> In another meeting, Neumann said three people were going to save the world: bin Salman, Jared Kushner, and Neumann. Shortly after the news broke in October 2018 that Saudi agents tortured dissident and Washington Post columnist Jamal Khashoggi and carved his body with a bone saw, likely on order from the crown prince himself, Neumann told George W. Bush’s former national security adviser Stephen Hadley that everything could be worked out if bin Salman had the right mentor. Confused, Hadley asked who that person might be, according to a source familiar with the meeting. Neumann paused for a moment and said: “Me.”
Look I want to put the boot into silicon valley snake oil salesmen and billionaire assholes as much if not more than most here but this troubles me a little.
None of this kind of story before his fall from grace and now here it all is. So I guess we don't get it reported if his snakeoil IPO'd for a squillion dollars? Or maybe is it exaggerated now it publically failed to IPO so putting the boot in is allowed.
It seems like there is a fair amount of reporting where those working on it are desperate to knife the subject but only occasionally allowed to be let off the leash to do the hatchet job.
Maybe it has some baring on how such an asshole as Neumann has failed upwards to become a billionaire.
Failed upwards to become a billionaire. Does he care what we think of him in any way?
Maybe it has something to do with availability of sources? People at the company are more willing to talk now than before, when they were hoping to get rich from the IPO. And he's no longer the boss so it's less risky to talk about him.
That is a wrong way to look at it. Journalists dig into stories that pop up or give them a reason to look into. Without this fall from grace and outed as a cheat, he is just another success story, a valley billionaire so nothing really to look at. They have limited time and will try to invest in stories that they feel are important.
All sorts of stories were out in the wild about Neumann before the failed IPO. It's one of the reasons IPO failed. I remember on Hacker News people talking about WeWork's acquisition of a surfing company years ago and there was a notable post about them evicting a customer for a negative blog. The thing is though, a founder/CEO of a private company isn't subject to public pressure, and it's not unusual for Tech Bros to be total douchebags (see also: Jack Dorsey - Biohacker Extra-ordinare, Mark Zuckerberg - The 21st Century's answer to Nero, Musk - Pedofinder General).
What changed isn't the failure of reporters, it's the fact that suddenly the guy had actual public accountability.
Skepticism of WeWork has existed for years. Just check the comments on pre-2018 HN links related to WW.
> Does he care what we think of him in any way?
Is that what you're getting out of this? That the media are revelling in taking down a fraud? What I get out of this is the scale of the disconnect between academic theories around capital investment, and the bullshit upon which those decisions are actually based.
Anybody who claims MBS and Jared Kushner are going to save the world is a sociopath and a liar willing to say whatever it takes to get pen to paper on another billion dollar funding round.
This Adam Neumann guy is a living legend. The inevitable HBO miniseries will have an A-list actor and associates will tell tales of his exploits for decades. $1 billion parachute and public investors never got burned. I feel most bad for the employees, but that’s the free market for you. Bernie Madoff represented the worst of the financial crisis villains, and Adam Neumann is the millennial con artist for the unicorn era. A man of the times.
I keep eating up these stories, as I’m sure most of us here are as they keep getting upvoted to the front page. Fascinating
I have two live-action soap operas that I follow closely as my guilty pleasures. The main one is the Trump saga and related stories, anchored by Ken White and Josh Barro's phenomenal podcast, "All The President's Lawyers."
The second is the swamp called Silicon Valley: Theranos, Wework, etc. But I don't have a good anchoring podcast for it, I only get it piecemeal via HN and such. So recommendations appreciated!
The Trump one is totally badly written and really stands out as fictitious.
One side excites it's base by making wild promises but when it seems that they would lose they make up fake collusion dossier and used the full power of their owned govt and bought media apparatus. And then 2 years later when turned out everybody lied and their was no collusion, not a single person batted an eye? Come on, that doesn't happen in reality.
I don't think this is a fair comparison. WeWork is guilty of projecting too optimistically. Enron was engaged in massive accounting fraud, booking potential future revenues in this quarter's numbers, etc.
> $1 billion parachute and public investors never got burned.
An unironical hero. Taking a rich, corrupt, murderous regime for billions and providing thousands of jobs. He is taking a whole lot of flak for doing a whole lot of good in the end.
That's an interesting point of view. Just not sure that everybody on the losing side was rich and complicit in corrupt murderous regime - could have been tiny investors like you and me who put some savings into mutual funds or something.
Not sure in what world 2400 layoffs without redundancy counts as “job creation”, with the remainder having little to no job security in a company losing 5k on each new customer.
Trying to work out the leaps of logic: I guess you're assuming all WeWork employees were unemployable before starting there, and that all other potential beneficiaries of Softbank investment would invariably have been zero-employee operations...?
I have no idea where you're getting these assumptions from.
Laid off WeWork employees were probably employed someplace before working there and will likely work someplace else after WeWork.
All employment is temporary. They still extracted billions. Some got more then others. Most just got a job for X years. Likely well paid. How is that anything other than a benefit?
All the firing of brilliant coders at WeWork makes sense now, after reading that Adam is dyslexic. These coders were asked to make something awesome. Given that vague direction, some of the probably did TDD, and tried to show kanban or project management burn lists or something like that. These coders would say the awesome was in the code, and the summary of features for product spec. He should just read it. That probably triggered Adam to no end. And that's why in the end he just bought Meetup.com, but even that didn't work. He ran into the same problems again. Reading about Adam is like reading about Hitler. The German high command was suckered into thinking a hateful person who couldn't stand people more brilliant than him knew it all.
All the firing of brilliant coders at WeWork makes sense now
It makes sense because WeWork was not a tech company, had no need of “brilliant coders”, and besides, they were not brilliant anyway and produced basically nothing beyond a website and perpetually broken wifi and printing.
The real question is, why is the Saudi Arabia sovereign wealth fund such a huge source of dumb money? They propped up WeWork. They propped up Uber. To some end, or just through sheer dumbness?
None of this could happen without a huge source of dumb money.
Investing $10 billion responsibly across a lot of private companies is hard work. Gotta find the companies, negotiate, join the board, monitor them, be apprised of the goings-ons. Then you find a company that can plausibly take $10billion in one go and return the same as any other tech company, plus by giving them so much capital they can destroy the competition.
It really comes down to easy-money policies of central bankers combined with the laziness of investors. So much money to invest and doing hard work is for suckers who don’t have the connections to get the capital to invest.
I don’t mean to generalize, but there’s a aspect to Saudi culture where they look at down upon people who work - regardless of whether you’re a doctor or a rocket scientist - they look down upon folks who work for a living as if they’re lesser people.
In that micro culture, you cannot rely on your own population for economic output. You rely on foreigners or you directly invest in foreign companies and hope to find the next Amazon, Microsoft, or something like that.
Source - I married right after high school and my first husband (15 years older) worked in Saudi Arabia. I went there to live with him. We lived together there for 3 years. I eventually left him because I didn’t want to be in a cage (at least that’s what it was like to live there as a female) and wanted to go to school and have my own career and freedom.
Why are all the best performing funds closed to new investment? Good strategies have limited capacity. The more capital you have, the dumber you have to be with it.
Otherwise we'd invest the whole economy in the Medallion Fund and go home.
Because when you are too big, you start changing the market conditions with your investments. This makes investing harder since the ground starts moving under you that much more.
Coz it's good intelligence to have insights into Americans' everyday life and habits? Moreover legally, without any espionage effort? Just speculating, but I don't think MBS is investing in Uber or WeWork to "get rich" really...
why is the Saudi Arabia sovereign wealth fund such a huge source of dumb money?
Because they never earned that money via ingenuity, it is rent paid by foreigners for access to natural resources. It makes sense that they never learnt to invest wisely. Contrast with the Norwegians who extract their own oil with their own skill and technology.
They are strategic investments. They'd probably get better returns if they invested in a balanced portfolio like most SWFs, but making money is probably lower down in terms of priorities than having economic leverage.
Let's say if a dissident with US residency were to disappear on foreign soil. Diplomats have started asking some awkward questions. The way to make them go away is to point to major investments you've made in high-profile US companies, that could be impacted should such questions persist.
There is a lot, $15+ trillion USD, of cash sitting in bonds/treasuries/etc around the world. Interest rates around the world are low if not negative plus many treasuries are hitting low if not negative rates meaning the groups or people sitting on these piles of cash look to invest in riskier VC/stocks/etc for a positive return.
This money is ripe for investing in active funds or financial management groups. The leader of SoftBank approached the Saudis years back and, allegedly, got a $45 billion buy in from a 45 minute meeting. That's a lot of cash on hand. The amount of cash sitting around has stuffed typical investment opportunities and led to (relatively) incredibly risky investing or active management like SoftBank/WeWork. It's mostly worked out for VC funds as if group A doesn't buy in for billions, group B and C are available for a meeting next week losing Group A the opportunity. And Group A has enough cash that they could lose the investment and recover via less risky investment opportunities give say 1 in 10 investments pays out 20-50x.
It's great if you are, say, an ex WeWork CEO who can take advantage of the free money. You might even be paid in negative interest to take it on. It's a bit scary from an economics point of view but also highlights inequality given so many Americans are paycheck to paycheck or hold so much debt while there are trillions to push around in money markets and billions to fund losses at Uber and others.
Not sure how accurate this article is, but having no background on Neumann nor WeWork, it sounds like a cult that brainwashed a lot of hard working people. Adam sounds delusional at best and a predatory conman at worst, at least from the conclusions one can draw from the article, and Wall Streets delusion on profitability was nothing more than a loaded gun given to a toddler.
I’m not sure what conclusions to draw from this - in my own experience, I’ve met managers, directors, and executives who can be very charming and flattering. These are people who I seemed to instantly like... in hindsight, they have some common traits (their ability to sell, 1:1s where the people just talk on and on and on about themselves, their achievements, or their vision without asking about my ideas, vision, concerns, motivations, etc)
These are the people you have to be extremely cautious of. In my experience, they are deluding themselves and others, or they are purposely giving that pitch because they see you as a useful pawn for some agenda. I’ve learned this lesson a few times now. I don’t mean to sound cynical but that’s reality.
I feel like I also know the type.
Confident and charismatic. Rarely apologetic. Rarely empathetic. Can easily build out many relationships. Only concerned about other people insofar that they can help accomplish the predators end goals. Not fun to work with this kind of person.
Crossed more of this manager type in my life I care for. As you mentioned, common traits are selling, self-promoting, vision not grounded in reality. At one point I kind of learned to see through it, and the sheer amount of people like that is mind blowing. That only a rare few of those have any qualification to speak of only makes matters worth. I just don't know how many of them I didn't see or even fall for in the early days of my career.
A lot of people expected inflation with newly printed money (central banks poured ridiculous amount new money in economy after 2008), but it never arrived. Because that money never found a way from investment to consumer goods, so for normal people the inflation is pretty standard.
Except of prices of housing, which is also an investment asset.
Inflation in investment assets is quite larger and we consider it "economic growth".
The amount of free floating cash is the problem if you ask me. All that money wants to go somewhere, so it is creating bubbles and going into stuff like WeWork.
Could this be a consequence of inequality? Perhaps an individual can now hold a large proportion of the wealth, but without the quality/volume of ideas or capacity to use that wealth.
Is there an ELI5 of why all this cash doesn’t find its way to the economy (and that we get housing and companies valuation bubbles instead of inflation, with salaries stagnating for more than a decade)?
Trickle down economics is a lie. Quantitative easing is so far removed from salaries. It ends up just creating more capital for banks, which they invest into assets (companies and properties being two asset classes) or use as liquidity. Labor isn’t really in the picture at all except that companies which use less of it can be better assets to invest in.
The Fed's interest on excess reserves (IOER) keeps a lot of money there. The graph https://fred.stlouisfed.org/graph/?g=pB2X shows that the IOER was regularly above the effective federal funds rate.
That means, banks made more money parking their money at the Fed, effectively removing it from circulation; than they could make holding bonds.
When a bank holds a government bond, someone else in the economy has to do something with the money they paid for the bond.
In contrast, excess reserves might as well not exist as far as the rest of the economy is concerned.
It certainly inevitable for the United States. Two of its biggest companies, Google and Facebook, survive on advertising alone. The number of IPOs is falling, and even those that have IPO'd (Uber, Slack) have bombed and aren't profitable.
What's the most exciting tech IPO of the near future? Pinterest, aka another ad-ridden hellscape that WSJ, Bloomberg and others have to talk about in glowing terms, until they too, bomb.
> In the wake of the Journal exposé, investor Michael Eisenberg and WeWork CFO Artie Minson held a conference call with WeWork’s directors and argued that Neumann had to step down, two people briefed on the call said.
So Minson went to the board behind Neumann's back and suggested that Neumann should be fired. Ultimately, Neumann was fired and Minson became co-CEO. The human dimension here is interesting.
Fascinating. A lot of the stuff they did still makes sense. Even having a hyperenergetic lunatic as a company face might work. But how on Earth did the investors refuse to address the red flags, that's criminal.
Because there are only a few investors, and they are all in on the scam. Even admitting the existence of red flags would have tanked the S-1, so they just hoped that the public markets wouldn't ask too many questions and buy shares at the desired IPO price.
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[ 0.18 ms ] story [ 18.9 ms ] threadNone of this kind of story before his fall from grace and now here it all is. So I guess we don't get it reported if his snakeoil IPO'd for a squillion dollars? Or maybe is it exaggerated now it publically failed to IPO so putting the boot in is allowed.
It seems like there is a fair amount of reporting where those working on it are desperate to knife the subject but only occasionally allowed to be let off the leash to do the hatchet job.
Maybe it has some baring on how such an asshole as Neumann has failed upwards to become a billionaire.
Failed upwards to become a billionaire. Does he care what we think of him in any way?
What changed isn't the failure of reporters, it's the fact that suddenly the guy had actual public accountability.
> Does he care what we think of him in any way?
Is that what you're getting out of this? That the media are revelling in taking down a fraud? What I get out of this is the scale of the disconnect between academic theories around capital investment, and the bullshit upon which those decisions are actually based.
Anybody who claims MBS and Jared Kushner are going to save the world is a sociopath and a liar willing to say whatever it takes to get pen to paper on another billion dollar funding round.
I keep eating up these stories, as I’m sure most of us here are as they keep getting upvoted to the front page. Fascinating
The second is the swamp called Silicon Valley: Theranos, Wework, etc. But I don't have a good anchoring podcast for it, I only get it piecemeal via HN and such. So recommendations appreciated!
One side excites it's base by making wild promises but when it seems that they would lose they make up fake collusion dossier and used the full power of their owned govt and bought media apparatus. And then 2 years later when turned out everybody lied and their was no collusion, not a single person batted an eye? Come on, that doesn't happen in reality.
An unironical hero. Taking a rich, corrupt, murderous regime for billions and providing thousands of jobs. He is taking a whole lot of flak for doing a whole lot of good in the end.
(You might say that they knew what they were getting into. Startup stock options are risky. But you can't deny all sympathy to those working stiffs.)
Trying to work out the leaps of logic: I guess you're assuming all WeWork employees were unemployable before starting there, and that all other potential beneficiaries of Softbank investment would invariably have been zero-employee operations...?
Laid off WeWork employees were probably employed someplace before working there and will likely work someplace else after WeWork.
All employment is temporary. They still extracted billions. Some got more then others. Most just got a job for X years. Likely well paid. How is that anything other than a benefit?
It makes sense because WeWork was not a tech company, had no need of “brilliant coders”, and besides, they were not brilliant anyway and produced basically nothing beyond a website and perpetually broken wifi and printing.
None of this could happen without a huge source of dumb money.
It really comes down to easy-money policies of central bankers combined with the laziness of investors. So much money to invest and doing hard work is for suckers who don’t have the connections to get the capital to invest.
I don’t mean to generalize, but there’s a aspect to Saudi culture where they look at down upon people who work - regardless of whether you’re a doctor or a rocket scientist - they look down upon folks who work for a living as if they’re lesser people.
In that micro culture, you cannot rely on your own population for economic output. You rely on foreigners or you directly invest in foreign companies and hope to find the next Amazon, Microsoft, or something like that.
Source - I married right after high school and my first husband (15 years older) worked in Saudi Arabia. I went there to live with him. We lived together there for 3 years. I eventually left him because I didn’t want to be in a cage (at least that’s what it was like to live there as a female) and wanted to go to school and have my own career and freedom.
Otherwise we'd invest the whole economy in the Medallion Fund and go home.
Because they never earned that money via ingenuity, it is rent paid by foreigners for access to natural resources. It makes sense that they never learnt to invest wisely. Contrast with the Norwegians who extract their own oil with their own skill and technology.
No shortcuts. Invest the oil money in a broad portfolio ~10k companies for the benefit of all future and current citizens.
https://www.nbim.no/
Truly amazing.
Let's say if a dissident with US residency were to disappear on foreign soil. Diplomats have started asking some awkward questions. The way to make them go away is to point to major investments you've made in high-profile US companies, that could be impacted should such questions persist.
This money is ripe for investing in active funds or financial management groups. The leader of SoftBank approached the Saudis years back and, allegedly, got a $45 billion buy in from a 45 minute meeting. That's a lot of cash on hand. The amount of cash sitting around has stuffed typical investment opportunities and led to (relatively) incredibly risky investing or active management like SoftBank/WeWork. It's mostly worked out for VC funds as if group A doesn't buy in for billions, group B and C are available for a meeting next week losing Group A the opportunity. And Group A has enough cash that they could lose the investment and recover via less risky investment opportunities give say 1 in 10 investments pays out 20-50x.
It's great if you are, say, an ex WeWork CEO who can take advantage of the free money. You might even be paid in negative interest to take it on. It's a bit scary from an economics point of view but also highlights inequality given so many Americans are paycheck to paycheck or hold so much debt while there are trillions to push around in money markets and billions to fund losses at Uber and others.
https://www.washingtonpost.com/business/economy/banks-are-pa...
I’m not sure what conclusions to draw from this - in my own experience, I’ve met managers, directors, and executives who can be very charming and flattering. These are people who I seemed to instantly like... in hindsight, they have some common traits (their ability to sell, 1:1s where the people just talk on and on and on about themselves, their achievements, or their vision without asking about my ideas, vision, concerns, motivations, etc)
These are the people you have to be extremely cautious of. In my experience, they are deluding themselves and others, or they are purposely giving that pitch because they see you as a useful pawn for some agenda. I’ve learned this lesson a few times now. I don’t mean to sound cynical but that’s reality.
A lot of people expected inflation with newly printed money (central banks poured ridiculous amount new money in economy after 2008), but it never arrived. Because that money never found a way from investment to consumer goods, so for normal people the inflation is pretty standard.
Except of prices of housing, which is also an investment asset.
Inflation in investment assets is quite larger and we consider it "economic growth".
That means, banks made more money parking their money at the Fed, effectively removing it from circulation; than they could make holding bonds.
When a bank holds a government bond, someone else in the economy has to do something with the money they paid for the bond.
In contrast, excess reserves might as well not exist as far as the rest of the economy is concerned.
https://fred.stlouisfed.org/graph/?g=pB2X shows the absolute amount of excess reserves.
IOER explains a big part of the puzzle you found without invoking any conspiracy theories or sly remarks about 'trickle down economics'.
See https://www.cato.org/publications/working-paper/floored-how-... for a broader discussion.
What's the most exciting tech IPO of the near future? Pinterest, aka another ad-ridden hellscape that WSJ, Bloomberg and others have to talk about in glowing terms, until they too, bomb.
So Minson went to the board behind Neumann's back and suggested that Neumann should be fired. Ultimately, Neumann was fired and Minson became co-CEO. The human dimension here is interesting.