WeWork Filing Bankruptcy
Business news isn't usually our cup of tea, but this one is too spicy not to dive into.
This story came out this week and I can’t get enough… Incredibly entertaining from start to finish. I am going to do my best to shed some light on it but I really do encourage everyone to do further reading on WeWork and the inner workings on what made Adam Neumann and WeWork fail.
The Adam Neumann startup has finally filed bankruptcy. After years and years of yielding no net profits besides gaining new investors every quarter that believed one day, WeWork would finally turn into a net positive. This is one of the most intriguing stories of 2023 and the best part… There is already a documentary that outlines the life of Adam Neumann and the startup that at one point was captivating the country with the most bombastic style of leadership imaginable.
I mean look at these numbers… The assets and liabilities stacking like pancakes while the net return looks like something out of a horror movie.
Yes, you are reading that correctly, that chart, especially the net income chart, is in quarters. Billions of dollars lost in meer quarters. The cherry on top, Adam Neumann escaped with reportedly over a billion dollars sold shares of the company.
This story really has it all.. The rise of a risk taking entrepreneur, the crazy company culture that existed during the startup phase, the peak where WeWork was once the hottest and most valued startup in all of the United States. Now, we see a bankruptcy filing on 11/8.
If you haven’t watched the documentary already, it’s a great watch. WeCrashed does a great job dramatizing most of the facts that exist during the whole story, but we might see a part two after all. The Neumann’s story might not be done after all.
Reports are out that Neumann now has interest to buy the company back in bankruptcy, as his new company “Flow” (which is oddly similar and really hard to tell apart from WeWork besides it focusing on residential rather than commercial) is starting to take off and is recently valued at over $5B.
What have we learned from this story in its entirety? Well, other than an obvious leadership issues within the company, we can see what truly matters here in some of these early stage startups, revenue. It doesn’t matter how much you lose quarter after quarter, as long as you are growing on the revenue side, spend as much as you please. Anything to make that number go up.
I suspect you may see some more of these same companies have the same fate in the next 12-18 months as investor funds dry up and the money into the companies that are net negative get shown the door.
Although a brief touch on WeWork, I really encourage everyone to dig into the incredible story of WeWork, I don’t believe it’s the last of its kind. This unfortunately might become a trend.
