WeWork's Former CEO Has a New Startup, Reportedly Valued At More Than $1 Billion (cnn.com) 64
Nearly three years after Adam Neumann stepped down as CEO of WeWork following a failed attempt to take the company public, he is said to once again be in charge of a billion-dollar real estate startup. CNN Business reports: Andreessen Horowitz, the prominent venture capital firm known for its early investments in Twitter and Airbnb, has pumped about $350 million into Neumann's newest venture, called Flow, according to The New York Times, citing unnamed sources briefed on the deal. The investment valued the startup at more than $1 billion, according to the report. In a blog post Monday, Marc Andreessen, cofounder and general partner at the VC firm, announced the investment, without disclosing financial details. He also explained his thinking for backing Flow, a residential real estate company, and Neumann despite the founder's high-profile fall from grace at WeWork.
"Adam is a visionary leader who revolutionized the second largest asset class in the world -- commercial real estate -- by bringing community and brand to an industry in which neither existed before," Andreessen wrote in his post Monday. "Adam, and the story of WeWork, have been exhaustively chronicled, analyzed, and fictionalized -- sometimes accurately. For all the energy put into covering the story, it's often under appreciated that only one person has fundamentally redesigned the office experience and led a paradigm-changing global company in the process: Adam Neumann." It's not immediately clear how Flow seeks to revolutionize the residential housing industry. Flow currently has a bare bones website, with the slogan "Live life in flow" and two words stating it will launch in 2023.
Andreessen positioned the new company as a long-awaited solution to the nation's "housing crisis." He used a mix of jargon-filled terms -- "community-driven, experience-centric service" -- to explain how the new startup would "create a system where renters receive the benefits of owners." "We think it is natural that for his first venture since WeWork, Adam returns to the theme of connecting people through transforming their physical spaces and building communities where people spend the most time: their homes," Andreessen wrote. "Residential real estate -- the world's largest asset class -- is ready for exactly this change."
"Adam is a visionary leader who revolutionized the second largest asset class in the world -- commercial real estate -- by bringing community and brand to an industry in which neither existed before," Andreessen wrote in his post Monday. "Adam, and the story of WeWork, have been exhaustively chronicled, analyzed, and fictionalized -- sometimes accurately. For all the energy put into covering the story, it's often under appreciated that only one person has fundamentally redesigned the office experience and led a paradigm-changing global company in the process: Adam Neumann." It's not immediately clear how Flow seeks to revolutionize the residential housing industry. Flow currently has a bare bones website, with the slogan "Live life in flow" and two words stating it will launch in 2023.
Andreessen positioned the new company as a long-awaited solution to the nation's "housing crisis." He used a mix of jargon-filled terms -- "community-driven, experience-centric service" -- to explain how the new startup would "create a system where renters receive the benefits of owners." "We think it is natural that for his first venture since WeWork, Adam returns to the theme of connecting people through transforming their physical spaces and building communities where people spend the most time: their homes," Andreessen wrote. "Residential real estate -- the world's largest asset class -- is ready for exactly this change."
Where renters receive the benefits of owners? (Score:4, Interesting)
Are they talking equity? Because that's really the only benefit that truly matters. But I'm guessing that's not the case. You don't want the plebs owning real-estate.
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There has been a lot of ads for apps that do this. Find a house, tell the app, then it will tell you how much the rent will be over a few years. Makes sense from the finance side as it reduces costs a lot. An
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Yeah, I got a kick out of that. What benefits? When the toilet breaks you get to fix it yourself instead of calling the landlord?
"community-driven, experience-centric service" (Score:4, Insightful)
Prepare for a residential-themed twist on the classic time share: you can "own" Flow-owned investment properties and presumably even live in one, but good luck getting your equity back out.
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And then this: “[. .
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It took a bit over a year to get the WeWorks failed office cubes formaldehyde smell out of the Sprint Campus building they redesigned.
The entire floor had to be abandoned a year before the pandemic. I'm told it's fine now, but I'm not going back.
It was so bad T-Mobile did not lease that building back when the new commercial owner took over the campus.
You're. Fucking. Kidding. Me. (Score:5, Informative)
What Adam is returning to is fleecing investors with a hare-brained scam. What, was walking away from your fraud with a billion dollars not enough? This will be the 2008 mortgage crisis, except it will be your apartment that gets fscked.
This jackass is pretty much single-handedly responsible for ARM nearly being devoured by NVIDIA. ARM Holdings used to be owned by SoftBank, who bought in to Neumann's WeWork scam to the tune of roughly $17 billion. When WeWork cratered, SoftBank needed cash to cover the losses, and immediately started shopping around ARM Holdings.
With that kind of track record, what kind of imbecile would take this guy's phone call, much less drop another billion dollars on him?
NO, IT ISN'T!! The housing market worldwide, and in the US in particular, are already a shambles thanks to rampant speculation, with properties being snapped up by hedge funds and being turned into "investments" which will be required to yield 8% growth year over year. And now this scam artist proposes to inject more speculation into the mix.
If this bell-end gets his way, living out of your car will become the new normal -- if you can afford even that much.
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Anyone who loans money to this dipshit con artist will inevitably get the losses they deserve.
If only they could have seen it coming! /s
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Let's hope he manages to bankrupt them the day before this scam falls over, and they all wind up living under the same bridge muttering about "synergy" or whatever.
Hype value (Score:2)
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I couldn't understand how We Work wound up with the valuation it did, they didn't actually do anything that wasn't already available.
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With that kind of track record, what kind of imbecile would take this guy's phone call, much less drop another billion dollars on him?
This is the wrong way to look at it. As you correctly say, this guy is going to lose money for these people.
Are you really going to complain that a bunch of billionaires are going to lose money because a hippy ripped them off?
Re:You're. Fucking. Kidding. Me. (Score:5, Insightful)
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Re:You're. Fucking. Kidding. Me. (Score:4, Interesting)
It's not speculation, it's increasing wealth inequality. The rich are running out of shit to buy, so they buy homes ... they already own everything else.
Re: You're. Fucking. Kidding. Me. (Score:2)
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If this bell-end gets his way, living out of your car will become the new normal -- if you can afford even that much.
Perhaps revolutionizing "living out of a car" will be his next endeavor.
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Sounds Too Good To Be True (Score:1)
Re: Sounds Too Good To Be True (Score:2)
Fools, money, etc
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How grand. (Score:2)
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Valued by who? (Score:2)
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That's the issue. It's the amount of money, not how responsible you are with it. Often seen in management where once you have a big title it doesn't matter whether you're competent or not when finding another job.
Renters can receive benefits of ownership now (Score:5, Insightful)
Renters can already receive the benefits of ownership. There are many residential REITs you can own that pay dividends. For a long time I've thought it might not be a bad idea if a residential REIT credited renters with some shares along with each rent payment. Of course TANSTAAFL. They'd be paying a higher rent in exchange for some ownership.
If that's what he's doing, fine; but based on his history he'll probably wrap it up in some VC snake oil and lose a bunch of people their shirts.
Your current landlord almost certainly doesn't offer shares; but you can own a little bit of real estate via many REITs which include some residential as well as commercial, with an important caveat: They're stocks, and sometimes they're badly managed so there's always the risk your shares could go to zero. Your shares aren't guaranteed to be backed by actual real estate, because the managers might over-leverage (works well in good times, crushes you in bad times).
A non-leveraged REIT would fix this--something like GLD for real estate. I'm not aware of such a thing and this too would be a legitimate financial innovation. A legit innovation that this dude is... probably not doing, because why do legit business when you can sell rainbow colored unicorn real estate farts and walk away with $100s of millions of OPM?
Whew (Score:2)
Somehow reading these breathy buzzword-laden expositions that VCs routinely come up with always wears me out. Think I need a nap after this one.
What a load of horse-puckey!
Buuullllllsssshhhhiiittttt (Score:2)
A fool and his money were lucky to get together in the first place.
What about Rebeka-a-a~aa~aaaa-aa=ah? (Score:2)
Adam's leadership role isn't complete without the mental support of his beloved Rebekah!
Where did you think he got the idea for the revolutionary all-vegan salad yoga bar at WeWork?
Benefits (Score:4, Insightful)
He used a mix of jargon-filled terms -- "community-driven, experience-centric service" -- to explain how the new startup would "create a system where renters receive the benefits of owners."
Let me guess how this would work: The "benefits of owners" that renters will receive will be things like mowing lawns, replacing roofs and servicing HVAC equipment. The savings that the landlords reap from this new maintenance paradigm will then be siphoned off by this app to fund new yachts for the VC investors.
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Let me guess how this would work: The "benefits of owners" that renters will receive will be things like mowing lawns, replacing roofs and servicing HVAC equipment. The savings that the landlords reap from this new maintenance paradigm will then be siphoned off by this app to fund new yachts for the VC investors.
I reckon so: renters will be responsible for repairs but hey, you can paint it what colour you like.
The real question here is (Score:2)
Where do these scammers keep finding people with millions to fleece? Forget the "value" of his "company", what everyone here really wants to know is where to find those patsies and how to fleece them themselves.
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Exactly right. It seems like once these people get too big, then they just lose their minds and do stupid crap. What SoftBank + Son did with WeWork was beyond idiotic.
Musk making a stupid high and fast offer for Twitter is another example. At least he realized his mistake and tried to back out, but it's probably too late.
HAHAHAHA (Score:2)
only one person has fundamentally redesigned the office experience and led a paradigm-changing global company in the process: Adam Neumann
HAHAHAHA oh my gosh hahaha I am crying.
hahaha
They are serious haha. The guy who changed nothing about offices hahaha.
The biggest change lately hahaha that we are not using offices hahaha.
He completely predicted the bubble wrong.
Oh I can't stop laughing.
Revolutinized? (Score:3)
Revolutionized commercial real estate by bringing community and brand to it? I think firms like CBRE would be very surprised by finding out they didn't have established brands. And it turns out that having employees work from home is an even better deal than renting office space in commercial buildings, which finished off WeWork as a major company.
Andreessen Horowitz are top of the scam (Score:4, Interesting)
"Adam is a visionary leader who revolutionized the second largest asset class in the world" - No he didn't. He made himself and some investors, namely AH a ton of cash fleecing other smaller investors before the inevitable collapse of the business. It's nothing to do with the actual business, the business was crap. That's what AH do, they're doing it in crypto, and they are doing it again here. It's simply pump and dump dressed up.
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the business was crap
Their offices were, too. I had the displeasure of working in one for a couple of years. Think about all the bad things about a postmodern office, e.g. filthy reclaimed wood floors, glass walls/no privacy, unfinished ceiling, unfinished concrete pillars, etc.
Add to that all the worst things about about having random close-in next-door neighbors: no privacy, constant noise (the NOISE), disgusting and unmaintained bathrooms, coffee dispensers not being refilled, kitchen consumables always unavailable, messes
The revolution e need... (Score:3)
...is for a way to not have to cough up tens to hundreds of thousands up front to get in a position to replace rent payment with paying off "owned" property.
Now I realise the payment up front has thought behind it and is useful in several ways to fight a real estate bubble, specifically the crash thereof, but still.
It is to many, and IMO rightfully so, inconceivable how a bank can deny them a mortgage costing 1400 a month when they've been paying rent between 1500 to 1800 (pulled the numbers right out of my arse, just FYI).
In Switzerland, where you probably don't even get small apartments anymore in rural areas for under half a million, you still have to put 20% of the buying price on the table up front to even be considered. Also the interest at 5% cannot be higher than a third of the family income no matter what kind of mortgage contract you have. Even if you get your interest fixed at 2% for fifteen bloody years, if a supposed 5% interest rate is more than a third of your income, your shit out of luck.
Meanwhile, in this country at least, you pay imaginary income tax on a supposed rent you would make if you did not live in your own property... because someone decided having to come up with all that cash up front and carrying all the risk of a property was not enough to offset the "inequality" to renters... so we homeowners get shafted every year. My income gets progressively taxed an additional 13k I never saw in my life.
I feel like there are forces at work that want to stop people from owning their homes...
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You see this complaint a lot. It's a very good sign that you definitely do not want to be loaning money to the person who wrote it.
First, if you think the loan payment is the only thing attached to owning a major asset, you shouldn't be buying major assets. Second, if you don't understand that givin
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I've been seeing this bullshit meme going around lately. The vaguely novel twist is that they're deliberately not saying what they're really whining about:
It's called, "Property Tax." It's normal. It's to defray the costs to the community of you and your plot existing -- infrastructure costs of water, sewage, power, gas, telecom, roads, not to mention fire/police,
re: forces trying to prevent home ownership? (Score:2)
To those saying the system seems rigged to prevent many people from owning a home? Technically, yeah, it is -- for good reasons. When we had Presidential administrations pushing the idea that home ownership should be made possible for everyone, it led to housing crashes and defaults.
There are absolutely programs in place to assist home buyers who took all the right financial steps to make a sound purchase, though. The USDA loan is a great example. They won't let you buy some insanely big, million dollar typ
I wonder what the investors are thinking (Score:3)
So knowing that, are these investors a) gullible, or b) hoping to sell the venture on to some greater fool? Seems to me b) is the likely option - to use the hype and bullshit to build this company as the next great hope in real estate and sell out before the whole thing collapses. It is unlikely there is any future that involving a successful, self-sustainable business model with him in charge.
I guess I'm wrong again (Score:3)
I thought these high end grifters had managed to reduce the opportunity for average families to own a house as far as possible.
Evidently, I was mistaken.
Sounds like a bunch of BS (Score:2)
From a NIMBYist's kind heart (Score:3)
In 2022, Andreessen and his wife advocated against the construction of 131 housing multifamily units in their affluent Atherton, California town. [theatlantic.com]
Is Marc out of touch? (Score:3)
WeWork didn't actually revolutionize anything. They played a bubble, a fad. What made them look more powerful than they were in the market was offering turnkey corporate office space. It fucked up commercial real estate for a few years, but has since corrected to a significant degree.
Residential real-estate is inefficient from a capital and flow perspective. Residential hotels used to be a thing, and its absence pushes many people to live in their cars. There are plenty of ways you could innovate ("for good and not evil") in this space, but most people would really be better off just minimizing what they spend on housing and save the difference.
Just great... ðY'Z (Score:1)
Welcome to your brand new caravan (Score:2)
Following the Model of WeWork (Score:3)
Neumann is rich beyond measure after WeWork. So what it likely means is a more curated AirBnB experience, but living full time. Knowing how these visionary guys think and the world "flow", it likely means you as a person can live wherever life takes you, staying in the flow, by moving within a network of Flow-owned residential properties. It's likely a subscription style AirBnB model allowing you to live in any home, anywhere, at your own pace. However the properties are likely owned by Neumann directly, enriching him, and Flow just manages the experience. That's what WeWork did, and as a result Neumann got rich (by owning the properties) whereas WeWork tanked because it rented from him and couldn't make up his rental costs.
Where this goes south though is residential landlordship is a minefield. In most states it's VERY tenant friendly; it's a totally different situation than being an office landlord. So part of me hopes this gets going; it'll be an utter disaster for homeownership, destroying vacation spots the way that AirBnB has priced people out of their neighborhoods and caused lawsuits when temporary residents violate CCRs, but honestly if they're going to do this at scale they litigation they're opening themselves up for is so massive that I hope he gets sued into oblivion.
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With AirBnB rentals? It seems to me like the easy "fix" for most of the issues people claim they cause is restricting the number of them in a given municipality or city. Require a business license to legally run one, and make the license really inexpensive. (It's not supposed to be a big money-maker for the city or even supposed to make it harder to do your AirBnB. It's simply to keep track of who actively runs one in the area.) Restrict the number of licenses issued to X number, as the local government dee
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There's been more success at the neighborhood level by modifying CCR's but that's a patchwork response rather than a true solution.
Andreessen is blind (Score:4, Insightful)
"Adam is a visionary leader who revolutionized the second largest asset class in the world -- commercial real estate -- by bringing community and brand to an industry in which neither existed before"
Neumann's "revolution" was to burn billions of his investors' dollars by trying to turn work into a party. It was an utter and complete failure.
WeWork took nearly $13B in investment before it immolated. Today, it is valued at something like $5.5B and it is STILL losing money. It is unclear if they will ever achieve breakeven and may very well be on their way to bankruptcy and liquidation in a year or two.
Neumann's conduct in running the company was egregious. He basically ran a successful Ponzi scheme all while partying on others' money. He personally walked away a billionaire.
Andreessen is allowing himself to be conned by Neumann's personal charisma exactly like Son was. Given what we all just saw with WeWork it is simply mind boggling that anyone would be eager to make the same mistake again as BankSoft did.
It's time sharing (Score:2)
If we made a list... (Score:2)
Re: If we made a list... (Score:2)
Someone suggested the Pootin (abbr. Poo) as a unit of measure for unwanted behavior projected onto the (1, -1) direction in the Cipolla graph.
Obviously Putin scores 1Poo, so it's a fairly big unit.
This Adam scores around 2mPoo.
Here to make things worse. (Score:2)
Regus likely takes issue with that remark (Score:2)
by bringing community and brand to an industry in which neither existed before
Regus likely takes issue with that remark.
Softbank wasn't the lead on the round? (Score:2)
Hi, I'm Jeffrey Epstein. I'll be babysitting your teen daughters tonight.
New timeshare, who dat? (Score:2)
It's definitely not timeshare for residential real estate. /S