Adam Neumann’s last big idea? Becoming America’s Largest Home Owner | We are working

ANDdam Neumann presided over one of the most spectacular business crashes in recent history. A barefoot business messiah of the New Age succeeded in founding and burning down his latest venture, the office-sharing company. We are workingin such a magnificent way that even Hollywood took notice.

And now it’s back – on a quest to become America’s biggest homeowner.

Neumann, this reported this weekis running a new company that wants to reinvent apartment living. Details are sketchy, but the company Flow aims to solve the world’s housing crisis with “community-focused” rentals – basically WeWork for tenants.

After receiving one of the most sought-after blessings a startup can receive from Silicon Valley, the stream gets off to a jump start: a $350 million investment from venture capital giant Andreessen Horowitz, known as A16Z.

The announcement of the company’s $1 billion investment in Flow, which values ​​the “pre-seed” company, meaning it hasn’t been released yet, shook the startup world. It’s not only the A16Z’s biggest investment in a startup, it’s also a huge boost from Neumann, who has become an enterprising antihero. The news immediately sparked a lot of jokes and a lot of outrage on Twitter.

a16z: How can we trust you after WeWork?

Adam Neumann: I am a Neumann.

– Douglas A. Boneparth (@dougboneparth) 15 August 2022

After pledging to reshape the office world and successfully becoming the largest office holder in many cities, including London and WeWork in New York suffered a devastating crash in 2019 when the company turned out to be much less valuable than investors thought.

The company was planning to participate in the stock market at a valuation of $47 billion, but when investors began to examine the company’s business model and corporate governance structure, its value collapsed and the company cancel his plans. We are working dismissed 2,400 employees and Neumann 445 million dollars awarded leaving the company.

While the collaborating company was by no means failing and was slowly finding its footing after Neumann, he was the textbook example of startup boom and bust and an avatar of trouble ahead.

Investors find that many “unicorn” companies (those valued at over $1 billion) pumped with venture capital cash have over-inflated valuations and often subsidize the price services and products to kill your rivals.

Over the last few years, WeWork’s story has been told over and over in countless books, documentaries and documentaries. and moviesmany focused on the eccentricities and intensity of Neumann’s leadership.

According to A16Z co-founder Marc Andreessen, lessons have been learned. This week he described Neumann as a “visionary leader” who has revolutionized commercial real estate and is ready for his next adventure.

“It is often under-appreciated for just one person to fundamentally redesign the office experience and lead a paradigm-shifting global company in the process: Adam Neumann,” Andreessen wrote. blog post. “We understand how difficult it is to build something like this, and we love to see repeat founders build on their past success by growing from lessons learned.

“For Adam, successes and lessons are many.”

Neumann has kept a low public profile since leaving WeWork, but has slowly started to appear more and more. In November, he appeared at the New York Times’ DealBook summit, where he said that WeWork’s growth “happened to me.”

“I had a lot of time to think and many lessons and regrets” aforementioned.

spoke in the spring Financial Times About Flow, whose name was still unknown at the time, and his new passions, including his new role as an investor in startups. According to the Financial Times, Neumann invests in more than 45 startups through its family office and has more than 50 employees.

“The opportunity is enormous,” Neumann told the newspaper about his new idea. “We started by buying this real estate, but then I started walking the buildings, I just felt and felt like there was a lot that could be done to make the lives of these tenants better.

“Frankly, I felt like there was room for more community.”

'The achievements and lessons for the man are many.'
‘The achievements and lessons for the man are many.’ Photo: VCG/Visual China Group/Getty Images

Even before Flow made his idea public, Wall Street Journal It was revealed in January that Neumann had quietly purchased 4,000 apartments worth more than $1 billion in major metropolitan areas in Sunbelt, including Miami, Atlanta, and Nashville. Neumann had begun to tell friends and partners that he wanted to start a company that would create branded apartments with amenities. One of the Nashville apartments has a saltwater pool and dog park.

It is indisputable that there is a housing crisis in the USA. Lack of supply and rising prices have made home ownership unaffordable for many, and rents have skyrocketed.

As Neumann puts it: “If you stop construction today, [would] running out of houses in less than two months. Crazy huh?”

Andreessen also sees the need for more housing, not in his backyard. and 2020 article In his vision for the future titled “Time to Build,” Andreessen said: “In all of our best cities, we must have sparkling skyscrapers and gorgeous living environments far beyond what we currently have; where are they?”

“We’re not able to build enough housing in our cities with growing economic potential – resulting in wildly rising housing prices in places like San Francisco and making it nearly impossible for ordinary people to move and get jobs of the future,” he wrote. .

Despite this statement, it’s unlikely that Flow’s first apartment was in Andreessen’s posh neighborhood of Atherton, California. earlier this month, Atlantic Ocean Andreessen and his wife, Laura Arrillaga-Andreessen, posted a public comment in all caps against zoning for multi-family housing development in Atherton.

In an effort to increase the housing supply in the area, they write, “EXCELLENTLY lowers our home values, our own and our neighbors’ quality of life, SIGNIFICANTLY increases noise pollution and traffic.”

And it’s not just housing advocates who roll their eyes at Flow. The A16Z has been criticized for giving Neumann a sizable boost. woman and Black and Hispanic Founders are struggling to find funding. Recent data has shown that as little as 2% of venture capital funds go to underrepresented founders in recent years.

“This is disgusting,” tweeted Switch CEO and general partner of the W Fund, Kate Brodock. “A16Z’s biggest check goes to the founder of one of the most toxic companies (straight white male) we’ve ever seen. Firms like this repeatedly perpetuate a traditional system that supports a small, homogeneous group of founders.”

THIS IS DISGUSTING.@a16zBiggest check to the founder of one of the most toxic companies (straight white male) we’ve ever seen. Firms like this repeatedly perpetuate a traditional system that supports a small, homogeneous group of founders.

— Kate Brodock (@Just_Kate) 15 August 2022

But for all the shock and surprise of Neumann’s resurrection, McKeever Conwell II, founder and managing partner of RareBreed Ventures, said we shouldn’t really be surprised. Neumann is an example of the norm rather than the exception in venture capital.

“At the end of the day, we VCs are essentially money managers – we are glorified financial advisors. We get money from rich people or groups with big pockets of capital and our job is to make them more money,” he said. “Our job is not necessarily to deal with ethics, morality, systemic racism or financial inequalities. There are many VCs who care about this, but that’s not the job.”

Despite Neumann’s background, Conwell notes that the founder brought generous returns to his initial investors, who sold before WeWork’s collapse.

“From a VC’s perspective, if you’ve been an investor in WeWork before, you’ve made a lot of money,” Conwell said. “It’s very common for VCs to reinvest in the people they previously invested in, especially those that made them money. Adam Neumann is very people and made a lot of money.”

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