WeWork's Neumann Is Stepping Down as CEO (bloomberg.com) 66
Adam Neumann, the charismatic entrepreneur who led WeWork to become one of the world's most valuable startups, is stepping down as chief executive officer, after a plan to take the company public hit a wall. From a report: Members of WeWork's board have been pressuring Neumann in recent days to step aside, taking a new role as non-executive chairman. The move is designed to salvage an initial public offering, which had been met with immediate scorn from public investors. A litany of apparent conflicts of interest and Neumann's propensity to burn through capital were chief concerns. Two senior WeWork executives, Sebastian Gunningham and Artie Minson, will become co-CEOs. WeWork's parent company, We Co., intends to push ahead with the IPO, but some people briefed on the deliberations said it's unlikely to take place next month as planned. The new CEOs said in a statement that they will be "evaluating the optimal timing for an IPO."
Again? (Score:2)
Didn't he step down less than a week ago?
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Didn't he step down less than a week ago?
No, they just took away the power his wife had to choose the next CEO whenever he did leave.
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The CEO owns the buildings
He also owns the trademark "The We Company" which is the name of the company that owns WeWork.
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The CEO owns the buildings
He also owns the trademark "The We Company" which is the name of the company that owns WeWork.
Hey, to be fair they did make him pay back the several million dollar licensing fee he charged WeWork to use the word "We".
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The CEO owns the buildings
He also owns the trademark "The We Company" which is the name of the company that owns WeWork.
I read they're going to layoff about 5,000 people, maybe he'll have to change it to "The Wee Company" ...
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Wheeeee!
Re:Again? (Score:5, Interesting)
If so, then what's all the hoopla and big money IPO for this....?
What am I missing here?
Re:Again? (Score:4)
Re:Again? (Score:4, Informative)
But doesn't Airbnb's business model work, as in they make real money as a broker, not owning any of the properties in question? They do have to pay out serious money when a property that was rented through them gets trashed, but that's not common, and can be built into their rates.
WeWork is bogus because this subletting business model is well known, and they violate the rules of it, up to now explaining it all away by claiming they're a technology company, which besides providing WiFi and doing the usual IT is a blatant lie. Look at how their growing revenues match their growing losses.
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Kinda, sorta.
It's not AirBnB of office space. I
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Sort of. It's essentially office rental, but more flexible. So you'll typically have a certain amount of space on a floor "permanently," but you can also do stuff like reserve large conference rooms and only pay for them when you need them. Or if some of your staffers leave, you can downsize by consolidating the remaining staff into a single workspace, and immediately stop paying for the second room -- as opposed to if you were leasing the whole space yourself, and you'd be stuck paying for space you're no
Re:Again? (Score:4, Insightful)
The thing is companies have been doing exactly this forever. There is a big German company (don't remember the name) that makes a profit doing this. They have absolutely no buzz. When I was in a startup in 2004 we rented a few offices in a highrise from a company with a similar business model (although they considered themselves a real estate company and executed like one).
Re-selling leases is great business in a boom but it is really, really hard to make money doing this during a recession. Last recession a huge percentage of office space was vacant in Silicon Valley for a few years. This eats you alive if your business model is to rent in bulk in long-term leases and make your skim on short-term rentals. WeWork hasn't experienced a recession yet and from all appearances they are going out of business during the next recession, especially if it is soon, unless they get enough money so they can burn it for warmth during the hard times.
Re:Again? (Score:4, Insightful)
Re-selling leases is great business in a boom but it is really, really hard to make money doing this during a recession. Last recession a huge percentage of office space was vacant in Silicon Valley for a few years. This eats you alive if your business model is to rent in bulk in long-term leases and make your skim on short-term rentals. WeWork hasn't experienced a recession yet and from all appearances they are going out of business during the next recession, especially if it is soon, unless they get enough money so they can burn it for warmth during the hard times.
I think WeWork is thinking the opposite way. In San Francisco, after the dot-com boom, demand for commercial real estate went through the floor. Prices plummeted. That was great news for startup companies just entering the market -- but there weren't any. Meanwhile, a lot of companies had previously been so desperate to get a nice space that they had locked themselves into multi-year leases at exorbitant rates. With revenues down across the board, for many of these companies their rent became the boat-anchor that dragged them out of business.
So what WeWork is offering is a "pay as you go" model with no lock-in, where you can enjoy some of the benefits of a spacious building, but you only need to pay for what you need right now. I understand the investor buzz, in light of the fact that commercial real estate in markets like San Francisco, Silicon Valley, and New York are once again pretty brutal. WeWork's problem, though, is that it simply doesn't have enough customers. It's priced itself low enough to be attractive to the smallest startups. But at those rates, I don't think WeWork has been entirely honest with its investors as to what the tipping point for profitability will actually be.
TL;DR -- lots of vacant square feet in the WeWork spaces I've visited, and their revenues clearly can't offset that.
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I agree that WeWork is offering a "pay as you go" that would be attractive to a lot of companies. But WeWork itself will be the one with the rent boat-anchor around its neck since it signs long-term leases or owns buildings.
When rents go down in Silicon Valley and SF (like they did after the dot-bomb) WeWork is screwed even if they get more customers. If the going rate is less than what WeWork is locked into, it doesn't matter how many customers it has. WeWork is going out of business (unless it gets more i
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In a nutshell, a lot of corporate money is spent dealing with "right-sizing" and living with the effects of not doing it. WeWork and similar companies basically offer that flexibility to the companies with short-term commitments. This has real value, but also creates systemic risk in a downturn when most customers are likely to be ditching space. This is offset somewhat by a co-working space being able to rent excess space to small users whom tend to be more consistent in demand and prosper in downturns.
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What am I missing here?
they have an app
More seriously though, their play is something like a consistent standard co-working space experience pretty much all over the world. I've been to several WeWorks in different countries and it's kind of like a McDonalds thing - just one cookie cutter style applied globally (except the price varies, sometimes significantly, depending on which WeWork you want to go to, so the Maccas comparison kind of ends with the look and feel).
They try to make it a little easier for new companies to get co
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This guy successfully convinced a bunch of bankers that his company, which rents office space, is a tech company. Some smarter bankers wrote some articles about how ridiculous this all was, and the dumb bankers felt, uh, dumb.
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he also want(ed) to be the president of the world [instagram.com]
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He's still making his way, stepping down all those staircases: https://www.wework.com/ideas/s... [wework.com]
It's lovely to see where the missing millions have gone, and how nice that the PR people thought to publish it all for us to see!
co-CEO? (Score:2)
That sort of defeats the "C" in CEO, doncha think? Gee, what happened to the last company that had two CEOs?
https://en.wikipedia.org/wiki/... [wikipedia.org]
Re:co-CEO? (Score:4, Informative)
Cherry picking data are we? Oracle, SAP, Deutsche Bank and Chipotle are all doing quite well and have all had 2 co CEOs...
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Adding more data is cherry picking? Interesting....
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Oracle and Chipotle are not "doing quite well".
I don't know about SAP, but Deutsche Bank is dead if Brexit happens.
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Deutsche Banknis dead anyway. (Score:1)
And nobody deserves it more, given their involvement in the Libor scandal. (Which makes the bailout look like small change.)
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Deutsche Bank is dead if Brexit happens.
Is that a promise? Finally a silver lining!
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The plural of Anecdote is not Data
And Deutsche Bank is certainly not doing that well for itself. It is about to get right royally screwed because of corruption. Reminds, me, I have to move my account away from there.
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Gee, what happened to the last company that had two CEOs?
https://en.wikipedia.org/wiki/... [wikipedia.org]
Same with GovWorks [wikipedia.org] (covered in the excellent Startup.com [wikipedia.org] documentary).
burn it... (Score:2)
Neumann's propensity to burn through capital
Did he go to the Holmes School of Business?
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Apparently this guy smokes a lot of weed. They might have punned on purpose.
You... you mean he's Erlich Bachman? (Score:1)
I sure hope Sergei Brin pays his opium-for-life deal.
Gavin Belson would be a better match (Score:2)
if you forget about the weed for a second.
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He didn't burn enough. The highest the burn rate, the less profitable a startup, the hotter it gets when it goes public. Of course, the share price collapses in short order, but not before a bunch of clever rich sumbitches in the know make a ton of money by cashing out at the right time.
Everybody knows that since the internet bubble of 2001. I guess Neumann wasn't such a clever rich sumbitch...
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Didn't he get five million personally, for licensing the "We" logo back to WeWork? That's a pretty good level of wasteful burn, there. I would have guessed it would play out with the clever rich sumbitches like you said.
$700 million in loans, extortions and kickbacks (Score:2)
Selling the 'We' logo was just the latest pre-IPO cash-grab for this kleptomaniac :
https://www.wsj.com/articles/w... [wsj.com]
He's Holmes and Bevos love-child (Score:2)
but rumours are that Allison, Zuck and Benioff were also part of the party because how can 1 single person collect so much kleptomanic and sociopathic DNA?
WeWork has $47 billion in lease obligations (Score:2)
It isn't all due next year, but will come due. They need to bring in HUGE revenue from the people who use their service to pay the landlords.
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Fortunately, the ex-CEO is their landlord. So he might cut them some slack on the schedule. Or he'll demand his sweetheart deal from the funding they get from the IPO.
"valuable"? (Score:2)
How else do you *make* money? (Score:1)
If you want people to give you money for something, you have to declare it to be extremely valuable. And if you fell for that, you have to inflate that even more, to get your money back. It's like a Ponzi scheme where everyone is a retard, including who started it.
It's also how all stock markets work that don't deal with physical goods. At least until the healthy collapse. (Unless some asshole puts a cork on that volcano.)
"Making" money is always meant literal. As in: Making it up.
The opposite word would be
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The WeWork spaces that I have visited (only a few I'll admit) have been largely filled with tech companies in the start-up phase. The idea behind WeWork being that you can obtain a relatively small office space with access to shared common areas (restrooms, kitchen, etc.) and book out other spaces (conference rooms) on an as-needed basis and at a rate much more affordable than trying to obtain an entire office space. This is ideal for start-ups that don't want to blow all their capital on a regular lease
No, it's not. (Score:3)
No, it's not, and never has been. It's always been tech news heavy, but it's always been "News for Nerds". Nerds come in all different types. Only one kind of nerd is interested in tech stuff. I'm a biology and sociology nerd, thank you.
WeWHO? (Score:1)
I'm seeing news about this company(?), but that is all I ever heard of them.
What are they? One of those "take existing fuctionality, bundle them into a monolithic something, add a 'weby/appy' .com bubble 2.0 feel to it, catch and lock-in people too stupid to live" kinda things?
Like Juicero [youtu.be]?
No, I refuse to read the articles until I have heard of them in the real world. I just come here to say this is not news and should not ever be talked about.
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Done already: https://www.wired.com/story/be... [wired.com]
Re:WeWHO? (Score:5, Informative)
I'm seeing news about this company(?), but that is all I ever heard of them.
What are they? One of those "take existing fuctionality, bundle them into a monolithic something, add a 'weby/appy' .com bubble 2.0 feel to it, catch and lock-in people too stupid to live" kinda things?
Like Juicero [youtu.be]?
No, I refuse to read the articles until I have heard of them in the real world. I just come here to say this is not news and should not ever be talked about.
The now former CEO owns a bunch of buildings that WeWork leases from him then rents out to small businesses for office space. They provide essential business supplies and facilities such as beer and cool stairs. They also paid the former CEO millions of dollars to license the word "We" from him.
So basically it's a scam to do nothing but funnel VC money to the CEO.
Re:WeWHO? (Score:5, Funny)
"They provide essential business supplies and facilities such as beer and cool stairs."
Don't forget ball pits and nap pods. How else are you going to get a bunch of college grads to crank out JavaScript for your disruptive blockchain-enabled beer delivery app in the cloud? They'll go across the street for a 50% raise if the company across the street has cooler stairs than you do.
Befuddled (Score:1)
I am a little bit lost on this one.
Why would he step down ? He hasn't been seen wearing black makeup or cracking a blond or homo joke !?
Shareholders don't like self-dealing I guess (Score:2)
There are _plenty_ of small business owners who funnel all of their personal expenses through their company. The company owns their house, owns their cars, all their expenses are business expenses, and the costs for maintaining all of this come out of the company's profits. As a result, small business owners pay a lot less tax than they would on normal income.
The problem is that you can't really be a public company and do this same sort of thing. The CEO of WeWork personally owns a lot of the buildings that
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Re:Shareholders don't like self-dealing I guess (Score:4, Interesting)
And once they start with the car, they will go through everything with a fine-tooth comb. That dinner you had with your wife, that you claimed was a business expense? She's not an employee. That trip to Miami last winter that you claimed was a business trip? Can you provide an itinerary and list of who you talked to? The cell phone you write off - why are 80% of the texts and calls to your wife and kids? They will go through EVERYTHING and find out you've basically lied about tens of thousands of dollars of unreported income...
If it's not directly related to work happening RIGHT NOW, or has the ability to result in a gain in revenue - it's not deductible. Housing doesn't count, and clothes (for the most part) don't count. Food MAY count, but it's only at 50%. Transportation? Rarely. And so on...
Obligatory... (Score:2)
Newman! [youtube.com]
Silly question.... (Score:2)
but what the hell is We's product/service??
The only thing I've heard about this company is the troubles with its IPO.
Yes, I'm answering my own question (in the hopes it helps others that were wondering the same), from Wikipedia [wikipedia.org]:
WeWork is an American real estate company that provides shared workspaces for technology startups, and services for other enterprises. Founded in 2010, it is headquartered in New York City. As of 2018, WeWork manages 46.63 mill. sq. ft. WeWork designs and builds physical and virtual shared spaces and office services for entrepreneurs and companies. WeWork has more than 5,000 employees in over 280 locations, spread across 86 cities in 32 countries.
Who (Score:2)
is this dickhead I keep hearing about and why should I care?
Tech misunderstanding (Score:2)