder, all who interacted with him, including SoftBank, signed up for it. Similar to Facebook CEO.
With a record so bad, yet he's now at a new start up, not using his own billion, but some other moron investor is paying him hundreds of millions to F up again, proving that once you are rich, people will just give you money.
"{Their primary clientele are} startups who either grow large and successful enough to rent traditional office space, or go bankrupt and fail. Either way, they leave WeWork." And that is the textbook definition of a failed business model.
SoftBank probably made billions in other investments. Lot of startups close the shop. Venture capitalists take risks. Can’t say SoftBank is awful by using one data point. Even buffet probably made bad investments in his carrier.
Wework one of the greatest con job making investors believe that something more related to pretty much being a landlord is not only a tech startup but a Unicorn that amazing in an evil way
What???? Put more effort into your lazy attempt at a critique because we have no idea WFT you are trying to say. If your commentary is inane, at least use punctuation, full sentences and proper English, for fuck sakes.
Yup. I worked at a company that rented office space at a wework. Free beer, kombucha, and cold brew coffee. It started out with no limits but as the years went on, they’d lock up the taps after 6pm.
Adam grew up in a commune.... But successful tech companies do give great freebies. Weworks claimed it was a tech startup but it was a real estate company.
Do NOT LISTEN TO HIS AD. BONDS JUST GOT DROPPED FROM A TO B RATING. This dude doesn't care and wont tell you the downsides of bonds so he can make his comission off the affiliate link. Shameful.
Now Adam’s newest con is rent to own condos with high end amenities and weekly building parties. Rich people, since he’s only in large cities, don’t need to rent to own and they don’t need your free beer, wine, booze and hors-d’oeuvres at an inflated price. He got venture money for that non original idea too.🙄
Depends on the prices and target market. Recent grads with massive student loans have no other option to own. But then, dealing with condos, HOA's, etc. is not for amateurs.
"Many employees prefer working from home." That would depend on the home of the employee. My best friend has two kids who had to be home during the pandemic and to work, my friend had to sit on the marital bed with his laptop. There's no space to place a desk anywhere
It feels like their business model only had a hope of working in the near 0% interest rate environment we saw for the last decade. Their customer base just isn't broad enough otherwise.
They were buying retail and reselling wholesale. And the Adam Newman is a narcistic crook. There was no possibility of wework ever being profitable, not in a month of Sundays. Even once he was gone, the leftovers were structurally unsound, and amount of new management was going to turn them into a Regus clone.
The guy at SoftBank who negotiated with Neumann should have been sacked. He gave him unbelievable sweetheart terms…such as walking away with $1B after running the company into the ground.
My company decided to update our office space which wound up being WeWork designed, built out, and managed the space that we moved into. They had that whole nouveau-mid century modern aesthetic, but there was a lot deficiencies in the construction. All glass conference rooms with no sound proofing, laminate or maybe some kind of LVP laid over a less than optimal subfloor with big gaps between some of the planks. An office space that was overall loud and cramped. They were all about the perks and how much they concentrated on little things like making the bathrooms nice. Overall, an OK aesthetic, but nothing amazing.
Where I've worked there have been two times Regus/etc have been used and it was for short term office space while waiting for long term space to be ready. And it was pricey.
Part of this too is, to allow massive expansion, they RENT. Flexible office spaces may be possible on an OWNED building when you aren’t paying an internal rate of return of 15+% to someone else. There are a few out there but they’re smaller and less sexy. That business model makes some sense though I’m still not a huge fan of it
Honestly serves them right. I based my office there for a bit and thought it was a joke with extremely rude staff and bad policies. This was post Neuman as well.
This is why co-working coffee shops make so much sense. Very minimal staff, often one or two for the whole coffee shop. You need to do your own checkin and checkout, your own dishes. But, no subscription, pay as you go and very minimal cost. Tailors not just to startups, but anyone who wants to work outside the house and office
Imagine being an executive of this company and being paid 7 figures for 20 years and losing 10s of billions of dollars just to walk away and get a job somewhere else...
It's called a "golden parachute". Virtually every executives in huge companies have them regardless if they resign or are forcibly terminated. This is why I firmly believe we really should regulate or at least put some form of cap on how much these super entitled executives are paid because it's not short of absurd how these people get compensated even when booted out of the company. If the same exact thing were to happen to lower level employees, they would receive nothing in comparison.
That's a myopic statement. Many companies, including Microsoft and Apple created markets, then market needs, then filled those needs making the world a better place. Maybe We work would have been successful save for butthole Neuman and others like him.
If i was hired as CEO, I would have got out of many of the lease deals and bought a few key buildings in major cities during covid. If anything, the ownership of these large commercial real estate would have increased in value.
I mean out of all the IPOs this one takes the cake as being the STUPIDEST one ever. The business model was already proven to not be profitable. I mean who the hell actually bought this stock???
They weren't buying stock in the company. They were buying stock in Adam Neumann. Guy was, and is, basically a cult leader. WeWork's price started tanking almost immediately after he left, which tells you where people's loyalty actually was.
Good video, as usual. Suggestion: when showing graphs and charts, fill the screen. Leaving a large border to show a beach makes the text too small. Thanks
The problem with WeWorks business model is that it’s nothing special. The barrier of entry into its market is pretty low, so prices and profits would end up low as well. There never where any big profits in this.
I can see how it could have worked but actually.. because there will always be small groups of people looking for working space.. what I don’t get is why they didn’t just outright own the office spaces.. with the amount of money they had they could have.. even a hybrid would have been better
@@Allen-L-CanadaTrue, but they are willing to pay a premium. Those startups are funded by investors so it's not their money. The first thing these wannabe startuppers do when they get funding is waste it on status symbols like nice offices and unnecessary employees to look better for the next round. The entire "startup culture" is based on bubbles, appearances and sales, not on entrepreneurship.
That was the grift: The sleazy founder owned buildings and rented them to the business. Of course he designed that to be the business model; that way he made money coming and going. Investors' money.
And then, Neumann raised $350 million from a16z in a deal that reportedly valued his new real estate venture, Flow, at $1 billion before it had even launched.
It seems that their business model was the commercial real estate version of renting a hotel building and then trying to charge high enough rates on the rooms to pay your expenses, make a profit, AND pay your rent on the building. I guess the investors didn't realize there's a reason hotels aren't run that way.
Wework could be profitable. Buy book stores. Renovate them, keep the books. And see coffee, tea, and beer. Maybe a food vendor or donut vendor. Very easy business model that would work. Essentially. Library with alcohol and some food. People will flock.
I wonder how much money there could be made using put options for those horrible companies - options to avoid liquidations and the unlimited downside of shorting outright... Yes, I know that this is a horrible idea, as something will go wrong eventually.
The problem is, they wanted to position themselves as a tech startup conpany to attract investment from rich technology companies. If they just acted like a normal office rental company like Regus does, they'd still be in business today.
Going concern does not mean that the company will go bankrupt, it actually means everything is fine. "A going concern is an accounting term for a business that is assumed to meet its financial obligations when they become due. It functions without the threat of liquidation for the foreseeable future, which is usually regarded as at least the next 12 months or the specified accounting period"
Thank you for this comment. I feel there's so much misleading information. I read all the 160+ pages of the 10Q report and I have a strong belief that "smart money" pushes people to sell their stocks so they can buy them cheaply. I may be wrong but wework have some positive points that the media didn't cover as well as they going to the right direction for quite some time. Also, this model does work - Ask regus who are operating for more than 30 years with nice peofits(with more than 3 times the size of space than wework- which very surprisngly have almost same revenue) risky investment but hey, no pain no gain
I don’t see how WeWork was a novel idea. Lawyers have been renting out office space by the hour for decades. Say you have to take a deposition of a witness who lives in an area where your firm doesn’t have an office. The court reporter company (that provides the reporter who creates the transcript of the depo, the videographer, etc.) would simply book an office suite for the day, from a company like Regis. It was routine.
WeWork business model We rent from Peter to rent to Paul. Once established, they honestly should have started buying space if they wanted this to work long term. That way they aren't as impacted negatively if costs increase. They have literally nothing if something fails.
It didn't help that the CEO that replaced Neumann and other senior executives that were later hired were being paid multi-million dollar salaries, higher than many other MNCs. This is despite the Company not achieving profitability. If they wanted to cut costs, they should have taken big pay cuts.
Wework’s idea is to use free beer, large lobby to attract the big logo, then use the big logo to sell to investors with herd mentality. Then just spin with their money. There is no workable long term biz model.
I sometimes met up with my manager in a wework since we usually work remote and booy is it an ADHD nightmare. So much noise and stuff going on makes it impossible to concentrate. Very much prefer the nice quiet coworking space I sometimes use.
