Ousted WeWork founder plans unlikely comeback with ‘adult dormitories’ – but is Adam Neumann’s $350 billion investment a mistake?


It never ceases to amaze. However brief memories are in business, how often there is room for a comeback, however unlikely.

Last week, Silicon Valley venture capital firm Andreessen Horowitz announced it was funding Adam Neumann’s new venture.

The new company, called Flow, seems aiming to do for rentals what its WeWork once promised for collaborative work.

Neumann has acquired interests in more than 4,000 homes in the United States, and his intention is to create “a widely recognized, amenity-rich home brand.”

To help it along the way, Andreessen has invested $350 million, “the largest single check” it has written for a startup. The company valued Neumann’s new hobby horse at more than a billion dollars.

Yes, this is the same Neumann, the long-haired Israeli-born entrepreneur who promoted WeWork with messianic zeal, driving it to a $47 billion valuation at its peak before the joint office developer collapsed.

Today, WeWork is worth $4.2 billion. However, the founder is long gone. After questions surfaced about his leadership style and WeWork’s losses, Neumann rose with a package worth more than $1 billion.

That was three years ago. Now he’s back.

“We love to see repeat founders build on past successes by growing from the lessons learned,” Marc Andreessen said in a blog. “We think it’s only natural that Adam, for his first venture since WeWork, would return to the theme of connecting people by transforming their physical spaces and building communities where people spend the most time: their homes.

“Residential real estate – the world’s largest asset class – is poised for exactly this change.”

I want what Neumann has. Whatever it is, it’s really wonderful. You build a company and practically collapse it, then persuade a supposedly hard-nosed company that previously backed you to do the same thing again, for hundreds of millions of dollars. Wow.

Neumann probably won’t be the least bit surprised. His happiness depends entirely on his own brilliance. I met him when he was founding WeWork in London and he spent the whole time convincing me of his genius. Not only did he provide his clients with desks where they could develop their own technical and creative ideas, he changed the entire global office culture and offered a completely new work-life balance.

Neumann said at the time: “We treat (tenants) as we would like to be treated ourselves. For us and them, work means much more than achieving material goods.”

They weren’t punters in the strict sense, but members. They had to apply and were screened. “No call centers, we don’t want people just making calls and selling.”

WeWork was on a mission. According to Neumann, younger people “change an average of nine jobs. We help them find what they love to do.”

He continued: “More and more people are working for themselves. Why is that? Because they want to do something more meaningful.”

His goal, he said gravely, was “to change the world.”

Andreessen said the story of Neumann and WeWork was “extensively chronicled, analyzed and fictionalized — sometimes accurate.”

“Despite all the energy that went into covering the story, it’s often underestimated that only one person fundamentally transformed the office experience while leading a paradigm-shifting global company: Adam Neumann,” he said.

Exactly what Flow is up to is unclear. His website consists only of a landing page with the words “Live Life in Flow” and “coming 2023”.

However, Andreessen hinted that Flow would seek to replicate Neumann’s vision of creating “adult dormitories.”

He said that as a result of the pandemic, “many people will live in places far from where they work, and many more will move into a hybrid environment.”

“As a result, they will experience far fewer, if any, social bonds and friendships in the office that local workers enjoy,” he said. “For many of these people, increased screen time and less face-to-face interaction will lead to challenges not just limited to work, such as alienation and loneliness.

“This is not a good path for anyone and needs to be addressed head-on now.”

Even if you concede that Neumann revolutionized office work (Regus had arguably gotten there before, albeit without some of WeWork’s touches, although some of those were no doubt naff), the idea of ​​him earning such trust again is to me ridiculous.

It will be interesting to see exactly what lessons he learned – surely there is a strong sense of deja vu after what Andreessen conveys.

https://www.independent.ie/business/world/ousted-wework-founder-plots-unlikely-comeback-with-dorms-for-adults-but-is-350bn-investment-in-adam-neumann-a-mistake-41926993.html Ousted WeWork founder plans unlikely comeback with ‘adult dormitories’ – but is Adam Neumann’s $350 billion investment a mistake?

Fry Electronics Team

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