'It seems insane now' — WeWork employees bought into cofounder Adam Neumann's vision but grew worried as red flags mounted - Business Insider

WeWork cofounder and former CEO Adam NeumannMichael Kovac/Getty Images for WeWork

• WeWork employees were swept up by cofounder and then-CEO Adam Neumann's wild ambitions and enthralled by his startup's cool culture and lavish perks, according to the New Yorker.
• "In retrospect, there's no way this could have worked," a WeWork software engineer told the magazine. "People were high. It seems insane now, but at the time it made so much sense."
• WeWork flew 8,000 employees to London for a company retreat where Lorde performed and Deepak Chopra led a meditation, and Neumann floated the idea of a WeWork on water called WeSail, the New Yorker reported.
• Read more of Business Insider's WeWork coverage here.

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WeWork employees were swept up by cofounder and then-CEO Adam Neumann's wild ambitions and enthralled by his company's cool culture and lavish perks, but grew concerned as red flags mounted, according to the New Yorker, which interviewed several WeWork staff.

"In retrospect, there's no way this could have worked," a WeWork software engineer told the magazine. "People were high. It seems insane now, but at the time it made so much sense."

The shared-workspace startup plowed money into growing its business without setting realistic targets.

"It was chaos," a WeWork architectural designer told the New Yorker. Trying to organize the large teams "was like herding cats," she said, and WeWork's sales staff "were always promising insane things like 'We'll get it done by October!' And it's July."

WeWork also splashed its cash on flying 8,000 employees to a company retreat in London last summer, where Lorde performed and Deepak Chopra led a meditation, the New Yorker reported. The event was a warning sign for some employees.

"OK, this is $2,500 a head just for the flights," a WeWork designer told the magazine. "From a business perspective, there were some red flags there."

WeWork staff, increasingly worried about their employer's scattershot approach and reckless spending, hoped there were adults pulling the strings.

"There was always this assumption that, behind Adam, there was someone intelligent — a group of people — who were watching and making the practical, financial decisions," a WeWork development worker told the magazine. "That someone was taking care of it."

However, that idea was dashed at another WeWork gathering in Los Angeles in January — figure skater Adam Rippon and actor Jaden Smith made appearances — where Neumann floated the idea of a WeWork on water called WeSail, and creating a WeBank.

"That was when it hit me," the development worker told the New Yorker. "There wasn't anyone else running the company. It was just Adam and his wife."

WeWork, which secured a private valuation of $47 billion in January, scrapped its planned IPO in September after investors attacked its business model, mushrooming losses, governance, and Neumann's controversial behavior. Running short of cash, it agreed a $9.5 billion rescue deal with SoftBank last month.

The Japanese conglomerate slashed its valuation of WeWork by more than 80% to below $5 billion in the three months to September 30, it revealed this week.

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https://www.businessinsider.com/wework-employees-startup-rise-fall-new-yorker-2019-11

2019-11-08 11:25:07Z
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