bubbles   2037

« earlier    

Twitter
Celebrating the end of a busy week with bubbles! Thanks to 😌
-
-
audiobooks  bubbles  slowmotion  from twitter_favs
11 weeks ago by tolkien
How Did WeWork’s Adam Neumann Build a $47 Billion Company?
“The We Company’s headquarters in Chelsea, where more than a thousand of its employees work, is something of a testing ground for how it can serve even larger organizations. (The company will eventually move into the old Lord & Taylor flagship on Fifth Avenue, which it recently bought.) The sixth-floor entrance is flanked by a full-service barista and a “living room” with an array of couches and lounge chairs roughly the size and feel of a West Elm showroom. There are Foosball and bumper-pool tables, along with three video-game consoles. Beyond that is the WeMRKT, an “in-office bodega,” as a WeWork spokesperson called it, next to a kitchen with a dozen taps serving beer, cider, cold brew, Merlot, Pinot, several kombuchas, and seltzer. On one of my visits, signs advertised astrology readings for employees that afternoon.

Aside from a few offices reserved for Neumann and a handful of executives, the headquarters has almost no assigned desks, and some WeWork employees describe a near-constant mental and physical battle to find a space with enough quiet and privacy for concentration. (The private phone booths are coveted, as they are in most WeWorks.) Joel Steinhaus, a WeWork executive, told me that his previous office at Citi allocated 200-to-250 square feet per person, while WeWork has shrunk that number to around 50. (A WeWork spokesperson says the number is higher.) WeWork claims that additional common spaces and amenities make up the difference, but also that closeness has benefits. A half-dozen WeWork employees repeated the same talking point to me about the narrowness of its staircases and hallways, which are there to foster community by forcing people to physically interact with anyone they walk past. They say any cost savings from fitting in more people is merely a bonus.

Building community is what WeWork has always promised, and its pitch to large corporations is not just hip design and flexible leasing terms but what WeWork calls its “WeOS,” referring to its expertise in helping companies optimize both space and overall culture. (In 2017, McKelvey was named WeWork’s chief culture officer, and he’s fond of using one of WeWork’s many internal slogans: “Operationalize Love.”)

But in dozens of interviews, current and former WeWork employees and executives questioned whether the company’s culture is itself one worth spreading. Despite the company’s slogan “Make a Life, Not Just a Living,” employees at all levels have often reported working 60- or 70-hour weeks, and events like Thank God It’s Monday and Summer Camp were mandatory. At its annual summit, the company keeps track of employee attendance at panels and events by scanning wristbands given to each person; excessive absences are reported to managers. A number of employees describe a regular cycle at WeWork: New people would arrive, excited by the company’s mission, only to get burned out, leave, and replaced by a fresh crop. Multiple executives told me Neumann’s cheerleading was critical to the company’s success. “From a business perspective, the cult is working,” said one executive.

Employees say turnover at the company has been dizzying. Multiple people told me Neumann has expressed a desire to turn over 20 percent of WeWork’s staff every year — he denies this — whether through attrition or firings, as a means of keeping staff on its toes. There have been two publicly reported rounds of mass departures, both of which the company said involved culling unproductive workers. But employees say that restructurings, in which entire teams are suddenly disbanded, are a regular occurrence. “When you’re at WeWork, there’s a certain lack of culture, which is ironic for a company selling culture,” one former executive told me. “If there is a culture, it is that of a revolving door.” The need to hire employees at a rate to keep up with its growth has led to occasional hiccups in its hiring process: In 2015, Neumann chastised a group of employees for not Googling a job applicant after finding out that WeWork had hired the Hipster Grifter, a Brooklynite who had become briefly famous several years earlier for scamming her way into jobs and cheating people out of money.

The focus on growth often seemed to leave little room for other concerns. Two people told me that during an early town hall when WeWork had just over 100 employees, Neumann took questions alongside two other executives, Michael Gross and Noah Brodsky, and someone asked about the lack of diversity among the executive team. Neumann disputed the point by referring to himself and the other people onstage, saying, “I’m a brunette, Michael’s blond, and we have a Noah.” (Brodsky, who is gay, went bright red.)

Employees and executives say much of the culture stems from Neumann, whose rule by fiat could be frustrating. Last summer, he announced at the end of a companywide meeting that WeWork employees would no longer be permitted to expense meals that included meat. Several senior members of the company had no idea the announcement was coming or what it even meant. Hundreds of employees joined a Slack channel to debate the policy, while some found various ways around it: A person in the New York tech world said WeWork employees have asked her to expense the meat when they go out for meals.

Especially at the top, WeWork looked to some like a boys’ club. The executive ranks have been sprinkled with Neumann’s friends from Israel as well as his extended-family members. During an executive off-site meeting in Montauk, he gave a joking toast to the virtues of nepotism. In a job interview, the first question one former executive asked a young female applicant was whether she had a boyfriend (he was later fired). Last year, two female employees reported that they were having trouble getting a meeting with Adam Kimmel, the chief creative officer, to whom they reported. According to multiple people with knowledge of the situation, Kimmel later said he hadn’t met with the women because he and his wife, the actress Leelee Sobieski, had a rule against meeting alone with a member of the opposite sex. (WeWork disputes this.) In October, Ruby Anaya, the former head of culture, sued WeWork, alleging she had been groped at both the company summit and Summer Camp by colleagues (the lawsuit is pending).

Several people told me they worried about what the company’s younger employees might absorb from their experience. A former WeWorker who now runs a company told me, “I spend a lot of my time on culture and HR, and it fucking slows you down worrying about how people feel.” But one employee told me his WeWork experience had made him think about what he would do differently if he were ever to run his own start-up. “You can move fast and break things,” he said, citing Facebook’s widely adopted empire-building ethos. “But you can’t move fast and break people.””



“Will WeWork work? The company has existed entirely in an expanding economy, and its business has never been tested by a downturn. WeWork argues that in a recession, larger companies will downsize into its spaces while laid-off workers will need them to start their solo careers. But it’s also very possible that large companies who currently have ancillary spaces in WeWork will identify those as easy costs to cut, and entrepreneurs will revert to coffee shops. A third argument goes that WeWork occupies so much space that many landlords will have no choice but to renegotiate its leases.

During the dot-com boom, a company called Regus became a stock-market darling by offering similar but much blander flexible offices. In 2000, Fast Company published a story about Regus titled “Office of the Future,” highlighting its efforts to bring “community” to the workplace. But the bubble burst and Regus went bankrupt. The company recovered and rebranded as IWG, but its existence presents another conundrum for WeWork. IWG currently has roughly 3,000 locations and 2.5 million customers worldwide, numbers that dwarf WeWork’s. IWG is profitable and now has a hipper, WeWork-ish offering. It is publicly traded and worth around $3 billion.

Everyone in real estate expects the kind of flexible office space WeWork offers to become an increasingly large part of their world, and many of the company’s rivals are grateful to Neumann for preaching the gospel of co-working and shorter-term leases. Even people critical of WeWork’s culture, or skeptical of its focus on hypergrowth, say it will likely remain a force in commercial real estate. But many, too, have begun to wonder what can explain the $44 billion in valuation difference between WeWork and IWG. In a financial disclosure last year, when it was in the process of losing $1.9 billion to fund its growth, WeWork acknowledged, “We have a history of losses, and we may be unable to achieve profitability at a company level.” It also published a financial metric it called “community-adjusted EBITDA” — earnings before interest, tax, depreciation, and amortization, which is an accountant-approved way of measuring a company’s performance — that excluded many costs, like marketing, construction, and design, that WeWork claimed would disappear once it reached maturity, in an attempt to show it could make a healthy profit; the Financial Times dubbed WeWork’s doctored version “perhaps the most infamous financial metric of a generation.” WeWork employees told me they would be happy if the company were worth half of what SoftBank said it was going to be. “Even if it goes down to $5 billion, Adam’s still worth a billion dollars,” one rival said, expressing concern about the perverse incentives of the modern economy. “So from an objective perspective, was it a mistake to take this hemorrhage-inducing risk? You could argue that was the rational mode.”

Back in his office, Neumann remained upbeat. “Before you ask, let’s set an intention,” Neumann told me, after a WeWork spokesperson said I had time for … [more]
hucksters  cults  adamneumann  wework  2019  scams  realestate  bubbles  openfloorplans  fraternities  hiring  turnover  myths  diversity  privilege 
june 2019 by robertogreco

« earlier    

related tags

2008.crisis  2018  2019  active_investing  adamneumann  altcurrency  alternative-currency  android  apocalypses  art  art_finance  art_market  artificial_intelligence  artists  auctions  audiobooks  balls  banking  bayarea  bear_markets  behavior  ber  bias  biology  bitcoin  blackberry  blockchain  bookmarks_bar  books  boom-to-bust  bubble  bubblewand  button  buybacks  capitalism  capitalism_post  carbon_tax  catastrophes  cell_membrane  chat  china  choropleths  christie's  cities  climate_change  clos  cmgi  code  collapse  collateralized  collective_action  communication  complacency  consumer  contemporary_art  corruption  counterparties  crashes  credit  crisis  crypto-currencies  css  cults  currency  d3  damien_hirst  dark_side  datavis  dealerships  deanbaker  debt  deficits  democracy  depression  designthinking  digital_curation  disaster_myopia  diversity  dog  donaldtrump  drinkaccessories  droughts  easter  echo-chamber  economic_downturn  economics  economists  economy  ee  efficient_markets  election  election2012  entertainment  entrenched_interests  epistemic-closure  epistemology  españa  etfs  ethereum  ethics_of_algorithms  eu  example  examples  extreme_weather_events  exxon_mobil  facebook  famines  fees_&_commissions  filtering  finance  financial_crises  financial_regulation  financial_system  financiers  floods  fluid  fog  fractional_ownership  fraternities  fraud  fruit  fun  games  gdp  giant  governance  government  greatrecession  greece  green  gsd  health  healthcare  hedging  high-end  hiring  historical_amnesia  history  holding_periods  housing  how-to  html5_css_html  hucksters  hydraulic_fracturing  hype  ice  ico  imessage  index_funds  inflation  insurance  insurers  interactive  internet  investing  investments  investopedia  investors  iota  iphone  iste18  javascript  jeremy_grantham  kids  labor  learning  lemon  liquidity  lolbuttcoin  luxury  macro  mancur_olson  mapping  maps  market.crisis  market_fundamentals  markets  martin_wolf  maths  misallocations  mispricing  mix  moguls  money_/_economics  mood  morphogenesis  mortgage.backed.securities  motivation  museums  myopic  myths  nudge  nyse  obligations  oil_industry  openfloorplans  opportunism  paintings  parenting  particles  passive_investing  pattern  paul-ford  paulryan  pay_attention  performance  photography  piling_on  plotly  policy  policymakers  politicians  politics  portugal  posters  priorities  privilege  procyclicality  psychology  quantitative  realestate  recession  recipe  recsys  redmond  refer  regulation  regulators  regulatory_arbitrage  religion  renewable  reserve.capital  reserve.currency  rethinking  rice  risk  risks  roadmap  rules-based  scams  science  securities  shale.gas  shale.oil  shale_oil  short-term  silicon-valley  slowmotion  smith  smoke  snow  socialsecurity  solar  sotheby's  spain  stability  status  stress-tests  sweets  systemic_failures  taxes  technology  this_time_is_different  timothygeitner  tinkercad  tipping_points  tokenization  top-tier  toy  trophy_assets  trucks  trust  turbulence  turnover  u.s._federal_reserve  uncertainty  underestimation  underpricing  us  valuations  vernon  video  wagoner  wall_street  weak_ties  wework  wiki  wildfires  winter  youtubegaming  youtuber 

Copy this bookmark:



description:


tags: