The Diary of a CEOBillionaire's WARNING: His $47 Billion Empire Collapsed! | Adam Neumann
EVERY SPOKEN WORD
140 min read · 28,320 words- 0:00 – 2:43
Intro
- ANAdam Neumann
I went from 13,000 employees to three employees in one week. WeWork was one of the fastest physical global growths the world's ever seen, but everything went wrong. We lost everything.
- SBSteven Bartlett
At 2019, WeWork publicly filed its S1, company valued at around $47 billion. The S1 showed some losses, $3 billion in the past three years. Also, the S1 revealed, when you were CEO, that you'd also trademarked the word We and sold it back to the company.
- ANAdam Neumann
That's not true. People sometimes think I was fired because the Wall Street Journal said so. Not true.
- SBSteven Bartlett
I wanted to hear directly from you, like, what happened?
- ANAdam Neumann
You really wanna go there?
- SBSteven Bartlett
I wanna go-
- ANAdam Neumann
I'm, I'm, I'm happy to.
- SBSteven Bartlett
The floor is yours.
- ANAdam Neumann
So in WeWork, the business grew faster than I could grow. And every step I take, suddenly the ego starts coming up. Oh, $20 billion valuation, billion valuation in Japan on top of that, $5 billion valuation in China. It suddenly became about the money. I forgot what we were all about. And when I lost it, everybody lost it. And the next thing is, we found ourselves being forced to go public when we weren't ready.
- SBSteven Bartlett
Then you resigned as CEO of WeWork after the IPO didn't pan out.
- ANAdam Neumann
So I stepped down out of choice, and the second after I did it, we got stabbed in the back. And the only lesson there, if you're gonna stab the king, kill. If you're not gonna kill, I'm gonna come back again.
- SBSteven Bartlett
Why did you make that choice to go back into business again? 'Cause you had money, from the reports, almost a billion dollars. You know how hard it is.
- ANAdam Neumann
I now realize that in WeWork I did a lot more things right than wrong. A lot more. Not like 10% more, like 95%. Some of what I'm saying is hard for you to fully hone in on, but all these founders you spoke to, all this, I don't think they shared this playbook. So let's talk about it.
- SBSteven Bartlett
So first, you might have seen, or you might not have seen, but this channel is chasing a big subscriber milestone. So I have to ask you for a favor. Roughly 58% of the people watching right now still haven't hit the subscribe button, despite the fact that you watch this channel every single week. So could I ask you guys a favor, that 58% of you that, for whatever reason, haven't yet hit the subscribe button, if there was ever a time to deliver upon a favor for us, it would be right now. And I promise that I will do everything in my power to make sure that this channel gets better and better and better for you. Do we have a deal? [upbeat music] Adam Neumann, I've had the privilege of getting to know you briefly over the last, um, couple of months, and it struck me almost immediately that you are unlike almost any other founder or CEO or really person I think I've ever met. There's a depth to you and a, and a philosophy and a perspective that is just incredibly rare. My question to you is, for you to be an anomaly, if we accept that, am I right in thinking that you had some sort of anomalous early
- 2:43 – 3:43
Growing Up on a Kibbutz
- SBSteven Bartlett
origin story? What is that, that story that shaped this man that's sat in front of me?
- ANAdam Neumann
You know, for me first, when I get to know someone in the beginning and they say, "Where is it coming from? Who are you?" I usually start the same. First of all, I'm a husband. It's my first job, what I'm most proud of. Then I'm a father. I'm a father of six. Then I'm a friend. Friendships are very important for me. And after that, I'm an entrepreneur. I think each one of us has a phenomenal soul. I think it's perfect. And I think what really we see when we look at people is the distance between where we think they're holding to where their potential is. And I think it's that gap between those two things that actually defines a person. And for me, throughout my life, sometimes out of my control when I was young, and sometimes with my control when I got older, I've always been striving to close that gap.
- SBSteven Bartlett
So you talk about not having
- 3:43 – 4:30
How His Mother’s Behaviour Shaped Him
- SBSteven Bartlett
control. Your early context is quite unstable from what I read, because your mother suffered from bipolar. Can you bring me into that world so I can understand, like, the sort of context that Adam was raised?
- ANAdam Neumann
Happily. So we'll start, uh, like every story, it has two sides to it. Eh, my mom and my father are both doctors. And growing up, I always saw both of them taking care of the patients, and it would feel sometimes like the patients came ahead of us. So for example, my sister and I, we were never sick. No matter how sick we were, we'd look at my mom, she was an oncologist, and she would say, "My patients are sicker. Go to school." And that was sort of the beginning of it. When I was in the second grade, my parents got a divorce. It was very difficult for my mom, and she needed a change of scenery, so we actually moved to the United States.
- SBSteven Bartlett
You know this photo here?
- ANAdam Neumann
I do.
- SBSteven Bartlett
Um, and this one here.
- 4:30 – 9:40
Why He Struggled at School as a Child
- SBSteven Bartlett
You've got a kid, this is you as a, a child, that is beaming with a smile sort of e- ear to ear. Often when I see photos like that, my, my curiosity is what, what you can't see, and what that young kid, that young boy there is, is not saying, but what he's feeling underneath all of those, uh, those emotions.
- ANAdam Neumann
What I could tell you is, I think for me, I think the challenge started in the house. So we talked about my mother being bipolar. I only observed my mother's moods when we moved to the United States. There was no one around. It was only my mom and my sister and I, and all day she would work with patients, and at night at 8:00 PM she would come home and all hell would break loose. And I remember, there are many stories, but I remember this. She would tell my sister and I we had to wash the dishes. That was our one chore, and we wouldn't, no matter what, because kids sometimes rebel by action when they can't rebel by words. And she would come home, "You didn't wash the dishes," and she would take the dishes and throw them on the floor, and then she would cry and start cleaning the dishes and, and mopping them. And it was every night ended with some version of action like that. And for two years, I remember how crazy my sister and I thought the whole experience was, and we didn't have any friends who were sharing that experience. Until one day she bought this nice set of dishes, and she comes home again to throw the dishes, and we notice she's only throwing the cheap dishes. She's not throwing the ones that she liked, which gave us a little hint that maybe there's a little more control over what's happening than this out of control situation. So if I had to guess what was happening with these kids, now in hindsight, I know my mom and my dad very well. Probably there was a lot of arguing in the house. Probably as a kid, 'cause I now see my kids that are very young, I'm sure a child finds it very confusing when the parents are not aligned as a team. Because as a child, all you have to lean on are your parents. But I think the most important thing to say, if my mom wasn't the way she was, and if I didn't go through all those challenges that I went through growing up, and I went through a lot. We're talking about bipolar. There's a lot that comes with it, and we could go deeper or less, but almost every single thing, if you took a piece of paper and you had to do a check mark for every bad thing you think can happen to a little boy, you get to check mark with me all, almost all of them, including the really bad ones that we don't like to talk about. As bad as that was, when I was 22, 23, I remember being very angry about my childhood. Only when I met Rebecca, my then girlfriend to then wife, she very quickly introduced me to a spiritual practice. The way she introduced me, by the way, was after a week of dating, she came to me and she goes, "Look, you're really nice. You have a lot of potential, but you're not the guy for me." I was very surprised at the time. I was living in New York. My sister was the supermodel, and we were hanging out. I, I thought a lot of myself. And I said, "What do you mean I'm not the guy for you?" And she said, "Well, you don't have a spiritual bent. You're very focused on material things. You wanna be successful, but you're not actually understanding the game of life. The guy I'm interested in is gonna want true happiness and true fulfillment, and true happiness and true fulfillment does not come from material things." It was so different for anything anyone has ever told me, that instead of running away or doing this or doing that, I thought for a second and I said, "Well, how would one come to explore this spiritual life that you're talking about?" And she said, "Well, you need a practice." And for me, that practice started being Kabbalah, but for all of us, there can be different practices. The thing I learned very quickly in the practice is the difference between meant to be and free choice. And I think a lot of people don't understand it, but how can there be... We talk a lot about in spiritual about it's meant to be and there's free choice. How could there be free choice and things be meant to be at the same time? The way I explain it is you get to a fork in your life, and you choose left over right, and everything works out. Meant to be. You get to that same fork, and you choose right, and you crash on your face horribly. Everybody's watching. And you stop, and you actually learn lessons from it, and you take accountability and you say, "You know what? Whatever happened to me happened for a reason, and I'm gonna learn from it. I'm gonna be stronger." Almost like a sword that's getting forged, and the more times you hit it and the more hit you put on it, the stronger it gets. And then you learn those lessons, and you go back into the game of life, and you apply that in again. Suddenly, you take the catastrophe or the tragedy or the curse, and you make it into a blessing. You turn it into a made to be. When the world did crash on me as an adult, it was nothing compared to what I had to deal with as a child. I was like, "It's okay. I have a wife. I have kids. I have close friends. We'll take a deep breath, and we'll start from scratch again." And that kind of fortitude, I think regretfully, comes through going through very difficult things. So if you're listening to this right now and you're going through something really difficult and it feels dark, I encourage you to remember that the darkest moment of the night is a second before dawn.
- SBSteven Bartlett
I feel like there's things in your early context that you haven't shared
- 9:40 – 14:18
The Childhood Experiences That Left a Lasting Impact
- SBSteven Bartlett
before. Because y- you said there's things that we don't usually share.
- ANAdam Neumann
Not publicly, but meaning I have in front of-- So I used to share everything in front of our employees that we work, so there's things I shared in front of 10,000 people. I'm not sure it ever made it to the press.
- SBSteven Bartlett
What is missing?
- ANAdam Neumann
You really wanna go there?
- SBSteven Bartlett
I wanna go.
- ANAdam Neumann
I'm, I'm, I'm happy to.
- SBSteven Bartlett
If you're happy to, I'm happy to.
- ANAdam Neumann
I'll share two things that I'm not sure, but maybe could be helpful for other people that are going through similar things. So the, the hitting and stuff. And so when someone's bipolar, by the way, they get very angry or very happy very fast. When they're happy, they're the happiest. You have fun, and everything's amazing, and my mom would play games with us, and it was phenomenal. But also, and that I think happens a lot with bipolar, there's the th- suicide threats. And then there's one thing when you threaten to... So again, if you're two children and your only parent threatens to commit suicide, who's gonna take care of you? What is gonna happen if suddenly that happens? And I have a lot of memories, but one that just came back to me not too long ago, we were in the kibbutz, which is where we were living after we came back from the US. My mom wanted us to have a special experience, so we went to this community where everybody l- shares a lot of things together. It's also the beginning of why I love communities. And we get into this big fight, and my mom basically says she's gonna kill herself, and she takes the knife. And I remember she's holding this huge knife. I'm like, "No, no, don't do it." And I remember, I just remember feeling that I have to stop it, that it is up to me, and if I don't stop it, then she's gonna kill herself right there in front, my sister and I. So I grab the knife, and we're fighting left and right, and my sister, she's sitting right there, and she's crying, and she's crying. And I'm no, and she's saying yes, and the whole thing is so crazy.
- SBSteven Bartlett
How old were you?
- ANAdam Neumann
12 at that moment. That's one. There's more if you wanna go deeper, but that was one.
- SBSteven Bartlett
I invite you to go deeper.
- ANAdam Neumann
When I was in f- between second grade to fourth grade, um, I was sexually, I think you call molested, by an older, uh, than a teenager. Um, so she was at least six or seven years older than me. This one I didn't even know that what was happening was wrong. And many years later, Rebecca and I are in the Hamptons, and it somehow the story comes up, and she goes, "Adam, you understand that this is not normal for a child at that age." And I didn't even fully understand. And that taught me, that explained to me a lot about children. And again, we go back to the responsibility of parents and the responsibility of society to take care of the children, and schools to understand what's happening. And whenever we see anyone, we are so good at walking into a room, seeing someone else, and judging, "Oh, they're not acting the way I would act. They're not acting right. They're not speaking right." Everybody's so busy judging everybody. I wanna encourage every single person, next time you're about to judge, you don't know who that person is. You do not know where they come from. You do not know what happened to them as a kid. God forbid they were molested. God forbid they dealt with all these things. You don't know where they started. You only know where you see them now. And it could be that if you really got to know them, and you'd have known the distance they went from here to here, you would've been, uh, extremely impressed with them, and you would've not measured them that way. And this is why I think it's so important for all of us when we walk into rooms to really go after unity. You and I can say the same sentence in a way that tears people apart or brings people together. It takes more effort to speak in a way that brings us together. But if we don't start acting like this, if we keep dividing and keep splitting, I'm worried.
- SBSteven Bartlett
Sounds like as an adult you've been able to understand that early experience and sort of create a new sort of perspective or lens on what happened to you and what it means. And as you said, you know, you've, you've orientated it around the fact that it's happened for a reason, or at least there's, there's something to have learned from it. W- was that always
- 14:18 – 16:07
Why He No Longer Sees Trauma the Same Way
- SBSteven Bartlett
the case? I, I, I sometimes reflect on my own experience and think that for the first season of my life I was dragged, and then at some point I, like, got hold of the steering wheel and I was able to, like, drive. And one of them was, like, sort of unconscious, and the other one was more in sort of intentional and thoughtful. And I'm wondering through your early teens and 20s whether you had the wisdom and the perspective that you have now on your early experiences and how that's evolved over time.
- ANAdam Neumann
I probably went to sleep crying every single night for probably until I was 14 or 15. And I remember, and if you ask my sister, "Adi, what, what, what would I say?" She's-- I, I completely forgot. She said, I told her that one day I'll become very successful, and we'll take care of-- I'll take care of us. That was what I used to say. I, I literally didn't remember. This is something she told me. I think that's how I, I interpreted that control and how I'm gonna fix all these challenges that I had. But we launched a school, Rebecca and I. More Rebecca. I help. It's a fifth school. In the school, we teach kids how to be connected to themselves, how to be part of something greater than themselves. If someone just taught me this as a kid, and I would've understood then that there's this bigger picture, I think I would've been able to handle it a lot better and skip the challenging years faster, move faster into the point where I realize that I don't control what happens, but I can control how I react to it. So back to your point of driving, are you driving?
- SBSteven Bartlett
Dunno. [laughs] Now you question it, I'm questioning myself.
- ANAdam Neumann
Well, I, I would question, you know, my, my follow-up question to you would be how do you define success?
- SBSteven Bartlett
My definition of success these days, it's funny, I was thinking about it this morning when I got on the lift on my way here. I thought, um, do you know what it was? 'Cause my, my fiancée turned to me this weekend and she went, "Steven, I think you have enough now." And then she paused, and then she retracted the
- 16:07 – 19:12
Why Money Isn’t His Definition of Success
- SBSteven Bartlett
statement. But I, but then, uh, it got me thinking about what enough is. And actually, I thought, "Well, it's the motion forward in the pursuit of goals that matter to me, that are challenging, surrounded by people that is the, that is the success." And that's like a daily, a daily thing. There's no, there's no podium in this, this game that I'm playing.
- ANAdam Neumann
By the way, when she said she thinks you have enough, was she referring to material things?
- SBSteven Bartlett
Yes.
- ANAdam Neumann
I think society has taught us that once we gain that success, once we gain those material things, we get to this number, suddenly that hole that we all feel inside of us will be full. Now, I know it's very hard to hear, especially for people who haven't gotten there yet. Like, "Oh, yeah, you got there already, so now you're saying it." I'm only gonna share with you what I have learned, and from all the most successful people that I know, and I'm lucky to know quite a lot of them, I have not seen one that got happy or fulfilled from attaining a number or a material thing. I don't believe that's how the game of life works. So when your fiancée said, which not like her 'cause I think she's more on the spiritual side-
- SBSteven Bartlett
Mm-hmm
- ANAdam Neumann
... tell her that I said I'm surprised she said that. I think she had something deeper to say, and she was holding back. When she said, "I think you have enough," I would really go back to redefining success. So back to that q- I'll tell you how I define it in a second, but I think if we can agree on the definition of success, then we can start having a discussion of, A, are we there and are we headed there, and B, how do we do better to get there? And if we agree on our definition of success, then now we can start working together towards the same goal. If one of us defines success by making the most money and the other person defines success by being the most fulfilled, the most happy, the most light that they can be, then playing two different games.
- SBSteven Bartlett
What's your definition?
- ANAdam Neumann
When you're at your deathbed, and you're one minute before it's all gonna go, and you know you're out of time, all you have left is the love that surrounds you at that moment, your children, your grandchildren, your friends, your friends' children, all the love that surrounds you at that moment, and all the love that you have cultivated for your entire life. And I think it's that love which then moves on to whatever it is that happens after. So my definition of success is in that last moment, right before you go, how do you feel? Do you feel full and surrounded by love and like life has been this amazing journey? Or is there regret or is there this? And I'll tell you the one thing that happens right before we pass away, the ego goes away completely. No more secrets. And, and again, in the spiritual study you say, what's the definition of hell back to how we started this? You get to s- you get to glimpse for a second the ultimate potential that your soul had, how perfect it was, and how high you could have gone, and where you really got to. And the distance between those two, that's hell.
- SBSteven Bartlett
When you were 31 years old in 2010, and you sat down with your partner, Miguel-
- 19:12 – 22:20
How Failure Changed His Definition of Success
- ANAdam Neumann
Miguel McKelvey
- SBSteven Bartlett
... and you s- you made this sketch on a whiteboard for WeWork, if I'd asked you then what your definition of success was, would you have turned to me and said love or would you have said something else?
- ANAdam Neumann
I believe I would have said something else. So my big shift is when I met my wife. So by this point of this picture that you're showing me, I was four years into Rebekah teaching me about the game of life, so I'm starting to get advanced. So I, I could tell you what, what I was thinking. It wouldn't have been love, but it would have been we. And the point about, 'cause it was called, if you look at that picture, it's gonna say, We Work, We Live, We Give, We Share. I don't remember. I haven't seen it for like 10 years. [laughs]
- SBSteven Bartlett
[laughs]
- ANAdam Neumann
It was never about desks and chairs. It was always about creating a world where people make a life and not just a living. It was about something greater than ourselves.
- SBSteven Bartlett
If we just jump sort of backwards in time from that day by about 10 years, if I'd asked you what you want to be when you're older, what would you have said?
- ANAdam Neumann
At 21?
- SBSteven Bartlett
21.
- ANAdam Neumann
It's embarrassing. I'll tell you if you-- It's embarrassing, though. I'm embarrassed for my tw-
- SBSteven Bartlett
Amazing. Great. Tell me
- ANAdam Neumann
... I'm embarrassed for my 21-year-old self.
- SBSteven Bartlett
What did you wanna be?
- ANAdam Neumann
A billionaire.
- SBSteven Bartlett
You wanted to be a billionaire at 21?
- ANAdam Neumann
I did, regretfully.
- SBSteven Bartlett
Why?
- ANAdam Neumann
I thought that making the money is going to compensate. I thought it was gonna fill that hole for my childhood.
- SBSteven Bartlett
What about at 16 if I'd asked you?
- ANAdam Neumann
I think I said millionaire then. I don't think I knew the word billionaire at 16.
- SBSteven Bartlett
Okay, so the numbers. [laughs]
- ANAdam Neumann
I think the numbers grew 'cause the world changed. But I thought that making money was going to fill that hole from the childhood that back then seemed very difficult and very aggressive and very with all these negative words that we can use about, uh, difficult and abusive childhoods, and I thought that making money would solve it. But then I did three businesses afterwards who did not succeed until I met Rebekah. And Rebekah was like, "You're chasing money. You will never have it. And even if you get it, it will never make you happy."
- SBSteven Bartlett
You will never have it.
- ANAdam Neumann
She said, "Chasing money is like chasing cool. You're cool. You're just like that. You didn't ch- I don't think you're working too hard on doing it."
- SBSteven Bartlett
Thank you so much.
- ANAdam Neumann
You don't like putting on shoes.
- SBSteven Bartlett
Thank you.
- ANAdam Neumann
I like putting on shoes.
- SBSteven Bartlett
Can we keep that, please [laughs]
- ANAdam Neumann
It's all good. So she said, "You're chasing money. It doesn't work like that. It's also like chasing a girl. You really want someone, you have to take a deep breath." But she said to me, "Even if you were to get money the way you're chasing it, it not only will not fulfill you, it will be negative for you." So I said, "Well, what should I do?" She said, "Well, you're a very talented individual. You should figure out what your superpower is." It's the first time I've heard anyone use the word superpower. She goes, "You need to take your superpower. You need to connect it to something that's really meaningful for the world, something you're passionate about, but something that can make a difference. You need to bring those two things together. You need to only focus on making that a reality. Employees will wanna work with a company that's doing that. Investors will wanna invest in a company that's doing that, and consumers will wanna buy from a company that's doing that. The rest will follow." Then she said, "Success, the way you b- you define it then, that money success you think is it, will fall on you from the sky more than you can ever imagine." I was like, "I wanna marry this woman." [laughs] I proposed three months after we met.
- SBSteven Bartlett
And the idea of we was central to this drawing that I have in front of me, which is a, a, a drawing you did on a whiteboard when you were 31 years old, 2010, with your partner
- 22:20 – 27:52
Why the Idea of “We” Became So Powerful
- SBSteven Bartlett
Miguel, after selling your company. I think it was called Green Desk.
- ANAdam Neumann
Green Desk.
- SBSteven Bartlett
You sold it for how much? It wasn't like a-
- ANAdam Neumann
1.5 million.
- SBSteven Bartlett
Okay. Nice.
- ANAdam Neumann
There were three partners, so we each got half a million, half a million, half a million. But our partner didn't wanna pay us the whole amount up front, so he only gave us $300,000. The rest was installment over four years for Miguel and I. And I remember telling Miguel, "Miguel, you keep the money 'cause I'll waste it." First time I ever made money. "You keep the money 'cause I will waste it, and we'll keep it for our next business." And the way the universe works, by the way, the universe speaks to us. These signs start happening, and you sort of one thing leads to another. It's almost serendipity. Our first WeWork building, to get the building, the landlord wouldn't give it to us unless we gave a check of exactly $300,000, the same $300,000 that was sitting in Miguel's account. It went from there to there, and WeWork was created.
- SBSteven Bartlett
So tell me what that is.
- ANAdam Neumann
Okay, we're in Green Desk. Just to remind everybody what Green Desk is, Green Desk was created in May of 2008. The world was, the world was crashing. That was the downturn. And before it started, Miguel and I got to know each other. He was an architect, and I had a baby clothing company. And we're in the same building. My roommate introduced us, and we would just talk about doing great things. And there was a landlord there, and every day he would see me, he goes, "Adam, your baby clothing company sucks." And I said, "Mr. Gottman, why do you say that?" He said, "Well, my wife, we have eight kids. She loves buying baby clothes. She didn't once buy from you. I don't know how you pay me rent. Your baby clothes suck." [laughs] And I would say, "Well, Mr. Gottman, you own all this real estate around here." He goes, "Yes, I do." I said, "Your real estate sucks." He goes, "Why do you say that?" I said, "It's all empty." And we would do that for four month, back and forth. One day he looks at me, he goes, "Adam, if I gave you one of my buildings, you keep saying that it sucks, what would you do with it?" So he takes me upstairs, and he shows me this, this beautiful floor plate. And I said to him, "How much do you get in rent?" He goes, "$5,000 a month." I said, "Well, it's empty, but let's say you would get 5,000." I said, "Look, I'm a small business. I don't need this much. Let's divide it to 15 small places, spaces. We'll charge $1,000 each. We'll put a receptionist. We'll pay the receptionist 2,500. We'll get 15,000. That will leave us with 12,500. You will get 7,500, and we'll get the difference." And he was like, "Let me think about it." He calls me the next day, he goes, "I love it, but instead of one floor, take the whole building," it had five floors. "We'll put the receptionist downstairs so we can share the expenses. It will be even better." And we put five ads on Craigslist. We launched Green Desk. It was 92% full within a week. Started cash flowing positive, which was a new thing for me 'cause this was my fourth business. Never had cash flow positive. Cash flowing positive within a month, and became very successful very fast. After about six, maybe 12 month, we started thinking bigger, Miguel and I said, "We'll take Green Desk national." We went to our landlord, said, "I'm not interested." We asked for $20 million. We said, "We'll split the business 50/50." He wasn't interested, so we started and, and very soon after he said, "I'll buy it from you," and we started planning this.
- SBSteven Bartlett
And you drew this on a whiteboard?
- ANAdam Neumann
Miguel drew this on the wall, not even a whiteboard. The walls were made of glass. This was drawn on the glass. So all of our walls in Green Desk were also whiteboards, and 'cause everybody was about creating and inventing. And what you see here is that social life, commercial, friends is here. This proves the fact Ben Horowitz, in the interview that you saw he did with me in the podcast, he says to me, "Adam, you've always had one idea." And then at the end, at the end, he apologized, said, "Adam, I didn't mean to say you only have one idea. Of course you have all these ideas." I said, "Ben, you're right. This is not that different from what Flow is. This is all about the friends and all about the living and all about the working, life essentials." Wow, I haven't seen this for a long time. Fintech, travel, everything in between.
- SBSteven Bartlett
So for anyone that's watching, uh, listening and can't see, it's a circle that has lots of circles in it. Um, and it says all the little circles are like travel, health, social life, friends, um, co-work, coworkers, supporters, uh, life essentials, work ri- ri- rituals?
- ANAdam Neumann
Work rituals. I can-
- SBSteven Bartlett
Is that what it's saying?
- ANAdam Neumann
You can read it better than me, but that makes sense.
- SBSteven Bartlett
And this was the idea for WeWork?
- ANAdam Neumann
This is the idea for WeWork. So sometimes people said, "Oh, you grew out of desks and chairs. You shouldn't have gone to all these categories." The idea started, this was before there was one desk.
- SBSteven Bartlett
What is the essence of this?
- ANAdam Neumann
We wanted to make a world, at least in our opinion, that really needed community. This was to deliver on a mission of, of create a world where people make a life and not just a living. This was a full life-style, life circle, and it was very aspirational. And it's how, by the way, for any one of our listeners or your listeners that, uh, that is starting a business, start with a vision. Dream as high as you can. Go all the way to the stars, 'cause if you don't shoot for the stars, you're never gonna get to the moon. Go far. Then take a deep breath and go back to basics. What do I need to do first? What do I need to do second? What do I need to do third? The secret of life and entrepreneurship is to be able to be in both places at the same time. On the one hand, I'm gonna go so far. On the other hand, I'm just starting, so I better roll up my sleeves and get the broom and start brooming. It's both of them. I need to go knock on doors. I need to go meet people. I need to do whatever work needs to be done at the beginning to get the business started.
- SBSteven Bartlett
Let's talk about both then. So the tr- you've got the trenches, and then you've got, let's say, the clouds or the moon as you refer to it. Why is it important to dream
- 27:52 – 31:17
Why You Have to Dream Bigger Than Feels Possible
- SBSteven Bartlett
big? Why is the scale and the size of the dream important?
- ANAdam Neumann
So I believe it's the secret of manifestation. So when people ask me, "Adam, what is the secret of manifestation? How do you make something out of nothing?" I think the order is, first you have to believe. If you and I have a big idea, first we have to believe it. Then that takes time to believe. True belief, by the way, do you know when belief is measured?
- SBSteven Bartlett
No.
- ANAdam Neumann
When it's really tough. Belief is not measured when everything... So I remember this, this is, and I've shared this story before, but your audience is so wide that I'm sure a lot of them haven't heard it. When right after the whole explosion of WeWork occurred, and it was like five days in and the whole thing was crashing on us, and there's a million articles and the whole thing is happening, my spiritual teacher, who I haven't spoken at this point almost for two years after I studied with him for eight years, calls me, said, "Adam, how are you doing?" I said, "I'm not doing so well right now. It's crazy." He said, "Oh, great. That's why I called you." I said, "Why did you call me?" His name is Eitan. I said, "Eitan, why didn't you call me?" He said, "I called you to make sure that you remember the two things we learned for eight years." I said, "Eitan, we didn't learn two things for eight years. We studied twice a week. We learned endless things." He goes, "No, you missed it. We learned two things." I said, "Please remind me." He goes, "One was love thy neighbor as yourself, and the rest is commentary." I took a second for it. I said, "Let's talk about this for a second. What does love thy neighbor as yourself mean to you?" Such a famous saying. We've heard it so many times.
- SBSteven Bartlett
When I think about it, the way that I understand it is to have empathy and compassion for, uh, all of the complexities, both the good, the bad, the indifferent, and that which you don't understand, which is like how I would treat myself. Like, I understand, um, all the, that I'm a complex person and that I'm multifaceted and imperfect and that I have strengths and weaknesses, and I kind of app- I'm okay with all of it, and in others we're less okay with all of it.
- ANAdam Neumann
Beautiful. Let's say it a little bit in different words, but that was right on. Love thy neighbor as yourself means that you first have to love yourself. To love yourself, you have to acknowledge not only the great strength that you have that you love, you must acknowledge your weaknesses, your failures, your mistakes, and the only way you can love yourself after all of those is if you're able to forgive yourself. So the true secret of loving oneself is to forgive yourself, to not carry guilt, to really be able to know that all of these are lessons for you to grow and change and go to your next level from. Back to the sword analogy, that you're a sword and you're getting forged, and every single time you get hit, you just get stronger. Once you feel that and you're able to love yourself- Then you're able to love everybody else. That was the first thing he told me we learned. The second thing he said to me, which we said before, is, "I want to remind you that the darkest moment of the night is the second before dawn." Belief is not measured when everything is going up and everybody's telling you what a genius you are and everybody wants to be your friend and everybody wants to be your investor. Belief is measured when it's all crashing, when even your friends are questioning you, when the phone is not ringing. And if a person is able to have true belief then, then he says to me, "If you're gonna be able to take this experience and really hold your belief, hold your positivity, hold your happiness, be the person I know you can be, you can't imagine what the future stores for you."
- 31:17 – 34:56
What Kept Him Going at His Lowest Point
- SBSteven Bartlett
What did you believe in in your hardest moment?
- ANAdam Neumann
In God and in myself, in my wife, in my kids, and in the fact that even though I don't know at this moment why this thing happened, I am going to be stronger for it. And I remember that morning, this phone call was, was late at night. The next morning at 6:00 AM, I walked down to, to my three... I went from 13,000 employees to three employees in one week. I walked down to the three employees who were my partners in the family office, not even employees, partners. I walked down to them and I'm smiling, and they're stressed out. We would meet every day at 6:00 AM. They're, "We're done. We're bankrupt. It's finished." They only joined me three months before. They came to manage what they thought was a 5 to $10 billion family office, and they're dealing with negative 400 million compounding interest, full bankruptcy situation. And I started and I thought about them all my... Not all. A lot of friends that I had that were really there with me and enjoyed with me and grew with me and made money with me, when I really needed that one small moment, a lot of them weren't there. And these three almost strangers who I didn't really know were standing right there by my side, and they see me smiling and say, "Adam, why are you smiling?" You- They're like, they thought I really lost my mind. It was done. And I said, "I'm smiling because I remember that the darkest moment of the night is the second before dawn, and I remember that belief is actually measured when things are difficult, not when everything is working. And I believe, and I know it's gonna work out, and I don't know how, and I don't know why, but this is all gonna work out for the best, and we're gonna learn a lot from this, and it will actually prepare us when a real difficulty happens, so we're ready to go and deal with it." And about 10 days later, we started coming out of it in a very positive way.
- SBSteven Bartlett
I wanna go to the top of the story and I re- 'cause I really wanna walk through some of the key moments, but, um, I noticed your energy shift a little bit when you started describing those three people.
- ANAdam Neumann
Here's another thing that I've learned. If you now haven't... You're facing this as we speak right now. I bet you have lots of friends. I, I bet you have lots-
- SBSteven Bartlett
Depends how you define friends. [laughs]
- ANAdam Neumann
Exactly. Well, I'll tell you a secret about them, and I'm sorry to say that. We're only gonna know which one of them's are your friend and which ones are not whe- if, God forbid, you crash and you actually need them. And then I can also tell you if you're gonna crash or not. If you go big enough, really, really big, you crash. Whenever someone says, "Oh, Adam, it's never gonna happen to me. My ego is never gonna get the best of me. I'm never-- I'm always gonna stay in control." Every young successful people like to say that to me. I say, "Oh, you haven't gone big enough." 'Cause if you really, really... That's part of the definition of going really, really big. Life is not about if we fall down. We're supposed to fall down. Life is about how we get up, and the more times we fall down, the more times we get to get up. And if you practice getting up enough times, then you might not fall. Then you get very good at it, and then you can go and really go for the stars. So with the friends, the reason I-- my energy changed about those three, I didn't know them that well, and they stuck by me. I have a weakness with loyalty. I'm very loyal. So if you were there for me when things were tough, I'm a sucker for that. I'll be there for you, even if you mess up, to a fault almost.
- SBSteven Bartlett
A lot of founders who start businesses have this thing that pop culture's called imposter syndrome, where they kind of do doubt themselves, and this sort of sits in contrast to this idea of having belief, because sometimes they don't believe, and they are plagued with insecurities and doubts, and they kind of go back and forward and they think, "Really, am I the person to do this? I've never done it before." Which is... That, that comes with
- 34:56 – 35:07
How to Overcome Self-Doubt
- SBSteven Bartlett
pursuing something great. You had never done it before. So what do you say to those people who are struggling with doubt and... 'Cause they're hearing, "Listen, you have to believe." Did you have doubt when you-
- ANAdam Neumann
Oh.
- SBSteven Bartlett
When you drew
- 35:07 – 44:24
The Self-Doubt Behind Building WeWork
- SBSteven Bartlett
this?
- ANAdam Neumann
A fascinating question. My level of certainty was so high when I was doing WeWork. I, I was sure it was gonna work. It was... A lot of times, I think people confused my certainty as a different word. I was just-- I was that sure that the product is needed for the world. When I started Flow, which was different and came after everything and after also we had a family. When I started WeWork, I had no kids. It was just Rebekah and I. It was very easy to throw myself into something and work 18 to 20-hour days, seven days a week, and love every second. There was nothing else.
- SBSteven Bartlett
WeWork grew astronomically quickly, really atypically quickly, especially for that, like, type of company, and I, I wanted to hear s- directly from you, like, why? What, what happened? What were the factors that contributed to this meteoric rise? I think a couple of years after you founded the company, I became a customer of it, um, both in New York, but also in London. What didn't I see? What was... What, what was it?
- ANAdam Neumann
So WeWork started in February of 2010, and it's, for anybody listening, I think this is the way that, that it should and could work. I think from the first day, we were so clear, as you pointed out with the circle, on, on the fact that this mission is bigger than us, and when you're part of a mission that's greater than yourself, urgency doesn't just become something like, "Oh, we have to do it now because I said so" or, "Because we said so." When you feel that your mission really needs to come out to the world, then you have to do it now because there's no time to waste, 'cause it's really important. And we just started with our first, and part of my energy is I bring people together. I really like creating community. But I also, I love to move fast when we're clear on the direction that we're moving, and I don't believe anything is impossible. So when you connect that mission of something being greater than yourself, speed and not accepting a no, you put those things together, then real magic happens. I think that's one. Two-
- SBSteven Bartlett
I want an example of that.
- ANAdam Neumann
I'll give you one. Many examples, but let's, let's start, let's start early WeWork 'cause I think this all started where-- But before the example, one more thing I was gonna say that made WeWork, to answer your question, it's the team. The team was so dedicated. The team believed so much. It was their, it was their essence. It was their experience of being part of something greater than themselves. And when you can bring a group of people together to all run in the same direction, you almost can't stop anything. Give you an example. It's our second WeWork building. We need to do, we need to do the, the floor. We only had, uh, ninety thousand dollars. We didn't have any more money. And all the quotes were two hundred thousand dollars a floor, whatever the number was. And I said to Miguel and to the few people there, "We have to do it for this price." And they said, "You can't. We got five quotes. It's not the price." I said, "Well, how much is the floor?" And everybody's like, "The floor is between thirty to forty-five thousand." Were these wood floors. It was an important part of the design. I said, "Why?" They said, "What do you mean, why? These are the quotes." I said, "Well, can you break down the quote for me?" They said, "What do you mean?" I said, "Well, how many pieces of floor? How many nails? How much glue? How much rubber? How many hours of work per person? How much does each person cost?" No one could answer. Said, "Okay, I have a idea of how we can negotiate this differently." I called the top three guys and said, "Guy, I would like you to in- to earn fifteen percent above the cost. I think that's a fair margin, fifteen percent. Do you agree?" He said, "Of course, I agree." It's like, great. And all three of them, by the way, said yes. I said, "Great. Well, I'm gonna need to see the cost of each piece. I'm gonna go quote it myself, and we're gonna get to fifteen percent." Very quickly, the cost went down to that first floor instead of thirty to forty-five thousand was twelve thousand. The guy says to me, "Adam, no one's ever worked with me that way." Before you know it, they joined us, and we had our own internal construction company, and we realized that only by controlling it could we get the right price and move fast enough. So it's not taking no for an answer, but also using logic to really look into it. Now, it could be that if I looked into it, I wouldn't have been able to get a better price. But what I'm describing is the challenge in construction in general and globally, and it's part of the things that Flow is solving today.
- SBSteven Bartlett
Elon would call that, like, reasoning from first principles. I, I had a similar story-
- ANAdam Neumann
He would. He would call it like that. And, and from what I know, uh, in Flow, we look up to Elon as an entrepreneur. We think he's unbelievable. And whenever someone gives Elon as an example, say, "No one is Elon." No one... That's not an example we use.
- SBSteven Bartlett
Mm-hmm.
- ANAdam Neumann
We just, we look at him for inspiration. I happen to know that he can put an engineer, 'cause I have a friend whose daughter works for him in SpaceX. He can put an engineer to work on one problem for six month, one screw, one connection, but the result ends up being not twice as simple as anything NASA has done, but, like, five hundred times as simple and cheaper and faster and lighter. So yes, it's going back. You can call it first principles. You can call it asking every question. But if you're the entrepreneur and you're gonna run, or if you're an employee or a partner, ask why.
- SBSteven Bartlett
People don't because they don't wanna be rude or inconvenience others, or they're too concerned with being liked. So pushing back on a supplier or, you know, conventional status quo in any way is seen to be inconvenient.
- ANAdam Neumann
I'm gonna try to say a different reason why they're not. 'Cause they don't ask themself why. It's gonna go back. This discussion can keep going back to the same basics. A person who's comfortable asking himself why is he doing something, questioning himself or herself, seeing negative things, seeing problems, and then enjoying the process of growing out of them, will have no problem asking someone else why. And whenever you ask someone why and they don't wanna answer you, what are you hiding? This is a discussion. I usually, when I go into topics like this, start by telling the vendor, whoever it is, "I want you to make money." No, no one's trying to make you lose money, but, but we're on a mission, and if I'm gonna pay even twenty percent more than I should, then that's twenty percent less of another building, another community, another neighborhood that Flow is not gonna take part in.
- SBSteven Bartlett
This really does, uh, make a lot of sense to me. We have this, um, Slack channel in our company called Paper Walls, and the whole idea is that we're trying to encourage our team to push on paper walls. A paper wall is something that looks solid, but y- reveals itself to be completely made of paper the minute you try it, you ask why, you push on it. And there's a, a story of a, a kid that worked for me in one of my companies for four years, and, um, he animates video. I said to him, "How long is it gonna take you to animate a video for us that's thirty minutes?" He said, "It takes nine days." Right? He worked for me for four years. It took him nine days to animate the video. We decide we wanna launch a weekly channel. I need him to do it in three or four days max so that the rest of the team can do it. I say to him, "How long is it gonna take you?" He says, "Nine days." And then, because we had established this culture in our company of pushing on paper walls, I said to him, "Why?" And do you know what he said to me? I think I said something like, "What would it take to do it in two?" [chuckles] And he went, "Steven, you just need to buy me a new laptop. I have an old laptop." I thought, "Fucking hell, I've been paying him for four years, and he's been-- Think about how much time I've lost in those four years just simply because I didn't ask that question." But also, to your point, he never mentioned it. He never knew he was in a paper wall himself.
- ANAdam Neumann
First year of WeWork, we opened one building.
- SBSteven Bartlett
Hmm.
- ANAdam Neumann
Year nine of WeWork, we opened two buildings a day in a hundred and thirty cities, fifty countries, seventy languages, a hundred thousand square foot per building, so that's two hundred thousand square foot a day, twenty thousand square meter for your European listeners, a day. A lot of the same people who are only capable of doing the one and two particip- were leaders by that time of, of being able to do one of the fastest physical global growths the world's ever seen. Same people. As you learn to, in your words, go through paper walls, as you learn that anything is possible, suddenly this is the secret of high growth and momentum. Whatever you can do today, if your company starts growing fast, you'll be shocked what you'll be able to do in three months, nine month, and in two years, you're gonna look back and not believe that that was your capacity. And I keep telling people, and they tell me, "Oh, I can't do this, and this takes three months." I say, "Guys I've seen this done before. Forget I know we can do it. It's easier now. I've already been there. Now you just need to believe. It goes back to the belief. Then we're gonna need to put the systems and the processes and, and today with technology, and this is where I think AI is very exciting, you could shortcut a lot of these things and, and do a much better work. But back to what you said about your company, I bet... When's the last time you sat with them in a circle? How many employees?
- SBSteven Bartlett
About 200 in total.
- ANAdam Neumann
200 is a big number.
- SBSteven Bartlett
Mm-hmm.
- ANAdam Neumann
But if you took 30 of them-
- SBSteven Bartlett
Mm-hmm
- ANAdam Neumann
... sat in a room-
- SBSteven Bartlett
Mm-hmm
- ANAdam Neumann
... and actually asked them, "What are you working on personally? What is your internal paper wall? What is your internal challenge? What's stopping you?" And they got comfortable talking about it, and then as a group, first of all, all their peers would hear, and before you know it, their peers would help them. "Hey, I remember that you said that this is a challenge for you. You're insecure. You don't talk in public. You're a little judgmental. You're too hard on yourself." Every person has another story. Before you know it, the moment you get them used to grow internally, it will affect your business to grow externally. In WeWork, the business grew faster than I could grow. That's where everything went wrong. I actually think whenever a company grows faster than its founder, one of two things will occur: either it will crash, because that's what happens, or if somehow miraculously that founder is able to keep it all together, in my experience, they're not fulfilled and happy. And if they're not fulfilled and happy, why do it?
- SBSteven Bartlett
How important,
- 44:24 – 47:45
Why Hard Work Still Matters
- SBSteven Bartlett
for the founders listening and for the people that wanna build or become, is hard work? 'Cause there's a real debate around hard work. You know, some people say, you know, work-life balance is, is the ultimate. Some people say if you're a founder, you've gotta give 100-hour weeks.
- ANAdam Neumann
Ah, I... By the way, new answer to that question. It is the most important thing, but we have to define hard work. Hard work as a founder is not just limited to how many hours you put in the office. Hard work as a founder is how much time do you put on the business, how much time are you putting on yourself? As you grow, you will be a better leader. You will be a better money raiser. You will be a better express- You will express your business better. So hard work is the only way to do it, and you can't be 50%. And here's something else that your founders know. When I had to decide if I'm doing Flow again or not, the reason it was so hard is 'cause I knew that there is no such thing as being 80% in or 90% in. Either you are 100% in and you're all in or it's not gonna work. So how important is hard work? Most important thing. What is hard work? Some of it is on the business. Some of it is on you. If you're married, it's also on your relationship. If you have kids, it's also with your kids. By the way, for those listeners who have kids, if you're ever wondering what you need to work on, just listen to your kids. They know.
- SBSteven Bartlett
There you were alluding to this, like, sort of magical thing that happens when one focuses on something. You were saying if you're, like, 90% in it, like, doesn't work, but if you're 100% in, it works. What is the, the magic w- that is unobvious with that?
- ANAdam Neumann
When you're 100% in, there's no time for doubt. There's no time for questions. There's no time for fear 'cause you're so in it. [laughs] When you're, "Oh, I can find this work-life balance while doing it," you're not gonna do something great, and if you are, if you were to achieve something, it's not close to your potential. But again, I'm redefining what 100% in meant. We talked about Warren Buffett. Was he not 100% in? Of course he is. Does he have a full schedule? No way. He keeps it open so he can have the important meetings, so he can read, so he can connect. There are different ways to be 100% in, but you must in life, in my opinion, be 100% in. It's why I love surfing. In surfing, when you're on the board on a wave, if you're not present and you're not in flow, you're knocked off that board.
- SBSteven Bartlett
What about founders that are doing two different businesses, pursuing two different missions? Do you-
- ANAdam Neumann
Remember what I told you we say in Flow? You're not Elon. I would tell them, "You're not Elon." Elon can do two different. Very few people. I know, I- He's one of the only examples I have. Jack Dorsey. Some of the best on the planet can do. But, uh, it's very hard to do two businesses at the same time. It's hard enough to do one.
- SBSteven Bartlett
And I guess even in those cases, they built up tremendous resources by doing one really, really well.
- ANAdam Neumann
Again, my question about, I don't know which founder you're thinking, but you've met people like that. Really where I-- When I've met people doing two that are somewhat succeeding, they're spending no time on their own personal growth. So the extra time they have because they did their first business so well, they're using it to do another business, which usually in my experience is an excuse not to actually experience life for what it is. If you're already doing one and it's meaningful and it's fulfilling, why do you need another? What are you hiding from? What is it that you're not actually doing would be my question. Now, if they, maybe there's a, maybe they're a miracle.
- 47:45 – 53:09
Ads
- SBSteven Bartlett
[paper rustles] Hello, I wasn't able to make that finance meeting. Can you tell me what I missed? What I have in front of me is Wispr Flow's new Notetaker, and for me it's been an absolute game changer. I spend most of my life sat in very, very long meetings with lots of different teams and lots of different departments. In any given week, I could have 40, 50 meetings and sometimes more. But also I sit in podcasts where lots of very interesting things get said and I need to focus on the conversation. What Wispr Flow's Notetaker does for me is it captures the entire context of everything that's happened throughout my entire week. It labels who the people are that said what, and I can ask it for things that I might have forgotten, for actions, things that I said I would do that I haven't yet done. It's building this sort of broader context of everything that's happening in my life, and it's an incredible, incredible superpower. I love the fact that so many of you come up to me in the street because you know I'm an investor in Wispr Flow and tell me how much it's changed your life. It is the worst-kept secret in productivity. If you wanna give it a go, head to wisprflow.ai/stephen to download it right now and give it a try. And once you try it, I think you'll realize why we let them sponsor this podcast. It's amazing. I, um, have a stat here that genuinely shocked me. It says that sales teams spend about 50% of their time on admin and manual CRM updates rather than selling. That is deadly for their bottom line, and that is part of the reason why a decade ago at my previous company, I switched to using Pipedrive, who are our sponsor. If you've never used Pipedrive, it is an intelligent AI-powered sales CRM, and they just launched new meeting intelligence features like an AI note-taker built right into the CRM. Pipedrive now automates more of the admin that stops you from doing the work that you love to do best. Before your meeting, it pulls deal history, email records, and previous conversations into a single brief so you're prepared, and it joins your meetings with you. It's in there to take notes, so you don't need to, and it turns those notes that it takes into accurate auto-draft CRM updates. 100,000 companies are already running their sales on it. You can sign up at Pipedrive.com/ceo, where you'll get an exclusive 30-day free trial instead of the usual 14 days. Absolutely no credit card needed. Just head to Pipedrive.com/ceo to get started. If you're in sales and you run a sales team, I don't think you'll regret it. [paper rustles] We often say, you know, on one end, you're saying, "Go fast," and I hear that from great founders like yourself and Elon and those guys. They say, "Go fast. Push on paper walls. Go as fast as you can." But then also, there's other areas where you go, "You have to go slow to go fast."
- ANAdam Neumann
But also know your weaknesses. I obviously did not succeed in building great technology in WeWork. That is a known fact. So if I'm gonna partner again and I'm gonna build a business larger than WeWork, put the right partners.
- SBSteven Bartlett
Know what you don't know.
- ANAdam Neumann
Know what you don't know and let them lead. When we hired our CTO, we had four different CTOs. I let Ben do the final interview.
- SBSteven Bartlett
Okay, uh, this is what I was gonna ask because one of the things I hear from founders a lot is they know they don't know X, let's say it's finance, and then they ha- they do an interview with someone and the, the person says, "I'm the best at finance." They have no idea if they're the best at finance because they don't know finance, the founder. So what did you do to mitigate the trap of accidentally hiring someone that you weren't able to assess their competence?
- ANAdam Neumann
I chose partners that say the truth. When Mark and Ben and I do a board meeting, and Mark is our board member and Ben joins us-
- SBSteven Bartlett
For context, I should say, uh, Mark and Ben are t- two of the world's most famous investors, and they have backed you with your new venture, Flow. Um, yeah, just for context.
- ANAdam Neumann
Mark and Ben have invested $470 million into Flow at the Series A and Series B, and I, Adam, and my family personally invested $350 million. 'Cause part of when we created the, the, the business together, we wanted to be aligned. We buy together. We sell together. We do everything together. We have our board meetings. They usually start at 8:00 AM. They end at 5:00. Very long board meeting. We talk about everything. We love it as a team. We really respect them. We truly prepare for these meetings. We don't spend too much time 'cause, again, we are really busy. Don't have time. So it's not like we spend a month. We go f- a week before, look, take stock of everything we did that quarter. It's always shocking to see how much you did 'cause when you're not really measuring, you're just doing.
- SBSteven Bartlett
Mm-hmm.
- ANAdam Neumann
When you stop for a second and look what you did, like, "Wow, we did quite a lot in three months." So very useful. We put together our board decks. We send them to them a few days before. They actually read them, and then they come for the meeting, so it's like 8:30 to 5:00. And then when it's done, I go to dinner with the two of them, and the dinner starts by me saying, we sit down, usually wherever it is, "Please tell me what I can do better." And the first time I asked them, they were a little bit uncomfortable. The second time, I literally remember Mark going like this, Mark Andreessen, like this, like he was ready.
- SBSteven Bartlett
[chuckles]
- ANAdam Neumann
Ben taking out his notes. That's a true partnership, and we do it every single time. And when you have the privilege, so you said some of the biggest investors. In my opinion, a16z, number one investor on the planet. And if you're an entrepreneur today and, and you can, that's where you want your money from. If you're an entrepreneur today and you take it from Benchmark, the company that took me out, that took Travis, superstar, out, Jack Dorsey out-
- SBSteven Bartlett
Travis from Uber, Jack from-
- ANAdam Neumann
Travis from Uber, Jack Dorsey from-
- SBSteven Bartlett
From Twitter
- ANAdam Neumann
... Square, Twitter, Block, and, and many more. And many more. So when you choose your investors, look at their history. Are they the kind that support entrepreneurs like you? Are they gonna take you to the next level, or do they have a history that actually clashes with the entrepreneur? If they have a history that clashes with the entrepreneur, park now.
- 53:09 – 55:27
What Makes a Great Team Member?
- SBSteven Bartlett
So there was two, two key things I pulled out from there. The first was around this idea of, like, knowing when to go fast and slow, and you used technology as an example. The second thing, which was, opened up the story about, um, a16z, is the right people and partners.
- ANAdam Neumann
So important. More. If I had to choose one, right investors, right employees, right partners, most important thing.
- SBSteven Bartlett
What did you learn about employees? Like, what is a great team member?
- ANAdam Neumann
If I have a problem with an employee, there's only one person to blame, and that's me.
- SBSteven Bartlett
And what are the mistakes that you made in choosing employees?
- ANAdam Neumann
I think it's how I was leading that I've been learning more about. Where I used to lead from top to bottom, I now am learning how to lead bottom to up.
- SBSteven Bartlett
What's the difference?
- ANAdam Neumann
Top to bottom means you think because someone reports into you, they have to do what you say. But it's not true. This is not a dictatorship. They have free will. They can go work if they're tale- If you hired someone, they're really talented, they'll go work elsewhere, especially great leader. The more talented they are, the more the top to bottom does not work. They, they won't be willing to do it. They shouldn't. Great talent is not willing to be managed like this. Great talent wants to be inspired, wants me to see the full version of themselves even more than they see it, and they want the room to make mistakes, but also to grow. But they also need feedback. If you have someone amazing and they're fucking up... Sorry. They're mis-
- SBSteven Bartlett
You can swear. Doesn't matter.
- ANAdam Neumann
I can swear. Yeah, my kids are gonna listen. It's all good.
- SBSteven Bartlett
[chuckles]
- ANAdam Neumann
They're fucking up. Are you gonna tell them? Or because you're not comfortable with conflict, you're gonna wait for 90 days, and every time they're gonna make that mistake, you're gonna get so upset that by the time you communicate to them, it's too late? The moment they made a mistake, if you respect them, give them the feedback 'cause that's the best thing for them. By the way, when you give them the feedback, give them room to give you feedback. If you're gonna manage these employees and you wanna attract the best talent in the world, remember that power comes from influence, not control. If you think they need to do what you said because you're their boss, you've already lost, and it's a matter of time till it doesn't work out. If they're okay with it, just because you're the boss, you have to tell them what they do, and they accept that power, they're not the right employee for you, and you're not the right boss for them. There's no chance you're getting the best out of them.
- 55:27 – 56:06
What Happened When He Met Masayoshi Son
- SBSteven Bartlett
One of the, um, parts in your journey that I have reflected on a lot because it's a fascinating story is the day that you meet Masa at SoftBank. And I'm, I'm keen to understand the context of where the business was before you met Masa at SoftBank. That particular story has always inspired me for a multitude of different reasons. Um, but where was the business at? Was it w- it was, um, what, 2017?
- ANAdam Neumann
I'm gonna tell you about the day I met Masa, and I'm gonna connect it to, I think, the biggest mistake I ever made in WeWork. I'll bring it together. Masa is one of the best investors in the world. He's also one of the biggest investors in the world. In my story, Masa is the hero,
- 56:06 – 1:14:51
How to Build Strong Foundations Before You Scale
- ANAdam Neumann
even though a lot of people who didn't know the story correctly might have misunderstood. So in my story, Masa took a bet on me, and, and he did amazing, and he deserved to have become very successful from it.
- SBSteven Bartlett
And he leads SoftBank.
- ANAdam Neumann
Masa is the leader of SoftBank, so if you want a little history of Masa, Masa is the h- leader of SoftBank. He becomes very well known to the world where he buys a tech conference, actually, in Vegas, and he buys this tech conference for, I think, about eight hundred and eighty million. And at the same time, he has his own tech businesses, and he owns a phone company, and he starts growing and growing. He's famous to have gone to Steve Jobs and said, "I'm gonna take the iPhone." When the iPhone just came out, he knew it was gonna be a hit, "And I'm gonna give it to every subscriber in Japan." He invents the leasing model for it and gives an iPhone. Then everybody signs to his service 'cause everybody wanted the iPhone. So a lot of things. And then he gives Jack Ma twenty million dollars that over time, I think, becomes two hundred.
- SBSteven Bartlett
For Alibaba.
- ANAdam Neumann
For Alibaba, which at its peak is worth about eighty billion.
- SBSteven Bartlett
Wow.
- ANAdam Neumann
So at the time when I meet Masa, this is 2016. Let's start with the night before. The night before I meet Masa in New York City, I have a board meeting the day before. This is the old board, and we're all sitting together. I just raised at sixteen-- I raised maybe six month before at sixteen billion valuation.
- SBSteven Bartlett
How big is WeWork?
- ANAdam Neumann
It's about to do that year about nine hundred and fifty million in revenue. And the reason I know is 'cause WeWork doubled in revenue every single year. So WeWork, the business model was working very well, and the four walls were working very well.
- SBSteven Bartlett
What's the distinction, sorry, between the four walls and everything else?
- ANAdam Neumann
When you have a retail business, you could have your stores could be doing really well-
- SBSteven Bartlett
Yeah
- ANAdam Neumann
... but your state not making money.
- SBSteven Bartlett
And your what's not making-
- ANAdam Neumann
State, the co- the-- So let's say you're in New York City. So let's talk high growth for a second. When you're growing as fast as we're growing, you're always putting new buildings on the map.
- SBSteven Bartlett
Yeah.
- ANAdam Neumann
A new building has a ramp-up.
- SBSteven Bartlett
Ah.
- ANAdam Neumann
Usually ramp-up of a retail store or a food or a restaurant could take two years, three years, and we like to talk about ROI, return on investment, and how long does it take.
- SBSteven Bartlett
Mm-hmm.
- ANAdam Neumann
A great time to return your investment would be twenty-four month, thirty-six month, and then it can grow. WeWork, at its peak, was returning its money somewhere between six month to nine month, and then afterwards it was going up to twelve month and eighteen month. So if you're gonna grow, we, we grew New York City to a hundred and thirty buildings. So you can have thirty buildings. If the following year you're adding thirty more buildings, those new thirty have to, per definition, lose money for at least the first six month, if not nine month. So you could be very profitable in these buildings, but not profitable in these 'cause they need time, which means this-- New York City, the city, doesn't look as a city profitable, or the country, if you're looking at your P&L, doesn't look as a country profitable. Which is why in a high-growth business, you gotta get very specific and in the details, and you gotta really understand what's working, what's not. Even in a building, you can have one floor that's profitable 'cause you opened it first, and the new floor that you opened after, not profitable yet. WeWork's technology was never able to count this way. Flow's technology, if I threw it on WeWork today, I could tell you which square foot is pr- forget which building is profitable or which floor is profitable. I could tell you which corner is pr- it knows everything 'cause it's a connected system. It's not disconnected. Back to what we were saying. I'm sitting with the board, and we decide that we wanna turn the business. We're gonna go out and raise money, turn the business profitable, and take it public.
- SBSteven Bartlett
How are you gonna turn it profitable?
- ANAdam Neumann
All you have to do in a high-growth business that's working to turn it profitable is stop growing. You just stop adding new buildings, and you give time to all the buildings to catch up. Remember I explained that in WeWork, your problem was not demand. It was supply. So the moment you don't add more supply, the demand is greater than the supply, everything fills up. The moment everything fills up and you didn't add anything new, you go cash flow positive, as simple as that. So we sit in that board, and we decide that I'm going to go and raise, and the number was three to four hundred million, stop the growth, meaning stop signing leases, maybe even move to management deals, something we'll talk about in Flow in a second, and, and then take it public. This is 2016. That was the, the day before. The same time, at some point, Masa's right-hand guy, his name is Ron Fisher, sends a email, a text to one of our guys and says, "Hey, Masa wants to come see Adam." This is at the same time that Masa is raising the Vision Fund. For those who don't know, the Vision Fund was his hundred billion dollar venture fund, largest venture fund ever raised. "Masa wants to see Adam." We say, "Great," and we schedule ninety minutes in the morning, the next morning. And we do, we do the-- We get ready in the morning. Masa is coming. Everyone's excited. And I'm like, "This is amazing. Maybe that investment we just talked about yesterday will come today." His team says, "Just to let you know, there will be no discussions of investing." I say, "Okay, no problem." As it gets closer to the morning, we keep getting text messages. He's not gonna have 90 minutes, he's gonna have 75 minutes, he's gonna have 60 minutes, he's gonna have half an hour. And I'm like, "Okay, whatever it is sounds great." At the same time, President Trump wins for the first time. This is the end of December, and Masa had a meeting with him. They wanted to talk about the future of America. He said, "I'm so sorry. I have a meeting with Trump, President Trump, and I only have 12 minutes." Again, we all find ourselves in situations like this when, oh my God, I had all this planned, and I was gonna do this tour, and I was gonna show these numbers. I'm gonna do all these things, and suddenly it all changes. I take a deep breath. [inhales] Let's make it the best 12 minutes we can. But I can't help myself. I go, "Tell me something, Masa. If you're meeting President, uh, future President Trump, do you have Jared Kushner introducing you to him first?" He goes, "Adam, it's so funny you're saying that. Everybody told me that it's better if Jared introduces me. I don't know him. We've been trying to get in touch. No." I said, "Give me a second." I'm very lucky to, to count Jared as, as one of my close friends.
- SBSteven Bartlett
Jared's married to Ivanka Trump.
- ANAdam Neumann
Jared's married to, Jared married to Ivanka Trump, and he's the advisor, I think, to the president. But right now he's helping do peace both in the Middle East and in Europe. So I text Jared, and I was like, "Masa is here, ta, ta, ta, ta, ta. Will he spend five minutes on that?" Jared says, "No problem. Send him. I will introduce him to the future president." Now we have seven minutes left.
- SBSteven Bartlett
[laughs]
- ANAdam Neumann
I say, "Masa, we only have seven minutes. We're only gonna stay downstairs, but this is WeWork." And he looks at me. He goes like this. [inhales] Smells there. He goes, "You know what this smells like?" And I'm like, oh, no, what is he gonna say? They, they were serving waffles that day. Is he gonna say it smells like waffles? It's like, what is he gonna say? He goes [sniffs] , "Smells like dreams. This is a fact- WeWork is not an office space. It's a factory of dreams." And I'm like, "Whoa."
- SBSteven Bartlett
He's speaking your language.
- ANAdam Neumann
Oh, no, not my language. One step above my language. He took, [laughs] he took the dreamer and went one step above the dreamer. He outdid the, he, he Adammed Adam.
- SBSteven Bartlett
[laughs]
- 1:14:51 – 1:15:33
Ads
- SBSteven Bartlett
There should be a button just down below here, and if it says subscribed, you're already subscribed. If it says subscriber, that means you're not yet. And if you're not subscribed, please could you do us a favor and hit that button? It helps the show more than you know, and according to the algorithm, you're someone that watches our show, but you haven't yet hit that button. Thank you so much. I'm thinking also about a founder that's 21 years old. They've got a startup or an idea that they wanna start. They're-- Like, like when I was 21 years old, my mom tells-- well, 18, "If you do this, I won't speak to you again." It's a, you know. She was warning me against business because she had struggled in business herself. So I go, that's a proxy of love, I guess. And then you've got other people here telling you that it's gonna be amazing and you're gonna make millions. When you're in that situation and you've got noise, how do you find the
- 1:15:33 – 1:16:01
How to Find the Signal in the Noise
- SBSteven Bartlett
signal
- ANAdam Neumann
Two ways. One, they have to go back to the mission. So if one had the mission, and then someone off-- someone offers them something, and it's off mission, and you're like, "Oh, I'm gonna do it anyway because it's good money," but it's off mission, that already is a warning sign. But I think the other one, which is something that I have more today than I used to back then, one needs a practice. Part of the way to drown the noise is with a practice. I've been enjoying
- 1:16:01 – 1:35:41
Who Should You Listen to When Everyone Has an Opinion?
- ANAdam Neumann
meditating lately in the past year, and I've been getting better and better at it, and meditating is something that takes time. Meditating helps drown the noise, and then the thoughts that I do get while I meditate tend to be very healthy thoughts that are headed in a good direction. Uh, I-- there's many th-- I do the hyperbaric chamber.
- SBSteven Bartlett
Steve Jobs talked about meditation and his sort of spiritual practices, and it's something that I, I actually in the last year I started really looking into. Um, when I say looking into, I mean, I started looking into what he did and why he did it. Because he's someone that I look at and go, it was like he was able to see around the corner. And in-- for a guy running a big company, how was he able to make these really unpopular calls today that proved out to be true tomorrow? And, you know, one of the conclusions I arrived at is that he spent just as much time in the trenches as he did in the clouds. i.e. he st- stood away from the picture enough so he could see the full picture. And that's something that I thought, oh gosh, that's-- it kinda cor- correlates to what you were saying earlier about your redefinition of hard work. Not just being in the office and being there, you know, twenty-four seven, but actually when you're on the surfboard, you're doing hard work because you're giving yourself time to see the full picture.
- ANAdam Neumann
And when you're honest with yourself about your weaknesses, like I spoke about my speech, it can elevate things, but it could also break things. We've seen that happen before.
- SBSteven Bartlett
Mm-hmm.
- ANAdam Neumann
So hard work is also-- personal growth is very hard work, and most people don't have the courage to even look in honestly, let alone change.
- SBSteven Bartlett
What is the exact mechanism that you think would result in me being more successful at 40 in business, let's say, if I did exactly what you said and focused on personal growth?
- ANAdam Neumann
We're gonna have to start by redefine-- the moment you said in business, I'm gonna have to push back on it. We are not gonna measure your success just in business. We're gonna measure your success in life, in relationship, in friendships, in effect on the world-
- SBSteven Bartlett
Mm-hmm
- ANAdam Neumann
... and in business.
- SBSteven Bartlett
Do you know why I'm asking this question? Because there will be some people that are listening right now, and they have heard, you know, founders come on and people say, "You need to just take a moment, meditate, do these things, focus on personal growth." And for whatever reason, because of their trauma, because of how they were raised, the lens that they will receive that message through or the thing that will be the carrot will be a promise that it'll make them better at the thing they currently care about. Now, we might be tricking them a little bit because we're gonna get them to do the work, and they'll realize that other things matter. But just for those people that have that lens-
- ANAdam Neumann
No, I'm gonna-- we're gonna have-- we're gonna say something, and I hope people have said it here before, but I'm not sure they did. But tell me if people said it. We're gonna-- all these founders that are listening, falling is not just okay, it's the best thing that ever happened to you. If these founders can all redefine success, think about if in school, instead of learning about all the successes. Spoke about Steve Jobs, and he's a real hero of mine. But would I have wanted his life? How old was he when he passed away? How was the relationship with everybody around? How did he affect people? Now, I don't know. I wasn't a friend. I don't know him, and I am not judging or measuring. I'm just telling you, we cannot measure a person just through their business achievements. We must look at people holistically. So I'm telling all these young founders, forget take time to meditate. You asked how I do it, and I s-- how we quiet the noise, and I answered meditation. But that is not my first advice to them. My first advice to all of us-- By the way, you talk a lot about 20-year-old, one-year-olds. With AI coming in, everybody's about to be a founder. Everybody can start a business. It's true for everyone. It's true for 12-year-olds, and it's true for 60-year-olds. This is for everyone. Have the courage to actually look inside and say, "Where can I become a better version of myself?" Don't work on three things. Work on one thing And choose that thing and work on it. And by the way, if you do, when you fix it, how are you gonna know that it's better? 'Cause you're gonna see the next thing you need to work on. It is like an onion, and every time you peel it, you will see another layer and another layer and another layer. That is the advice I'm actually giving them, and I'm promising them that if they look deep enough, what they're gonna find is their calling. And when they find their calling, when you match that calling with that energy of wanting to be a founder, that's when everything works. As we are able as human beings to do that, find our true journey, find our flow, the world is open for us.
- SBSteven Bartlett
So let's zoom back into the story. You're walking down towards 18th Street. Um, you've just raised all this money. You feel like a king. That's the way you're gonna-
- ANAdam Neumann
No, just on paper, right? We're just, we're just saying. It didn't actually happen yet.
- SBSteven Bartlett
Only on paper. What was, um... You said over the next y- you s- that was the start of the end. Over the next three years, decisions changed. Specifically in terms of business-
- ANAdam Neumann
It became about money
- SBSteven Bartlett
It became about money.
- ANAdam Neumann
It became about valuation.
- SBSteven Bartlett
And that was a s-
- ANAdam Neumann
It forgot the mission
- SBSteven Bartlett
And that was a slippery slope.
- ANAdam Neumann
It's not my truth. It-
- SBSteven Bartlett
And that means that you, you grew even faster. You opened up even more leases.
- ANAdam Neumann
We blew up. We grew. We went even faster. We were going-- We went really fast. We went f- we went very fast.
- SBSteven Bartlett
One of the things that I, I read or something from when I was doing the research is that you had lots of sort of tangential ideas at that time, maybe because of the money, things like surfing and-
- ANAdam Neumann
Fake news.
- SBSteven Bartlett
Oh.
- ANAdam Neumann
This was before WeWork ever started. I had all these ideas. Anybody who tells the story that we had a lot of ideas in 2016 'cause we raised money doesn't know that this was done before WeWork ever started in a green desk office, and all the ideas we had were right here.
- SBSteven Bartlett
This doesn't look like focus to me. I feel like if I showed my investors this now, they would shout at me.
- ANAdam Neumann
Could be.
- SBSteven Bartlett
[laughs]
- 1:35:41 – 1:51:38
Why Focus Is Essential for Success
- SBSteven Bartlett
I watched where Jony t- I've s- I've sent it around for the last couple years to all of my team. Jony says Steve had this remarkable ability to focus. And he said focus isn't saying no to things you don't wanna, remotely don't wanna do any way. It's saying no to things that with every bone in your body you want to do and you wake up thinking about, but you say no to them because we're gonna do this. And famously in Steve Jobs' story, when he came back into Apple after being fired, he was sat in a room with all of his executives. They've all got a million-ish initiatives they're working on. And famously, he goes up to a whiteboard and draws four things. Like, I think it was a four quadrant thing. And he says, "This is what we're gonna do. Everything else is canceled."
- ANAdam Neumann
Canceled it.
- SBSteven Bartlett
One of the things that I concluded from the, the, the period after you'd raised all this money was that there was a lack of focus 'cause you ended up doing lots of things at the same time, and that's something that I find myself almost at, like, the foothills of being tempted to do. So that's why I wanted to ask you the question, like [laughs]
- ANAdam Neumann
Let's, let's, let's answer it. So first of all, we talked about superpowers and super weaknesses. I cannot tell you that my superpower is focus.
- SBSteven Bartlett
Okay.
- ANAdam Neumann
It's, it's not, not, not my superpower. I actually have the opposite of it. My challenge is, and Ben Horowitz and Marc Andreessen helped me understand this, I'm very good at zero to one. So the problem with many pe- many entrepreneurs have a lot of ideas. The problem with me having a lot of ideas, they actually become a reality.
- SBSteven Bartlett
[laughs]
- ANAdam Neumann
So one entrepreneur has... Ben was telling this to me. He said, "Another entrepreneur is gonna come with nine new ideas. In the next board meeting, maybe he did one of them. You have nine ideas. We didn't say anything in the board meeting. We come next board meeting, there's nine new businesses." So focus is something that I need to work on. So now let's go a little deeper, and this is how I do my own personal growth. I'm a creator. I'm not a protector. I'm really good at creating. I'm not that great at protecting. Rebecca's grandfather famously said, "It takes one lion to make a fortune and 10 lions to watch it." His name was Andre Hertz. One lion to make a fortune, 10 lions to watch it. Very smart saying. Because I'm now aware that I'm more a creator than a protector, there needs to be someone else around the table on the team whose job is to say, "Adam, sounds great, and maybe we should do it in three months or in six month or in nine month. But right now we really need to focus, not on one thing, I'm not a one thing kind of guy, but let's say on three things." Where other people can only do one at a time, I'm probably very good at three to five. But once you go above that number, 10 to 15 Which I could fall into that trap, not going to succeed. So for me, with my personality, I would have to surround myself with people I trust to say no.
- SBSteven Bartlett
Did you have that at WeWork?
- ANAdam Neumann
A little, but not really. Because again, remember back to that horrible moment where I walked back into the office and the ego got the best of me. What happens next when you lose yourself? You start attracting the wrong people. So the people that were hired after that were just there for the money. The energy that was being projected was, let's go public. Let's do this. Let's do that. The energy that's projected was wrong.
- SBSteven Bartlett
You filed for an IPO and I think SoftBank invested a further $2 billion into WeWork.
- ANAdam Neumann
So you really are trying to get to the story. The challenge with what you're trying to do is there's so much context to the story missing. I'll give you the little piece.
- SBSteven Bartlett
At the high level.
- ANAdam Neumann
No, I understand. I'm all good with that. I'll give it to you if this is your podcast.
- SBSteven Bartlett
No, no, no.
- ANAdam Neumann
Hey, Abel.
- SBSteven Bartlett
I'll tell you what I want to get. I just want to understand.
- ANAdam Neumann
Tell me where you're going after and then I'm going to tell you something that I mentioned once, but no one has your viewership, so we'll mention it again.
- SBSteven Bartlett
I want to close this now.
- ANAdam Neumann
Yeah, I'll close this for you. I'll close this for you. So Masa gives the money.
- SBSteven Bartlett
Yeah.
- ANAdam Neumann
We lose our mission a little bit, but he's very clear what he wants. He wants the fastest. He wants the largest company on the planet.
- SBSteven Bartlett
A trillion dollar company.
- ANAdam Neumann
I can deliver big company. I can by then, back then, by the way, no one said numbers like that. Today, we've seen companies five years old that are getting to those numbers. Look how the world's moving. What was impossible and no one could talk about and made fun of 10 years ago suddenly is everyday reality. Not a big word anymore, but it's a huge number, obviously, and very few companies are going to be there and stay there. But more, as time moves forward, more and more. Masa invests and the money ends up coming in only in 2017. Takes quite a long time between when the investment is offered in 2016, that piece of paper, to the money coming in in 2017. But we deliver on our $960 million in sales. And the following year, we deliver on our $1.8 billion or $1.92, whatever the exact number we said. We hit our number. And Masa comes and says, wow, you really delivered on your number. I said, of course, Masa-san, we always deliver on our number. And he said, well, Adam, I've invested with Vision Fund a lot of companies. Everybody promised me to double the revenue. You're one of the only ones who did it. I said, well, that's what we did. I said, well, so our expenses grew. I said, I have no problem with the expenses. When the time is right, we'll stop the growth and profitability will catch up. As we explained, that happens in businesses that are actually successful. And he comes and basically comes up with this idea. He says, how about we buy? Your investors are going to want an IPO and they're going to want an exit. They're going to want focus. I have no problem with how wide we're going. How about we buy the company for $20 billion? And this is the story that a lot of people don't understand. How about I buy the company? I'll give it a $20 billion valuation, which is very similar to the valuation he came in before. But I said, $20 billion, isn't it a little low? He said, no, no, $20 billion of actual cash. We'll give $10 billion to the investors and we will put $10 billion on the balance sheet.
- SBSteven Bartlett
In the bank account, basically.
- ANAdam Neumann
In the bank account. You, Adam, won't sell. Your employees can sell some so they make money. All the investors are out. You and your management team will go down to 30%. Me and the new me, SoftBank, Vision Fund, whoever is going to do it, will own 70%. And when you hit goals that we agree, you and the management team will go from 30% to 51% and we will go to 49%. And I understand that we're growing too fast and I understand that we'll have too much expenses, but I'm putting my money where my mouth is and I don't care because I think this is going to be one of the biggest companies in the world. This happens, this is a very important part of the story. This happens in March of 2018. This is before the IPO. You can't bring this story back if you don't understand this part. March of 2018, he only invested. The money really came in in the middle of 2017 or like Q2. This is only a year after he's with us. He's on the board. He has two boards. They know everything that's happening in the company. No secrets. I take the offer to our board. Say, look at this amazing thing. 20. Remember, they invested pre-money valuation of $84 million. This is $20 billion. They invested at $84 million. By this point, they've already pulled out because of all the secondaries. They've already pulled out somewhere between $300 to $500 million. I'll check the exact numbers so you have it. Maybe even more. Maybe even $700 million by this. They've pulled out a lot. Whatever the number was, at least $350 million on an investment of $21 million. I take it to them. The offer. I said, Masa, sounds like a great offer. But I, Adam, am going to stay in the company, me and the management team, so we can't make a deal like this. So in boards, when someone has a deal that they're staying behind, you need to create a special committee. And a special committee is created. The board member from Benchmark and another board member that we had in the, that we had, which out of respect to him, I'm not saying his name. And they create a special committee. And they decide to negotiate a $20 billion all-cash deal that would have made money for everyone. Remember, Masa came in at $20. He's the only one who's not making money from this deal and he's staying in. Everybody else came in at $50 million, $100 million, $400 million, a billion. Everyone's making money. And there, and this word is a dangerous one, but it's greed. Because the company at that point is losing about $2 billion a year, forecasted to lose over $3 billion the next year. He knows the forecast. He wants to put $10 billion to give it run rate of three years so we can build whatever we want between the two of us. He'll be the majority shareholder. They say no and negotiate a $20 billion deal from March till October for a company losing $2 billion. Now, I don't know how you value companies. We could talk about how we should value companies because there are very valuable companies who are losing money, of course, at high growth. But still, they have a company losing $2 billion. Masa-san is offering them $20 in return for that pleasure. And they negotiate these two special committees, special, uh, board members. Now, I'm not part of it 'cause I'm staying in the deal, so I have zero part of it. In a normal world, if I were to sit on your board, and, and I'm sitting on your board and, and someone comes and gives this crazy offer to buy me and all the other friends out, and I invested in you now in this four hundred million, and you gave me a deal at twenty billion, and I'm making two, three billion on my fifty million. First, I come to you and I say, "Steven, thank you. Thank you for being such a great entrepreneur and doing this for me." That's number one. But number two, I say, say, "Steven, I'm a little offended that you don't want me with you anymore. Is this really what you want? And if you would tell me, 'Yes, Adam, this is what I want,'" and this is how a16z, this is why they're so amazing. They go with the founder. I will tell you, "Steven, it's not what I wanted, but I'm grateful for all the money you've made for me. You've worked extremely hard, and I wish you good luck. And maybe next time when you do your next business, come back to me again." They don't do that. They don't ask me what I want, what I... They negotiate 'cause they think they can push Masa from twenty billion to thirty. Their number was thirty-two billion. They don't know how they invented it. They were thinking a hundred billion. Remember, they're the same ones sitting around the board that never gave the feedback on the technology. Never. They've never done any of... They have one thing in their eyes and one thing only, and that's dollar signs. But the problem with greed and dollar signs, if you're greedy, you even lose what you have in your hand. So they're negotiating this twenty, but Masa from the first day said, "Guys, this is my final offer. There is no twenty-one billion. Twenty-- Even twenty is crazy. It's as high as I'm gonna go because I believe in Adam, and I believe in me, and we're gonna build together." They do that until October. And somewhere around Oct-- end of September, beginning of October, they realize he's not moving. Stock market is starting to go down and, and in Japan and this, and, and these growth businesses are starting to take a hit. They see that things are changing. Then they decide to engage and actually negotiate the deal. By the time they're done to documents, it's December 24th, 2018. SoftBank stock is really down for, for reasons that had nothing to do with us. There's no world in which they could do a twenty billion dollar cash deal, and Masa still stays in his place. And Masa calls me and said, "Adam, I'm so sorry. I cannot do the deal anymore." It was offered in March. Again, what these two board members should have done is gotten on a plane the next day, came to Masa Son, and said, "Masa, please sign. You know everything about the board. You're, you're in the board. You don't need any diligence. Here's our bank account. Here's the signature. We're disappointed we're not staying with Adam, but if that's what he wants and that's what you want, good luck to both of you. Thank you for the very fair price. We'll take our benchmark at the time, at least two point four billion they would have put. We'll take our cash and walk away." Now, now Travis said very-- In, in an interview I just saw-
- SBSteven Bartlett
Travis being-
- ANAdam Neumann
Travis Kalanick
- SBSteven Bartlett
... being the CEO of Uber, the, the founder of Uber.
- ANAdam Neumann
And he said that being an entrepreneur is like playing eight-dimensional chess. Being a venture capitalist is like watching the game. Again, remember, as you're choosing your investors, choose the one who play eight-dimensional chess, not the watchers. So they didn't do that. Masa calls me. It's December. He says, "I can't do the deal." And I actually understand him. I actually say I understand because they did waste all that time. Then I found myself in trouble because from when he offered the deal, remember, he was gonna have seventy percent, we were gonna have thirty percent, and the goal was a revenue goal that we needed to... We were already all working towards that goal. We signed the leases. We made the commitments. We were already rushing. We found ourself in a way that if we weren't to-- He gave the two billion because to try not to really ruin the business. He's already put a lot of money in the business already. We found ourself being forced to go public. So we actually went public when we weren't ready. That's what actually happened. So it's, it's very important, this piece of the story, because without that context, then you don't understand. And again, it's back to all the founders you're talking about. You gotta choose your investors wisely, because if you choose the wrong investors, when the time comes for that big move, if they're not gonna prioritize you, they're gonna do what's best for them, and everybody's gonna lose.
- 1:51:38 – 2:03:02
What Went Wrong at WeWork
- ANAdam Neumann
go there. The only reason a person in control chooses to step down is because they think that it's the best choice. At the time, and again, this is part, by the way, of the play... This is the same playbook, uh, now we're gonna say his name again, Travis, the founder of Uber, famously, Bill Gurley comes and puts a piece of paper in front of him.
- SBSteven Bartlett
He's Bill Gurley.
- ANAdam Neumann
He's one of the benchmark, um, partners. He famously puts a piece of paper in front of him, I think, and, and either you step down or we do this, this, and this, some threat that makes him step down. I have a different version of it, but they're pushing me very, very hard to step down, and at the beginning, I-I'm like, "I'm not stepping down." And then I have a meeting with one of the heads of the two biggest banks in the world, and he sits with me and he says to me, "Adam, if you step down, then we will fund, um, two billion dollars into WeWork, which will give it time to move profit- profitable. Step down, by the way, from being CEO, become chairman." And I, at the time, had personal debt, which is a story for another time, but I had personal debt of four hundred and sixty million to that bank and to other banks. And I said, "But what about my personal debt?" My board member was next to me, and the guy who runs my family office was next to me. We said, "What about our personal debt?" And he said, "Uh, don't worry about it. Uh, we'll, we'll figure it out." There was also an advisor to, to my board, and he came in front of the whole board and he said, "I spoke to the bank. They said it's all good. Everything will work out." So I stepped down out of choice because I thought it was gonna fund WeWork. I thought it was gonna take care of, of Masa. I thought it was gonna take care of the employees. I thought it was gonna take care of everybody, and it sounded like it was in the best of everybody. But I wasn't going away. I was just stepping down from being CEO and becoming executive chairman. I do the board call. I step down, and ten minutes later, a legal letter comes from the bank and basically says, "Because of your breach of contract," 'cause it's change of control, something very technical, something we talked about to them before and they said, "No problem," but we didn't have it in writing. "Because of your breach of contract and because you had the change of control, you now have fifteen days to pay us back our debt," that four hundred and sixty million, "or we will take your shares." And because of my super voting rights, my shares were five to one, which means that by taking away my shares, they would have taken control over the company. Now, what I'm describing to you, and you talked a lot about founders, but you didn't know a lot of the names. It's important to know the names and the history because I'm not describing to you something that happened for the first time. This famously happened to multiple entrepreneurs in history. This used to be the venture capital playbook. Today, there is a new crop of venture capitalists, and they're very different, but old school venture capital, this is, this is a, a lot of times, this is how it used to go. That was the surprise. That's how we found ourselves suddenly so low because we-- I stepped down because I thought it was the best for everybody, and the second after I did it, we got stabbed in the back. And the only lesson there, if you're gonna stab the king, kill. If you're not gonna kill, we're gonna take a deep breath. We're gonna learn our lessons. We're gonna know what's really important in life, and we're gonna come back again. And that's what actually happened there. And the only reason the story's a little challenging for you is because we never corrected it publicly. And the reason-- corrected some of it, but not all of it. And the reason we didn't correct it publicly, for what? The best way I can talk about the past is by what I do today, by how we're speaking right now, by how my kids are, by the businesses I build, by the nonprofit I do, by the friendships I have, by the relationships I hold. And the reason a lot of entrepreneurs come to take money from us, and again, we don't invest anymore, but we have a huge inbound of people wanting us to invest in them, is because we don't talk about our successes all the time. We talk about the lessons. Measure us by how we're gonna be next to you when ti- when time is very tough. So that's what actually happened there, and I found myself out of it very quickly. And from there, without making the story confused, Masa came. Masa saved the day. He paid the debt to all the banks, four hundred and sixty million. And in return, I gave him my control of the company. I gave him whatever shares in-- I gave him whatever he asked for because we were done and the company was done, and he came to save it, and then the rest, they were, was running under them.
- SBSteven Bartlett
You get an email from the bank within sort of, I think it was nine minutes, I read.
- ANAdam Neumann
Nine minutes.
- SBSteven Bartlett
Nine minutes asking for you to immediately repay, I think, four, was it about four hundred and fifty million dollars?
- ANAdam Neumann
Four hundred fifty compounding daily 'cause you're in default.
- SBSteven Bartlett
Just for anyone that doesn't know what compounding daily means, so I have, I have 435 million-
- ANAdam Neumann
But if you read it, it's only for my Rick Rubin interview 'cause the first time I said it was only a few month ago.
- SBSteven Bartlett
Okay.
- ANAdam Neumann
I never spoke about this.
- SBSteven Bartlett
Okay. Compounding daily means every day-
- ANAdam Neumann
So if you have debt of, uh, 10% annual, or let's do 12 so it's easy, which would calculate to 1% a month just to keep things really easy. Compounding daily is when your debt suddenly goes, back then I think it's 5% became 50%, uh, 15, and you calculate it on daily increments, so each time it compounds again and again and again. It's m- it ends up that when you do the calculation for the year, it's more than the debt number.
- SBSteven Bartlett
Your debt is growing by more than a million a day?
- ANAdam Neumann
No, it's not. We would have to do the math.
- SBSteven Bartlett
Over the course of a year.
- ANAdam Neumann
It's not a million a day.
- SBSteven Bartlett
Okay.
- ANAdam Neumann
But it's, let's say it's 15%. Let's just use clean numbers.
- SBSteven Bartlett
Okay.
- ANAdam Neumann
Let's say it's 15% over 400 million, which would've been 60 million.
- SBSteven Bartlett
Okay.
- ANAdam Neumann
It's actually more than 60 million, and if you divide it to it, it's huge numbers that we don't have money to pay.
- SBSteven Bartlett
Okay, so you have no money.
- ANAdam Neumann
No money.
- SBSteven Bartlett
And the bank have asked you for 400 and f- let's say 450 million.
- ANAdam Neumann
And gave us 15 days to pay.
- SBSteven Bartlett
Given you 15 days to pay.
- ANAdam Neumann
Or they take everything.
- SBSteven Bartlett
You say, "This is what broke me."
- 2:03:02 – 2:10:47
The Advice From His Wife That Changed His Perspective
- SBSteven Bartlett
There's another remarkable story I remember you saying about, um, her giving you some advice to stand your ground in the post sort of WeWork era where, you know, there was negotiations still going on about, I think, your, your compensation that you were gonna get, and she gave you some really, really good advice about standing your ground
- ANAdam Neumann
She did
- SBSteven Bartlett
What was that, for those that haven't heard that story? It inspired me 'cause, like, you know, I, I do tend to think my fiancée's always right. And so when I heard that, I thought, "Huh
- ANAdam Neumann
So first of all, it's very hard to stand our ground when we think we have a lot to lose. It's back to that fear. Rebekah has many superpowers. One of them, she has no fear, to a fault. She's all truth. She sees people for who they are, and therefore she's honest, and she's not afraid of her truth. If someone's not gonna be our friend, if someone's not gonna talk to us because of it, she doesn't care. She calls it as it is. And at the end of this whole negotiation, when it came time to finish everything, my litigator at the time, today he's my partner, his name is Eric Seiler, uh, called me, and we talked, and we said, and said, "I think we can get to a deal." And we talked about the deal, and we got to the deal
- SBSteven Bartlett
With who? Between her and who?
- ANAdam Neumann
Between S- so fast to finish for the story for everyone, I stepped down. The world... I, I get the letter from the bank. We have nothing. Masa Son comes in, saves the day, funds the company, funds us, fund-- uh, pays our debt, but we don't get, get... We get money, but we don't get the big number, and agrees in April 1st, 2020, to pay myself and all the other investors three billion dollars cash, out of which we would've been thirty percent, so a billion dollars for us. Corona happens really in March, and on the last day of March 2020, we get a letter from SoftBank saying that this is force majeure. For those of you who don't know what force majeure means, it's when an event happens that's greater than life, that's out of control, like a flood or something, force majeure, force of n- nature, something unexpected, and they don't have to pay the money, and they don't send the three billion. I remember by this point, I've taken so many hits. Ah. One, at this point, I'm already practiced. I look up to the heavens, and I say, "Thank you, God. What do we need to learn from this one?" This one, I'm already ready to learn. And the lesson there was apparently litigation is what we need to learn from this one. And we go into a very complicated litigation. When the litigation ends with a settlement of a billion and a half, so instead of the three billion, it ends up being half, so everybody gets half, but it's done. We negotiate a certain negotiation and it was gonna take a certain time for the money to come in. And Rebekah was just about to give birth. This was four days before she was giving birth. And I walk in with my best friend, Andrew Finkelstein, who was there with me for this whole experience, and we walk in to tell-- 'cause this is corona, so everything's on Zoom. So Eric Seiler, the litigator, is in his house in New York. We're in the Hamptons. They're in Japan. Everybody's all over the place. And we walk in to tell Rebekah the settlement that we agreed, and we settled, but the money will come in two month, and this will happen, and that will happen. And she says, "No." And we were surpri- if we don't close the deal, Monday we're going to court. And court was not, A, not gonna be great for anyone, and B, it wasn't great for WeWork, because if, if, if we weren't gonna go to court, another investor was gonna come. They're gonna take the... WeWork at least stood a chance. Um, and she goes, "No. We've already had... They were supposed to pay April 1st for 2020. They didn't pay
- SBSteven Bartlett
The three billion
- ANAdam Neumann
The three billion. Why are you now settling the three billion with another agreement to delay payment again? What if they don't pay? And now you missed your court date. Either they pay, and then it's settled. We'll all say thank you, and everybody will walk away. And it's not just paying to us. That billion and a half is to all the employees and all the investors. It's half a billion to us and a billion to everyone else. Either... And, and, and I know for all of us listening that these are outrageously large numbers. I completely acknowledge and understand. Either they pay or they don't. And I say to her, "Well, what do you wanna do? We agreed on it." And she goes, "Tell them you agreed on it, but your wife didn't." And she goes, "You didn't do the money aside that we talked. You signed the personal guarantee. It's not just your money. This is our money, and I don't accept this settlement. Go back and tell them that either they pay it tomorrow..." This was, like, a Thurs- this was Wednesday. Before, we had to schedule C-section, so Friday, 8:00 AM. "Either they pay it before Friday, 8:00 AM, or we'll see everybody in court on Monday." And she said, "Also tell them that any horrible thing that's ever been said about you has been on the press and public. It's all out there." So Eric Seiler calls me, and he says, "I t- I..." So actually Rebekah called him, and he says, "Adam, I have a question for you. Who do I work for, you or Rebekah?" I said, "Well, you work for me, and I work for Rebekah, so you work for Rebekah." He goes, "That's what I thought 'cause she called me and told me I'm a lousy lawyer." I said, "You're not a lousy lawyer. She just doesn't like our settlement, but we did get to a resolution." I go, "What do you think we should do?" He said, "You have no choice. You should tell them there's no deal." I said, "What are they gonna do?" He said, "They're gonna explode." I said, "And then?" He said, "I don't know. Either they'll meet you in court, and this was a horrible decision, or they'll break and send the money." I said, "What do you think is gonna happen?" He said, "I, I've never been in this position." He said, "I, I don't know." I said, "Okay Got on the phone. We told them what we told them. They hung-- They screamed, "Blah, blah, blah. We're gonna sue you for this and sue you for that." They hung up the Zoom. I called Eric, "What now?" He goes, "Now we wait." Okay. Two hours later, Marcelo calls, and, and Marcelo is not the person who made the original investment in me. Marcelo Claure is-- he, he was, at the time, he was very big personality in SoftBank. Today, he has his own business. Every time that I've had an interaction with me, he's always kept his word and always did the right thing. Even when I didn't agree with him, he told it to me straight, so I respect him and a lot. And Marcelo calls me. He's on the walker. He's like a tall guy. Like, he's on this walker, and he goes, "Call Rebekah." I was like, "Are you sure, Marcelo?" He's like, "On the couch. Call Rebekah." I was like, "Okay." I call Rebekah. She's coming in, again, right before birth, and she's standing there next to him. Marcelo goes, "Rebekah, I wanted to tell you that you and Adam were ahead of your time. He's so correct." He said, "The world is lonely. The world is disconnected. People need we. People need to bring people together. People need community. You're t- you're ten years ahead of your time." I don't think we were ten years. I think we were five years ahead of our time 'cause the world's moving so fast. " 'Cause I just wanna tell you, the money will be in the bank before you give birth. I'm th- sorry we had to go through all of this. This is just business. Nothing here was personal. We'll take the keys. Hopefully, we do well by the company, but we're good." He gets off the Zoom. I look at her. I say, "Now what?" She goes, "Fine. Sign the documents." I said, "But you said we can't do it if the money's not in. What if..." She goes, "No, no, we're all good now." We signed. At four thirty AM, the money hits the account. We all get on a Zoom. At eight AM, I'm in Mount Sinai Hospital, great hospital. Re- Rebekah is giving birth to Moses. Everybody took a deep breath, and we're here today.
- SBSteven Bartlett
Adam, I have, um... I'm gonna wrap up, but I, I have these five pieces of empty card, and I wanted to give you the opportunity to write on it. Do you-- Are you okay with writing, or shall I write it for you?
- ANAdam Neumann
You'll write for me-
- SBSteven Bartlett
Okay, I'll write for you. Yeah
- ANAdam Neumann
... with my, with my dyslexia.
- SBSteven Bartlett
Okay. Um, just the, the five most important lessons that you have learned over since the beginning of WeWork, uh, well, I guess from
- 2:10:47 – 2:11:57
The 5 Biggest Lessons He Learned
- SBSteven Bartlett
the beginning of your early years.
- ANAdam Neumann
How, how about we just do the five lessons I feel we learned today by talking?
- SBSteven Bartlett
Sure.
- ANAdam Neumann
Lesson one: Choose your life partner, friends, and business partners for the worst day in your life, not for the best.
- SBSteven Bartlett
Okay. Great advice.
- ANAdam Neumann
Lesson two: Life is not about when we fall down. It's about how we get up.
- SBSteven Bartlett
Okay. Number two.
- ANAdam Neumann
Choose the life partner that will make you the best version of yourself, the one that you need, not the one that you think you want.
- SBSteven Bartlett
Okay.
- ANAdam Neumann
Control doesn't come from power. It comes from influence, and influence needs to be earned every single day from the beginning.
- SBSteven Bartlett
And last but not least.
- ANAdam Neumann
We all have a destiny and a journey. Get to know yourself so you can start living yours. That one's for you.
- SBSteven Bartlett
Yeah, I thought so. [laughs] Adam, thank you so much. I am-- I couldn't be more excited by all the wonderful things you're doing at Flow at the moment. Um, got some wonderful photos here of, like, the team, and I've looked into the business. I also had your partner,
- 2:11:57 – 2:13:01
The Letter Ben Horowitz Sent When Everything Fell Apart
- SBSteven Bartlett
um, your partner, one of the greatest investors of all time, Ben Horowitz, w- write me this beautiful letter where he talks about the amazing journey he's had with you, um, why he backed you, and how amazingly collaborative you've been, what a sponge you are for learning, and how he strongly believes that you are now building a generational business that will change the world, and how proud he is to be associated with a man like you. He tells us all, Ben Horowitz, "We should never judge a founder by his worst moment. But with Adam, that was easy because his light shined and shines so brightly. You have over-delivered in every sense of the word, including on your promises." Thank you, Adam.
- ANAdam Neumann
That's beautiful. I want, Steven, to thank you. I know we had a real discussion because I learned a few things for the first time, and you made me talk out loud about a few things that I've almost never had. I appreciate it, and I'm gonna think about it, and I'm gonna learn
- 2:13:01 – 2:15:02
His Final Message to Entrepreneurs
- ANAdam Neumann
from it.
- SBSteven Bartlett
What's your last word? Is there anything at all that you wanted to leave the audience with?
- ANAdam Neumann
We all came to this planet with a purpose and a destiny. We started this life as this perfect light. Noise came, challenges came, people came, ego came, everything came. It is up to all of us to have the courage to look inside, see whatever are the things that are stopping us from really becoming the best version of myself, of ourselves. Surround ourselves with the right people, with the right family, both real family, spiritual family, whatever you consider your best and closest, and go and chase your dream, your journey, your truth. And I know as a fact that if you go through the process, if you remember that life is not about how we fall and how many people saw us fall, it's genuinely about how we get up. And if you have the courage to really be the full version of yourself and you're truthful about not just your strength, but also the weaknesses, and if you remember that it's truly is a journey, that when you get to that last few minutes of your life, you're gonna look around, you're gonna be surrounded by loved ones and by a lot, a lot of love that you've created and cultivated for your entire life, and that you're gonna live this world and this planet much better than it was before you came. I wish you and all of us good luck at this journey of life.
- SBSteven Bartlett
Amen.
- ANAdam Neumann
Amen.
- SBSteven Bartlett
Thank you. We're done. Thank you. YouTube have this new crazy algorithm where they know exactly what video you would like to watch next based on AI and all of your viewing behavior, and the algorithm says that this video is the perfect video for you. It's different for everybody looking right now. Check this video out, and I bet you, you might love it
Episode duration: 2:15:03
Install uListen for AI-powered chat & search across the full episode — Get Full Transcript
Transcript of episode IQ4JVWdj4Q0
