# data[].attributes.headline
Roberts, M., 2019. Wework’S Spectacular Self-Destruction.

# data[].attributes.subject
Roberts, M., 2019. Wework’S Spectacular Self-Destruction.

# data[].attributes.body
In this opinion article by Molly Roberts, the reasons that led to WeWorks failure are evaluated. Using a degree of sarcasm, it explains how Neumann was way over his head and took the fallacy of claiming to be a tech company too far. It makes sarcastic yet informative between WeWork and other tech companies such as Tesla to show how divergent the ideas of the two companies were. It was a useful source identifying some of the weaknesses in the company's culture and organizational design that caused its destruction.

# data[].attributes.attachment_link.readable_text
Adam Neumann, WeWork's co-founder and chief executive. (Michael Kovac/Photographer: Michael Kovac/Gett)

WeWork was worth $47 billion. Then it was worth $15 billion.

WeWork was going public next week. Then it was going public in a month, and then it was maybe never going public at all.

WeWork was laying off one-third of its workforce. Then, chief executive Adam Neumann was one of those on the way out.

The rise, fall and further fall of the massively popular purveyor of shared office space is already being spun into narratives about Silicon Valley speculation, or venture capital, more generally. Companies achieve dizzying valuations while they're private, and then an unenthusiastic stock market knocks them over.

But WeWork might be less a harbinger of a collapse to come than it is a warning about a company that trapped itself between our brave new world and the old one we haven't quite left behind.

WeWork worked because it injected the digital ethos into what was essentially an analog experience. It offered office space but sexier - if sexy looks like coffee and kombucha and beer all on tap, all (at least at first) unlimited. The company's very name radiates everything the Internet era has to give; not the "i" that Apple sticks in front of everything to make it sound sleek and shiny, but a "we" instead, because this is supposedly the age of connection.

The product was useful. Businesses need somewhere to base themselves, and smaller businesses need smaller spaces. But it was also compelling. "Digital juggernaut revolutionizing our 9 to 5s" sounds a hell of a lot better than "office subleasing company."

The problem is, WeWork took it too far.

The tech ethos, to Neumann, couldn't only be an ethos. WeWork had to dramatically alter people's lives, much like the rest of Silicon Valley was altering lives - and the lives of its employees, and especially its leader, had to match the high-rolling habits of the Bay Area's best.

So WeWork bought a marketing platform, and a meetups platform, and a coding academy, and an app for construction worker communications, and - a hefty chunk of a manufacturer of wave pools? Revenue was doubling annually, but expenses were doing one better, which meant one worse. WeWork seemed to light every incoming dollar on fire.

Vanity Fair reported that Neumann claimed he had cajoled Rahm Emanuel into running for president on "the WeWork agenda," whatever that is. He claimed he was partnering with Mohammed bin Salman to save Saudi Arabian women by teaching them to code; he claimed Jamie Dimon might leave JPMorgan Chase to run Neumann's family investment fund. The Wall Street Journal reported that he wanted to be a trillionaire! He wanted to run the world, literally! He wanted to live, baby - forever!

When you're a tech company, you can sometimes get away with all this. Network effects can eventually win you back the money you spent to build your network in the first place. Growth costs are low. Oh, and haven't you heard data is the new oil? All these new truths at least present the possibility of sustainability for tech titans-to-be. But for a real estate business dealing almost exclusively in physical space, they're not really part of the equation.

When you're a tech company, you can sometimes get away with an erratic chief executive, too, because in Silicon Valley, erratic equals eccentric, and eccentric often equals genius. Neumann reportedly joked recently that dealing with the Securities and Exchange Commission had made him sympathize with Elon Musk - as if he weren't flying at Muskian altitudes already, gliding on a Gulfstream G650 above the Atlantic Ocean and smoking marijuana contra transnational rules. But Elon Musk makes electric cars.

And when you're a tech company, you can almost always get away with carrying off a jaw-dropping initial public offering. WeWork hooked nearly 11 billion of SoftBank's dollars by selling fund manager Masayoshi Son on its far-reaching vision, but the Silicon Valley venture-capital market was reluctant to bite. Investors weren't convinced WeWork was a tech company. And here's the rub: The tried-and-true property industry wasn't interested either, because WeWork had so thoroughly convinced enough people that it was a tech company that its price-tag had spiked too high.

Adam Neumann wanted to "elevate the world's consciousness." Now, if a friend of mine spending his days in one of its spaces is to be believed, his landlord has been reducing the amount of fruit in the complimentary fruit water. WeWork's quest to be something more ended up making it a whole lot less.

Molly Roberts: What to do when everything you buy is a little bit evil

Megan McArdle: What's making tech unicorns lose their magic?

Megan McArdle: Treating Uber and Lyft drivers in California as company employees is not going to work

Alex Karp: I'm a tech CEO, and I don't think tech CEOs should be making policy

Katherine Boyle: Goodbye, trolley problem. This is Silicon Valley's new ethics test.

Today's Headlines

The most important news stories of the day, curated by Post editors and delivered every morning.

By signing up you agree to our Terms of Use and Privacy Policy

# data[].attributes.attachment_link.title
Opinion | WeWork's spectacular self-destruction

# data[].attributes.attachment_link.description
WeWork was worth $47 billion. Then it was worth $15 billion. WeWork was going public next week. Then it was going public in a month, and then it was maybe never going public at all. WeWork was laying off one-third of its workforce. Then, chief executive Adam Neumann was one of those on the way out.

# data[].attributes.headline
McElroy, C., 2018. Wework Sees Appetite For Coworking Boom Beyond Millennials. 

# data[].attributes.subject
McElroy, C., 2018. Wework Sees Appetite For Coworking Boom Beyond Millennials. 

# data[].attributes.body
This article was written in 2018 which was before WeWork's issues arose. According to the article, targeting the millennial demographic had significantly contributed to the company's growth and expansion. Millenials The article uses statistics to paint a clear picture of how the company had grown and was helpful in learning how it became so popular amongst millenials at its peak.

# data[].attributes.attachment_link.readable_text
WeWork Cos., the global shared workspace provider valued at about $20 billion, is seeing demand for its coworking spaces grow significantly beyond the millennial demographic often considered responsible for the trend, Mary Finnigan, the company's head of real estate transactions said at a conference in Amsterdam.

Speaking at the Private Equity Real Estate Investor Forum in Amsterdam, Finnigan said more than 40% of WeWork's membership is over 35 years old. Millennials are generally considered to be people born from the early 1980s to mid-1990s.

"[There's a] whole shift in the way everybody is approaching work and thinking about work," said Finnigan. "I think there are various platforms out there in the market that perhaps appealed to millennials to start off with, but we've now all leveraged them and we've all used them. So many businesses [have staff in coworking spaces], I can't begin to list them. It's just a general change in mindset."

WeWork has risen from a small startup established in New York in 2010 to become one of the world's largest providers of serviced office space, with a particular focus on coworking. In July 2017, the company was reported to have raised $760 million in a funding round, bringing its valuation to $20 billion. In July, the company secured a $500 million investment for its Chinese arm to fuel its expansion in that country. SoftBank Group Corp., the company's largest backer, was reported in October to be in talks to make an up to $20 billion investment for a majority stake in WeWork.

Millennials' desire for alternative workspaces has been a key factor in WeWork's growth, said Finnigan. The company's "large enterprise members" - multinational companies that take up about 30% of the company's space at a variety of WeWork's locations around the world - have told the company the kind of spaces WeWork offers have become a key factor in their recruitment package.

"The feedback we get from our large enterprise members is that part of the attraction when they come to a space like WeWork is that it enables them to recruit and retain staff," Finnigan said. "And part of that is not just about the design, it's about the access to the community, the access to the creators, the tech companies, all those other platforms within the WeWork space. That is what is so attractive to large companies that are seeking to recruit and retain millennials."

The impact of millennials on the office market in recent years has been significant, said Robert Rackind, partner and head of the real estate advisory team at EQT Partners, with office design that meets the demographic's demands now the main concern for many investors. "I get asked, 'What keeps you up at night?' And in the old days I always used to say 'leasing an office building,'" he said. "Nowadays I say it's designing an office building ... It is really difficult to design offices and future-proof them."

Rackind added that the often positive changes that millennial demands have brought to office design might not last should an economic downturn negatively impact their job opportunities. "Everybody should have services. Millennials have driven [the adoption of] those services to start off with, whether it's in residential or in the office, and it is changing the urban fabric," he said. "Will it go on forever? I'm still of the mindset that if we have a recession and there's an oversupply of space, things could turn pretty quickly. But for the time being, we're not there."

# data[].attributes.attachment_link.title
WeWork sees appetite for coworking boom beyond millennials

# data[].attributes.attachment_link.description
WeWork Cos., the global shared workspace provider valued at about $20 billion, is seeing demand for its coworking spaces grow significantly beyond the millennial demographic often considered responsible for the trend, Mary Finnigan, the company's head of real estate transactions said at a conference in Amsterdam.

# data[].attributes.headline
Kosoff, M., 2015. How WeWork Became The Most Valuable Startup In New York City.

# data[].attributes.subject
Kosoff, M., 2015. How WeWork Became The Most Valuable Startup In New York City.

# data[].attributes.body
This article was written in 2015, years before WeWork's IPO scandal and subsequent downfall. Kosoff in this article gives a brief history of Adam Neumann and how WeWork grew to be as successful as it was. Still, it highlights a few concerns about the sustainability of the company's business model as some critics had labeled it to be a technology bubble. It also discusses ways in which WeWork was trying to diversify its services by venturing into other dimensions of real estate. It was a well written and informative piece that gives perspective on how WeWork was perceived by investors and the public in general, years before its bubble burst.

# data[].attributes.attachment_link.readable_text
Adam Neumann is the CEO of super-hot office rental company WeWork, the most valuable startup in New York City. This year WeWork ranked third on our Silicon Alley 100 list.

WeWork, which has raised $969 million in funding at a $10 billion valuation, is the 11th most valuable startup in the world.

But Neumann, who was born in Israel and moved to the US in 2001 after serving as a navy officer in the Israeli military, had an interesting venture before he launched WeWork.

"Before I started WeWork, I owned a baby clothing company based in Dumbo, Brooklyn," he tells Business Insider. The company, called Krawlers, sold clothes with padded knees for crawling babies. "We were working in the same building as my co-founder Miguel McKelvey, a lead architect at a small firm. At the time, I was misguided and putting my energy into all the wrong places."

McKelvey and Neumann saw that the building they both worked in was partially vacant, and they got the idea to open a coworking space for other entrepreneurs. After a lot of convincing of their landlord, McKelvey and Neumann opened the first floor of a startup called Green Desk in 2008 - an early incarnation of the company that would eventually become WeWork. The focus of the company was sustainable coworking spaces featuring recycled furniture and electricity that came from wind power.

Green Desk quickly took off. But Neumann and McKelvey eventually sold the business to their landlord Joshua Guttman. "Within a week we realized that being green should be a part of anything we do, but community is really the future of work," Neumann told Business Insider. The two founders knew they had a good concept. They pocketed "a few million" from selling Green Desk, according to The Real Deal, and founded and launched WeWork.

WeWork in its current iteration opened its doors to New York City entrepreneurs in April 2011. Since then, the company has expanded to cities across the country, and recently opened its doors globally too. WeWork's coworking spaces give entrepreneurs space to work, and come equipped with amenities like free beer, stocked fridges, and Foosball tables.

In total, WeWork has 54 coworking spaces in New York, Boston, Philadelphia, Washington DC, Miami, Chicago, Austin, Berkeley, San Francisco, Los Angeles, Portland, and Seattle, with additional international locations in London and Amsterdam, along with new locations in Tel Aviv and Herzliya in Israel.

WeWork's 30,000 clients range from startups - Business Insider uses a WeWork space out in San Francisco - to big companies like Merck and American Express. Individuals can also buy packages starting at $45 and rent a desk for a day.

WeWork has its its critics. It recently settled a dispute over its custodial services. And though WeWork became profitable as of this summer, some skeptics believe its financials may not support its valuation, suggesting it could be part of a new technology bubble. And there are basic concerns about the sustainability of its business model. WeWork, of course, is an alternative to real estate companies for freelancers and companies. And the real estate business can be risky.

One argument against WeWork goes something like this: Lots of startups make up WeWork's client base, so if there's a downturn in the market, and it becomes difficult for startups to raise funding, WeWork might have trouble staying profitable - its clients wouldn't be able to pay the rent.

But, WeWork says, only a small fraction of its clients are other tech startups. "Venture capital backed companies only make up mid-single digit of the total population of our WeWork member companies," a spokesperson told Business Insider. "The membership is very diversified across multiple industries and our fastest growing segment is larger, more mature companies who have joined for the value proposition of more affordable space, community, network, and flexibility - as well as services (healthcare, payment processing, etc.)."

In addition to renting out office space, WeWork is forging ahead to find ways to rent people a place to lay their head at night too.

WeWork is busy launching its co-living apartments - known as WeLive spaces - in places like New York City and Washington DC.

In the case of WeWork's Crystal City WeLive location, the company will ultimately be renting out 360-square-foot "micro apartments," which sit on top of WeWork's co-working spaces, BuzzFeed reported earlier this summer. WeWork will offer more than 250 micro-apartments at that location, along with amenities like bike parking, an herb garden, and a library.

By the end of 2015, WeWork will have 58 locations open. "We want to be everywhere and serve everyone, so as we expand globally we are welcoming more and more WeWork Commons members to our community-members who don't always need dedicated physical space, but who stay connected digitally through our app and have access to our services," Neumann says.

What's Neumann's ultimate vision for the company? "WeWork Mars," he says.

# data[].attributes.attachment_link.title
How WeWork became the most valuable startup in New York City

# data[].attributes.attachment_link.description
Adam Neumann is the CEO of super-hot office rental company WeWork, the most valuable startup in New York City. This year WeWork ranked third on our Silicon Alley 100 list. WeWork, which has raised $969 million in funding at a $10 billion valuation, is the 11th most valuable startup in the world.

# data[].attributes.headline
Ghaffary, S. and Molla, R. 2019. The WeWork Mess explained. 

# data[].attributes.subject
Ghaffary, S. and Molla, R. 2019. The WeWork Mess explained. 

# data[].attributes.body
This article in Vox explains how WeWork has been struggling after it was lowly valued by investors. It explores how poor cooperate governance, struggling finances, and bad behavior by Neumann all pooled together to cause WeWork's downfall. The article was helpful in learning how the different stakeholders, including employees, Adam Neumann, and Softbank, have been affected by the unfortunate turn of events.

# data[].attributes.attachment_link.readable_text
This story is part of a group of stories called

Uncovering and explaining how our digital world is changing - and changing us.

WeWork, the coworking unicorn startup whose IPO had been one of the most highly anticipated public offerings of 2019, has mostly imploded.

The company's largest investor, SoftBank, is taking control of the struggling company, per the Wall Street Journal, infusing the cash-strapped firm with a rescue funding package. The deal values the company at $8 billion - a small fraction of WeWork's peak valuation of nearly $50 billion earlier this year. Reportedly, WeWork is so short on funds that it had to delay laying off its staff because it couldn't pay their severance packages.

The deal also cuts off most ties between the company and its former CEO and founder Adam Neumann, who will give up most of his stock in the company in exchange for nearly $1.7 billion, including a $185 million consulting fee, per the Journal's report.

Last month, Neumann said he was stepping down after pressure from some of the company's board members, including officials representing SoftBank. It was an extraordinary fall for a founder who until recently seemed to be on the cusp of taking a nearly $50 billion company public.

"We have decided to postpone our IPO to focus on our core business, the fundamentals of which remain strong," wrote company co-CEOs Artie Minson and Sebastian Gunningham in a joint statement in September.

While it's unclear what the exact number will be, WeWork will lay off a large portion of its staff. The Information reported last month that could be as much as one-third of its total workforce.

When Neumann stepped down as CEO last month, the company announced that Artie Minson, formerly co-president and chief financial officer, and Sebastian Gunningham, formerly vice chairman, would take over as co-CEOs. At the time, the pair said it would "be taking clear actions to balance WeWork's high growth, profitability and unique member experience while also evaluating the optimal timing for an IPO."

Now, the new co-CEOs will reportedly step down and SoftBank is set to start a search for a new CEO, according to Axios.

In the months and even years leading up to WeWork's IPO push, concerns abounded about its massive losses, whether it's really a tech company, and its hard-partying corporate culture. But investors seemed to be fine with WeWork's many problems - until it registered to trade on the public markets. Suddenly the company's insider dealings (like being both its own landlord and tenant), its track record of burning cash without a path to profitability, and reports of poor executive judgment seemed to become an issue.

The abrupt drop in WeWork's valuation probably had something to do with it. WeWork declined to comment to Recode on the matter. SoftBank did not immediately respond to a request for comment.

But its investors had known about most of WeWork's problems for a while.

"It's one thing for people to know, but when you're visiting with potential investors and they raise all these questions, that's where the rubber hits the road," Amy Borrus, deputy director at the Council of Institutional Investors, told Recode. "It turns out a lot of investors had pointed questions as to how the company was structured, how [Neumann] ran the company, as well as the economic outlook for the company."

From the next Alibaba to a financial liability for its biggest investor, here's how WeWork got to this point.

Poor corporate governance

WeWork's corporate governance issues are myriad, and the company's corporate structure is at the root of it all. Like many other tech companies that have recently gone public, WeWork had a multi-class stock structure that gave Neumann more power than the company's other stockholders.

With the previous multi-class stock, it would have been hard to get rid of Neumann if he didn't want to leave since his super votes still gave him the power to fire the entire board. But if Neumann did get rid of his opponents on the board, he would have run the risk of making WeWork look even more chaotic than it already was in the eyes of investors, threatening the outcome of an IPO.

Original company filings stated that if he died, his wife Rebekah, the co-founder and the chief brand and impact officer of WeWork, would have been charged with appointing a successor. The updates to WeWork's S-1 changed that Game of Thrones scenario to one in which the WeWork board would be responsible for finding the next CEO in the event of Neumann's death.

Rebekah is one of several family members employed at WeWork, including Neumann's brother-in-law, who served as its "head of wellness."

Neumann's board supremacy allowed him to enact a number of nonstandard financial practices that many have viewed as a conflict of interest.

WeWork, which at its heart is a company that leases long-term office space in order to rent it to others in the short term, didn't initially plan to own property. Not doing so saved it from larger expenses that would burden its already laden balance sheet. But earlier this year, the Wall Street Journal reported that Neumann was privately buying property that he then leased to WeWork.

And at the same time, Neumann was borrowing money from WeWork at little to no interest. So the company was paying him rent while lending him money.

Responding in part to investors' concerns, Neumann said he would transfer ownership of these buildings to the company's real estate investment vehicle, ARK.

In a similar vein, WeWork paid Neumann nearly $6 million to change its name to "The We Company," a trademark that Neumann owned. In the mea culpa/updated S-1, he gave that money back.

Neumann reportedly cashed out of $700 million in stock ahead of the IPO - the S-1 pegs his last stock sale to "late 2017" - which isn't a good look for a CEO trying to convince others that they should buy the stock.

The company has also attracted public scrutiny for, until recently, having no women on its board. WeWork finally appointed its first female board member in September.

Struggling finances

It's no secret that WeWork is, for now at least, a money-losing business. It lost $1.6 billion on $1.8 billion in revenue last year.

The company's expectations have changed even since its initial IPO filings in August. The company's updated S-1 in September got rid of numerous references to "break-even," "profitable," and "cash flow" - suggesting those goals are further off than expected.

And WeWork's operating losses, what's left after the costs to bring in revenue, are marching in lockstep with its growing revenue. This means that the more money WeWork makes, the more it loses. Ideally, you'd want to see the opposite: shrinking losses as the company gains more revenue.

Its biggest expense - 65 percent of its revenue - is renting office space, which makes sense for a real estate company but not for a tech company, where you'd want to be able to rely on savings as you grow.

Of course, much of WeWork's losses can be attributed to its breakneck speed of growth. Opening up new locations is expensive and it can take time to see returns.

Presumably, if WeWork stopped expanding, it would curtail its losses. But even that is difficult to know since WeWork hasn't explained how profitable or not its established locations are.

As the Financial Times wrote in August, "[I]nstead of a neat profit and loss table for mature and growth locations, WeWork calculates a 'contribution margin' - the metric formerly known as 'community-adjusted EBITDA [earnings before interest, taxes, depreciation, and amortization].' Like any adjusted financial metric, it's designed to say to investors, 'ignore these costs, because they don't matter to our core economics.'" (Investors have been widely skeptical of WeWork's community-adjusted Ebitda measurement.)

What we do know is that WeWork has lots of debt, including a $702 million bond that's due in 2025 and whose price has fallen in the wake of the recent company turmoil. The company also needs a lot more money, and raising it is becoming more and more difficult as its valuation declines.

Other bad behavior and distracting business priorities

Recent allegations that Neumann brought a "sizable chunk" of weed on a private jet across international borders (which is illegal) as well as his general "unusual exuberance and excess," as first reported in the Wall Street Journal, have reportedly led him to being pushed out of the company.

But for many who have been following WeWork closely, these allegations are nothing new. They're just a few examples from a long list of other liabilities connected to a company culture that some former employees say can be hard-partying and inappropriate.

One of the alleged assaults against Anaya took place at WeWork's former annual "Summer Camp" festival-style work retreat - where thousands of employees would camp in tents together in bucolic settings like the British countryside, listening to talks from the likes of Deepak Chopra and dancing to live performances from artists like Lorde. WeWork didn't hold the event this past year.

The company has also made a dizzying list of acquisitions and investments - like its $13 million investment in a wave pool company - that many have viewed as distractions from WeWork's core business (which is still burning through piles of cash). The company has also tried to get into the business of running gyms, co-living apartments, coding camps, and even a school aimed at budding child entrepreneurs, called WeGrow (which it recently announced it's shutting down).

The company has said its ambition is to create a "We" brand that permeates every aspect of people's lives, but according to the Wall Street Journal, these other endeavors outside of WeWork's coworking business have been struggling.

What comes next

While WeWork's drama has reached an inflection point, the company has been a mess for a while. The warning signs were visible but the private market largely ignored them and continued to pour billions of dollars into the company, with SoftBank leading the charge.

More than anything, the current WeWork debacle raises bigger questions about SoftBank and the future health of its Vision Fund, as well as the funding environment for tech startups at large. SoftBank's other crown jewel, Uber, also went through an executive shake-up in the approach to its IPO when former CEO and co-founder Travis Kalanick resigned in 2017. But even with new leadership, Uber has struggled on the stock market since going public and recently laid off 8 percent of its workforce.

Whether or not WeWork rebounds from its current woes, those bigger questions will remain.

# data[].attributes.attachment_link.description
Uncovering and explaining how our digital world is changing - and changing us. WeWork, the coworking unicorn startup whose IPO had been one of the most highly anticipated public offerings of 2019, has mostly imploded. The company's largest investor, SoftBank, is taking control of the struggling company, per the Wall Street Journal, infusing the cash-strapped firm with a rescue funding package.

# data[].attributes.headline
ColdFusion, 2019. Wework- The $47 Billion Disaster.

# data[].attributes.subject
ColdFusion, 2019. Wework- The $47 Billion Disaster.

# data[].attributes.body
This YouTube video narrates WeWork's journey, and gives reasons that led to its failure. It is especially useful in understanding how Neumann's poor leadership contributed to it by highlighting specific details of Neumann's bad behavior both at the workplace and in his personal life. This source helped in getting a fresh perspective about WeWork and Neumann's leadership.

# data[].attributes.headline
 Softbank Values Wework At $2.9 Billion, Down From $47 Billion A Year Ago. ---Feiner, L. (2020).

# data[].attributes.subject
 Softbank Values Wework At $2.9 Billion, Down From $47 Billion A Year Ago. ---Feiner, L. (2020).

# data[].attributes.body
In this article, Lauren Feiner explains how Softbank had expressed regret over its decision to invest in WeWork. This came after the bank reevaluated the company's worth and realized that WeWork's actual value was much lower than its initial valuation before the botched IPO. The article was well explanatory and also gave numerical details about the deals that WeWork had made which helped in realizing the financial implications of all that had happened.

# data[].attributes.attachment_link.readable_text
SoftBank Founder and CEO Masayoshi Son said Monday he was "foolish" for his firm's multibillion investment in WeWork.

His comment in an earnings presentation came as SoftBank gave WeWork a valuation of $2.9 billion as of March 31 based on a discounted cash flow method, down from $7.3 billion as of Dec. 31, following its failed IPO. SoftBank has reportedly invested $18.5 billion in the company, according to a comments leaked in October from WeWork's chairman. WeWork's private valuation was as high as $47 billion before its botched IPO last year.

WeWork Chairman Marcelo Claure said on Twitter that he and Son are still "huge believers" in what he called the "new" WeWork and its management team.

"[W]e will continue to support the company," wrote Claure, who is also CEO of SoftBank Group International. "We have no doubt that @WeWork will emerge from #COVID19 stronger than ever and are committed to profitability by 2021."

SoftBank had long been heralded for its savvy and splashy investments. The firm built its name on a massively successful bet on Chinese tech giant Alibaba. But SoftBank's reputation began taking hits last year when two of its Vision Fund portfolio companies, Uber and WeWork, revealed massive losses in their filings to go public. WeWork's bid to go public ultimately flopped when the company pulled its IPO filings following persistent criticism about its financial hits and unusual corporate governance structure.

SoftBank's $2 billion funding round in January 2019 valued WeWork at $47 billion ahead of its bid to go public. Prior to the IPO filing, the coworking-space company was expected to seek a valuation as high as $100 billion. That number slowly crept down as investors and analyst dug into its financials.

"We made a failure on investing in WeWork and I've been admitting that several times I was foolish," Son said, according to a FactSet transcription of his earnings call.

WeWork's business could suffer even greater losses now that the coronavirus pandemic has made coworking a dangerous activity. With many workers adjusting to their home offices, some companies are reconsidering their needs when it comes to office space altogether.

SoftBank's Vision Fund posted $18 billion in losses compared with $13 billion in total annual losses for SoftBank Group overall. The $100 billion fund was created to make large bets on companies and infuse them with cash. Of the 88 companies the Vision Fund has invested in, Son predicted Monday about 15 will be successful and 15 could go bankrupt in the midst of the pandemic.

In a slide deck, SoftBank illustrated the negative impact of the coronavirus on many of its investments. The presentation said that two major challenges for unicorns, or companies valued over $1 billion, would be a "Rapid decline in demand (sales)" and negative free cash flow.

A series of slides illustrates the "Valley of Coronavirus" in which three animated unicorns trot straight into a massive hole in the ground while running uphill. While two unicorns appear to get stuck in the valley, one flies across the hole to the other side, a metaphor for how SoftBank sees some firms succeeding in the wake of the crisis.

Son also announced Monday that Alibaba founder Jack Ma will also be stepping down from SoftBank's board effective June 25. He retired as Alibaba chairman in September.
WATCH: How does WeWork work, and why it is losing money

# data[].attributes.attachment_link.title
SoftBank values WeWork at $2.9 billion, down from $47 billion a year ago

# data[].attributes.attachment_link.description
SoftBank Founder and CEO Masayoshi Son said Monday he was "foolish" for his firm's multibillion investment in WeWork. His comment in an earnings presentation came as SoftBank gave WeWork a valuation of $2.9 billion as of March 31 based on a discounted cash flow method, down from $7.3 billion as of Dec.

# data[].attributes.headline
How WeWork Has Perfectly Captured the Millennial Id---Bliss, R. (2018). 

# data[].attributes.subject
How WeWork Has Perfectly Captured the Millennial Id---Bliss, R. (2018). 

# data[].attributes.body
In this article, author Laura Bliss expounds on how WeWork has become a favorite amongst millennials and describes all the reasons why they are preferring it to formal office arrangements. According to the article, WeWork had positioned itself as a disruptor just like Uber and Airbnb. It gives a history of coworking spaces and their revolution from the 1990s to the modern-day. The article helps researchers to understand why millennials are drawn to WeWork and the benefits of they got from using its working spaces such as networking and creative environment; which could explain why it had become so successful. The article also raised suspicion on the overvaluation of WeWork, a year before the IPO scandal happened.

# data[].attributes.attachment_link.readable_text
Geoffroy de Crécy

In March 2017, the New York City-based editors and writers of The Atlantic moved to a WeWork office in Brooklyn. I remember our first morning vividly: It was like entering the Millennial id. Craft beer and cucumber water poured from kitchen taps. Laptoppers in jeans and toques clacked along to MGMT in the wood-paneled common area. A WeWork "community manager" showed us to a glass-walled office so small that my colleagues and I could clasp hands while seated. We sat. Had we arrived in the future of work?

The Atlantic told us this arrangement would be temporary while our real office was renovated. As of this writing, we're still here. If WeWork had its way, we'd stay forever, along with much of the 21st-century workforce.

WeWork is the world's leading co-working company and the sixth-most-valuable start-up, according to VentureSource. Last year it was valued at $20 billion, a staggering sum for a company renting out short-term office space, mostly to small businesses and freelancers. But like Uber and Airbnb, WeWork positions itself grandly, as a disruptive revolutionary. It promises to "humanize" work, making the office a more creative place, with the right lighting, the right snacks, and, crucially, the right people.

WeWork would say it's well on its way to transforming white-collar labor: It seats 175,000 "members" in 207 locations across 20 countries, with plans to double in size this year. Its leaders describe it not as a real-estate venture but as a "community company."

Whether that's a $20 billion business, however, is a matter of contention. Companies specializing in shared office space have come before. As The Wall Street Journal noted this fall, the office-leasing company IWG manages five times the square footage but has about one-eighth the market value. Even Adam Neumann, a co-founder of WeWork and its CEO, admits that his company is overvalued, if you're looking merely at desks leased or rents collected. "No one is investing in a co-working company worth $20 billion. That doesn't exist," he told Forbes in 2017. "Our valuation and size today are much more based on our energy and spirituality than it is on a multiple of revenue."

That's a striking statement. Shuffleboard tables and free IPAs, however enticing, surely can't justify the recent $4.4 billion round of venture capital propelling the company's growth. But these cramped quarters may hold more than meets the eye. WeWork's real value might indeed be in the elbow-to-elbow "energy" Neumann describes-just not for the community you might imagine.

The office sublet is not an innovation of the digital age. But the idea of a co-working space-a collection of like-minded renters committed to forming a community- is a more recent development. Its history might begin with the European hacker spaces of the 1990s, where independent programmers swapped coding skills in dark basements with an air of techno-anarchism. Americans caught on a few years later. The first true co-working space, so-called, emerged in 2005, renting square footage from a feminist collective in San Francisco's Mission District. This eventually became the Hat Factory, an industrial loft in the Dogpatch neighborhood, which described itself as a "community office space for geeks and media hackers." It was co-founded by the guy who invented the hashtag.

The first wave of co-working served a relatively small, scrappy set of independent contractors and do-gooders. The second wave has responded to an economy in which independent work has become more default than choice. The 2008 financial crash forced employers to cut hours and jobs, and the emerging gig economy swelled the ranks of the self-employed. Thus WeWork's eclectic mix of freelance writers, labor organizers, financial consultants, and app developers hustling for investors.

Adam Neumann was himself a struggling entrepreneur (he owned a company that sold baby clothes) in recession-era New York when he and a couple of friends rented out space in a Brooklyn building to make some additional income. Demand proved stronger than expected. In 2010, Neumann, who was raised in part on a kibbutz in Israel, and Miguel McKelvey, who grew up with five mothers in an Oregon collective and studied architecture in college, leased a few thousand square feet in SoHo and opened the first WeWork: a shared space where enterprising creatives could work and play.

From the start, WeWork offered a somewhat uneasy combination of its founders' ambitions and co-working's communal roots. Neumann describes WeWork as a "capitalist kibbutz." Members are encouraged to mingle, network, and leverage one another's talents, frequently under the auspices of a corporate sponsor: Witness taco pop-ups promoting internet phone service; talk-therapy circles sponsored by a women's activewear brand; cocktails served up by the payroll-software giant ADP. Billed as community-building programming, the events can feel more like exercises in targeted advertising, with members as the marks. Genuine connections do occur-sometimes at happy hours and often through WeWork's online member network, where people share marketing tips, sell furniture, organize cryptocurrency seminars. (The variety of requests never ceases to amaze. Quickly fulfilled: "Any WeWork salted cured meat companies?" Apparently unfulfilled: "Can anyone refer me to a good venture capitalist in the NYC area?")

Despite the company's occasional excesses, WeWork offices are more pleasant than many a soulless cubicle farm, according to people I spoke with at locations in New York; Washington, D.C.; Boston; and Los Angeles. "People are relaxed. No one's watching the clock," says Liz Granda, who works for Brooklyn Paws, a concierge service for pet owners, in a WeWork under the Manhattan Bridge. The relentlessly cheerful vibe encourages members to be social, or at least forces them to be nice. Nicole Shore, the principal of Zero to Sixty Communications, a boutique PR firm, has rented desks in locations around the country. She told me she got to know her go-to graphic designer at a WeWork Christmas party. At its best, with its abundant conveniences and event-directing community managers, WeWork can feel like an all-inclusive cruise.

Cruises, of course, aren't for everyone. Many observers in the real-estate industry say WeWork is wildly overvalued, and its aggressive expansion plans unrealistic. Although it has reportedly begun raising money for a real-estate-investment fund, the company owns few physical assets. Its practice has been to sign long-term leases en masse, striking multiproperty agreements to get the best deals with landlords, then renting spaces at a premium. (Many members told me that, per square foot, WeWork is considerably pricier than a traditional rental, but that they're willing to pay extra for the turnkey flexibility and sense of community.) It's a classic lease-arbitrage model, which business-school professors will tell you carries significant risk: Whenever the next economic downturn hits, demand for office space may retreat, leaving WeWork with a lot of empty desks and multiyear leases to pay.

Investors have seen this movie before. IWG, itself a network of flexible office spaces, expanded rapidly in the 1990s (it was known as Regus at the time) on a wave of high-hope investment, only to seek bankruptcy protection after the dot-com bust. What distinguishes the younger player, really, besides charismatic leadership and lofty rhetoric? "WeWork is nothing but Regus with a paint job," one industry veteran told The Wall Street Journal. Many investors have placed their bets because they're dazzled by Neumann, Konrad Putzier, a real-estate reporter at The Real Deal, told me.

WeWork may be positioning itself more strategically than some of its detractors allow. More and more of the people inside the glass-walled grids are not entrepreneurs or gig workers. They're employees of Facebook, Amazon, General Electric, IBM, Bank of America, and hundreds of other large corporations. Blue-chip companies are the fastest-growing segment of WeWork's client base. Their employees now represent more than 25 percent of WeWork members.

At WeWork, companies with more than 1,000 employees globally are known as "enterprise" members. Veresh Sita, an executive who oversees products for this group, told me that many enterprise members first looked to WeWork for temporary overflow space or as an outpost in a new market. Now WeWork is actively courting them. "Our concept is 'Come for a month, stay for life,' " Sita said.

The benefit that big companies offer WeWork seems clear: Salesforce, HSBC, and Facebook are presumably more reliable subtenants than a fluctuating mix of long-shot start-ups and quixotic nonprofits. What do corporations get in the deal? WeWork estimates that enterprise members save 25 to 50 percent in operating expenses, compared with traditional office build-outs. But members told me it's less the cost, and more the convenience and cool factor, that draws them in. Big, buttoned-up companies aren't always good at providing the kinds of perks and services many workers have come to expect. "We've become a talent feeder for the rest of the company," says Adam L'Italien, the vice president of global consumer markets innovation at Liberty Mutual Insurance, which leases space at a Boston WeWork. "We're able to show people we do things that are less obvious when you think about Liberty and insurance products."

WeWork offers more than just a chiller vibe. In a 2016 trial run, Microsoft gave 300 salespeople in three U.S. cities access to WeWork spaces as an alternative to their existing offices in those cities. After a few months, more than 80 percent of the workers reported that the access made them more productive throughout their day.

WeWork is selling enterprise members on the idea that it can make their workers more productive still. Sita told me that WeWork plans to sprinkle offices with data-harvesting sensors and facial-recognition software as part of its "Powered by We" suite of services. The program will allow WeWork to monitor how employees use its spaces: how they adjust their desks, where in the office they spend their time, and maybe even how engaged they are in meetings. These data-which, according to WeWork, would never be used to track the movements of individual employees-could allow companies to lease exactly the right amount of space, and exactly the right kind of space, too. Phil Kirschner, the director of workplace strategy, describes a future in which someone could check into any WeWork in the world and sit at a desk that automatically adjusted to the right height.

Until that creepy, if ergonomically correct, future comes to pass, the benefits that WeWork confers on enterprise members may come from a tried-and-true real-estate verity: It's all about location. Microsoft employees noted that WeWork's scatter plot of primo sites gave them more-convenient access to clients. Other enterprise members have benefited from new neighbors within WeWork's walls. The accounting giant KPMG has a 50-desk space in a Manhattan WeWork. Leaders say one of the greatest advantages has been access to the entrepreneurial talent of WeWork members. David Pessah, the director of KPMG's Innovation Labs, previously worked at a Snapchat-esque start-up in the same WeWork. Repeated run-ins and informal chats with his now-boss led to a job offer. "I'm not sure if I would have applied to KPMG, or been interested in the same capacity, if not for the WeWork environment," Pessah told me. "It was an easy transition."

Sita said WeWork will soon begin offering some enterprise members the ability to manipulate, to an extent, who works in a given location. He offered an example: Say a large pharmaceutical brand wants to work with biomedical start-ups. WeWork would seek out congenial neighbors by tapping willing members or interested recruits. "Every start-up wants to be an enterprise, and every enterprise a start-up," Sita said. "We think we have a responsibility to curate some relationship between these two groups."

The upshot of such an arrangement is not just the stuff of WeWork's corporate talking points. Prominent 20th-century urban theorists like Jane Jacobs and the economist Robert Lucas argued that dense packs of talented workers boost local economies and innovative thinking; recent data-backed research supports the theory. In a way, WeWork is taking the "creative clustering" already happening in cosmopolitan centers and concentrating it even further, in a few thousand square feet of class-A office space.

What does that mean for the average co-worker? WeWork will try to "balance" the mix of members by location, Sita said. He stressed that start-ups can benefit from proximity to blue chips, whether through knowledge-sharing, contracting, or even acquisition. That makes sense, at least in some cases. But a future where co-working is made entirely of big fish and little fish content to swim in one transactional bowl is a future that seems to leave out a lot of other fish: the vegan-meal-kit makers, the community bail fund, and hey, the journalists. We, too, are working here. What would Big Business want with us? And what would we want with Big Business? The day may soon come when we're forced to repair to our dark basements-because the economy cools off, or because WeWork has cooled on us.
This article appears in the March 2018 print edition with the headline "Building a Better Office."

We want to hear what you think about this article. Submit a letter to the editor or write to letters@theatlantic.com.

Laura Bliss is CityLab's West Coast bureau chief. She also writes MapLab, a biweekly newsletter about maps ( subscribe here). Her work has appeared in The New York Times, The Atlantic, Sierra, GOOD, Los Angeles, and elsewhere, including in the book The Future of Transportation.

# data[].attributes.attachment_link.title
How WeWork Has Perfectly Captured the Millennial Id

# data[].attributes.attachment_link.description
In March 2017, the New York City-based editors and writers of The Atlantic moved to a WeWork office in Brooklyn. I remember our first morning vividly: It was like entering the Millennial id. Craft beer and cucumber water poured from kitchen taps. Laptoppers in jeans and toques clacked along to MGMT in the wood-paneled common area.

# data[].attributes.headline
The Wework Fiasco Of 2019, Explained In 30 Seconds. ---Aydin, R. (2019). 

# data[].attributes.subject
The Wework Fiasco Of 2019, Explained In 30 Seconds. ---Aydin, R. (2019). 

# data[].attributes.body
This article gives a chronological account of the events that led up to WeWork's withdrawal from the IPO. It gives finer details of what led up to the fiasco and even has information on what has happened since the IPO failure, including laying off of employees and Soft bank's involvement. This source helped in gathering updated information on the aftermath after the scandal broke out.

# data[].attributes.attachment_link.readable_text
WeWork has been in turmoil since it filed its public-offering paperwork in August.

In one month, the coworking company cut its valuation down to as low as $10 billion from $47 billion, removed Adam Neumann as CEO, and delayed its initial public offering indefinitely.

In October, WeWork was taken over by its biggest investor, Softbank. Softbank gave Neumann a $1.7 billion golden parachute to step down from his position as chairman of the board at WeWork. Softbank assigned WeWork a $5 billion valuation at the end of the third quarter.

On November 21, WeWork confirmed that it laid off 2,400 employees.

Visit Business Insider's homepage for more stories.

What just happened to WeWork?

Attempting to go public this fall stirred up a lot of drama - in finances and leadership - for the nine-year-old coworking company.

# data[].attributes.attachment_link.title
The WeWork fiasco of 2019, explained in 30 seconds

# data[].attributes.attachment_link.description
WeWork has been in turmoil since it filed its public-offering paperwork in August. In one month, the coworking company cut its valuation down to as low as $10 billion from $47 billion, removed Adam Neumann as CEO, and delayed its initial public offering indefinitely. In October, WeWork was taken over by its biggest investor, Softbank.

# data[].attributes.headline
WeWork is less We and More “I”. --- Anand, A. (2019). 

# data[].attributes.subject
WeWork is less We and More “I”. --- Anand, A. (2019). 

# data[].attributes.body
This article details Adam Neumann's unethical behavior and gives examples of instances when he was a poor leader. It criticizes claims that WeWork is a tech company and asserts that it is just an ordinary real estate business. The article challenges entrepreneurs to do better in terms of ethics because it influences others in society. The article further questions how WeWork was able to get away with such an overestimation during valuation, without any investor becoming suspicious.

# data[].attributes.attachment_link.readable_text
The unethical behavior of Adam Neumann, and all who empowered him.

"Nothing to see here". Apparently that's the strategy WeWork has been going with (image)

WeWork has been in the news a lot lately. Whether it was the shocking revelations on improper self-dealing by the CEO, the rumored watered-down valuation, or the IPO being pushed further away - this past week, my feed has been saturated with stories and news articles about WeWork. And then came Larry...

# data[].attributes.attachment_link.description
WeWork has been in the news a lot lately. Whether it was the shocking revelations on improper self-dealing by the CEO, the rumored watered-down valuation, or the IPO being pushed further away - this past week, my feed has been saturated with stories and news articles about WeWork. And then came Larry...