Today’s overworked, underpaid and unappreciated employee is tomorrow’s confidential source for a reporter.
And disgruntled workers will happily talk as it all goes wrong for leaders lacking in hubris.
In writing about the rise and fall of shared office renter WeWork, journalist Reeves Wiedeman did more than 200 interviews over 18 months with employees at all levels and from every department. Senior executives, landlords, investors, bankers, lawyers and advisors also chimed in.
What they told Wiedeman for his book Billion Dollar Loser: The Epic Rise and Spectacular Fall of Adam Neumann and WeWork makes the company’s botched $47 billion initial public offering and the sacking of co-founder Adam Neumann seem inevitable. This was a company and leader who weren’t exactly diligent at managing their nickels.
Take WeWork’s annual summer camps, which Vanity Fair once described as “a lavish bacchanalia” and “a sort of corporate retreat-meets-Coachella for the Silicon Valley set.”
In 2018, WeWork flew 6,000 employees to Eridge Park south of London. Deepak Chopra delivered a keynote. Lorde and Bastille performed concerts. Employees camped out in tents and slept on air mattresses.
Neumann, his wife and kids flew in on WeWork’s brand-new $60 million Gulfstream jet. To furnish and stock their campsite compound, Neumann sent his event team a shopping list that ran to three-and-a-half pages which Wiedeman reprinted in his book. Along with a “tent house suite via Raj Style” and an RV, Neumann ordered three air conditioning units, two fridges, a king-size bed, four twin-size beds, a coffee table plus a 24/7 security guard, two drivers and two bartenders. The bar included two bottles of Highland Park 30-year-old single-malt Scotch retailing at $1,000 each plus all the ingredients for making Bellinis, mimosas and white wine sangria.
In between sets by new age gurus and pop stars, Neumann and his wife took to the stage and talked about going beyond renting coworking spaces to finding homes for every orphan. “If we do the work right, we could wake up one day and say ‘we want to solve the problem of children without parents in this world’ – and do it, within two years,” Neumann said. “And from there we can go to world hunger. There’s so many topics that we can take one by one, and we will be able to tackle anything that we set our minds to.”
Not everyone was sold on Neumann’s plans to save the world. “For many longtime employees, the close of Summer Camp 2018 felt like the end of an era,” says Wiedeman. “The event had grown so large that it lost much of its charm, and many employees wished the company would just give them a week off to rest and spend the money it poured into Summer Camp on giving them all a $2,000 bonus instead.”
At its peak, WeWork had almost 10,000 employees. By the end of 2018, half the workforce had been with the company less than 6 months. “Many employees began to see WeWork less as a company than a cult. Adam’s preaching attracted a constant influx of fresh devotees who kept the machine running.”
But the machine stalled out when private investors quit throwing billion-dollar lifelines at WeWork. With a growing mountain of debt, Neumann had no choice but to take his company public. Wiedeman says prospective investors were shocked by what they discovered in WeWork’s filing with the U.S. Securities and Exchange Commission.
On his way out the door, Neumann negotiated a billion dollar severance package. That deal fell through when SoftBank, a Japanese conglomerate and WeWork’s largest investor, abandoned its $3 billion buyout of existing shareholders. Neumann has since sued Softbank, accusing it of breaching a contract.
Like John Carreyrou’s Bad Blood: Secrets and Lies in a Silicon Valley Startup, Wiedeman’s equally excellent book begs the question how smart people make stupid bets on false prophets. Along with a COVID-19 vaccine, we need an inoculation against the reality distortion fields thrown up by charismatic, cult-like founders with messiah complexes.
Jay Robb serves as communications manager for McMaster University’s Faculty of Science, lives in Hamilton and has reviewed business books for the Hamilton Spectator since 1999.