The Catastrophic Story Of WeWork | Reeves Wiedeman | Modern Wisdom Podcast 238

1. 0:00 – 15:00

   Some of this just…

   1. RWReeves Wiedeman0:00

      Some of this just comes down to temperament, and we start the book with a quote from Adam Neumann's high school driving instructor. Adam's either going to be a millionaire or he's going to jail. Those are the two options. There's no, like, nice steady Adam Neumann work his way up the ranks at, at some job. He was ... He was a go big kind of person, and the question was going to be whether he, he, (laughs) he ended up, uh, being successful with that risk or, or falling on his face.

   2. CWChris Williamson0:24

      Or both.

   3. RWReeves Wiedeman0:25

      Or both.

   4. CWChris Williamson0:30

      (wind blows) What have you spent the last couple of years researching?

   5. RWReeves Wiedeman0:35

      Well, I've spent about the last year and a half researching WeWork, the company, and, and the last few years researching sort of the world of, I guess, high-growth unicorn startups, um, is, is one way of, of, uh, putting it, some of which, um, have flamed out in one way or another, or ... and some of which are, are still with us, so.

   6. CWChris Williamson0:58

      Is WeWork classed as one of those unicorns? And what, what is a unicorn? For people that don't live in Silicon Valley, what's a unicorn?

   7. RWReeves Wiedeman1:05

      Sure, sure. Well, there's, there's, there's unicorns, there's zebras, there's all kinds of different species now, but it ... But a unicorn very, um, simply is a, is a company that, according to private valuations set by private investors, is worth more than a billion dollars. Um, and, you know, there, there are now, um, certainly more than 100 of, of these, um, uh, k- kinds of companies, and, and WeWork, uh, despite all its troubles, remains one of those.

   8. CWChris Williamson1:37

      Those companies that are unicorns, are they still private or have some of those transitioned to now be traded?

   9. RWReeves Wiedeman1:44

      Yeah. The, the, the typical way it's sort of looked at is, is these are, um ... You know, they are magical creatures. They exist outside of the way the, the markets traditionally treat these companies. So, so unicorns are, are generally companies that are, that are private before, um, before they hit the stock market, which-

   10. CWChris Williamson2:01

       And then you ... Are you no longer a unicorn once you do?

   11. RWReeves Wiedeman2:04

       I ... You a- ... You're not. I don't know, like, what you transform into exactly in, like, the Silicon Valley nomenclature.

   12. CWChris Williamson2:11

       Oh.

   13. RWReeves Wiedeman2:11

       But, but you, you, you ... Yeah. It's, it's sort of like caterpillar/butterfly thing, but I don't know what the next, like, transformation is.

   14. CWChris Williamson2:18

       Got you. If anyone understands the Pokemon game that is Silicon Valley sufficiently well-

   15. RWReeves Wiedeman2:23

       (laughs)

   16. CWChris Williamson2:23

       ... what does the unicorn evolve ... It's Charizard, isn't it? Charizard-

   17. RWReeves Wiedeman2:27

       Charizard, exactly.

   18. CWChris Williamson2:27

       And then you get the shiny one, and then that's ... Everyone at school wants you cards.

   19. RWReeves Wiedeman2:32

       Well, you're, you're joking, I, I think, but, but tru-

   20. CWChris Williamson2:35

       (laughs)

   21. RWReeves Wiedeman2:35

       Truthfully, there, there is, there is another group called a decacorn. And a decacorn is a ... is an even rarer breed of company, um, that has a private valuation above $10 billion. And WeWork was, was, um, uh, was one of those. I guess that is actually a qualification that the company has, has now lost, um, in, in-

   22. CWChris Williamson2:58

       What ... Who e- who else is in that, uh, category of your decacorns, do you know?

   23. RWReeves Wiedeman3:02

       You know, I'd have to think. I mean, Airbnb is one that is, um, is, uh, sort of going public, has said they're, they're going public soon. Um, I think Palantir, which also went public recently, uh, is, is another one that, that would have classified. It's ... It's a pretty small group, and it, and it has traditionally been kind of the biggest companies, the Ubers, the Lyfts, um, and, and the WeWorks, um, that, that reach that kind of, um, threshold.

   24. CWChris Williamson3:30

       Have you had a look at much to do with the electric scooter, Lime-

   25. RWReeves Wiedeman3:37

       Yeah.

   26. CWChris Williamson3:37

       ... uh, uh, and Bird and, and all of this? There was a period ... Was it towards the start of last year where they were doubling their valuation every six weeks, like all of them?

   27. RWReeves Wiedeman3:47

       Yeah. Well, uh, a- ... And, uh, here, here in the US, they seem to find a new city, um, to occupy, uh, every, every, um, every few weeks. And, and, um ... Yeah. I mean, tho- those are the kinds of companies that we're talking about. And I think one of them, I'm, I'm, I'm forgetting exactly, but I think Bird may have, at one point, had a, had a billion-dollar valuation, which is ... I've been, you know ... If you want to kind of summarize the last decade, a, a, a billion-dollar scooter company that didn't exist a few years ago is, is ... Which, by the way, I was, I was recently in Nashville, Tennessee, um, and tried to get a Bird scooter. I, I think technically I was trying to get a Lime scooter going. There are Birds, there are Limes, there's, like, five or six different companies in all these cities, and I, I could not, could not get the app going, could not get the scooter to stop chirping at me, and eventually, um, eventually just gave up on it. So, uh, it, it's unclear exactly what, what the billion-dollar valuation is, is, um, is worth. At this point.

   28. CWChris Williamson4:47

       There's some executive from Bird and Lime screaming into their AirPods at the moment going-

   29. RWReeves Wiedeman4:52

       (laughs)

   30. CWChris Williamson4:52

       ... "It was your fault. This wasn't us."
2. 15:00 – 30:00

   How would you describe…

   1. RWReeves Wiedeman15:00

      and then investors have to decide, uh, whether or not they want to invest. And this is going to, this is going to institutions, some... A place like Fidelity, that might be able to invest a billion dollars on its own if it wanted to, into an IPO, um, of this size. And- and essentially what happened is- is for a variety of reasons, w- a- and- and we can talk about them, um, investors just- just decided that- that the company wasn't worth what it, what it said it was, and- and there wasn't enough interest. And so, um, eventually once- once it was clear WeWork wasn't gonna be able to raise the three billion dollars, or at least that there was a danger, um, that it wouldn't get there, uh, for a handful of reasons, they decided to- to pull it. Um...

   2. CWChris Williamson15:45

      How would you describe Adam Neumann as a person and a CEO?

   3. RWReeves Wiedeman15:51

      Two different questions, but- but they are related. Um, uh, charismatic, um, outgoing, very tall. Uh, he's 6'5", which- which is, um, often noted, but I think is not an insignificant thing for- for someone like him, whose- whose charm and charisma and personality and vision, um, are, were what people were buying, as much as they were buying sort of the- the numbers that- that were- were behind, um, behind the business. Um, as a CEO, um, you know, the thing people always talk about was that he is that, that he was someone who could get into a room, and- and that might be a room with potential investors, uh, it might be a room with a landlord he was trying to make a deal with, um, and it- it might be a room with his employees. And- and that he was able to convince them that what he was selling would become true, that- that this vision of- of WeWork as much more than an office leasing company, um, was- was possible, and- and that- and that they were actually building that. And I think that was... Like, whatever people want to say about them, he was an incredibly inspirational leader, um, and that went for young people who were straight out of college, uh, as much as it did for sort of mid-career people who came in and- and- and saw something to kind of latch onto.

   4. CWChris Williamson17:20

      I mean, Billy McFarland from Fyre Festival was a very charismatic and outgoing CEO.

   5. RWReeves Wiedeman17:27

      Mm-hmm. Indeed. And, uh, for this book, I called Billy in prison. Um-

   6. CWChris Williamson17:34

      No way.

   7. RWReeves Wiedeman17:36

      Yep.

   8. CWChris Williamson17:36

      Fuck.

   9. RWReeves Wiedeman17:36

      And we- we spoke, uh, briefly, um, just as coronavirus was- was sort of hitting in the spring, um, so it was obviously a- a tense, tense moment for him. Um, and the reason I called him is that, uh, he launched his companies from WeWork offices. He was a WeWork tenant.

   10. CWChris Williamson17:57

       No way.

   11. RWReeves Wiedeman17:57

       Um, and in fact, the sort of mild amount of news that- that we break in the book is- is that, um, his company before the Fyre Fest, before Fyre, um, was called Magnises. And Magnises was a sort of credit card, uh, club access kind of company. Basically a- a lifestyle company. And at one point, um, Magnises had a WeWork office in New York, and, um, Billy had met Adam a number of times. He sort of talked to me about how...... at least the way that he thinks of, thought of his companies as, as, um, at least at their higher aspiration is connecting people. Um, he, he saw, he saw that vision in, in Adam and, and sort of what he was selling. And, and at one point WeWork and Magnises were in talks, WeWork was in talks to buy Magnises. It would sort of be the kind of lifestyle component to go along with the WeWork work component. Um, unfortunately, uh, Billy and his company trashed a townhouse, uh, where they had a party in New York, the deal fell apart, and, um, uh, the rest is history in, in multiple ways. Both Adam and Billy (laughs) went their separate directions, and I guess in a certain way they, they came back together in, in the way that their stories ended a little bit, but, uh-

   12. CWChris Williamson19:13

       I wonder what... I would love to be a fly on the wall at a meeting between Adam Neumann and Billy McFarland man.

   13. RWReeves Wiedeman19:20

       Yeah. (laughs) Same.

   14. CWChris Williamson19:20

       Did you ever see... Did you see that podcast between Grant Cardone and The Real Wolf of Wall Street?

   15. RWReeves Wiedeman19:27

       No, I didn't.

   16. CWChris Williamson19:28

       Okay. Well, it's ju- It's like a big dick measuring competition. They get them out on the table and they start wiggling them around. And then Grant wiggles his and then Wolf of Wall Street wiggles his, and it's just that. And I imagine Billy McFarland versus Adam Neumann would be something similar.

   17. RWReeves Wiedeman19:44

       Yeah. Yeah. And I, I think, you know, th- I, I mean, I remember watching the Fyre Festival documentaries, which I devoured, and, and, you know, you watch, at least for me, I would watch Billy and I would be like, "This is the guy that, that was so charming and, and charismatic?" But then, you know, and, and, and in some ways I had that feeling when, when I met Adam, but, um, of, of questioning this a little bit. But then I think it's hard to know when you sort of get into these rooms and, and people, people also are incentivized to believe. They, they want, you know... People wanted the Fyre Festival to happen. People wanted WeWork to change the world, to make it a better place. So, so, you know, it's, it's easy to think, sort of look at this sort of skeptically, but then I think when you get in the room, you know, there's a reason they, they appeal to people.

   18. CWChris Williamson20:30

       I think, I wonder if you agree, that the same compulsion we all have of why we watched the Fyre Festival documentary and fell in love with that sort of thing where you're kind of watching through your hands-

   19. RWReeves Wiedeman20:44

       Mm-hmm.

   20. CWChris Williamson20:44

       ... a little bit like how you watch a horror movie-

   21. RWReeves Wiedeman20:47

       Yeah.

   22. CWChris Williamson20:47

       ... um, at a much more transparent, and slower, and significantly in terms of capital, bigger scale, I think that's why WeWork has warranted a book written by yourself and all of these videos I've seen online with, you know, like hundreds of millions of plays and stuff like that.

   23. RWReeves Wiedeman21:05

       Mm-hmm.

   24. CWChris Williamson21:06

       Would you agree? Is that the, is that the, the primary, um, pull, like the reason that people are compelled to look at WeWork?

   25. RWReeves Wiedeman21:15

       Yeah, I think there's, there's a, there's probably a variety of things. Uh, Ja Rule plays a role in, in the WeWork story as well. So he is also, like, you know, lev-

   26. CWChris Williamson21:24

       That guy is everywhere.

   27. RWReeves Wiedeman21:24

       He's everywhere. He's everywhere. And I, I, um, you know... Good for him. But, uh-

   28. CWChris Williamson21:30

       (laughs)

   29. RWReeves Wiedeman21:30

       But I think there's... I mean, more seriously, yeah, like, I mean, I'd be curious to know why, why sort of what you think, um, makes the Fyre Festival and, and WeWork especially interesting. But for me, it's, you know, one of it is, is there's a certain comeuppance that, that comes for people. And, and, you know, with, with WeWork, you know, I would imagine, um, a- as you sort of said at the top, like a, a lot of your listeners, they probably knew what WeWork was. They, they, they might have been to one or, or at least had heard of it, but they didn't really pay much attention to it. And then same thing with the Fyre Fest, like most people didn't know what it was un- until kind of after it had blown up. And then, and then in hindsight you sort of see like all, (laughs) like Ja Rule's there-

   30. CWChris Williamson22:14

       (laughs)
3. 30:00 – 45:00

   Taking it on hastens…

   1. RWReeves Wiedeman30:00

      you know, invites all kinds of questions that, that we can talk about. But, but the upshot of it was that, you know, Saudi Arabia was trying to diversify its economy away from oil, um, and Masa was someone who was known for taking big bets. He, he... That, that's what he's done throughout his, his career is being willing to take huge risks and frankly, uh, in some cases, fall on his face and get back up and, and do it again. And so he had promised to Saudi Arabia, to some other entities, um, Apple, Foxconn were also investors, um, in the fund, that he was going to go out and find basically the companies of the future. He sort of talked about it as kind of building a new version of Warren Buffett's Berkshire Hathaway, where you would have this kind of conglomerate of, of companies, and instead of it being airlines and newspapers and, and whatever else, and trains-... it was gonna be tech companies and, and focus particularly on artificial intelligence. And Masa had become very, sort of obsessed with the singularity and, and the idea that you, it would be, you know, har- harder to do- differentiate between humans and robots and all the consequences, um, that, that would happen there. Uh, and he stumbled onto WeWork. And, and, um, there, uh, again, uh, as with Benchmark, there are all kinds of questions about why exactly SoftBank, um, decided WeWork was a good investment, um, as a firm that typically invests in, in tech companies. Um, but ultimately, uh, SoftBank invested initially more than $4 billion, uh, which was m- more money than, than WeWork had raised up to that point, um, (clicks tongue) uh, back in 2017. Um, and they followed that with another $2 billion a year later, and that, uh, was the money that really gave jet fuel to, to WeWork's growth, and at least in hindsight, may have been sort of a, a, a sort of poison chalice is, is one way to look at it that obviously turning down something like that is, is hard to do, um, but it, it may have kind of pushed the, the company sort of over a cliff.

   2. CWChris Williamson32:09

      Taking it on hastens the arrival of the inevitable.

   3. RWReeves Wiedeman32:13

      Exactly. Exactly. And it's, yeah, it's, it's, it's something you think you want, um-

   4. CWChris Williamson32:17

      (laughs)

   5. RWReeves Wiedeman32:17

      ... but, you know, and again, this, this, uh, come up with other companies that I, I wrote about, um, it's hard to spend $4 billion. It's hard to do that responsibly, um, in, in any way that kind of makes sense. And, and there's certain ways in which, you know, you can, you can point out sort of individual managerial missteps, but in some ways it's, it's almost just a, a, an, an impossible task to do that in a way that, that would, that would really make sense. (laughs)

   6. CWChris Williamson32:44

      Wasn't it right that the Japanese investor, whose name I'm not gonna try because I'm gonna butcher it, wasn't it right that he decided to invest after 15 minutes of a meeting with Adam? Is that true?

   7. RWReeves Wiedeman32:56

      Uh, you know, it's, it's, it's more or less true. Um, 28 minutes is what they say. Uh, you know, he-

   8. CWChris Williamson33:01

      Shit the bed.

   9. RWReeves Wiedeman33:02

      Yeah. And, and he is sort of known from, known for doing that. You know, I talked to someone else who, who had a company that SoftBank invested in, and, and, and that's basically what happened is, is he had a 10-minute meeting with Masa, Masa decided he wanted to invest. What of, what of course is sort of left out of all these stories is after that decision, months and months of due diligence is, is done, but, but what Masa himself has, has said over and over is that often his feeling, uh, in that first moment when he meets an, an entrepreneur, um, you know, his, his most successful investment was he was one of the earliest investors in Alibaba, um, the sort of Ch- uh, Chinese, um, Amazon. And he made that investment, um, he's often said just basically because he believed in Jack Ma, the, the entrepreneur. He sort of, he has sort of described it in these kind of like primal terms of, of just a, a feeling that he had as, as much as anything else. So, um, you know, he's also said with the Vision Fund, uh, he's, he's described his meeting with, uh, Mohammed bin Salman, the, the at the time soon to be Crown Prince of Saudi Arabia, as, uh, it took him 45 minutes to raise $45 billion. Um, and so he clearly prides himself and in some ways lives on this reputation of, "I make gut calls and then, and then I move on to the next one."

   10. CWChris Williamson34:25

       That's mental.

   11. RWReeves Wiedeman34:26

       (laughs)

   12. CWChris Williamson34:27

       (laughs) Like it's just, it sounds great and it's wonderful in a book, and is cool when tweeted online, and harks to a, a, a man who has the vision, Vision Fund, a man who has the ability to see that which other people cannot. And you're like, "Mate, this isn't me trying to get the next motivational speaker to work in the HR department of your company. This is me doing very, very complicated multifaceted financial products that require the, the most clinical dissection to work out what the hell is going on. And you're doing it based on whether or not this person..." Like I could send, I could send one of the 18-year-olds that works for me in club promo, one of the event managers I've got who are just brimming with testosterone and charisma, send them in as the pretend someone of something. And th- this, so anyway, uh, that I think lays the land quite nicely. We've got the fact that this was huge growth, that he had a lot of money behind him. Can you give the ele- elevate a pitch for how WeWork made its money? Like what the actual core of their money-making operation was?

   13. RWReeves Wiedeman35:52

       Sure. Um, it's, it was essentially a, a rent arbitrage. So the idea is they, um, would go to a landlord, uh, lease a building, um, or, or a, a floor of a building. Um, and, you know, they would pay a certain amount of money to that landlord, let's say it's a hundred bucks. Um, and then they ra- uh, they would then slice that office into, that office up into, um, a hundred little offices, um, rent it out to a hundred people and each rent it out to them for a buck 50. So then, you know, they're making, um, a hundred and fifty bucks. That's essentially the business. That's it. It's, it's as simple as that. And it's, it's frankly as old as time. Um, and, and that was what was so confusing to people, um, is that this is a business that existed before. Um, WeWork had made the offices cooler. Um, they had done a amazing job of branding, which is not insignificant. Um, but the idea th- of, of taking big spaces and, and cutting them up into smaller offices is something that-... this happened all the time. Regus, which is a company based out of Europe, um, is- is sort of the most- most prominent, um, most prominent example. And so, uh, that- that was kind of what was most confusing about people, or to people who were skeptics of it, is- is that's- that's a tough business and it's- it's a risky business, because what happens, and- and we've seen this now, is when you hit... What happens when you hit a downturn? And- and I think, you know, if- if suddenly all 100 of your tenants, or even 50 of your tenants leave, then you're under water. Um, and- and if that happens at the scale that WeWork had grown, um, that's- that's gonna be a problem. Um, and I think that's, you know, an- an- an underrated sort of part, or maybe underconsidered part of the success of a lot of these unicorns over the past decade is that the economy did nothing but grow, basically from the 2008 recession up until the- the pandemic that we're all experiencing. By and large, it was an upward trajectory, and so none of these companies had to deal with kind of what had- had fallen, um, or- or, uh, deal with doing business in a, in a difficult climate. So, you know, WeWork tried to- to make money other ways. I mean, the apartment business d- didn't- didn't quite work. The elementary school wasn't- (laughs) wasn't making money. You know, they tried to get people to pay for extra printing, but those are, those are marginal things. This is not like a software business where you're gonna be selling more and more services the more and more you get people on- on your business. Essentially, it just came down to renting out space for a certain amount and hoping you could lease it out to other people for- for more money.

   14. CWChris Williamson38:40

       Me and you could do that. Me and you could- we could get-

   15. RWReeves Wiedeman38:43

       I mean-

   16. CWChris Williamson38:43

       ... whatever that nice apartment that you're in now with that painting of a very majestic castle is-

   17. RWReeves Wiedeman38:49

       (laughs) This is, this is at WeWork in, uh, Austria.

   18. CWChris Williamson38:52

       (laughs)

   19. RWReeves Wiedeman38:54

       Yeah.

   20. CWChris Williamson38:54

       Like me and you could do that. And this really is like the elephant in the room, the crux of the story, that WeWork was positioning itself as a tech company, it was billing itself as a tech company, it was telling people it was a tech company, but it was the oldest of old time real estate, and it was just skimming off the top, the difference between long lease versus short lease, and once you get below your minimum occu- occupancy to hit breakeven point, which is inherently risky when you allow this hyper-flexible, one-month minimum, no-month minimum rolling contract bullshit, you are left-

   21. RWReeves Wiedeman39:35

       Yup.

   22. CWChris Williamson39:35

       ... holding 400 plus properties across six continents, all of which can't be occupied during a pandemic, which, uh, no one could foresee, but you certainly could foresee if there is ever a downturn-

   23. RWReeves Wiedeman39:49

       Mm-hmm.

   24. CWChris Williamson39:49

       ... if there's ever a reason for people not to go to work or just generally a recession, our costs are going to go up and our income is going to completely disappear off the face of the earth.

   25. RWReeves Wiedeman39:59

       Yeah. Yeah, I mean, to go back to your point, like, yeah, you and I could run one of these spaces. There are people like you and me who do them. They don't run 400 of them, you know? And- and- and the, like, you know, I- I, you know, speaking for myself and- and others, you know, what Adam Neumann had partly was- wasn't the same, and why he and- and Masa from Softbank were- were, sort of came so neatly together is, has a very high risk tolerance, and- and a willingness to sort of say, "This doesn't totally make sense, but there's an argument for it. There's an argument that we could kind of make that- that- that this might work." And so, you know, there- there's- there's a very thin line between- between, you know, the- the kinds of risks that pay off and- and the ones that ends up with you collapsing. And I think some of this just comes down to temperament, and we start the book with a quote from Adam Neumann's high school driving instructor, who, um, you know, recognized in kind of just the way that he operated as a teenager, the- the thing that he said in- in a class in- in Israel where- where Adam grew up was, was Adam's either gonna be a millionaire or he's going to jail. Like those are the two options. There's no, like, nice, steady, Adam Neumann work his way up the ranks at- at some job. He was, he was a go big kind of person, and- and the question was gonna be, um, you know, whether he- he- (laughs) he ended up, uh, uh, being successful with that risk or- or falling on his face.

   26. CWChris Williamson41:30

       Or both.

   27. RWReeves Wiedeman41:31

       Or both. I mean, and that's- that's-

   28. CWChris Williamson41:33

       (laughs)

   29. RWReeves Wiedeman41:33

       ... sort of the- the central irony here, and I think is, (laughs) a real central irony of- of a lot of this era. I mean, you can look around at- at other examples. I mean, I mean, Billy McFarland's in prison, so, you know, he, I- I think he- he- he clearly has- has fallen on his face. But- but for Adam, um, he's rich. He's- he's gonna be wealthy, um, for the rest of his life, um, in theory. He has a billion dollar package that is currently tied up in- in some legal maneuvering, but, um, you know, it... The- the risk paid off for him personally, and- and he's gonna have some reputational sort of work to do, but- but the risk paid off.

   30. CWChris Williamson42:16

       Take us through the downfall. What happened? And also-
4. 45:00 – 1:00:00

   What sort of quirks?…

   1. RWReeves Wiedeman45:00

      finding out about Adam and his quirks for the very first time and sort of being like, "What the heck is, is going on here?"

   2. CWChris Williamson45:07

      What sort of quirks?

   3. RWReeves Wiedeman45:08

      Um... What's that?

   4. CWChris Williamson45:09

      What sort of quirks?

   5. RWReeves Wiedeman45:12

      Um, the fact that he, um, uh, he and his wife, uh, Rebekah, who is also... Um, sort of came into the company later on as, as sort of a, a, a, an executive and, and was sort of the driving force, um, behind the company. Um, the fact that they had so much control was, was one big thing. And so much control that, that when they wanted to start an elementary school, they didn't really tell many people about it, and it just kind of happened. Um, and, and so some of it was just sort of the control that they had over the company. But if you want to talk about some of the weirder stuff, um... A- and, and some of it's not weird. In fact, you know, it's... Uh, for one thing, Adam surfed a lot. Uh, that's okay. Lots of people like to surf a lot. Um, but WeWork was also invested in a wave pool company, a company that made one of these kind of inland surfing pools that are now becoming vaguely popular, but didn't seem to have anything to do with, uh, WeWorks business. Um, it came out sort of, you know, sort of an open secret that, that, um, Adam smoked a lot of marijuana. Um, and that again, uh, in and of itself, um, not the strangest thing in the world, but when you have, uh, you know, the CEO of a c- of a company sort of, um, doing this as, as kind of regularly and openly as, as he seemed to be, um, it, it led people to, uh, ask a lot of questions. Um, and then I think the, the, the main quirk, I guess, to circle back to the, that sort of, uh, epigraph that I mentioned, was just the way that he talked and the, and the way that, that WeWork talked about what they were doing and the fact that they talked... They didn't... They, they just wouldn't state the obvious, which is, "We're a real estate company."

   6. CWChris Williamson47:04

      (laughs)

   7. RWReeves Wiedeman47:04

      They insisted on saying, you know, "We are elevating the world's consciousness," uh, that this is all about the energy of we, and, and all of this stuff that, that I think o- on the one hand, I'm in favor of elevating the world's consciousness, whatever that may mean. Um-

   8. CWChris Williamson47:22

      Sounds lovely.

   9. RWReeves Wiedeman47:23

      ... the ene- Yeah. The energy of we sounds like a good thing, but I think at a certain point, it became, eh, clear to people that it, it o- purposefully or not, it was distracting. It was distracting from the main... The, the actual reality of, of what was going on, which was WeWork provides nice office space, but, you know, elevating the world's consciousness is, is not something that, that it, it does.

   10. CWChris Williamson47:45

       Do you know the British term, "All talk and no trousers"?

   11. RWReeves Wiedeman47:51

       Uh, no, but I can guess-

   12. CWChris Williamson47:52

       You can imagine what it means. (laughs)

   13. RWReeves Wiedeman47:54

       ... where it's going. Yeah. Yeah.

   14. CWChris Williamson47:55

       And tha- that's Adam Neumann. Like-

   15. RWReeves Wiedeman47:56

       Yeah.

   16. CWChris Williamson47:57

       ... um, I, I... This is again-

   17. RWReeves Wiedeman47:59

       Well, the, the corollary for Adam is, is, uh, "All talk, no shoes," because he would walk around-

   18. CWChris Williamson48:04

       Barefoot.

   19. RWReeves Wiedeman48:05

       ... without wearing shoes a lot.

   20. CWChris Williamson48:06

       How did I guess? Um, I think that's another part of it. It's not only the comeuppance of an, an undeserved company overall, but it's someone in the Adam position who, from the outside looking in, has a number of things that the... Especially like the normal working class guy or girl would find pretty difficult to deal with. Spending a lot of time surfing, spending a lot of time smoking weed, decides to employ his wife probably on some ridiculous retainer package for someone who I'm sure that she has many talents, but I bet that she's less qualified than many of the people who could have got that job. Uh, and then this rapping in 2020 awakened like Austin Psychedelic language-

   21. RWReeves Wiedeman49:00

       Yeah.

   22. CWChris Williamson49:01

       ... is, is the icing on a very twatty cake.

   23. RWReeves Wiedeman49:04

       (laughs) Yeah. Yeah. And I think it's... You know, getting... Calling people on hypocrisy is, is, is almost tiresome because there's so much of it. But, but like th- you know...... the Newmans-

   24. CWChris Williamson49:16

       It never gets old, man. It never gets old, Reeve.

   25. RWReeves Wiedeman49:18

       I guess so. The, the (laughs) the, the, the Newmans, you know, talked constantly about making the world a better place. They talked constantly about climate change and sustainability. Um, they flew all over the world on a private jet. They had seven homes, at least, um, new homes kept emerging as I, as I would continue doing this, this reporting. Um, they lived a very lavish lifestyle. And, and again, it's, it's sort of, uh, you know, I, I, I don't wanna totally criticize that, I like having nice things, but you can't, you can't really have it both ways. You can't say, "I'm... All I care about, uh, is..." Literally, Adam said, like, "I want to change the world, that's all I care about." Well, no, clearly there, there are other things, and very material things, um, that meanwhile a lot of, a lot of your employees, frankly, are, are not getting to benefit from.

   26. CWChris Williamson50:11

       100%. There's a couple of quotes, uh, one in particular that I really liked, "Hyperbole, autocratic leadership, and a disconnect from reality were suddenly assets on the path to power." And that really, in a sentence, I think highlights the, um, growth at any costs or growth at by any means, uh, obsession that we've got coming out of this sort of angel investment world from Silicon Valley. And I tweeted something today which said that, "The internet has permitted sociopaths and charlatans to con people at scale."

   27. RWReeves Wiedeman50:50

       Mm-hmm.

   28. CWChris Williamson50:50

       And it really does feel like there's a, a particular, um, matrix framework that you would be able to create for these people, the Billy McFarlands of this world, the Adam Newmans of this world, the, uh... It was the th- who was Theranos' lady? E- Elizabeth Holmes.

   29. RWReeves Wiedeman51:07

       Elizabeth Holmes.

   30. CWChris Williamson51:07

       The Elizabeth Holmes' of this world. Like, there is common threads between them all that weave them together into a particular type of person. And the scary thing is, that all they needed was the right company. Like, the key issue behind Elizabeth Holmes from Theranos, from Adam, uh, Newman from WeWork, and Billy McFarland from Fyre Festival is their product was shit.
5. 1:00:00 – 1:02:01

   The partitioning of information…

   1. RWReeves Wiedeman1:00:00

      and that was the case with Adam. It was kind of these finance people. There was not a real estate person on, on WeWork's board of directors. Um, which, which was in some ways an intentional move. WeWork didn't want to be seen that way, and, um, and it's a lot easier to, to sort of pretend, pretend that you're something else.

   2. CWChris Williamson1:00:16

      The partitioning of information is really interesting, and it's-

   3. RWReeves Wiedeman1:00:21

      Yep.

   4. CWChris Williamson1:00:22

      ... telling that that's how every secret service across the world works as well.

   5. RWReeves Wiedeman1:00:27

      Yeah. Yeah, it's ... You know, uh, it's, it's a convenient way to run an organization so long as someone is, is sort of making sure they're all working together. But when, when ... The danger is, of course, when like one, one part of the organization isn't holding its weight, it could all kind of crumble, so.

   6. CWChris Williamson1:00:49

      Man, I, uh, I, I really enjoy this story. I don't know what it is about it, and I wonder if the people listening get the same sort of satisf- I know that they do. Everyone listening-

   7. RWReeves Wiedeman1:01:00

      Yeah.

   8. CWChris Williamson1:01:00

      ... gets this same comeuppance satisfaction, the calling out of hypocrisy.

   9. RWReeves Wiedeman1:01:04

      Yeah.

   10. CWChris Williamson1:01:04

       Uh, and Billion Dollar Loser linked in the show notes below. If you enjoyed this story, then go and check it out. Any other things that people should check out online? Any other places you want to send them, Reeves?

   11. RWReeves Wiedeman1:01:16

       Um, you know, you, you can go to BillionDollarLoserBook.com, and that's ... That has kind of all the information about, about where you can, you can buy the book. And, and, um, you know, I'm on, I'm on Twitter and not really on Instagram. But, uh, you can, you can find all my, my other thoughts on this and other things, uh, on Twitter, so.

   12. CWChris Williamson1:01:34

       Peace. Thank you very much.

   13. RWReeves Wiedeman1:01:35

       I don't follow Kim Kardashian either.

   14. CWChris Williamson1:01:37

       And on that note-

   15. RWReeves Wiedeman1:01:39

       So you and I are the only two people in the world.

   16. CWChris Williamson1:01:41

       Who don't follow Kim Kardashian.

   17. RWReeves Wiedeman1:01:43

       Yeah.

   18. CWChris Williamson1:01:43

       Right. Sorry, Kim. But for now, ladies and gentlemen, I'll catch you next time.

Episode duration: 1:02:01