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WeWork: Or the Making and Breaking of a $47 Billion Unicorn | REVIEW
An interesting look at the downfall of Adam Neumann — but one lacking the juiciest details on exactly how it happened.
Rating: ★★★☆☆ 3/5
In the world of tech, a ‘unicorn’ is a private startup valued at more than $1 billion. So-called, of course, because of how rare and unlikely this is: only a few hundred ‘unicorns’ have ever existed, a classification made up of unique, massive, and complex beasts such as SpaceX. Generally, surfers in their 20s who rent desk space do not end up alongside them.
Yet, in less than a decade, co-working startup WeWork became — or, rather, a handful of tech bros incorrectly claimed it had become — a unicorn 47 times over, allowing the ‘We Company’ to expand into communal housing (WeLive), children’s education (WeGrow), and a global enterprise whose mission statement, repeated simperingly throughout the documentary, was “to elevate the world’s consciousness”.
Hulu’s new documentary WeWork: Or the Making and Breaking of a $47 Billion Unicorn is absolutely worth watching, especially if you’re not yet familiar with the story. It’s an entertaining, if ‘101’, introduction to the biggest corporate fraud implosion since Enron. However, where Enron went into bankruptcy, saw its executives jailed, and was dissolved, WeWork has been propped up by venture capital, and in 2021 is about to make a second pitch at an IPO (with Adam Neumann, The World’s Most Ridiculous Fraudster of a Former CEO, remaining on board as a consultant with a $46m annual salary on top of his+$1bn severance payout, by the way).
It has been a huge story if you’re interested in business and finance or, I guess, co-working spaces, or cults. But with everything else going on in the last 24 months, it’s almost certainly flown under the radar for most.
The documentary gives a basic overview and has some solid access, getting inside goss from assistants, workers, and lawyers to show how Neumann, a young Israeli nomad, and his wife Rebekah (Gwyneth Paltrow’s cousin, who manages to come across even Goopier) managed to convince investors that their company — a bunch of talentless tech bros hawking deskspace, undercutting their rivals, dragging their renters to mandatory hellish ‘summer camps’, and giving away free craft beer — was some sort of intricately developed, innovative golden goose. It ended up valued at almost three times the market cap of Tesco.
Interesting tidbits about company culture and fraudulent profit claims are scattered throughout, but no clear answers are given to two key questions: firstly, exactly how are these kinds of frauds perpetrated, again and again, undetected? Midway through the film we get an animated graph that shows the inflation of WeWork’s profit margin, but not the mechanics of how this can be presented to, for example, the presumably financially-savvy investor at SoftBank who subsequently gave them billions. What exactly is the process of auditing a company before you drop thou’?
Secondly, why did no one call out their painfully bullshit culture earlier? The least offensive detail being: each department effectively had its own ‘CEO’, seemingly appointed at random by how ‘in’ they were with Neumann, re-branded as (get the sick bag ready) “C-We-O’s”. Interviewees keep saying what a charismatic and powerful presence Neumann was, which seems to fly in the face of this hard evidence that he was a pitiful adolescent melt in a cult leader’s body.
But there’s little discussion of reports that the company culture was abusive, and that Neumann presided over not only corruption but pervasive drug use, sexual harassment, and bullying.
If you want the details they’re out there. This New Yorker long read, How Venture Capitalists Are Deforming Capitalism, uses WeWork as its primary case study and reports a wealth of detail on its toxic culture and the corruption of Neumann and his C-We-Bros. I’ve included a lengthy quote from the article, to show just how much writer Charles Duhigg has managed to include in only two paragraphs, almost all of which is left out of the documentary:
WeWork had a number of internal problems that should have concerned Dunlevie and the other board members. In the spring of 2018, the board learned that a senior vice-president had prepared a lawsuit accusing a colleague of giving her a date-rape drug. She also alleged that executives often referred to female co-workers with such epithets as “bitch,” “slut,” and “whore.” (The senior vice-president received a settlement, and the suit was not filed; Dunlevie told me that he has no recollection of the complaint.) There were reports, too, of top executives using cocaine at events, dating subordinates, and sending texts like “I think I should sleep with a WeWork employee.” Some board members knew that Neumann used drugs, that he had once punched his personal trainer during a workout session in his office, and that — as the journalist Reeves Wiedeman details in his new book, “Billion Dollar Loser” — a raucous party in Neumann’s office had ended with a glass wall shattered by a tequila bottle.
The board had also allowed Neumann, a passionate surfer, to take thirteen million dollars in WeWork funds and invest them in a company that made artificial-wave pools, even though surfing had nothing to do with WeWork’s business. Neumann spent millions more to finance an idea from Laird Hamilton, a professional surfer, to manufacture “performance mushrooms.” The board knew that WeWork had spent sixty million dollars on a corporate jet, which Neumann and his family took to various surf spots. It had stood by as WeWork’s name was changed to the We Company; not long afterward, the company paid Neumann $5.9 million in stock, because he had trademarked the word “We.”
Several interviewees, of lower status, note on camera that they were suspicious about the venture as it went on, but did not leave or do anything about it. Understandable, as those with less power were more reliant on the jobs for survival. But much more could have been done to identify the executives in charge who allowed this to happen. A couple of lawyers are interviewed, neither of whom gives much away as to whether they questioned or challenged the situation in any material sense.
WeWork was predicated on the new ‘millennial entrepreneur’ hustle economy. Many of us living it don’t like it, but what choice do we have other than to participate? That question is the real crux of this film. It’s all well and good being Captain Hindsight, but some comment on what this company tells us about corporate culture and the gig economy as a whole could have turned the film from a 3- into a 5-star piece of work.
If you want an interesting angle on the ways in which modern-day capitalism is so distorted start with this film, then keep reading.