Earlier quoted context omitted.
The market is always flooded with "talent". The problem is finding good engineers which are around 1 in 100 resumes.
How do you know the other 99 are bad?
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WeWork says will file to withdraw IPO
211–220 of 404 posts
Re: WeWork says will file to withdraw IPO
#212Earlier quoted context omitted.
This gets called "being disruptive" but it's possible to be disruptive without ignoring the law. For example see SpaceX: successful disruption of the launch industry, without breaking any laws. The issue is that not every industry is so inefficient as to be possible to legally disrupt profitably, so people try to do an end-run around the law.
The CEO of SpaceX did commit a couple crimes in the same podcast. Uber's autonomous car fatally collided with a woman, raising questions of negligence and liability in automation. Uber acquired some of Alphabet/Waymo's trade secrets when they aqui-hired one of their former engineers who apparently kept a bunch of Waymo's IP he worked on. That engineer himself is now facing a federal indictment, and Uber and Waymo hav…
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Re: WeWork says will file to withdraw IPO
#213This is almost too perfect but SoftBank is, at the moment, trying to hire a valuations director: https://www.indeed.com/viewjob?jk=cf0378114e63aeb4&from=tp-s... Sort of a "Never attribute to malice that which is adequately explained by stupidity" kind of thing . . .
In their defense, Masayoshi Son made much of his fortune by applying the greater fool theory (and lost much of it that way as well). There's a chance they really just took a calculated risk here, and with many of their other investments too. The risk being not so much the success of the company like normal VC investments, but explicitly a "maybe we can profitably push this through an IPO, let's see if the sheeple fal…
Live by the sword, die by the sword. Eventually you will be the greatest fool.
Re: WeWork says will file to withdraw IPO
#214Earlier quoted context omitted.
“There are three ways to make a living in this business: be first, be smarter, or cheat.“ -Margin Call SV ran out of the first two because they are much harder. We are left with the dying gasps of companies trying the third way.
Oh man, what a fantastic film. It's a been a while since I saw Margin Call, but I still feel like it's one of the films that best captured the 2008 financial crisis. Jeremy Irons' portrayal of a Goldman CEO-like character — I think he's the one who delivers the line you quoted — remains probably the most convincing portrayal of that type of person I can remember. The wonderful board room scene: https://www.youtube.co…
Ah, yes! Jeremy Irons in that board room... wow!
Re: WeWork says will file to withdraw IPO
#215What I don't understand is how do things get this far down the road before a good old fashioned sanity check happens? I have got to think that Soft Bank knew/knows the valuation was off. The fact that they pushed on means they either intended to try and get away with it/take the money and run as I cant believe incompetence is the reason here. How did this get so far along??? As for Adam N, I have to think some part o…
> very curious to hear about any startup unicorns that are profitable or at least have a clear roadmap to profitability and not based on a business model that will be outlawed in a few years
Stripe. Recently valued at $35 Billion, although they being profitable is unlikely now considering their phase of international expansion; IMO it does check rest of your questions just because their growth is directly tied to the growth of their customers.
Re: WeWork says will file to withdraw IPO
#216Wow what a huge rise and fall in the past few weeks! What I don't understand is how the S-1 filing ever saw the light of day? How could nobody reviewing that see any of the red flags that were obvious? I think this just shows how hard it is to be objective when there are so many cultural/financial/etc influences affecting your judgement. Obviously their team bought the hype (and as a sad Browns fan I can totally symp…
they were all operating (and may still be) from within the reality distortion field. the field covers the valley and beyond.
Re: WeWork says will file to withdraw IPO
#217What I don't understand is how do things get this far down the road before a good old fashioned sanity check happens? I have got to think that Soft Bank knew/knows the valuation was off. The fact that they pushed on means they either intended to try and get away with it/take the money and run as I cant believe incompetence is the reason here. How did this get so far along??? As for Adam N, I have to think some part o…
Well, the answer is that since the market has been flush with cash, these companies kept raising more and more money in their rounds. The guys in the early rounds will make their money, but the later rounds ( Softbank) will lose it. VC is a massive bet, Softbank started a new vision fund worth 100B.
They know exactly what they are doing. But, with WeWork, they probably thought they could keep the charade long enough to go IPO and get unsuspecting investors in the IPO.
When a company is hot, the founders have massive leverage, look at Adam Neumann , employing his family and friends at all key positions.
Re: WeWork says will file to withdraw IPO
#218Re: WeWork says will file to withdraw IPO
#219What I don't understand is how do things get this far down the road before a good old fashioned sanity check happens? I have got to think that Soft Bank knew/knows the valuation was off. The fact that they pushed on means they either intended to try and get away with it/take the money and run as I cant believe incompetence is the reason here. How did this get so far along??? As for Adam N, I have to think some part o…
I was reading this blog post by Fred Wilson last night and I think this unlocked a key insight for me[1]. WeWork (Uber, Peloton, Lyft, AirBnB, etc...) are not software companies. None of these businesses sell software, they use software to enable them to sell their end product: Commercial Real Estate (Rides/Freight/Food/Bikes, Exercise Bikes/Treadmills, Rides/Bikes, Home Rentals, etc...).
The mis-calculation that I made was that I thought using software to enhance a legacy business was something that public market investors would apply a high valuation multiple to. What it looks like is happening is that public market investors are comparing these companies to traditional industry companies they already know.
The interesting note is that Amazon, Google and Facebook all stumbled out of the gate, but they were able to pivot to selling software. Amazon with AWS, Google with Search Ads, and Facebook with Mobile Ads. I think this is the pivot that's going to have to happen for the latest round of companies that aren't doing so hot right now to start throwing off cash and increasing their valuations.
[1] - https://avc.com/2019/09/the-great-public-market-reckoning/
Re: WeWork says will file to withdraw IPO
#220What I don't understand is how do things get this far down the road before a good old fashioned sanity check happens? I have got to think that Soft Bank knew/knows the valuation was off. The fact that they pushed on means they either intended to try and get away with it/take the money and run as I cant believe incompetence is the reason here. How did this get so far along??? As for Adam N, I have to think some part o…
On a spectrum we have Ponzi schemes, which never offer a product. We have MLMs which are legal Ponzi because there is an exchange of goods or services, but operate on social networks (original non internet meaning). Then we have franchise schemes where the wholesaling aspect is often less lucrative than the real estate angle (see also Sears, McDonald’s), and so despite offering goods they are de facto profitable real estate endeavors. Then we have manufacturers who actually work the way we believe these other organizations work, by providing goods to retailers who take over some of the salesmanship, logistics and risk for a slice of the profits.
Then we have WeWork. Which looks like a technical savvy landlord but under it all is subletting from one of the founders. Which I suppose would make this closest in structure to an IPO for a franchisee? That’s the sort of investment opportunity a bank would be into but makes no sense on the NYSE.
WeWork needs to get to a point where some to half of its properties were acquired under their own steam instead of through the founders. Otherwise it’s just a sucker’s bet.