The co-founder and CEO of We Co. had a talent that made many on Wall Street confusing. People loved to throw money at him.
In a January round of financing, Mr. Neumann's investors were so misled that his fast-growing office space startup, formerly known as WeWork, earned an implied valuation of $ 47 billion if that number was for a business would be appropriate, which lost 1.6 billion US dollars in 2018 with a turnover of 1.82 billion US dollars, believed the supporters of Neumann.
This month, the skeptics finally triggered the fire alarm before a planned IPO. Faced with growing concerns about the business model, corporate governance and future profit potential, the company considered reducing its valuation by more than half before deciding to postpone the IPO earlier this week.
Shortly thereafter, this newspaper reported on new details of unusual events personal business Mr. Neumann had cut with the company. It also showed that the CEO smokes marijuana in private jets, wants to become a billionaire, wants to live forever and wants to be the president of the world.
None of this made it easier to understand how he has raised so much money.
The 40-year-old Mr. Neumann is in any case a special seller. But I suspect there is another, deeper reason for its investor attractiveness.
For about a decade, the business community has been preparing for what might best be called the Millennial Prophet. In a time when young, courageous, visionary CEOs have disturbed almost everything, it seems only logical that one of them will solve the biggest challenge of all ̵
Mr. Neumann, these investors may have thought they had their husband.
The conventional modern view of what it means to have a job and how it relates to a life has not changed much in 100 years. In fact, it goes back to another extremely ambitious CEO, Henry Ford.
When Ford began selling automobiles in the early 1900s, the US was nearing the height of the industrial age. The old agrarian ideal of autonomy and rugged individualism had faded. People flocked to the cities to work in factories.
Ford was an engineer, but he also had some bold, utopian and sometimes vile views on how the world works and how people should live. He knew that the country was in transition and that cars would only accelerate the process. He saw building a business as an opportunity to transform society
Ford's 2005 biography, "The People's Tycoon," doubled the basic pay for his workers to about $ 5 a day-an astonishing step that took dozens of workers to a new middle class. Ford also believed that leisure in the industrial age could no longer be a luxury for the rich and a great tool for improving work ethic and productivity. In the 1920s, he had limited the company's work week to five days and forty hours.
For more than a century, companies have been following Ford's rationale: they give me 40 hours of dutiful work, and I'll provide you with the financial means to strive for happiness at home. For decades, when respondents challenged people to set priorities in their lives, their responses reflected that trade. Having things like family, having a home, and living in peace was about to do a great job.
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To understand what some investors might have seen in Mr. Neumann, you should consider what happened more recently when Gallup's pollster asked people the same question. Having a worthwhile job is no longer one of the lowest – he has climbed up. In other words, the world seems to have changed again. Modern workers are not content just to be happy at home. They want the work to be done.
The first companies to address this issue were Silicon Valley startups in the late 1990s who decided to install office table tennis. The future of work was apparently about making it "fun".
When this thought flared up, employers wondered if people might enjoy their work more and plan longer hours if the office had hip decor and local food. Lingerie and haircuts. That did not work either. If anything, the evidence suggests that modern employees are less interested in perks than in a sense of belonging.
Even companies that introduce open floor plans to improve communication and collaboration often lead to new problems.
have given employees a new bargain – in return for sacrificing comfort such as job security and benefits, they have more control over how and when they work. As these informal contract jobs or "gigs" explode, regulators go hard.
While companies are looking for answers, it is no less likely that young workers will thrive in the old Ford system. Studies have shown that they are better educated, more concerned with finding a social purpose at work, and less resilient to changing work. High debt burdens often force them to delay or refrain from buying a home, marrying or giving birth to children.
Mr. Neumann is technically not a thousand year old, but he certainly looks and behaves like a serial disrupter. What sets him apart from most young CEOs is that he tries to disrupt the work.
In return for rent payments, Mr. Neumann's company promises the workers to enter into a living community. They will work in hip, inviting, entertaining common spaces with organized social events, many connecting points and the latest technology – or what the company calls a "physical social network". The company also promotes flexible leases that make it easier to come and go and change trajectories.
However, part of Mr. Neumann's pitch is that we are just starting. So the company has made an effort to develop and rent shared apartments. At a staff retreat last year, Mr. Neumann suggested that one day the company could cope with major social problems, including hunger. "The impact and impact we will have on this earth will be so great," he said.
Mr. Neumann may not be the Millennial Prophet, but it's easy to understand why investors have tolerated or even valued his quirks and ambitions. At long last,
was a profoundly flawed guy with a messianic trail.
It's also possible that turning offices into human fulfillment zones is simply not profitable. Maybe the problem at work is that it still works, no matter how you put it on. Maybe Henry Ford's deal is the best we'll get.
One thing is for sure. With the attempt a fortune can be made.
– Mr. Walker, a former reporter and publisher of the Wall Street Journal, is the author of "The Captain Class: A New Theory of Leadership" (Random House).
Write to Sam Walker at [email protected]