The Cult of We

The Cult of We presents the story of WeWork, a hyped American company that offered office spaces for rent and became the most valuable start-up in the world, only to be exposed later on as a massively overpriced business that was in fact losing a million dollars a day.

Undoubtedly, Adam Neumann was a great communicator and knew how to sell his pitch. Back in 2006, he met Miguel McKelvey, who later became the co-founder of WeWork. Miguel never wanted to get massively rich. However, Adam was convincing enough to make him say yes to the crazy journey they were about to embark on.

At first, they sold ready-to-go offices for tech companies and freelancers. While profitable, they sold their stake to the landlord shortly. It was time to expand and look for new offices to rent. After pitching their startup to Joel Schreiber by saying it was worth $45 million, the investor bought one-third of the business for $15 million.

Later, they were presenting themselves as a tech startup offering renting services as a means to increase their valuation to venture capitalists. Neumann was comparing the company to a real-life Facebook, and himself as the new Steve Jobs. Everybody was hooked, and so WeWork quickly expanded in Europe and Asia.

Naturally, the two lost the pace of development, so Miguel opted out. But Neumann continued to seek insane growth. So he went to ask for funding from Softbank’s CEO, Masayoshi Son, which he received. In fact, Softbank valued the company at $47 billion, and American capitalists weren’t too far from this valuation figure either.

The problem with WeWork is that Neumann was looking to expand at a pace way beyond his powers. The founders expanded in Europe and Asia. And this was before they fully established the business and had well-set procedures in place. The hype continued to a point that people were investing in this company without taking the time to research it. In fact, WeWork was looking to create a modern workplace, such as Google’s, where you can benefit from free food (vegan options included), free gym, happy hours, and so on. Naturally, the company wasn’t making any profits and was in fact losing one million dollars per day. The other problem was the expansion in many markets. Offering so many complimentary services made everyone forget the core business model, which was to offer offices for people to work in. The biggest awe of them all is that both investors and institutions such as American or Asian banks failed to notice the faults in the business, up to a certain point. Neumann was so brilliant at painting a bright future and coming up with expansion plans, that…