BILLION Dollar Loser - The Rise and Spectacular Fall of WeWork
Issue 5 - November 6th, 2020
With incredible access and piercing insight, New York magazine contributing editor Reeves Wiedeman in his new book tells the full inside story of WeWork and its CEO, Adam Neumann, who together came to represent one of the most audacious, and improbable, rise and falls in American business.
I love listening to audio books on Audible, and this week I started listening to "Billion Dollar Loser" which chronicles the insane WeWork drama. At its core, WeWork was nothing new - they signed long term leases, spruced up office spaces, and re-leased them on flexible terms to start-ups and other companies. WeWork founder Adam Neumann had the entire world convinced his company was going to improve everyone's lives in everything from education to living and beyond. Then reality set in once their financial information became readily available for the world to see. Fast forward to present day, Neumann is gone and the company is worth 1/50 (or close to zero in my opinion) of what it what was on its way to being a public company. Here are some great quotes on people's thoughts of WeWork and Adam:
“They should have just changed the name of the company to ‘saving and loan.’ That’s really what you’re talking about, creating long-term liabilities and short-term assets,” said Zell, chairman of Chicago-based Equity Group Investments. “Every other time in history when they create that, results are predictable. Why is this any different?” - Sam Zell, (a real life) billionaire real estate mogul
“My own investment judgment was really bad. I regret it in many ways,” Mr. Son said. - Masayoshi Son on losing close to $5 billion on his Vision Fund's investment into WeWork
Adam Neumann is not "quirky," he is not "charismatic," and he does not have "an unorthodox leadership style." He is an untalented and abusive monster who lies to get what he wants. And he was given an unlimited credit line from which he could legally steal. - Matt Stoller, Business Insider
Newsworthy Links To Share
Everyone loves a good sneak peek at the homes of mega-celebrities. Justin Bieber and Hailey Baldwin just listed their Beverly Hills "starter mansion", and the photos and details of the home sale are HERE.
Insurtech companies continue to gain steam, and Goodcover is taking a very unique approach by giving customers money back. They launched out of Y Combinator in February of this year with a mission to charge as close to what is needed as possible in premiums, using its own machine learning algorithm for underwriting. It backs up that pact with its users by paying back unused premiums to its users. Read more HERE.
Zillow has an insane MOAT around online home search traffic, and the top brokerage firms don't even scratch the surface on Zillow's lead in traffic domination. There is a viable competitor snooping around the space who has incredible street cred in other arenas of the real estate industry. CoStar is rumored to be entering the residential side of the search space and would form a legitimate threat to Zillow's dominance. Who does Zillow Fear?
KayoCloud launches cloud based brokerage in the commercial real estate industry. ComRe lags way behind ResiRe on the innovation side of things, so this development is particualrly exciting for me to keep an eye on personally because I love to see people shake things up in the sleep brokerage space. Their model is similar to what we are focused on accomplishing at my new firm, Archetape. Check out more of what they are building HERE.
Online real estate marketing platform Hubzu has launched a new mobile app for residential real estate investors. The app offers potential buyers tools to find, research and bid on homes via a competitive auction format. Hubzo is an end-to-end asset management platform for residential foreclosure, short sale, REO, deed in lieu, CWCOT and retail property auctions. Since 2009, it has facilitated the more than 4.5 million bids and the sale of more than 225,000 homes. Read more HERE.