WeWork

Zoom

WeWork

WeWork's model was fundamentally a real estate arbitrage play dressed up as a tech company. They signed long-term leases on buildings (often 10-15 years), spent millions renovating them, then rented desks and offices to members on month-to-month or annual contracts.

The spread between what they paid landlords and what members paid was supposed to be the profit.

The problem was the mismatch. Long-term obligations on the lease side, short-term flexibility on the revenue side.

In good times, buildings are full and the spread is healthy. In bad times — say, a global pandemic that empties offices — you're locked into paying rent on empty buildings while members cancel month-to-month.

Neumann tried to juice margins with ancillary services: WeWork Labs for startups, Powered by We for enterprise buildouts, and WeWork's own internal ventures. The company also launched WeLive (apartment living) and WeGrow (a private elementary school run by Neumann's wife).

These distractions drained cash without generating meaningful revenue.

Zoom

Zoom uses a freemium model. Free accounts get unlimited one-on-one meetings and 40-minute group meetings.

Paid plans start at $13.33/month per user for Pro (meetings up to 30 hours), $18.33/month for Business, and custom pricing for Enterprise. Zoom also charges for add-ons — Zoom Phone (cloud phone system), Zoom Rooms (conference room hardware), and Zoom Contact Center.

The free tier is the hook. The 40-minute limit on group calls creates just enough friction to push power users to pay.

And once one person in a company pays, the whole team follows because nobody wants to be the one whose meetings keep getting cut off.

WeWork

Adam Neumann was a 6'5" Israeli former naval officer with a talent for fundraising that bordered on hypnosis. Miguel McKelvey was an architect from Oregon with hippie parents who raised him in a commune.

Together in 2010, they launched WeWork from a single building in SoHo, New York — though they actually started with a predecessor called Green Desk in 2008, which was a sustainable coworking space in Brooklyn that they sold to their landlord.

The original concept was dead simple: lease entire floors of commercial buildings at bulk rates, renovate them with trendy design — exposed brick, beer on tap, inspirational quotes on the walls — then sublease individual desks and offices at a premium. The "community" angle was the differentiator.

WeWork wasn't just selling desks. It was selling belonging, networking, the feeling of being a startup founder even if you were a freelance graphic designer working alone.

The timing was perfect. After the 2008 recession, commercial real estate was cheap and available.

The gig economy was exploding. Millennials were entering the workforce with different expectations about work environments.

And startups that couldn't afford traditional office leases needed flexible space. WeWork grew from 1 location to 5 within two years, and the waitlists were long.

Zoom

Eric Yuan grew up in Tai'an, a mining city in Shandong province, China. In the mid-1990s he was in his twenties and inspired by the internet boom happening in America.

He applied for a US visa. He was rejected.

He applied again. Rejected again.

Eight times in total over about two years before he was finally approved in 1997. He moved to Silicon Valley with barely any English and joined WebEx as one of its first engineers.

Yuan spent 14 years at WebEx, eventually becoming VP of Engineering. Cisco acquired WebEx in 2007 for $3.2 billion.

Yuan watched Cisco slowly bloat the product with enterprise features while the core video quality deteriorated. He kept telling Cisco leadership they needed to rebuild the product from scratch.

They kept saying no.

In 2011, Yuan quit and took 40 WebEx engineers with him. He founded Zoom Video Communications with a simple thesis: video meetings should just work.

No downloads. No lag.

No "can you hear me?" No IT department required. He built the product that Cisco refused to build.

WeWork

WeWork grew through sheer aggression funded by seemingly unlimited capital. They would enter a city, sign leases on multiple buildings simultaneously, renovate at premium cost, and absorb losses until locations filled.

The playbook was Uber-style: spend aggressively, dominate the market, worry about profitability later.

The "community" brand was powerful marketing. WeWork events, networking mixers, and the overall vibe attracted a loyal member base that became free ambassadors.

Instagram photos of beautiful WeWork interiors drove organic demand.

Enterprise was the real growth engine. By 2019, over 40% of members were from companies with 500+ employees.

Microsoft, Amazon, and Salesforce all had teams in WeWork. Enterprise clients signed longer contracts and were more predictable than freelancers, but WeWork still spent far more acquiring and building out space than it earned from these relationships.

Zoom

Zoom grew on one thing: it worked. In a world where every video call started with five minutes of technical issues, Zoom calls just connected.

That reliability was the entire marketing strategy for the first five years.

The freemium model did the rest. Teachers, coaches, therapists, book clubs, and small teams all started on the free tier.

When they hit the 40-minute limit, enough of them converted to paid. And every free meeting was essentially a demo — everyone in the meeting saw how good Zoom was.

Yuan obsessed over simplicity. While competitors like WebEx and GoToMeeting required downloads, plugins, and IT involvement, Zoom worked in the browser with one click.

The learning curve was essentially zero. Your grandmother could figure it out.

That turned out to be extremely important when a pandemic suddenly required your grandmother to figure it out.

Then COVID happened. In March 2020, the world shut down.

Every meeting — work, school, family, doctor, church, happy hour — moved to video. Zoom was already the easiest option.

Daily participants exploded from 10 million to 300 million in four months. The stock went from $70 to $588.

WeWork

Where to begin? The S-1 filing in August 2019 was a masterclass in red flags.

It revealed that WeWork lost $1.9 billion in 2018 on $1.8 billion in revenue — spending more than a dollar for every dollar earned. Neumann had taken $700 million off the table through stock sales and loans before the IPO.

He owned the "We" trademark personally and charged the company $5.9 million to license it. He had family members on payroll.

He flew on a private jet funded by the company.

The planned $47 billion IPO was pulled in September 2019 after investors revolted. The valuation was slashed.

Neumann was forced out and given a $1.7 billion exit package — for nearly destroying the company. SoftBank took control, cut thousands of jobs, and spent years trying to restructure.

WeWork finally went public via SPAC in 2021 at a $9 billion valuation.

Then COVID hit the commercial real estate market like a meteor. Remote work became permanent for many companies.

WeWork's occupancy plummeted. They filed for Chapter 11 bankruptcy in November 2023, listing $18.7 billion in debt, wiped out the equity, shed hundreds of leases and came back out in June 2024 as a far smaller private company.

The cautionary tale was complete.

Zoom

The post-pandemic hangover has been severe. Zoom's stock peaked at $588 in October 2020 and crashed to under $70 by 2022 — an 88% drop.

The company went from the most exciting tech stock on the planet to a cautionary tale about pandemic valuations. Revenue growth slowed from 300%+ to single digits as people returned to offices and competitors caught up.

Security and "Zoombombing" were early crises. In early 2020, as millions of new users flooded in, trolls discovered they could join open Zoom meetings and share offensive content.

Schools, churches, and AA meetings were disrupted. It turned out Zoom's encryption wasn't truly end-to-end as advertised.

Yuan had to halt all feature development for 90 days and focus exclusively on security fixes. It was a near-death reputational crisis.

Competition from Microsoft Teams and Google Meet intensified. Both companies bundled video calling for free into products that hundreds of millions of people already used.

Microsoft Teams integrated directly into Office 365. Google Meet was built into Gmail.

Zoom had to compete against free products from two of the richest companies on Earth.

WeWork

WeWork All Access — a membership that gives access to any WeWork location worldwide, targeting remote workers and traveling professionals. Dedicated Desks — assigned workstations in shared open-plan spaces for individuals and freelancers.

Private Offices — enclosed offices for teams, the bread-and-butter product generating most revenue. WeWork Workplace — enterprise software for managing hybrid work, office scheduling, and space utilization analytics.

On Demand — pay-by-the-day access to meeting rooms and workspace without a monthly commitment.

Zoom

Zoom Meetings is the core — video calls that actually work. Zoom Webinars handles large-scale events with up to 50,000 attendees.

Zoom Phone is a full cloud-based phone system replacing traditional office phones. Zoom Rooms turns physical conference rooms into one-click video meeting spaces.

Zoom Contact Center competes with established call center software. Zoom Team Chat is their Slack/Teams competitor.

Zoom Whiteboard is a collaborative digital canvas. Zoom Revenue Accelerator uses AI to analyze sales calls.

And Zoom AI Companion summarizes meetings and drafts messages.

WeWork

SoftBank Vision Fund was the largest and most consequential investor, pouring over $10 billion into WeWork across multiple rounds. Masayoshi Son reportedly agreed to invest after a 12-minute meeting with Neumann.

Benchmark was an early investor. JPMorgan Chase provided debt financing.

T. Rowe Price, Fidelity, and Goldman Sachs participated in later rounds.

The company raised more money than most companies ever generate in revenue.

Zoom

Sequoia Capital, Emergence Capital, Horizons Ventures (Li Ka-shing), Qualcomm Ventures