Inspiration shouldn’t mean indoctrination. When Adam Neumann co-founded WeWork, it took off thanks to his charisma alone.

Not only does the story of WeWork serve as a primer for what not to do as a leader, but also what not to do as an employee. If the leadership doesn’t walk the talk, don’t follow.

WeWork’s meteoric ascent and subsequent downfall provide a cautionary tale of ambition, ego, and the dangers of unchecked growth. This article takes a deep dive into the fascinating story of WeWork, exploring its origins, the charismatic figure at its helm, and the factors that ultimately led to its demise.

The Birth of WeWork

WeWork emerged on the scene in 2010, with Adam Neumann at the helm. The concept of shared workspaces was not new, but Neumann saw an opportunity to transform it into something more. His vision was not just about providing affordable office space but creating a “lifestyle” and “building a community.”

WeWork aimed to elevate the world’s consciousness and build a generation of workers who wanted to make a life, not just a living. In short, he was selling a utopia to burnout, disillusioned Millennials.

With Neumann’s wife, Rebekah, as the company’s chief branding officer, WeWork quickly grew from a single outpost in Manhattan to a global brand with co-working spaces in cities worldwide. Neumann’s charismatic personality and salesmanship skills played a crucial role in convincing investors and employees to buy into his grand vision.

The Messianic Vision

Neumann’s upbringing on a kibbutz in southern Israel shaped his worldview and influenced his approach to business. He believed that WeWork could be a modern-day version of a kibbutz, a communal settlement where weakness would not be tolerated. This vision of a “capitalist kibbutz” resonated with Neumann, who saw himself as a messianic figure leading a movement to change the world.

However, as time passed, scepticism grew about Neumann’s true intentions. Some argued that he was using the Israeli mystique to sell his personal brand and make excuses for his questionable behaviour. While Neumann spoke of community and elevating consciousness, his lavish lifestyle and questionable business decisions painted a different picture.

The Greed and Excess

Neumann’s appetite for growth and personal enrichment seemed insatiable as WeWork continued expanding. He spent extravagantly on parties and luxury items and even purchased a private jet. His lifestyle mirrored the rising brand of WeWork, creating an image of success and prosperity. However, behind the scenes, the company was haemorrhaging cash, and its financial deficiencies were about to be exposed.

Neumann’s obsession with doubling revenue every year pushed the company to expand rapidly, often at the expense of sound financial management. WeWork’s valuation soared, reaching astronomical heights, but it was built on a shaky foundation. The company’s business model relied heavily on long-term leases for office space, while its revenue came from short-term memberships. This imbalance left WeWork vulnerable to economic downturns and shifts in the market.

The Enablers

While Neumann’s leadership and grand vision were instrumental in WeWork’s rise, he was not solely responsible for the company’s downfall. The enablers, including investors, board members, and employees, all fuelled the WeWork hype and turned a blind eye to its flaws.

Investors, hungry for the next big thing in the tech industry, poured billions into WeWork, even as red flags emerged. SoftBank’s CEO, Masayoshi Son, encouraged Neumann to be even more ambitious and “crazier.” The allure of a unicorn, a privately held startup worth over $1 billion, blinded many to the realities of WeWork’s business model and financial health.

The Unraveling

In 2019, as WeWork prepared for its much-anticipated initial public offering (IPO), cracks in the company’s facade began to show. The public filing revealed the extent of WeWork’s financial troubles and Neumann’s questionable actions. One particularly egregious revelation was his trademarking of the word “We” and then charging the company millions for its use. The media and potential investors seized upon these revelations, and the gig was up.

Investors pulled back, the IPO was cancelled, and WeWork’s valuation plummeted. Neumann was forced to step down as CEO, and the company underwent a dramatic restructuring. The once-promising unicorn was left to pick up the pieces and rebuild its reputation.

WeWork filed for bankruptcy in November 2023.

Lessons Learned

The WeWork saga serves as a cautionary tale for entrepreneurs and investors alike. It highlights the dangers of unchecked growth, the importance of sound financial management, and the need for transparency and accountability in business.

Entrepreneurs should be wary of falling into the trap of ego and excess, prioritising sustainable growth over rapid expansion. Investors must exercise due diligence and not get caught up in the hype surrounding a charismatic founder or a trendy concept. And employees should never drink the Kool-Aid.

Conclusion

The rise and fall of WeWork and its co-founder, Adam Neumann, is a cautionary tale. It serves as a reminder that even the most visionary ideas can crumble when fuelled by unchecked ambition and greed.

The legacy of WeWork is one of ego and gullibility—and the ability of a vision to suck people into its vortex and, like a tornado, leave nothing but destruction.

It reminds us of the importance of humility, financial prudence, and ethical leadership. As the business landscape continues to evolve, the story of WeWork will undoubtedly serve as a cautionary tale for generations to come.

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