The 47 BILLION $ Cult [The dark history of We-Work.]

We-Work was one of the best start up companies in the world so how did a successful 47 Billion dollar real estate company end up being one of the worlds biggest scams. This is the insane history of the We company.

Adam Neumann was one of the Founders and CEO of We work. He is the main person in this story. He was born in Be’er Sheva in Israel on 25th April 1979. When he was a child his family moved from place to place. He liked the community feeling but didn’t like the fact that everyone got the same amount of money whatever their job on the farm was.

After he served the Israel Defense Forces in 2001 he moved to America as he had heard it was “the land of opportunity”. He arrived in U.S.A. with a business idea of a shoe which someone could remove or put high heels on. But since the first person who tried it nearly cut of her hand it was a huge failure. He was talking to his friends when one of them complained that their baby’s knees get hurt when they crawl on the floor. Another joked by saying “what if baby clothes had knee pads on them to protect them from hurting themselves”. Adam Neumann took this seriously and launched a company called “ Krawlers”. With a motto “Just because they don’t tell you doesn't mean it doesn’t hurt”. Most of his customers where women with their young children. But once again “Krawlers” failed as babies only craw for 3 months before they start walking. So Adam Neumann was in great dept. Adam was working in the same office building as a man named Miguel McKelvey [future founder of We-Work] and he met him in an elevator in the office building. They talked about different ways to make money and soon they became close friends with one another.

Neumann told Miguel about a good business idea of leasing buildings from landlords and renting it to small companies. Soon they met a landlord named Joshua Guttman. Joshua Guttman was first sceptical about the idea. He asked them “your a baby clothing company, what do you know about real estate ?” Adam replied “floors of your building are empty, what do you know about real estate?”. Guttman was impressed and told them to bring their business plan and go to him the next day. In truth however, Adam and Miguel didn’t even start writing their business plan, so Miguel wrote it over night. When they presented it to Joshua, he still liked it and gave them many floors in his building and some money for renovation in exchange for 50% of the company. The company was called ‘Green Desk’ to make it seem eco-friendly, even though Green Desk had nothing to do with saving the eco-system. Green Desk was launched in Brooklyn , New York during May 2008.

Although it was launched right after a major market crash they got many small companies to work there as it was the Yippee Period in New York when many people started their own small companies. Green Desk was mainly focused on community feeling and environment. It made sense because when a company moved in they would already get furniture from IKEA. Since Adam was very persuasive he got many investors. Adam wanted to start leasing more buildings from other landlords as Green Desk could become even more profitable than it already was, but Guttman found that very risky and disagreed. Adam Neumann told Miguel McKelvey that they didn’t really need Joshua Guttman and that they should just sell their shares of Green Desk and create a new chain of companies. Miguel agreed and they sold their shares for a total of 3million dollars they searched for different landlords but all declined the offer. Soon they met a real estate developer named Joel Schreiber. Joel asked Adam to name how much money was the company valued at, to which Adam replied, “40 billion dollars” but he was lying. Schreiber agreed to invest 15 million dollars and introduced them to different landlords who agreed to lend Adam and Miguel different buildings. Adam got a perfect building in the 154 Grand Street in SoHo New York City. Adam and Miguel named it ‘WeWork’ so in the future they could open apartments, restaurants, hotels, etcetera and name it things such as WeLive, WeEat, WeStay, etcetera.

Many of WeWork’s early employs had to do physical labor which wasn’t in their job contract. They day and night and Adam managed to convince them that once WeWork made money they would get paid alot in WeWork. WeWork unlike Green Desk focused more on the community and ditched the environmental feeling. Adam told investors that earlier it was the ‘i Period — iPhone, iPod and iPad’ and told them that now it would be the ‘We Period’.

WeWork was officially released on February 17th 2010. One day, Adam Neumann went to a near by Starbucks and convinced the people on their laptops working, to join WeWork. Even though WeWork was defiantly a real estate company Adam told investors that it was a tech company as tech companies make more money than real estate companies. Whenever investors wanted to see the interior of WeWork, Adam would tell his works to ‘activate the space’ a code word for ‘have a party’ so that the investors had the impression that WeWork was always a fun area for doing work. Only 9 months after the first WeWork office opened, the second office opened in 175 Varik Street in New York City. Every Summer, the WeWork team and its employs would go on an annual summer camp.

One reason WeWork went bankrupt was because according to Forbes, the camp costed $20 billion. During the summer camps, there would be lots of alcohol and cigarettes. In 2016, The We Company launched WeLive which had apartments in Wall Street, New York City and Crystal City in Virginia near Washington.

By that time WeWork had over 110 locations open world wide in 12 countries and 33 cites and had around 80000 members. Masayoshi Son who owned Softbank and briefly became the richest man alive for only 3 days in February 2000 met Adam Neumann for only 12 minutes before investing $4.4 billion.

Adam could not believe his eyes. WeWork’s valuation was now at $20 billion. Masayoshi told Adam to think four times crazier than he always thought and seemed like a father figure to him. All Adams employs though it was a bad idea because according to them Adam was already very crazy. Adam named his wife Rebekah Neumann one of the founders of the We Company even though earlier she was not involved. On 28th November, 2017 Rebekah launched a ‘Meat Ban’ because she believed that it contained emotional memory and Adam supported her even though many of his employs saw him eat meat after the ban and were not happy. Adam and Rebekah Neumann were not happy with the schools in New York City so they wanted to make their own school which Rebekah could teach in. On 5th September 2018, in Manhattan WeGrow was launched for ages 3 to 9. The students learnt about starting and running a business, had yoga classes, horse riding, soul sessions and went to the Neumann’s 60 acre farm to harvest vegetables and learn about sustainable agriculture.

The We Company also launched ‘Rise by We’ which was a luxury wellness and fitness concept, officially launched on 20th October, 2017. By now WeWork was at its peak. All these business plans were not profitable for The We Company and soon they went bankrupt. In order to get money, they had to reveal their loses and gains on the stock market, but they did not want to because they told investors that they were a profitable company, and that the company was worth trillions even though it wasn’t. WeWork originally tried to go public in August 2019, reveling massive financial losses [$1.9 billion]. To save themselves from bankruptcy, Adam Neumann launched WeStudio in May 2022. Since The We Company lost all its money, Adam Neumann resigned.

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SAMSON ARAUJO & SARAH ARAUJO