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How Did WeWork’s Adam Neumann Build a $47B Company?

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Re: How Did WeWork’s Adam Neumann Build a $47B Company?

#121

Post by arcticbull »

robertAngst wrote: post #98
mdorazio wrote: post #2

Cynical answer: he convinced VCs that his particular brand of shared office space was better than everyone else's, actual revenue be damned, and they believed him . That's it. Straight from the article: "Neumann declared that WeWork’s “valuation and size today are much more based on our energy and spirituality than it is on a multiple of revenue.”"

In my lifetime we will learn if 'tech' companies are overvalued. The fact that my friend, a total casual, is investing in Tesla and Apple via Robin Hood has me concerned the market is inflated with dumb money.

The fact your friend is using a no-fee platform to invest in the second-most profitable company in the world paying out a reasonable dividend is problematic? I mean, I guess they could invest in SPY but Apple's been a solid 5-year outperform. Tesla's worth half what it was 6 months ago, so seems like a balance of risky and less-risky assets.

Now Beyond Meat, well, that's a different story haha.

Re: How Did WeWork’s Adam Neumann Build a $47B Company?

#122

Post by hoodwink »

arcturus17 wrote: post #64
hoodwink wrote: post #60

Earlier quoted context omitted.

Finally, some clear thinking.

Doesn’t quite explain the cash hemorrhage or the path to profitability though.

I don’t understand why laypeople are so confused by how real estate investing works.

I build an office building and spend $100M. I “hemorrhaged cash” yet I own an asset that’s going to throw off cash flow for years.

It’s the same thing with WeWork on a smaller scale. They spend $5M to build our office space to own an asset that’s going to throw off cash flow for years.

Albeit a much higher yield for a much shorter term.

Re: How Did WeWork’s Adam Neumann Build a $47B Company?

#124

Post by thedrbrian »

rchaud wrote: post #116
spaceman_2020 wrote: post #37

Earlier quoted context omitted.

So many of these unicorns seem so stupidly simple in hindsight. I'm in St Petersburg right now and the taxi outside the train station quoted an initial rate of EUR 50 to drive a grand total of 6km (after haggling, "just" EUR 30). I booked an Uber (operated under Yandex Taxi in Russia now) and the total price was just EUR 5 Take stodgy, often scammy, and downright consumer unfriendly industries, add transparency and a…

> So many of these unicorns seem so stupidly simple in hindsight. The "stupidly" part comes in when you realize that maybe the cabbie had a better grasp of the economics of his business when he accepted your bid of 30 EUR. The gig economy people driving you for a fraction of the 5 EUR you paid might come to the same conclusion sooner or later.

Even worse Uber might have paid the cabbie another €5 to take the job.

Re: How Did WeWork’s Adam Neumann Build a $47B Company?

#125

Post by xkcd-sucks »

kemitche wrote: post #111
sharadov wrote: post #30

Earlier quoted context omitted.

It's interesting that godaddy would opt for a wework rather than leasing office space and setting it up. Probably less cost and hassle?

My naive view is that it's similar to the reason some companies use AWS rather than running their own data center. That is, it's worth it to pay the premium to not have to manage their own space, and have the flexibility to scale up/down their usage a bit more quickly than locking into multi-year leases.

Real estate is a real pain in the ass for small startups; it eats up like several man-months of companies that have no people dedicated to stuff like this. I do think wework is bullshit, but thinking back to the process of moving a company your point makes sense. And in earlyish-stave companies the CEO / bigwigs are most involved with moving and corporations' decisions are no more economically rational than those of the people in charge.

Re: How Did WeWork’s Adam Neumann Build a $47B Company?

#126

Post by florakel »

burtonator wrote: post #84
hdpq wrote: post #16

I'll just go on the record to say that I think WeWork is the biggest deck of cards that is begging for a collapse. I've only been to a handful of locations, but they never seem busy and I'm not sure how they're making rent. Plus, not to mention, back in my day, when you did a startup and got funding from your rich uncle (not Uncle Rich), you grew your startup from your apartment, and when you outgrew that space, you…

> I'll just go on the record to say that I think WeWork is the biggest deck of cards that is begging for a collapse. I've only been to a handful of locations, but they never seem busy and I'm not sure how they're making rent. VCs are paying the rent silly. It's VCs all the way down.

The VC will cash out with the IPO. That’s the new strategy. Drive companies to valuations higher than the market cap of many S&P500 companies and then sell them to the “free market” (Uber, Lyft). Great deal for the involved VCs and banks. Is the end result a sustainable business...? who knows...? who cares...?

Re: How Did WeWork’s Adam Neumann Build a $47B Company?

#127

Post by bitcoinmoney »

mbesto wrote: post #96
hdpq wrote: post #16

I'll just go on the record to say that I think WeWork is the biggest deck of cards that is begging for a collapse. I've only been to a handful of locations, but they never seem busy and I'm not sure how they're making rent. Plus, not to mention, back in my day, when you did a startup and got funding from your rich uncle (not Uncle Rich), you grew your startup from your apartment, and when you outgrew that space, you…

WeWork, of all of the overvalued unicorns that exist today, will likely be hit the hardest during a recession. Just watch.

How do I protect my VTSAX investment if we work goes public and is included in the basket??

Re: How Did WeWork’s Adam Neumann Build a $47B Company?

#128

Post by bitcoinmoney »

florakel wrote: post #126
burtonator wrote: post #84

Earlier quoted context omitted.

> I'll just go on the record to say that I think WeWork is the biggest deck of cards that is begging for a collapse. I've only been to a handful of locations, but they never seem busy and I'm not sure how they're making rent. VCs are paying the rent silly. It's VCs all the way down.

The VC will cash out with the IPO. That’s the new strategy. Drive companies to valuations higher than the market cap of many S&P500 companies and then sell them to the “free market” (Uber, Lyft). Great deal for the involved VCs and banks. Is the end result a sustainable business...? who knows...? who cares...?

47b$. Wow, even AMD making real products is not even worth that. How does one hedge an s&p 500 fund that buys all these stupid unicorns?

Re: How Did WeWork’s Adam Neumann Build a $47B Company?

#129

Post by rsuelzer »

hoodwink wrote: post #122
arcturus17 wrote: post #64

Earlier quoted context omitted.

Doesn’t quite explain the cash hemorrhage or the path to profitability though.

I don’t understand why laypeople are so confused by how real estate investing works. I build an office building and spend $100M. I “hemorrhaged cash” yet I own an asset that’s going to throw off cash flow for years. It’s the same thing with WeWork on a smaller scale. They spend $5M to build our office space to own an asset that’s going to throw off cash flow for years. Albeit a much higher yield for a much shorter te…

The article says they don't own property.

Re: How Did WeWork’s Adam Neumann Build a $47B Company?

#130

Post by jzl »

pawelk wrote: post #49
sharadov wrote: post #15

I have the next billion-dollar business idea, an " Airbnb for coworking spaces". Convert your existing house to a co-working space. Looked at Wework, already pay too much for rent in the Bay area. I work from home, and would not mind the company. Got good coffee and great beer as well!

Name it AirB2B and go get your initial founding round!

Good one!

I was thinking AaaS -- Aviato as a Service.

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