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.

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.

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.

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.

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.

The cautionary tale was complete.

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.