WeCrashed, hosted by David Brown, is a short but lively history of WeWork. Like Shaneyfelt’s The Trial of Jesus Christ, it is essentially a book presented as a podcast. Unlike Trial, WeCrashed is a production of a podcast network — Wondery — so I am not clear on the true authorship of the story. Nonetheless, WeCrashed has a vivid personality, both in its story and its tone.
WeWork was a luxury co-working real estate start-up. Co-working is a type of sub-leasing where tenants share some areas in common, and the aesthetic of a co-working place is similar if the tenants were actually employees of the same company. WeWork’s founders, Adam Neumann and Miguel McKelvey, understood the aesthetic of tech companies was valuable to potential lessees and that the first company to realize this vision at scale would have a first-mover advantage in the traditional world of real estate. WeWork at this stage is best thought of as The Trump Organization, but for shared office space.
This is also the current business model of WeWork, under current CEO Sandeep Mathrani. Neumann and McKelvey’s basic insight was correct, and the current multi-billion dollar valuation of WeWork is a result of the mostly successful execution of this vision.
In between then and now entered the SoftBank Vision Fund, which (with the enthusiastic cooperation of Adam Neumann) pushed for positioning WeWork as a tech company, a sort of physical social network for technology workers. Treating WeWork as a tech company, instead of a real estate company, temporarily gave WeWork a $47 billion valuation until its IPO was canceled. Neumann left with a golden parachute, there were large lay-offs as that dream proved impractical, and the company re-centered as a real estate company.
The producers of WeCrashed use two techniques to keep listener interest, and they do it effectively. The first are vignettes of the general West Coast or tech worker aesthetic of WeWork: The CEO bicycling to a meeting, video games and tequila (after hours) at the office, and so on. The other is the commentary of Scott Galloway, author of The Four, a book about actual tech companies.
While Galloway (who is also a producer for WeCrashed) provides a clarifying focus on luxury branding, he also provides a distracting and emotional critique of Neumann. WeWork’s dramatic decline of valuation was the market’s recognition that WeWork was always a luxury real estate company, and never a tech company. WeWork can’t be both a fantastic real-estate company and a terrible tech company. If it’s a tech company, Neumann’s legacy will be destroying it on the verge of the IPO. If it’s a real estate company, Neumann’s legacy will be establishing it as a multi-billion dollar empire and temporarily hyping it even more.
Unlike with Theranos, there was no scam or hallucinatory properties. Unlike BlackBerry or Nokia, this is not a company that moved too slowly. Unlike Apple or Microsoft a corporate titan was not born. Rather, the WeWork story is if anything an accelerated version of Compaq‘s history — a visionary founder, effective marketing, and execution good enough to allow an early mover a comfortable market position.
WeCrashed seems not to have had access to the founders, so that perspective, which was so enjoyable when I read about Oculus or Origin. Indeed, WeCrashed strings together a series of insults against Adam Neumann, matched only by backhanded flattery of his physical appearance. This childish part of the narrative is the weakest aspect of the book, podcast, or whatever this is.
I listened to “WeCrashed: The Rise and Fall of WeWork,” in the Wondery app.