WeWork's former CEO has a new startup, reportedly valued at more than $1B

https://www.cnn.com/2022/08/15/tech/adam-neumann-flow/index.html

by cpeterso • 4 years ago

41 81 4 years ago

cnn.com

bantunes• 4 years ago

We keep rewarding the wrong people, it's no wonder things are as they are.

simonswords82• 4 years ago

Yep, greed always seems to win out. Pretty depressing.

anthropodie2• 4 years ago

I think it only inflates the bubble and bubbles burst sooner or later. Only serious, genuine people working on betterment of humanity eventually win.

That's what I like to tell myself.

aucontrair3• 4 years ago

Just stop. Except education and healthcare, none of this is that important; it’s vanity projects all the way down; wowing ourselves since there’s no grand competition between space fairing civs, no Heaven to win entry to. None of us are going to Mars.

What wins is apathy; indifference to adopting new agency.

Stop believing typical meat bags are anything more; that a network of rich exists is entirely due to belief in them. They’re just meat bags. Their figurative identity is not sacrosanct.

Bombthecat• 4 years ago

I always say: when in doubt, count on greed.

It helps alot in life, project management, planning etc etc.

Closi4• 4 years ago

I suspect the personality trait of “willingness to break rules” is somewhat correlated with the success of creating large new companies (particularly in congested markets).

It’s not as important in a new market, but if you are in a fiercely competitive market (eg real estate) some rule breaking to advance you against the competitors is probably helpful to make a billion dollar company.

I.E. Uber, Deliveroo, WeWork etc might not be the hugely valuable companies they are today if they didn’t break the rules, regardless of how morally wrong that might be.

solarkraft• 4 years ago

We keep rewarding the wrong behavior ...

badpun2• 4 years ago

I.E. Uber, Deliveroo, WeWork etc might not be the hugely valuable companies they are today if they didn’t break the rules, regardless of how morally wrong that might be.

It yet remains to be seen whether they are a "hugely valuable companies" or just smoke and mirrors for gullible investors in an era of almost free credit.

plorkyeran• 4 years ago

I am fairly confident that I or pretty much anyone you grab off the street can turn $22B into a $4B company without breaking the rules.

Gatsky• 4 years ago

It's not a zero sum game, is it?

lnxg33k1• 4 years ago

Wrong? Depends from which point of view? As far as I can see the system is engineered to keep money flowing between the people at the top, hiring top-execs from family friends paid a huge amount of money to do anything, kids of owners using the company as a bank machine and owners complaining with employees that there are no money. I think we should not make the mistake anymore to think the system is flawed, the system as is, is working perfectly for the people who made it

guessmyname• 4 years ago

According to various online publications, Flow is a residential real estate startup.

This blog post [1] by Marc Andreessen, has a bit more information about the business idea.

And this is Flow’s website [2], which doesn’t have anything as of today.

[1] https://a16z.com/2022/08/15/investing-in-flow/

[2] https://www.flow.life

renewiltord• 4 years ago

Lol "our nation has a housing crisis". Cheeky bastard. Haha.

ivan_gammel3• 4 years ago

For an European it’s weird to read in the first link how renting an apartment is a soulless experience. Going vertical when the land is scarce in most of developed urban areas is THE solution to the housing crisis. Avoiding debt and not taking mortgage is a legitimate financial strategy, that may in certain circumstances yield better financial outcomes. Social life in rented apartments can be fun and community can be stronger. I guess they are solving purely American problem?

joyfylbanana• 4 years ago

This claim about renting being soulless experience is just bullshit. You can perfectly be friends with your neighbours etc with just renting, if you want that is. Most people usually socialize with other circles. I have been renting and owning along the years, always been on friendly terms with my neighbours, the fact if I am renting or owning hans't been a big factor.

I also live in Europe though.

nly• 4 years ago

Avoiding debt and not taking mortgage is a legitimate financial strategy

Is it though?

I don't know about the US, but the UK simply hasn't got any protections in place to protect retired tenants from eviction.

I know in Portugal and in other parts of Europe many people enjoy these protections.

Retiring on a fixed income when your landlord is free to put up the rent 5-10%/yr during cost of living crisis, or kick you out on the street because they want their investment back isn't a fun way to live. Moving in your 70s is stressful and not fun.

Then there's just the cost. Most people simply don't have pensions that can cover a private rent, and lack the financial education and discipline to invest judiciously throughout their life to reach that point. And even if they were so inclined, there's no money left to do so after paying rent!

Since the financial crisis repayment mortgags have been as cheap as rent on a like for like home, so the security of owning your home is "free" as far as most people were concerned.

Without it being cheaper to rent, your 20% house deposit needs to grow at 6.7%/yr ABOVE the rate of house price inflation, over a 25 year term, to make investing it instead of buying property a viable alternative. In the UK, residential property has matched the stock market. So it simply wasn't a good strategy over the last 20 years.

threeseed3• 4 years ago

I've rented apartments across Australia, UK, Europe, South Korea etc.

At almost all of them there has been some form of social group formed to foster this sense of community. And at every single one the attendance rate was in the low single digits. Most people treat their home as a sanctuary and want a place to relax and unwind. Not necessarily to socialise.

And these aren't exactly soulless people who need to be rescued.

manholio2• 4 years ago

Elizabeth Holmes, founder of Theranos, lost investors $1 billion. She faces up to 20 years in prison.
Adam Neumann, founder of WeWork, lost investors $11 billion. He then raised $350 million for his next startup.

istinetz2• 4 years ago

She systematically and intentionally defrauded investors. His startup turned out to not be as good as valued. Caveat emptor applies.

edrxty• 4 years ago

It's also a bit of a reminder that what society considers criminal and immoral-as-hell are often strangely misaligned.

It's entirely possible he was being fraudulent as well, but he didn't A. mess with icky medical things or B. cross the line as obviously.

If we were a strictly rational utilitarian society he'd be in prison for 220 years but because literally everyone is basically just shooting from the hip roughly all the time...here we are. This isn't necessarily a bad thing, just I feel something we all forget very frequently.

christkv• 4 years ago

Well he did lend himself money from the company to buy properties he then rented back to weworks so there is that.

manholio2• 4 years ago

She *was caught

BayAreaEscapee• 4 years ago

Well, it's understandable.

Incompetence is not a crime.

Fraud is a crime.

isaacremuant• 4 years ago

Holmes' case wasn't about "losing" investors money but knowingly defrauding people with fabricated claims.

WeWork may have a bad model but there's still "something" actually there. Not with Theranos.

Slartie• 4 years ago

Theranos and Holmes knowingly played with peoples' health by producing unreliable test results and marketing them as reliable.

Neumann just parted some fools from their money.

I'm fully in the camp of people wondering why anyone is stupid enough to give Neumann even one cent of fresh capital for anything. But focusing the comparison between Holmes and Neumann on the amount of money they lost their investors is just plain wrong.

victor9000• 4 years ago

Venture Nepotism in full display.

ok_dad2• 4 years ago

Sounds like it might be like a time share at scale for permanent housing. Whatever the case, a few connected people will make money on it and it’ll likely make housing worse somehow.

I can’t believe this degenerate can start billion dollar companies left and right and honest people are constantly getting told we’re asking for too much to have things like work life balance or decent pay.

I’ll giggle like a school girl someday when the other shoe drops and the rich are being eaten.

plankers2• 4 years ago

Lemmy is looking up on us and smiling in eager anticipation

mindentropy2• 4 years ago

I can’t believe this degenerate can start billion dollar companies left and right

Don't know how he manages to raise money. Who in his connections would risk such huge investments? Is it some kind of money laundering or something?

ReadTheLicense• 4 years ago

It's not so much money nowadays. The value of money went way down past 5-10 years.

It's just 10 people after a $1B exit allocating 10% of their assets. Sounds crazy, but that's this guy's social circle. Really underlines how important is networking in business.

anon9001• 4 years ago

If you're concerned about "work life balance", you're probably the rich that would be eaten.

ok_dad2• 4 years ago

What the fuck are you talking about? Everyone wants to have a personal life outside of work. The poor can’t have it because the rich burn billions trying to start yet another rent seeking leech company.

TrackerFF• 4 years ago

So let me guess, timesharing model for apartments?

Dwolb• 4 years ago

Neumann’s track record at WeWork:

Money raised - $22B

Peak market cap - $47B (while private)

Current market cap - $4B

IPO price per share - $9.82

Current price per share - $5.47

Looking at this data, he hasn’t proven to be an incredible operator in terms of equity returns.

He has however demonstrated an incredible ability to raise institutional funding and drive increased private valuations.

inglor_cz2• 4 years ago

Something similar can be said about Charles Ponzi.

smcl5• 4 years ago

Bernie Madoff was blessed with a similar gift

labster• 4 years ago

A hundred years after his great invention, Charles Ponzi is still world-renowned. If that’s not success in business, what on Earth is?

codeflo• 4 years ago

Maybe real life works like D&D after all, where maxing out charisma and a few lucky rolls allow you to convince anyone of anything.

elp• 4 years ago

Also the early investors in WeWork did rather nicely.

If you are a16z this is probably not a bad investment.

cpach• 4 years ago

Interesting business idea! I wonder if it will work, we’ll see.

bjarneh2• 4 years ago

It's not immediately clear how Flow seeks to revolutionize the residential housing industry.

I never understood how he revolutionized the "office market" with that wework stuff either. Renting out horrid shared office space with a coffee machine and printer? I guess the beer on tap was sort of original? At my old office we had beer bottles in the fridge, but still... In Oslo the prices for those wework offices were very expensive as well, and there were no quite place. Why not just go to a cafe or public library (or both) and save the money?

threeseed3• 4 years ago

Because a cafe or public library doesn't have meeting rooms, whiteboards, monitors and other facilities that you often need. I know when I was looking for a working space whilst travelling in Seoul it served a useful purpose.

I think the future will see more people working remote and travelling around looking for nomad and WeWork style places.

CaptainZapp• 4 years ago

Well,

https://www.regus.com/en-us/south-korea/seoul/gran-seoul-tow...

bjarneh2• 4 years ago

Because a cafe or public library doesn't have meeting rooms, whiteboards, monitors and other facilities that you often need.

Although a cafe will not have any of that, public libraries can often have some of that. But my point was that the horrid place they used to rent out in Aker Brygge (now taken over by another vendor) had very little of that as well. A shared noisy space + extremely tiny rooms for zoom meetings was all they had, and it wasn't cheap to rent a place there..

But at least here in Norway, there are other vendors that have much better deals. Perhaps things are very different in the US, but the product they offered here in Norway was not competitive. When I was in the market for something like that a few years ago, it was easy to find others offering much more (an actual office for myself) with access to a printer + meeting rom etc. for much less.

shawabawa3• 4 years ago

I don't think people realise just how bad the average corporate office is

When WeWork came along it was 10x nicer than any other office I'd worked in

hnbad• 4 years ago

As much as we like to paint VCs as rational economical actors, some of them (and especially a16z) are as informed by ideology as by economy.

Some prominent a16z figureheads have been talking a lot about crypto, not just about the usual value speculation and "decentralized finance" and all that but especially about the libertarian utopian visions that pretty much focus on eliminating state intervention and bypassing regulations, taxes and unions and reframing customers or tenants as "investors".

This may not be a crypto startup, but the language around it easily fits the same ideological bent. WeWork wasn't interesting because it was a real estate startup (its ultimate failure demonstrated how nonsensical the valuation was for its business model), it was interesting because of how it framed real estate. In other words: it wasn't functionally different from old school real estate companies but it was ideologically different in a way that appealed to this type of VCs. Given that Flow seems to be another real estate startup by the same CEO, it's likely that the ideological foundation will be similar.

Startups often use words like "paradigm shift" to make themselves sound more interesting than they are but I think some VCs and some startup founders genuinely want to "shape how we think" about econimical relationships, and a16z's behavior so far strongly indicates that they have a very specific paradigm in mind, disagreeable as many may find it.

fzliu• 4 years ago

This is the single largest investment into any company by a16z. This is just insane, especially given that Flow does not yet have a solid product.

buitreVirtual• 4 years ago

Considering that a16z is already invested in the scammy web 3.0, this is not too surprising.

emptyparadise• 4 years ago

How do you make housing better after raising $22B for your startup? Wrong answers only.

smcl5• 4 years ago

Incredible how this guy has managed to yet again convince VCs to part with millions in cash. I don't agree with the article that he's a "visionary" or that he "revolutionized" anything, but to lose investors so much money and then follow that up by raising a pile for a similar venture is bold as brass.

I don't think anything good can come of this. A company helmed by Neumann taking over residential real estate doesn't sound like a great prospect if it succeeds, but given his track record and the eccentric way he ran We[Work] it seems likely it won't.

nikanj• 4 years ago

I think he's a solid early investment (people are investing in him, not the company). Get in on a seed round, get out before the bubble pops

threeseed3• 4 years ago

I would definitely invest in him.

He has unlimited, free PR from every media company around the world.

He could found a pet rock company and make millions out of it.

smcl5• 4 years ago

I see what you mean and honestly that might be the play they're making. But I dunno if we can call that "investment" anymore, feels more similar to the TikTok kids pulling off NFT pump-n-dumps or just good old-fashioned gambling.

jfoster2• 4 years ago

I don't understand why people care if he manages to raise money. What am I missing? If you don't like the chances, but it's not your money, then so what?

smcl5• 4 years ago

It is definitely remarkable that someone who ran a fairly high profile company that exploded in value and deflated about as quickly, has managed to secure substantial investment in a relatively similar space. Do I care about this, or am I directly affected or upset about it? Well, not particularly. However I don't think it bodes well for many in the US that there have been a few VCs attempting to work their way into residential real estate.

The way things work here is that we tend to comment when we find something interesting, surprising or if we have a useful insight to contribute. You could cut out 90% of the comments on VCs and startups here with the template "I don't understand why people care [about $thing]. If you don't like [$thing] but it's not your money, then so what?" but I don't think it would make HN a better place. Besides that - the people involved are grown-ups, if they're even reading HN at all I'm sure they can handle the criticism.

jfoster2• 4 years ago

It's certainly remarkable and interesting that he's able to raise despite the bad rep. That's definitely worthy of discussion.

I'm just surprised that some seem to be almost insulted by it, if that makes sense?

michelb• 4 years ago

Looking forward to the new series.

benknight87• 4 years ago

Funny to see the ad hominem attacks coming out with little to no information about the actual company or deal. The well-oiled news outrage machine chugs along, baiting people into emotional reactions about things that don't affect them. Nice.

jwmoz• 4 years ago

They never learn.

frozenport• 4 years ago

> by bringing community and brand to an industry in which neither existed before

Lol what? Brand had no content and community didn't exist or was mostly remote companies needing meeting rooms. WeWork spaces were a bad value because I could get a desk at a real startup space, often sponsored by the host city and be surrounded by interesting people.

habosa• 4 years ago

I really hope this somehow combines crypto and timeshares. Two of the most famous scams of all time ... brought together under Adam Neumann. It will make for a truly hilarious postmortem.

tppiotrowski• 4 years ago

Didn't Neumann already try this with WeLive? [1] Does anyone know how this is different?

[1] https://www.nytimes.com/2019/10/13/nyregion/welive-nyc-wewor...

kelsolaar• 4 years ago

WeCrashed with Jared Leto and Anna Hathaway on Apple TV presented Neumann in a rather fascinating way. Recommended watching for anyone curious about the person.

papito• 4 years ago

It's pretty faithful to the book - Billion Dollar Loser.

The phrase is "unique leadership style", which is a euphemism for "that guy has no idea what he is doing".

WeWork's former CEO has a new startup, reportedly valued at more than $1B

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