So, I watched a fascinating Hulu documentary, “WeWork: or The Making and Breaking of a $47 Billion Unicorn.” I had vaguely heard of the company, and I guess they are still in existence, but before watching the exposé, I was pretty much unaware. In fact, I was 9 minutes into the program and still had no f***ing idea what the company’s business model was. It was also telling the producers began with the founder Adam Neumann stumbling to explain what his company does. Finally, about ten minutes in, they started presenting the actual business of WeWork, which I can sum up rather quickly: It is a reseller of already expensive empty office space that WeWork radically transformed into even more costly communal offices, which it then leases to start-up businesses run by 20-something-year-olds. I have a different interpretation: A huckster in his late twenties who spent too much of his youth raving to Offer Nissim on ecstasy wanted to create a business where no one ever had to grow up, and he could spread his new age mumbo jumbo self-actualization B.S. to impressionable Millenials.
Underlying all of this mess was a fanciful mass delusion of 20- and 30-year-olds who thought they could remake the world as if they were the first ones to invent the idea of a commune. If one wants to get an idea of how well collective living and working operates, then all one needs to do is find the nearest American communal society. Oh, that’s right! There isn’t one! And I’m not including religious organizations like the Amish.
Of course, what is even more pathetic is that supposedly sober, trenchant, and sophisticated venture capitalists bought into Neumann’s delusions for years with essentially no oversight. It’s one thing if WeWork purchased the buildings and leased the space, but they didn’t. WeWork, itself, was a leasee of the space. In essence, the business model was to be a mass sublettor of office space. And anyone in business who has needed to sublet their space will tell you that the company rarely sublets the space at a profit. But WeWork claimed they could. Spoiler alert: They couldn’t.
The moral of the story is this: A youngster selling utopia, rainbows, and the cure for the drudgery of work is probably a fraud. Unfortunately, it took billions of dollars of other people’s money to figure that out. But, naturally, Neumann walked away from the company with a golden parachute worth $1.7 billion. There is a sucker born every minute, and some people know how to make it very profitable. Welcome to stupid America!