Alain Guillot

Life, Leadership, and Money Matters

Billion-dollar Loser: The Epic Rise and Spectacular Fall of Adam Neumann and WeWork (Book Review)

Billion Dollar Loser: The Epic Rise and Spectacular Fall of Adam Neumann and WeWork

BILLION DOLLAR LOSER
The Epic Rise and Spectacular Fall of Adam Neumann and WeWork
By Reeves Wiedeman

The author, Reeves Wiedeman, is a Contributing Editor at New York magazine. He has written for The New Yorker, The New York Times Magazine, Rolling Stone, Harper’s, Men’s Journal, and other publications.

Adam Neumann proved one more time that the American Dream is alive and well.

In 10 years Adam Neumann came to the US as an immigrant from Israel and built a business (WeWork) from $0 to a multi-billion dollar enterprise. Never mind that the business fell short of Adam’s own expectations.

It also highlights the different sets of skills necessary to create a business and to run a business. Visionaries generally are not great operators and Adam Neumann proved that one more time.

The book recounts, in chronological order, the life of Adam Neumann, the co-founder of WeWork, and parts of the life of other important characters such as Miguel McKelvey co-founder of WeWork, Rebekah Paltrow (Adam’s wife), and Masayoshi Son, a Japanese venture capitalist who also came to the US with no money and right now is one of the wealthiest venture capitalists in the world.

Adam Neumann came to the US with the preset idea of building wealth. He was dreaming big right from the start. Nothing in his past showed signs of out of the ordinary intelligence, business savvy, or self-confidence. It’s my understanding that he had a deluge of grandiosity.

He created two businesses that failed, but when he met Miguel McKelvey, something seemed to click. They got along very well and they decided to create their first business together, Green Desk in 2008, a shared-workspace business focusing on sustainability.

The business ideal was very simple and easy to understand. In 2008, in the aftermath of the financial crisis, they leased a space on long term basis, they chopped it up into smaller spaces and rented it out for short term at a higher rate.

Reeves Wiedeman

There was nothing revolutionary nor groundbreaking about this business model, yet Adam Neumann was able to convince investors that he was doing something different and special and investors were willing to give him more and more money to expand and grow his vision.

The amazing superpower Adam Neumann had was that he was able to draw a picture in the sky representing his vision and people would see the same picture, would feel convinced that it was a great business opportunity, and would write a check to own a part of that dream.

Unfortunately Adam Neumann was a better storyteller than a business operator. He was also a pot smoker, and a big spender. As he got more and more funding to finance his dream, his actions became more erratic.

The crescendo of his fantasy world materialized when he met Masayoshi Son, a Japanese venture capitalist

What was the problem with WeWork? The problem was that was not making a profit. It was making big promises, but it was not sustainable.

As investors chipped in, Adam Neumann’s dream continued to grow, but eventually, he ran out of investors and the whole castle in the sky began to crumble.

As a last-minute ditch for more capital, Adam Newmann decided to do an IPO (Initial Public Offering). The problem was that the SEC (Security Exchange Commission) found too many irregularities in the filing and the spell of Neumann’s stories were beginning to dispel.

Eventually, the IPO was canceled. Neumann was ousted from his position of CEO, but with a golden parachute of one billion dollars.

The way the author, Reeves Wiedeman, tells the story is captivating and riveting. Not only do we learn about the rise and fall of WeWork and Adam Newmann, but we also learn the ins and outs of venture capitalism and thus the book becomes entertaining and educational. It’s also a cautionary tale for investors and founders with little or no restrain.

By buying the book with our link, you will be helping this blog.

Final score. 4 stars ⭐. The book is entertaining and educational, but it’s about a current topic that will not be current in a few months. In other words, the book has a short shelf life. In a few months, there will be more current and salacious dramas which will get all the attention. In the same way that people don’t talk or care that much about the life of John D. Rockefeller, no one will care about the life of Adam Neumann.

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