WeWork, Adam Neumann, & the Great Startup Debacle | Maureen Farrell

Hidden Forces

Demetri Kofinas

Business, Government

4.8 • 1.6K Ratings

🗓️ 26 July 2021

⏱️ 56 minutes

🔗️ Recording | iTunes | RSS

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Summary

In Episode 200 of Hidden Forces, Demetri Kofinas speaks with Maureen Farrell, author of "The Cult of We: WeWork, Adam Neuman, and the Great Startup Delusion."

Maureen, along with her colleague and co-author Eliot Brown, were some of the first reporters at the Wall Street Journal to cover what is arguably the biggest financial debacle in the history of early-stage investing. And yet, this description doesn't even begin to capture the incredible story that is the rise and fall of WeWork: a story about a real estate company that was at one point the most valuable start-up in America, despite racking up over $10 billion dollars in losses over the course of just nine years and vaporizing nearly forty billion dollars in equity value practically overnight.

The reality of WeWork—of what it is and what it was—stands in stark contrast to what its founder, Adam Neuman said it was to his investors, employees, and the media. It was going to be worth ten trillion dollars, more than any other company in the world. It wasn't just an office space provider. It was a tech play. Its spin-offs like "WeGrow" and "WeLive" were going to revolutionize education and change the world. Adam Neuman was going to solve Middle East peace and WeWork would help colonize Mars.

As crazy as all of this sounds, it is emblematic of a larger decay in the most basic principles of capitalism that prioritizes the raising of capital over the turning of profits. It rewards storytellers over businesspeople. Price overvalue.

This episode is broken into two parts, the first half of which is focused mainly on the particulars of WeWork, the characters involved, and the disastrous decisions made by its management along with the dereliction of its board. The second half focuses on the larger macro forces that are responsible for encouraging the type of behavior that we've seen in the case of WeWork and applying that template to other companies and their executives. We also explore the intersection of politics and finance, including a rise in demagoguery that parallels the institutional and moral decay we are witnessing across many parts of Western society.

You can access the second half of this conversation, as well as the transcript, and show notes to this week's episode through the Hidden Forces Patreon Page. All subscribers gain access to our overtime feed, which can be easily added to your favorite podcast application.

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Producer & Host: Demetri Kofinas

Editor & Engineer: Stylianos Nicolaou

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Episode Recorded on 07/18/2021

Transcript

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0:00.0	What's up, everybody? My name is Demetric Afinas, and you're listening to Hidden Forces,
0:26.9	a podcast that inspires investors, entrepreneurs, and everyday citizens to challenge consensus narratives,
0:34.1	and to learn how to think critically about the systems of power shaping our world.
0:39.2	My guest in this week's episode is financial journalist Maureen Farrell. Maureen, along
0:44.1	with her colleague and recent co-author Elliott Brown, were some of the first reporters at
0:48.8	the Wall Street Journal to cover what has in the intervening years become one of the biggest,
0:55.0	and if not the biggest, financial debacle in the history of early-stage investing.
1:00.0	And that doesn't even begin to capture the incredible story that is the rise and fall of
1:06.3	we work. A real estate company that was at one point the most valuable startup in America,
1:12.3	despite racking up over $10 billion in losses over the course of just nine years and vaporizing
1:19.0	nearly $40 billion in equity value practically overnight.
1:24.2	The reality of we work of what it is and what it was, stands in stark contrast to what
1:29.5	its founder, Adam Newman, said it was to his investors, employees, and the media. He was
1:36.0	going to be worth $10 trillion, more than any other company in the world. It wasn't just
1:41.3	an office space provider, it was a tech play. It's spin-offs like we grow and we live, we're
1:46.4	going to revolutionize education and change the world. Adam Newman was going to solve Middle
1:51.4	East peace and we work was going to help colonize Mars. I'm not making this stuff up. As
1:57.2	crazy as this story is, it is emblematic of a larger decay in the most basic principles
2:03.6	of capitalism that prioritizes the raising of capital over the turning of profits that
2:09.2	reward story tellers over business people. Price over value. We spend the first half of
2:15.0	this conversation focused mainly on the particulars of we work. The characters involved and the
2:20.3	disastrous decisions made by its management and the dereliction of its board. But it
	...

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