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

Reeves Wiedeman 0:00 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.

Chris Williamson 0:24 Or both.

Reeves Wiedeman 0:25 Or both.

Chris Williamson 0:30 (wind blows) What have you spent the last couple of years researching?

Reeves Wiedeman 0:35 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.

Chris Williamson 0:58 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?

Reeves Wiedeman 1:05 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.

Chris Williamson 1:37 Those companies that are unicorns, are they still private or have some of those transitioned to now be traded?

Reeves Wiedeman 1:44 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-

Chris Williamson 2:01 And then you ... Are you no longer a unicorn once you do?

Reeves Wiedeman 2:04 I ... You a- ... You're not. I don't know, like, what you transform into exactly in, like, the Silicon Valley nomenclature.

Chris Williamson 2:11 Oh.

Reeves Wiedeman 2:11 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.

Chris Williamson 2:18 Got you. If anyone understands the Pokemon game that is Silicon Valley sufficiently well-

Reeves Wiedeman 2:23 (laughs)

Chris Williamson 2:23 ... what does the unicorn evolve ... It's Charizard, isn't it? Charizard-

Reeves Wiedeman 2:27 Charizard, exactly.

Chris Williamson 2:27 And then you get the shiny one, and then that's ... Everyone at school wants you cards.

Reeves Wiedeman 2:32 Well, you're, you're joking, I, I think, but, but tru-

Chris Williamson 2:35 (laughs)

Reeves Wiedeman 2:35 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-

Chris Williamson 2:58 What ... Who e- who else is in that, uh, category of your decacorns, do you know?

Reeves Wiedeman 3:02 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.

Chris Williamson 3:30 Have you had a look at much to do with the electric scooter, Lime-

Reeves Wiedeman 3:37 Yeah.

Chris Williamson 3:37 ... 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?

Reeves Wiedeman 3:47 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.

Chris Williamson 4:47 There's some executive from Bird and Lime screaming into their AirPods at the moment going-

Reeves Wiedeman 4:52 (laughs)

Chris Williamson 4:52 ... "It was your fault. This wasn't us."

Reeves Wiedeman 4:54 (laughs)

Chris Williamson 4:54 "This was ... We tested it till the, till the cows come home."

Reeves Wiedeman 4:57 Yeah. Well, you know, unfortunately, uh, the scooter is no good without the human-

Chris Williamson 5:01 (laughs)

Reeves Wiedeman 5:01 ... um, human to get on it. So, uh, I, I guess maybe take the app back, back to the lab.

Chris Williamson 5:07 Yeah. It's, it's interesting with that, just to sort of linger on that scooter thing for a second as well, it really does show how decoupled valuation has come from marketability. There are entire cities that have outlawed these scooters. I think ... 'Cause it ... San Francisco had decided that they were going to permit one or two scooter companies at a time to trial, because they didn't want overload. Is that right?

Reeves Wiedeman 5:34 Yeah.

Chris Williamson 5:34 Here's this six-week window where everyone can have a go on a Lime. Here's a six-week wingo- window where everyone can have a go on a Bird.

Reeves Wiedeman 5:41 Yeah. That, that's right. And I, I, I live in New York City where, um, they, um, they aren't allowed. And, and it's been kind of a, a, a political back and forth of, of do we want these, these scooters, you know, cluttering up our, our sidewalks? And, and the battle we've had there recently, or sort of the back and forth, was, was ... (laughs) There, there's now multiple kinds of scooters. We have, we have these scooters called Revels which are ... You know, you actually sit back. It's almost sort of like a Vespa, an electric Vespa. And, um ...... several people have died. And, and, you know, the, the companies shut down for a while, but then they kind of brush it, brush it off and, and sort of continue, continue expanding. So it is... The, the scooter wars are, are sort of an interesting and, and weird dynamic that's now in, in pretty much every city at this point.

Chris Williamson 6:31 I can see you or an equivalently talented writer-

Reeves Wiedeman 6:36 (laughs)

Chris Williamson 6:37 ... coming up with a really interesting book about that in maybe five years once we have a little bit more story arc about all of this, because it's such a, like Pokemon, Power Rangers battle of the sort of weird novelty, uh, personal locomotion worlds.

Reeves Wiedeman 6:53 Yeah. (laughs) Right. And which one's gonna win, you know? And, and what's, what's the difference between them? And, and it is, I mean, you, you know, it's actually is something I've, I've thought about. And I think one of the interesting things about a lot of these kinds of companies, some of the ones we're talking about, but the scooter ones specifically is, is these are Silicon Valley startups that are taking that kind of ethos and bringing it into like the real physical world. Like this is not a piece of software that just exists somewhere. This is suddenly there are scooters all over my city. And, and there's good parts of that and there's bad parts of that. And you can argue both sides. I, despite the story I just told you, have enjoyed riding these scooters, um, in, in other situations. And I, I think there, there may be a very good argument for them, but, but they do put these companies in kind of an interesting place that they weren't in 10 years ago, which is that Silicon Valley startups typically, um, preferred to kind of choose to believe that the real world was sort of over there and, and that they didn't necessarily have to think about how their... whatever they were working on, sort of what effect it had on the broader world beyond whatever they want to do. And now these companies are having to deal with city councils and politicians and local businesses. And-

Chris Williamson 8:08 Real shit.

Reeves Wiedeman 8:10 Yeah. Real shit. And, and-

Chris Williamson 8:12 (laughs)

Reeves Wiedeman 8:12 And I, I remember I, I... one of the first of these companies I wrote about was Uber back in 2017. And, um, this was when Travis Kalanick, the founder of Uber, um, was... It was sh- around the time that he was ousted from the company. Um, the company was going through all this, all this turmoil. I remember talking to an advisor who, who the company had hired, who, who sort of, uh, his job was to kind of help, uh, startups deal with politics. And he was so frustrated that all of these companies just wanted to believe that they could go into any of these cities, do whatever they want, because in their view they were making it better and not realize that they're now part of an ecosystem. And, and that while there are great things about Uber, about scooters, about WeWork, um, you know, when you get into the physical world, you're suddenly dealing with more than just bits and, and data. So...

Chris Williamson 9:02 That's a lovely open loop into the story of WeWork, isn't it?

Reeves Wiedeman 9:07 Yeah.

Chris Williamson 9:08 So where do we begin? What's the... People who are listening don't have a clue what WeWork is. They've probably gone past them in the street, the sign, but maybe haven't realized... Give us the, the, whatever it's called, the CliffsNotes on-

Reeves Wiedeman 9:25 Yeah.

Chris Williamson 9:25 ... WeWork as a company.

Reeves Wiedeman 9:26 Well, well, in a n- in a nice loop, the story really begins... I mean, given the era that we're in, it begins in the last recession, and it begins in, in kind of 2008 when, um, Adam Neumann, who was one of the co-founders of WeWork along with Miguel McKelvey, an architect, um, long story short, got together and decided to... They wanted to bake- make what was basically an office leasing company. And, and they were both sort of had worked in, in small businesses. Miguel had worked at a small architecture firm. He had also worked at a tech startup before. Um, and Adam, uh, had a few of his own businesses, um, and, and they've been, they've been written about before, uh, somewhat humorously. One of them was a, a baby clothes business where the main feature of the product was that they had knee pads. Um, uh, the idea was that babies when they crawl their knees must hurt, um, even if they can't speak and, and tell adults that, that their knees hurt. Um, it didn't quite work, (laughs) but it did become a real baby clothes business. Um, and, and he tried a few other things and, and so, you know, i- in sort of the depths of the recession in 2008 when, when, you know, companies were, were crumbling, um, they started this business to, to lease, um, lease out, just basically take a space, cut it up into smaller pieces and lease it out to people. And, and it, it worked great and, and there are all kinds of reasons that, that it worked great. They built a nice space. Uh, people at that time were looking for community. You were getting laid off from your job and maybe you were starting to freelance and you wanted a place to go, which I think we can all kind of empathize with, with now even though we're, we're sort of dealing with a, a different set of circumstances. Um, so that's, that's sort of where the business began. And, and then from there, it, it, it grew, um, you know, pretty steadily and, and then eventually pretty exponentially, um, to become a, a global office space business, um,

Reeves Wiedeman 11:27 operating more or less under the same principles, um, that then morphed into other things. Um, it morphed into becoming a tech company or aspiring to become a tech company. Um, it morphed into becoming what, what Adam liked to call a community company. That WeWork was not in the business of, of real estate, but they were in the business of, of bringing people together. And, and under that umbrella, the WeWork eventually had apartments, um, they had a gym, um, they had an elementary school, um, and all manner of other kind of business lines that, that were, uh, eventually assembled under a mission statement that the company revealed at the beginning of last year, which is to elevate the world's consciousness, um, which we can dive into what exactly that means. That's actually a question that I asked Adam Neumann himself, um...... but that's, that's sort of the- the long story of the rise of WeWork, um, and- and then, you know, uh, the- the sh- the short, or the short version I guess, and- and the short version of the fall is that the company tried to go public. Um, the stock market looked at a company that had all of those things that I just talked about, that made some money but also lost two billion dollars, um, in- in, uh, 2018 alone, um, and decided that this was not a- a- a good business, frankly. And- and that they didn't have faith in the business, and- and sort of in- in pretty much the most spectacular kind of IPO failure anyone can remember, the company pulled its IPO. Um, Adam Neumann was pushed out, um, and, uh, he is, uh, sort of spending, spending his days at the moment, um, well, uh, surfing and waiting for a payout and- and seeing- seeing kind of what- what happens next. But that's the-

Chris Williamson 13:16 The short-

Reeves Wiedeman 13:17 ... short, uh, bre- that's the CliffsNotes versions of the- the book I just wrote.

Chris Williamson 13:20 Dude, I mean, I've watched, before reading, uh, your book, I'd watched a bunch of different videos that have been done on it. The guy's name is gonna escape me, Australian dude, YouTuber-

Reeves Wiedeman 13:34 Mm-hmm.

Chris Williamson 13:34 ... who does some really great... Again, everyone's just gonna be screaming down their AirPods at me. It'll come to me.

Reeves Wiedeman 13:41 (laughs)

Chris Williamson 13:42 Anyway, um, I noticed over the last two years or so, quite a lot of high profile YouTubers who are interested in this sort of stuff, documenting this slow motion third trimester car crash that is the WeWork kind of downfall.

Reeves Wiedeman 13:58 Yeah.

Chris Williamson 13:58 Just before we go back, I want to get into Adam Neumann, because I think he's kind of the crux to all of this. What- what actually happened with the IPO? Like, did- do you need, like, a particular amount of interest before you go public? Why- why was it-

Reeves Wiedeman 14:11 Sure.

Chris Williamson 14:11 ... a failure?

Reeves Wiedeman 14:13 Yeah, well, you know, the- the public often thinks of IPOs of, like, "Oh, am I, am I gonna invest in this, and is this gonna be the next Apple?" And it's, "Is this gonna pay for my kid's college education?" Like, an IPO is very specifically, company needs money and they need to raise it. And in- in WeWork's case, they were trying to raise three billion dollars. Um, and, you know, as part of these IPO roadshows, which is what all these companies are doing now, although they don't, they don't actually go on the road anymore, um, is they go around to investors. Um, they give them, uh, a document. It's called an S1. It's a document that's filed with the- the SEC in the United States. Um, and- and then they give them a presentation. They say, "Here's how our business works." Um, you know, they're supposed to sort of be honest and forthcoming about some of the potential problems. Um, 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...

Chris Williamson 15:45 How would you describe Adam Neumann as a person and a CEO?

Reeves Wiedeman 15:51 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.

Chris Williamson 17:20 I mean, Billy McFarland from Fyre Festival was a very charismatic and outgoing CEO.

Reeves Wiedeman 17:27 Mm-hmm. Indeed. And, uh, for this book, I called Billy in prison. Um-

Chris Williamson 17:34 No way.

Reeves Wiedeman 17:36 Yep.

Chris Williamson 17:36 Fuck.

Reeves Wiedeman 17:36 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.

Chris Williamson 17:57 No way.

Reeves Wiedeman 17:57 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-

Chris Williamson 19:13 I wonder what... I would love to be a fly on the wall at a meeting between Adam Neumann and Billy McFarland man.

Reeves Wiedeman 19:20 Yeah. (laughs) Same.

Chris Williamson 19:20 Did you ever see... Did you see that podcast between Grant Cardone and The Real Wolf of Wall Street?

Reeves Wiedeman 19:27 No, I didn't.

Chris Williamson 19:28 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.

Reeves Wiedeman 19:44 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.

Chris Williamson 20:30 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-

Reeves Wiedeman 20:44 Mm-hmm.

Chris Williamson 20:44 ... a little bit like how you watch a horror movie-

Reeves Wiedeman 20:47 Yeah.

Chris Williamson 20:47 ... 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.

Reeves Wiedeman 21:05 Mm-hmm.

Chris Williamson 21:06 Would you agree? Is that the, is that the, the primary, um, pull, like the reason that people are compelled to look at WeWork?

Reeves Wiedeman 21:15 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-

Chris Williamson 21:24 That guy is everywhere.

Reeves Wiedeman 21:24 He's everywhere. He's everywhere. And I, I, um, you know... Good for him. But, uh-

Chris Williamson 21:30 (laughs)

Reeves Wiedeman 21:30 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-

Chris Williamson 22:14 (laughs)

Reeves Wiedeman 22:14 ... and you tried to do this thing in, in however many weeks, and of course this wasn't going, gonna work. And, and so I think it's, it's, it is fun and, and satisfying too. And, and same thing with WeWork, you know? You've got this tall haired guy who smokes a lot of weed and, um, surfs a lot, um, who started an elementary school i- in an office leasing business. Of course this, this wasn't gonna work. Um, and people were saying that along the way, and there were certainly people who, as they said that, once it happened, they, they, um, felt sort of, um, rewarded for their, their skepticism. And then I think for the rest of us, it's just kind of the enjoyment of watching a train wreck.

Chris Williamson 22:53 Yeah. It, it feels like, um, vindication that someone has potentially got their comeuppance. I think that's, that's part of it.

Reeves Wiedeman 23:04 Yep.

Chris Williamson 23:05 I wonder whether companies like Fyre Festival and WeWork are latent pressure release valves for all of our pent up distrust and dislike of other unicorn-y companies that we think like, "Holy shit, calm, calm."

Reeves Wiedeman 23:23 Mm-hmm.

Chris Williamson 23:23 "Meditation app? Thumbtack?"

Reeves Wiedeman 23:25 Okay. Yeah.

Chris Williamson 23:25 "Thumbtack? Are we being serious?" Like, do you know what I mean? Like all of these... Everybody knows the, the, the big lie of Silicon Valley at the moment is that companies are being sold on this limitless upside scalability, but not all of them are going to make it, and yet all of them are being invested in as if they are. And I think that particular instances like this are kind of the, the, um, sacrificial lamb to the slaughter that allows all of us to bestow our, like, distrust towards Silicon Valley generally, it just happens to have fallen on Adam Neumann and, uh, Thingy McFarland's shoulders.

Reeves Wiedeman 24:03 Yeah. I think, I think that's right. And I, I talked to a, a guy who ran a company that was sort of competitive with WeWork in the early days. And, and for a variety of reasons, you know, this guy's done fine for himself. His, his business still exists. He's done great. He's very wealthy. Um, he didn't go on the kind of blitzscale, "I'm going to take over the world" path, um, that Adam did. And, and he talked to me about how... And this was, uh, w- we spoke, um, last spring for, wh- when I was sort of reporting on the company before everything, uh, fell apart in the spring of 2019.... and he talked to me about how, you know, the reason he cared about this story was it felt like if Adam gets away with this, then, like, what are the rules? Like... And, and what are the rules, frankly, and this is, like, from a diehard capitalist, like, worked in finance, went to business school. He's like, he's like, he was basically saying, "What is capitalism good for, um, if, if you can just kind of play fast and loose, uh, with the rules, if the whole goal is to grow big, not worry about consequences? Um, then, then maybe this whole system we've, we've set up, like, isn't, isn't actually as, as beneficial to society as, as I would, I would hope it would be." And that's, that's not coming from Bernie Sanders. That's, that's coming from a guy with an MBA. So-

Chris Williamson 25:20 Yeah, 100%, man. The last bastion that all capitalists, I'm one of them, have to stand at, like, "We will make our stand here," is supply and demand.

Reeves Wiedeman 25:33 Mm-hmm.

Chris Williamson 25:34 It's the fact that the market will reflect the demand for a product, and there's only so far that you can get on hype and clout and, um, just a, a, a charming guy in a meeting. Eventually, you will run up against the market, and, and it is a immovable object.

Reeves Wiedeman 25:51 Mm-hmm.

Chris Williamson 25:52 And if you're, if you're not an unstoppable force, the markets, the market's going to bum you, um, and it would appear that that's what's happened with WeWork. So before we get onto the downward slope-

Reeves Wiedeman 26:05 Mm-hmm.

Chris Williamson 26:05 ... can you lay the landscape of just how vast their operation was? And can we also talk about the amount of wealth and investment that they'd accrued, including that particular, uh, Asian investor?

Reeves Wiedeman 26:17 Sure. Um, so, you know, by the... By 2019, by the spring of 2019, when I, when I started reporting on, on the company, I, I think, and this... The first location opened in 2010, um, in, in SoHo in, in New York City. Uh, by 2019, they had more than 400, uh, 30-plus countries, um, five different continents. Uh, they were just opening in Africa, in, in Johannesburg. Um, hundreds of thousands of, of members, um, as they called them, not, not tenants. Um, and, and the reason... And, and by all accounts, as, as Adam Neumann himself put it, um, uh, and, and, and probably accurately, uh, this was the fastest physical expansion by any company ever. And that's, that's probably true. He, he very coyly said that he wasn't sure, uh, about Roman times and that there may have been, uh, high growth startups in, in Roman times. Um, but, uh, it, it, it grew incredibly fast, and the reason they were able to do that is because mainly... O- o- on the one hand, and, and I think it's worth giving credit where it's due, they provided something that people wanted. Uh, WeWork offices were cool. Um, they had good coffee. You could meet cool people. Flexible, if you wanted to get out next month, you could do it. You didn't have to sign a five, 10-year lease. There are all kinds of reasons that, that that's a problematic business model, but it was a thing that, that people wanted. The other thing, as you alluded to, is that Adam Neumann was extremely good at raising money. Um, and that started with him just kind of raising money from friends and family. Uh, the first big round of investment was from Benchmark, which is a big Silicon Valley firm. They were the earliest major investor in Uber, uh, big early investor in Instagram, um, and just kind of a classic Silicon Valley venture capital firm. Um, was a, was a big question of why they... Exactly they were investing in this, in this, um, real estate company that was, that was not a tech company like the ones they, they typically invested in. But, but once that happened, um, you went through a series of investors, kind of some, some blue chip names, the JPMorgans, the Goldman Sachses, um, of the world. Um, e- eventually getting to this point in 2016 when WeWork has, has more or less tapped out most of the available sort of private money that you'd be able to get, um, from, from those banks in New York to the Silicon Valley firms. Um, they had recently scored an investment in China. Um, but then what happened is that Adam met Masayoshi Son. Uh, and Masayoshi, or, or as he's known by pretty much everyone, uh, Masa, uh, is a Japanese businessman. He, he runs a tech conglomerate called SoftBank. Um, and SoftBank has a, has a long history. He founded the company in, in the 1980s. He's, he's ridden various waves, uh, in the tech boom from, you know, selling CDs and CD-ROMs and floppy disks, back when that's what you did, um, up through, uh, doing a lot of work in getting broadband in Japan and, and mobile technology. And, and what he did in 2016 is he created this thing called the Vision Fund. Um, and the Vision Fund was $100 billion, uh, venture capital vehicle, um, with various investors. The most significant one by far was the government of Saudi Arabia, which invested $45 billion dollars of the $100 billion, um, which, 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.

Chris Williamson 32:09 Taking it on hastens the arrival of the inevitable.

Reeves Wiedeman 32:13 Exactly. Exactly. And it's, yeah, it's, it's, it's something you think you want, um-

Chris Williamson 32:17 (laughs)

Reeves Wiedeman 32:17 ... 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)

Chris Williamson 32:44 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?

Reeves Wiedeman 32:56 Uh, you know, it's, it's, it's more or less true. Um, 28 minutes is what they say. Uh, you know, he-

Chris Williamson 33:01 Shit the bed.

Reeves Wiedeman 33:02 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."

Chris Williamson 34:25 That's mental.

Reeves Wiedeman 34:26 (laughs)

Chris Williamson 34:27 (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.

Chris Williamson 35:27 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?

Reeves Wiedeman 35:52 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.

Chris Williamson 38:40 Me and you could do that. Me and you could- we could get-

Reeves Wiedeman 38:43 I mean-

Chris Williamson 38:43 ... whatever that nice apartment that you're in now with that painting of a very majestic castle is-

Reeves Wiedeman 38:49 (laughs) This is, this is at WeWork in, uh, Austria.

Chris Williamson 38:52 (laughs)

Reeves Wiedeman 38:54 Yeah.

Chris Williamson 38:54 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-

Reeves Wiedeman 39:35 Yup.

Chris Williamson 39:35 ... 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-

Reeves Wiedeman 39:49 Mm-hmm.

Chris Williamson 39:49 ... 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.

Reeves Wiedeman 39:59 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.

Chris Williamson 41:30 Or both.

Reeves Wiedeman 41:31 Or both. I mean, and that's- that's-

Chris Williamson 41:33 (laughs)

Reeves Wiedeman 41:33 ... 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.

Chris Williamson 42:16 Take us through the downfall. What happened? And also-

Reeves Wiedeman 42:19 The-

Chris Williamson 42:19 ... it happened to be when you began reporting on them. Have you considered that?

Reeves Wiedeman 42:23 Uh, I- I- I think that I played a very, very, very, very small role.

Chris Williamson 42:27 Pivotal.

Reeves Wiedeman 42:28 (laughs) But I showed up, um, a few days before Adam went on his 40th birthday party, um, uh, around the world trip, uh, that ended up in the Maldives. Um, he's a big surfer, as- as I've mentioned, and, um, while they were there, this was in April of 2019, um, they, uh, decided to go public, and- and this had been a thing they had been kind of tossing around but- but didn't want to do, and Adam didn't want to do because if you're that, sort of have that temperament, it's a lot easier to just be able to connect with Masa and say, "We're gonna go take this big risk." Once you become a public company, you have shareholders to- to report to, and- and, you know, you're gonna have (laughs) to explain why you're, why you're opening an elementary school. Um, and so from there, it was basically...... an extremely chaotic summer. Um, a lot of the companies you're seeing going public now, uh, the Airbnbs of the world, um, they've been preparing for this for a long time. Um, WeWork in, in certain ways had been... There had been an, an early pre-Masa moment where they considered going public and, and very fatefully, uh, decided not to. Um, but it was, it was a sprint, and it was a sprint from April to the end of the summer, uh, when the company released, uh, what's called an S-1. Um, and, and the S-1 is a document... Uh, is again, this document that you, you, you send to the SEC, and it has all these, um, uh, all this information on, on how your business works, basically, that, that is meant to give to investors. And sort of from the beginning, it was clear, you know, these documents are, are very boring documents. They are pages and pages of charts and graphs and, uh, disclosures in very small font. Um, in the beginning, the very first page of... I've just looked it up so I can read it verbatim. Um, the very first page of WeWork's version of this said, "We dedicate this to the energy of we, greater than any of us, but inside each of us." Um, again, it's sort of a... You can ask lots of questions about what that, uh, that actually means. Um, but, uh, the point is, if you're a financial investor and that's the first thing you s- you see, you're sort of like, "Huh?" Um, and so, you know, then from there, it was, it was, uh, a sort of shockingly quick, um, turn of public opinion against the company. And again, some of that was people 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?"

Chris Williamson 45:07 What sort of quirks?

Reeves Wiedeman 45:08 Um... What's that?

Chris Williamson 45:09 What sort of quirks?

Reeves Wiedeman 45:12 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."

Chris Williamson 47:04 (laughs)

Reeves Wiedeman 47:04 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-

Chris Williamson 47:22 Sounds lovely.

Reeves Wiedeman 47:23 ... 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.

Chris Williamson 47:45 Do you know the British term, "All talk and no trousers"?

Reeves Wiedeman 47:51 Uh, no, but I can guess-

Chris Williamson 47:52 You can imagine what it means. (laughs)

Reeves Wiedeman 47:54 ... where it's going. Yeah. Yeah.

Chris Williamson 47:55 And tha- that's Adam Neumann. Like-

Reeves Wiedeman 47:56 Yeah.

Chris Williamson 47:57 ... um, I, I... This is again-

Reeves Wiedeman 47:59 Well, the, the corollary for Adam is, is, uh, "All talk, no shoes," because he would walk around-

Chris Williamson 48:04 Barefoot.

Reeves Wiedeman 48:05 ... without wearing shoes a lot.

Chris Williamson 48:06 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-

Reeves Wiedeman 49:00 Yeah.

Chris Williamson 49:01 ... is, is the icing on a very twatty cake.

Reeves Wiedeman 49:04 (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-

Chris Williamson 49:16 It never gets old, man. It never gets old, Reeve.

Reeves Wiedeman 49:18 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.

Chris Williamson 50:11 100%. 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."

Reeves Wiedeman 50:50 Mm-hmm.

Chris Williamson 50:50 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.

Reeves Wiedeman 51:07 Elizabeth Holmes.

Chris Williamson 51:07 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.

Reeves Wiedeman 51:30 (laughs)

Chris Williamson 51:30 Like, fundamentally, their businesses did not work, but specifically with Theranos, like-

Reeves Wiedeman 51:37 Mm-hmm.

Chris Williamson 51:37 ... you said it was going to do a thing and it didn't. At least Adam Newman actually had offices-

Reeves Wiedeman 51:41 Yep.

Chris Williamson 51:41 ... they just weren't financially sustainable, and they were, the, um, minimum occupancy was too high and it was too risky. Uh, Billy McFarland did not deliver a festival.

Reeves Wiedeman 51:50 (laughs)

Chris Williamson 51:50 Elizabeth Holmes did not test your blood.

Reeves Wiedeman 51:53 Mm-hmm.

Chris Williamson 51:54 Um, but between them all, there's some common threads. So I wanna get into the, uh, the Theranos story just a little bit, because it's just, it's-

Reeves Wiedeman 52:02 Sure.

Chris Williamson 52:03 ... just fun. Um-

Reeves Wiedeman 52:04 Yeah.

Chris Williamson 52:04 ... before we do that, what are the lessons that you think the world should take away from the WeWork story?

Reeves Wiedeman 52:12 I've been thinking about this a lot, especially, you know, I, I started writing this book before, um, the pandemic began, um, and we are in an era where, for better or worse, a new world is going to be built. And, and Adam new... Maybe not a new world, uh, new things are gonna be built, um, frankly more easily than, than they once were, because, you know, as, as with the Adam Newman WeWork story, um, he built it out of a recession. It, it, it wouldn't have worked if he, if he had started it at another point. He started it at this, this sort of trough when real estate prices were low, and, and you could do something kinda different. And so we're, we're at the beginning of some kind of new cycle, and, and I think as, as I look back, um, eh, on, on this story and, and this era, trying to figure out the fine line (laughs) between, um, I guess to, to sort of take what you said, being, being charming and being a charlatan, is, is a crucial sort of radar for, for all of us to develop. And, and I don't... You know, it's, it's tricky to know which person is gonna fall on, on which kind of line, but I, but I think, you know, we can look at this in our, in our politics, um, in business, in everywhere. We've, we've become more and more, I think, keen to follow kind of charismatic leaders, um, and there's no easy solution to, to solving that. But I think being wary, (laughs) I guess being wary of charisma, um, and, and thinking more about, about the numbers and, and the data behind anything is, is something that we'd all would do well to, to follow.

Chris Williamson 53:59 I agree, man, it is... The cult of personality is just so, so strong.

Reeves Wiedeman 54:06 Yeah.

Chris Williamson 54:07 And, um, I wonder how much social media's played into this, you know? Like previously, people who were famous or talented or competent or whatever, um, they felt like so untouchable, you know?

Reeves Wiedeman 54:20 Yep.

Chris Williamson 54:20 Like there were these angelic, symbolic, difficult to reach, barely human individuals that you would hear about or that people would go to a street parade to catch a glimpse of.

Reeves Wiedeman 54:34 Mm-hmm.

Chris Williamson 54:35 And now, like I know what Kim Kardashian's dog's called because she uploads like 45... I mean, I obviously don't follow Kim Kardashian on Instagram.

Reeves Wiedeman 54:43 (laughs)

Chris Williamson 54:43 Uh, but I imagine if I did, I would know what her dog was called. And-

Reeves Wiedeman 54:46 It's okay if you do, I think-

Chris Williamson 54:48 Reeves-

Reeves Wiedeman 54:48 ... uh, you know, a lot of people do.

Chris Williamson 54:48 ... Reeves, I promise you, I promise you-

Reeves Wiedeman 54:50 All right.

Chris Williamson 54:50 ... I, I don't. Someone's gonna go and check, but I, I know I don't.

Reeves Wiedeman 54:53 (laughs)

Chris Williamson 54:54 Um, yeah, e- e- we, we have this desire for transparency and this cult of personality I think is being fed by the ability to see behind the curtain, you know? Like, President of the United States, man, like he's tweeting all the time, and I think it's thoroughly entertaining, but I think it's incredibly unpresidential. Um, and the fact that you have this (laughs) ambassador for the...... personality, uh, frontier, being the most powerful man on the planet. It's like, "Well, if he can do it."

Reeves Wiedeman 55:32 Yeah. And I ... You know, um, Adam Neumann was very good friends with Jared Kushner. Um, they were, you know, both New York real estate people. Um, Adam Neumann and Donald Trump were, were New York real estate people. And it's, it's not new that, that, you know, this kind of bombast can, can get you far. Um, it does feel as if it can get you farther than it once did. Um, that it's-

Chris Williamson 55:54 Mm-hmm.

Reeves Wiedeman 55:54 ... maybe a liter- a little easier to sort of pull the wool over people's eyes. And yeah, I think, I think social media and, and the way it, it enables anyone to kind of, um, build a global brand off of very little, um, sometimes you can back that up. Uh, sometimes you can get by without having to back it up for a while. But eventually, at least that's what we'd like, we'd like to believe, um, eventually there, there will be some consequences for it. And I think there was in the WeWork case, um, we'll see in the President's case and, and in others, but, um-

Chris Williamson 56:28 Yeah. People get-

Reeves Wiedeman 56:29 ... I, I think that's certainly the case.

Chris Williamson 56:30 They get found out, right? Um, yeah, I mean, the thing with social media is that you can scale clout-

Reeves Wiedeman 56:38 Mm-hmm.

Chris Williamson 56:38 ... in a way that you never could before. Previously, to become famous, you had to do something, not just be someone. And the fact that you can be famous for just being someone, not like-

Reeves Wiedeman 56:49 Mm-hmm.

Chris Williamson 56:49 ... Louis XIV just be someone, not like dynasty wealth, uh, bourgeois living in some baroque mansion somewhere. Not that kind of be someone. I mean, like-

Reeves Wiedeman 56:59 Mm-hmm.

Chris Williamson 56:59 ... just, uh, reality TV.

Reeves Wiedeman 57:02 Mm-hmm.

Chris Williamson 57:02 Spent six weeks on the right TV program and come off, and the entire country knows your name.

Reeves Wiedeman 57:06 Mm-hmm.

Chris Williamson 57:06 Um, like, that is fame for fame's sake.

Reeves Wiedeman 57:11 Yeah.

Chris Williamson 57:11 As opposed to fame for talent or capability or hard work or whatever s- sake. Um, but as with many things that are hollow like that, when you come up against slightly tougher times, or when you decide to actually stress test that fame, you find that it's incredibly hollow. And you're like, "Oh, actually, there's nothing in here." Like, hit it-

Reeves Wiedeman 57:29 Yes. (laughs)

Chris Williamson 57:29 ... with a hammer and it crack- it cracks and splits everyone.

Reeves Wiedeman 57:32 Yeah.

Chris Williamson 57:32 And you're like, "Oh, th- that was all it was." I thought that this was the Elon Musk, "I am allowed to have this much bravado because of how much, uh, gusto I've got behind me, how virtuous and s- and sort of, uh, reliable this is." Uh-

Reeves Wiedeman 57:47 Yeah.

Chris Williamson 57:47 So I want to finish off on the Elizabeth Holmes-Theranos story. If anyone doesn't know or is interested, if this, um, slow motion car crash sounds interesting, first off, go and buy Billion Dollar Loser, linked in show notes below. Uh, the, the fantastic book that we've just been talking about. Um, but also on Amazon Prime, just search Theranos, T-H-E-R-A-N-O-S, and there's a really, really good documentary about it. What parallels can we draw from Adam Neumann to Elizabeth Holmes?

Reeves Wiedeman 58:17 I ... You know, I'll, I'll start by saying the one difference, which you hinted at earlier, is, is that, uh, you know, WeWork worked. The, the business was there, it was a real thing. There were offices. Uh, people liked them. They paid money for them. Um, all, all of those things was, was a very real difference. Um, but it was interesting that, you know, I started reporting on this just as, I think, that, that documentary was coming out. And I was talking to WeWork employees, and, and they were suddenly feeling kind of nervous having watched this, this Theranos documentary. And I think some of the similarities are, are obviously in, in the two leaders. Um, Elizabeth Holmes wa- you know, became famous, uh, as, as you said, um, at f- with- without having the real- or any- anything real to sort of, sort of back that up. Um, Adam had become this, this ... a similar kind of figure. Um, you know, there, there were, there were things like the stratification of information. I mean, you, you look at these two different- two companies and, you know, they, they ... both of them kind of became so big so fast, you were kind of in your own corner. And, and you assume that there are adults in the room.

Chris Williamson 59:24 (laughs)

Reeves Wiedeman 59:24 You assume that there are kind of checks and balances going on, which is like what we all hope. I mean, that's the only way to, like, go through your day, um, with, with some kind of healthy s- skepticism, but some kind of belief that, that people are running the numbers. And, and I think, you know, in both cases, that, uh, that failed, um, failed people. And then, and then the checks and balances on that point, you know? It w- A lot was made about with Theranos, there were no doctors on its, on its board. It was all kind of big names who had been kind of wooed by, by Elizabeth Holmes and, and charmed by her. And, 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.

Chris Williamson 1:00:16 The partitioning of information is really interesting, and it's-

Reeves Wiedeman 1:00:21 Yep.

Chris Williamson 1:00:22 ... telling that that's how every secret service across the world works as well.

Reeves Wiedeman 1:00:27 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.

Chris Williamson 1:00:49 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-

Reeves Wiedeman 1:01:00 Yeah.

Chris Williamson 1:01:00 ... gets this same comeuppance satisfaction, the calling out of hypocrisy.

Reeves Wiedeman 1:01:04 Yeah.

Chris Williamson 1:01:04 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?

Reeves Wiedeman 1:01:16 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.

Chris Williamson 1:01:34 Peace. Thank you very much.

Reeves Wiedeman 1:01:35 I don't follow Kim Kardashian either.

Chris Williamson 1:01:37 And on that note-

Reeves Wiedeman 1:01:39 So you and I are the only two people in the world.

Chris Williamson 1:01:41 Who don't follow Kim Kardashian.

Reeves Wiedeman 1:01:43 Yeah.

Chris Williamson 1:01:43 Right. Sorry, Kim. But for now, ladies and gentlemen, I'll catch you next time.