The Pomp Podcast - #615 How WeWork Grew, Fell From Grace, and Recovered

Episode Date: July 26, 2021

Eliot Brown writes about startups and venture capital out of The Wall Street Journal's San Francisco office. He previously covered commercial real estate and economic development from New York City. Eliot’s new book, The Cult of We, breaks down what happened over the last few years with WeWork.  In this conversation, we discuss WeWork, startup funding, Adam Neumann, Softbank, and a few crazy stories.  ======================= Remote makes it easy for companies of all sizes to employ global teams. We take care of international payroll, benefits, taxes, and local compliance, so you can focus on growing your business. Sign up for Remote today and receive 50% off your first employee for the first three months. Check out remote.com/pomp and enter promo code POMP to get started. ======================= BlockFi provides financial products for crypto investors. Products include high-yield interest accounts, USD loans, and no fee trading. To start earning today visit: http://www.blockfi.com/Pomp ======================= Choice is a new self-directed IRA product that I'm really excited about. If you are listening to this, you are likely part of the 7.1 million bitcoin owners who have retirement accounts with dollars in them, but not bitcoin. I was in that situation too. Now you can actually buy real Bitcoin in your retirement account. I'm talking about owning your private keys and using tax-advantaged dollars to do it too. Absolute game changer. https://www.retirewithchoice.com/pomp =======================

What's up, everyone? This is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Now let's kick this thing off. Elliot Brown writes about startups and venture capital out of the Wall Street Journal San Francisco office. He previously covered commercial real estate and economic development from New York City. Elliot's new book, The Cult of We, breaks down what happened over the last few years with WeWork. In this conversation, we discuss WeWork, startup funding, Adam Neumann, SoftBank, and a few crazy stories. I really enjoyed this conversation with Elliot and I hope you do as well. Before we get into this episode though, I want to quickly talk about

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not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only. Elliot, what's going on, man? Maybe let's just start with, you know, kind of your journey of covering WeWork? Cause the book really was the culmination of a lot of the coverage I think that you had of the WeWork story as it unfolded. Yeah, totally. So I had been covering WeWork since 2013 is when I first met Adam and I was a real estate reporter and I was like, what is this real estate company? And then quickly found out their valuation, which was

at the time like one and a half billion dollars. And I was like, what type of sense does that make at all. It's a tiny real estate company and all they do is real estate. But they keep telling me they're not a real estate company and they're about community. And so things got just crazier from there. Like the valuation kept going up. We'd write stories about how it seemed like an overvalued real estate company. And then it would go up more. They'd do really crazy things. He'd take money out of the company. He'd buy a wave pool company. He started an elementary school. And then it got even bigger. And then everything imploded in like this totally crazy immolation in 2019 when, um, yeah, like $40 billion of value disappeared.

So when you first come across, we work and you're told it's a community company, it's all these things other than a real estate business. You're obviously talking to other people in the real estate business as your job as real estate reporter. What was the general sense that people just not know about it? Were they like, that's complete nonsense. Did they buy the, the kind of story or the hype or kind of what was everybody else saying? so in in real estate it was interesting because uh you know on the one hand they didn't a lot of the landlords just didn't understand they're like yeah it seems like a real estate company to me uh but they weren't investing in it they all they wanted was rent and we work was paying them rent

and so they were kind of you know depending on the landlord pretty happy to have someone to pay maybe even slightly higher than normal rent uh and so then you'd have these conversations and people would be like, yeah, you kind of don't really understand how it's that different, but I don't know, maybe it works. But then the investors that invested with Adam were largely venture capital investors or tech investors. And he was just able to, to like, get them to, to look at, at this thing, which was very clearly office space and just tell them it was, no, it's about the energy. It's about the community. And he'd say it in enough of a convincing way, often with like shots of tequila, uh, that they, you know, sort of went along with it and, and

would just value this thing as really different. It's like 20 times the value of what a normal real estate company would be. Uh, cause yeah, there's comparable companies you can look to and be like, that's it. So it was quite the difference. So when you think of the WeWork model, is it fair to categorize it as they would go into space, uh, that a landlord owned, they would say, Hey, we will rent it for, from you for $1 a square foot, use easy numbers. And I'm going to turn around and I'm going to rent out, uh, after kind of fractionalizing it to some degree, and I'm going to charge the equivalent of two or $3 per square foot. So you, as the landlord gets your $1 per square foot, you're happy. And then they're taking the

difference kind of theoretically between, uh, what they're charging their members versus what they're paying you. Yeah, that precisely. And they would be the other sort of key thing to mention is WeWork would sign a 10-year lease, which is standard for these office buildings, because the landlords didn't like doing monthly leases because they couldn't get a loan from a bank. So WeWork was essentially taking the risk and then saying to these graphic designers or tiny companies, yeah, you can leave any time. You can just pay by the month. But to pay by the month, they would have to sort of pay up and pay WeWork that additional money. So in that sense, it's like a pretty good business. That's real. People forget there were some real things about

WeWork. But that doesn't mean that you're you should be worth like, you know, infinity or forty seven billion dollars. And so that's where things got crazy. So as this kind of happens, you pretty early found them, you know, given where they ended up going. Is this something where the founders start out? They've got kind of an idea. They start to execute and then they just buy their own hype over time and they kind of double and triple down and things get worse. Or very early on, would you like something here is like off and I should pay more attention because this seems like, you know, it's juicy, if you will. Well, so, yeah, I mean, I I was just interested and sort of baffled by this concept of sort of startup inflation where not tech companies were claiming they were tech companies. And we I've been told I overly obsess in the book about Casper, the mattress company that, you know, raised money at like a tech valuation.

And then you look at like what they do and it's like they just they don't even make their own mattresses. They pay somebody else to make the mattresses. And it's like it's a mattress company. And so I think that to me, that's what was really interesting about this. It's like they were finding smart people and investors and employees and getting them to like convince them that they were a tech company. And then you ask, like, well, how? And the explanations made up like to me, at least maybe I wasn't seeing it, but it just like made no sense. It's like you have an app that makes you a tech company like people are paying for real estate. so i was really interested in that i was really interested in in sort of um yeah just how kind of zany adam newman was and then as like the story grew it got like you learned it's like god this

guy is doing all these crazy things like why is he flying private at starting at like when we work was a series b company uh you know they're essentially a tiny startup um and uh you know then it's like why does he pass out trays of tequila uh to the entire staff and have them and do shots on like a Monday. Um, and, uh, yeah, things, uh, it was just like, the more you'd look, you'd be like, what is going on in the world? But this thing is, is becoming one of the most valuable startups in the country. What was the craziest thing that you found? Like you were, you know, from 2013 till today, right. When, when the book's coming out is a long time. Uh, I've heard insane stories, uh, from both people who work there and also people who, uh, who just kind

watch from the outside what do you in your opinion is the craziest thing that you came across okay so i'll start with one that is is kind of boring but i find totally insane and and so that is like at the end of the day this guy adam newman you know sort of convinced the world this thing was a tech company it raised you know it went up from you know zero to 47 billion and then back down to eight billion in valuation so people lose billions of dollars uh and he walks away with like one and one to two billion plus dollars uh so like he he essentially was was paid hundreds of millions of dollars to leave the company and then stay away from it and not control it uh and it's like that's the system like you convince people to give you all this money and

then to make it so they don't you don't take the thing to zero they pay you hundreds of millions of dollars more um so that that's that is one crazy thing um in terms of others that we could there's probably a list of like 300 i could do uh i i in terms of like more related to tequila um and and pot uh i one of the best stories we have in the book that it's really tiny anecdote but was just a fun one was uh on one flight um they were there was so much pot smoke that the uh on his private jet that the crew had to put on oxygen masks wait what is that confirmed he just like smoking on his plane yeah is that confirmed uh i mean to put it in the book yeah so they smoked so much weed on the plane that the crew had to wear oxygen masks

so this is sort of pairing with like the there were a lot of rowdy things on private jets and like he actually would rent for the first years of we work he was renting a private jet and one of the private jet companies vista jet was just always complaining to we work staff about how adam had ruined this or that on the jet and they had to take a jet out of service because a credenza was torn down and like stains were on the carpet from wine or something and another jet company sent them an email like uh the passengers were spitting tequila on each other and walking around without a like without any clothes on and they left uh they got sick across the plane and the bathroom or something like that i mean so he loved jets he just like absolutely obsessed over them

and i think that i read at one point that like there would be meetings on the jet as well right so so it was like there was partying but there was like meetings as well yeah and so some of these people i mean you some people would be like you know in his office and waiting outside for two hours because he was absolutely late for everything and then he'd be like come with me and so they go in the car with him to jfk or teterboro or whatever airport and then be like come on the jet and so then you just like continue your meeting on the jet and then the plane would arrive in boston and be like okay now go find your own way home uh so be meetings um they're often you know people said it was like really hard to get um go they hated flying with adam overseas because you couldn't

sleep because you were either working the whole night or partying or both uh so is this a uh a work hard play hard scenario or is this uh play hard and like somebody else does the work like how would you categorize it? Oh, definitely the former Adam, Adam worked really hard. He, he worked, you know, his biggest sort of talent in that regard was like, he just didn't need sleep. I mean, there was this story from the CFO where he told me once where like Adam had the CFO in a meeting until 1 30 AM or two at the office. And then he, Adam was like, I really want to go surfing sometime. Um, and the CFO was like, you can use my beach house. And so then Adam, the CFO comes in at 8am or 7.30am the next morning or something like that. And he gets there and Adam

is in the office in his beach clothes, having already gone surfing that morning at the guy's beach house near Rockaway. That's nuts. When you think about kind of the WeWork rise, how much of it is you have to have a founder like this to build this type of company. And at some point, they become kind of difficult to scale it. And so it's like, you know, what got us here may not get us to where we want to go versus some other founder who maybe had different tendencies or different preferences could have built the same company. Yeah, I think there, you know, this whole story is is an outgrowth of sort of the the type of founder that Silicon Valley and the venture capitalists on Sand Hill Road really like to promote, which is, you know, in the words of sort

of like the Founders Fund website, they look for founders with near messianic qualities, I think is the quote. And so that's the type of founder who really like Adam was really good at motivating people. In hindsight, they all kind of hated him for it, or a lot of them did because he was sort of, you know, made them working insanely hard and sort of do the impossible. But they did sort of the impossible. They hit really crazy deadlines. And I do think that to grow so fast because they just grew so rapidly, you need something like that. Now, the other way of looking at it is WeWork grew revenue so incredibly fast that they also grew losses at this just such an extraordinary rate. It's really astounding. I mean, so it was not they were able to to grow that fast.

They hit two billion dollars of revenue in nine years. And but it was at just an extraordinary cost where they were spending four billion dollars a year. So you spend four billion, you make two billion. And so then you have negative two billion, which isn't, I think, the way these these businesses are supposed to work. So my last question before I let Joe and John ask you a couple is what would be your bull case or kind of your bull argument for the positive impact that WeWork's had on the world versus the bear case? And I think that a lot of the bear case obviously surrounds around like loss of capital, just insane stories like you kind of hinted at there. Um, but is there a bull case or like a, a kind of a counter example that you would use after, uh, you've kind of spent so much time looking at it that you kind of say like, this

would be the thing that would harp on. So, yeah, I mean, it kind of depends on, on your framing, but, um, one of the things they really did, well, I guess a couple of things that they really did find a, a new demand out there for a different type of office space. There had always been this, this concept of, of subleasing, uh, and, and sort of temporary office space but but they made it much more institutional they made it so now it's a thing where where companies want sort of more hip office space like big kind of boring companies and city bank and uvs want more hip office space and they also want more flexibility so they're

leasing for one year at a time instead of 10. uh and now real big landlords have sort of copied we work and tried to adopt that and so that you know like that that's not um changing the making the world that much of a better place uh we're elevating consciousness as as we work uh said they were going to do um but but that's a thing in real estate uh now you know then like they also created a lot of really nice space like i think their office space is pretty good like there's people complain about this and that but all things considered i think they had good design taste and they build a good product they had smart people working there um and then yeah on the bear side uh the thing that i like to say that's a little less tangible than just sort of destruction

of of capital is uh they just distorted reality and it was really frustrating being a reporter covering this for so long because people just started saying things and believing things that that at least to me and based on my understanding of the laws of gravity made no sense and it was like i mean the big thing people would always say is like well the thing people that makes we work special is they're here paying for the energy uh and it's like what is energy worth uh i mean it seems like they're paying the same amount that they'd pay for office space uh because they were paying competitors were charging the same thing and they didn't have energy but like people just really believed so firmly uh because adam was such a good salesman and sort

of taught them to see this thing that wasn't that they were a disruptive tech company even though know there was like no evidence of it and so um that uh it was just like really frustrating sort of communicating to that world and dealing with we work for for years joe john what do you guys got yeah i'll start thanks for doing this elliot really appreciate it uh i'm excited to read the book but so uh i want to talk about softbank real quick the they obviously lost a bunch of money on this i think the valuation went from 45 50 billion dollars to two or three billion uh in a short period of time and i'm curious when it comes to softbank um kind of how much did they know about the summer camps, the tequila shots, the private flights versus just being blinded by the whole

kind of change the world type vision that Adam was pitching? So, yeah, I think they and the other investors, it would have been so impossible to avoid knowing about Adam's antics and him being sort of totally crazy. And it's like, what, this guy, you know, drinks a lot because his pitch to a lot of these investors was to and especially like baby boomers in suits was they'd walk in at 10 30 in the morning and and he'd just like feed them tequila shots uh as he has a bit performative he'd be made they'd feel cool in his presence so soft bank i mean they just had to know about some of the stuff like that they did a lot of due diligence on the company after they agreed to invest four billion dollars in it uh and then actually their analysts came back and said you

guys realize we've looked at this twice before. We passed twice before. They didn't hit any of their projections that they gave us before. And it's a real estate company. And then, you know, Masa's own at SoftBank is like, no, no, no. But I like Adam. It's visionary. He's visionary. It's an AI company. He's the next Jack Ma. And then they wrote like the second largest check ever written to a U.S. startup. So, you know, I think SoftBank knew, but it was like in a bubbly mentality you you just don't focus on the negative and you you just your eyes are drawn to the positive and so in a normal time you would have been like well here's all these 55 reasons this is a bad investment and like here's this one and you would look at the 55 and the one uh and be

like i'll probably go with 55 um but in a bubbly time you like look at the one you're like but but it could change the world's real estate market um and you sort of forget the other issues yeah um Elliot, one, congrats on the book. I know that's a big accomplishment, but I'm curious what you think about Adam himself. You spent a lot of time, obviously, reviewing the whole situation. What do you think his strengths are? Because I see a lot of people investing in founders and sound like he was a very good talker, salesman, all that. I'm curious what you think his strengths and weaknesses were. Yeah. And he did have strengths. His ability to... Really early on, what he'd do is he'd sign a lease at a new building. He's an enormous risk taker, so that's

one. So he'd have the sort of willingness and vision to sign a lease before they were finished with their first building. And then he'd tell his team, okay, well, we're opening on this date. And they'd be like, oh, no, there's no way we can do that. And he's like, well, I already signed some new customers to come there. So you guys got to, and then they would like do it, they would sort of, he would will be impossible into existence. And so, you know, I don't know that that's a sort of long term strategy with the same workers, because they get very tired and eventually get married and have kids and can't do it anymore but um because they work really hard but but that's like totally an important skill and we were actually did uh for the one year in its history

turn a profit around then in 2012 um and so uh he was also like really talented at communicating a vision obviously in the end it was a mirage and and a hollow vision but uh if he had had a like a little bit maybe maybe a little less ambition or um had more of a real like tech company uh that he was building instead of a real estate company uh that's also a great skill like he his the reason he could raise so much money is beyond sort of making these people feel fun and and and giving them tequila was because he was able when you get in a room with him he would talk about the future in a way where it just felt so real like i met him in 2013 and you know he's like 40 minutes late And I was like, where is this guy? And he brings me in and he like shows me his laptop with a video of their summer camp and him like riding around on a boat.

And then we like have this long conversation. He's like name dropping, like Rahm Emanuel and Ashton Kutcher. But then he like talks about how he's like, when we open up in Portland in nine months, we're going to be full within two weeks. And I would sit there thinking like, wow, what a good business. Like, that's crazy. And then I left and I was like, how would he know that? Like, he can't know they're going to be like, it's like literally impossible for him to know that it's in the future. And so I think he would was really able to sort of bend reality and like get people to just like live in the future with him, which is like an important skill for luring talent and money. And it's just nice when it's real, I guess. And did you feel that he ever had real genuine aspirations for WeWork or do you think a lot of it was still centered around kind of the notion of him wanting fame and wealth and kind of notoriety for this stuff? I think he melded the two in his mind. So I don't think there was some sort of like evil plan where he took out a whiteboard and said, like, how to best enrich myself. Step one, pretend it's a tech company.

And like, I do think he would drink his own Kool-Aid. But I think it was like you can sort of see in the marketing over time. it became like it shifted like at first when the social network the movie had come out and and facebook was a big thing he was telling everyone and i think himself that he had a physical social network and then suddenly when the sharing economy is in vogue uh he's telling everyone like no no we're part of the sharing economy we share space uh and so like he uh his mind he was a chameleon and like his his uh mind would sort of quickly change color for whatever the sort of in vogue financing was at the time and what happened to the to they had like a living concept at one point

right outside of offices where people would come what happened with that what's what's the story there we live so everyone is always like we live such a great idea so we live was like essentially an adult dorm where like it's like well if you're 23 you can rent by the month and you you the furniture is already there and and you can have friends built in and like you know i think that's actually a good concept the problem is like economics uh one of the like one of the reasons that that we work work so well is they would take a normal office space and then they were able to pack people in uh at much denser rates so they were able to get more revenue per square foot uh but if you you pack like four times as many people in apartment as you used to it's called

like an illegal tenement and they had those in the 1910s and and they were pretty gross so uh you you you need a certain amount of space to live in in modern society and uh then it's harder to make the economics work there. And so then it's like, why wouldn't I just build a normal apartment and make more money? And so that's what ended up happening to it. So they only did two of them. Adam would always talk about how they were going to do more. He once had a meeting with Brian Chesky, two meetings. He was like, let's do 10,000 apartments together for the new we live. And Brian Chesky of Airbnb was like, that's a little small for us because we have like millions of apartments on our platform. And then Adam comes back and he's like, let's do a million apartments together.

And then Brian Chessie's like, where are you going to get the like, you know, scribbling down? It's like one trillion dollars you need to build that. And I'm saying, well, Masa. So, yeah, it didn't go very far. Talk to us a little bit about the transition. Obviously, there was the kind of loss of the market cap and eventually SoftBank steps in. And I spent some time with the SoftBank people and they seem from like an operation standpoint to have really gone in there and completely turn that business around. Um, and, and, uh, it started to drive a recovery, uh, that appears to be working right.

And again, I think they would be the first to say like, you know, not out of the woods. Yeah. You got to build a great business. You got to serve customers, got to do all the right things. But during that transition period, uh, you were reporting on this, you know, it seemed like, uh, definitely weekly or almost daily or hourly. I mean, it was like just nonstop, you know, there was always a rumor or something happening. So like, what, what do you remember from that time period?

And, and kind of, were there any main takeaways, uh, when that transition was happening? this is in the sort of 2019 implosion uh era yeah so yes that that was kind of as a journalist a tiring uh and but thrilling time to cover uh as this this thing like i'd spent years wondering like where what is with reality that this thing is worth so much and then just like became like the biggest business story uh for weeks um so uh right afterward there was a ton of uh by the media by investors, by shareholders, like a ton of interest in SoftBank and this whole strategy. I mean, they raised the world's largest private investment fund. It was like, I think, 30 times bigger than the next biggest venture capital fund that had been raised beforehand. And it was just

sort of a realization that they were making some really, really reckless, spending it in really, really reckless and dumb ways and kind of absurd ways right like uh and they at the time they ended up betting huge on ride hail which was less of an absurd and absurd bet but ride hail like lift an uber stock had plunged like it was clearly not the golden goose they thought it was they bet sort of at the peak and they're still hurting from that um and then you just looked at these other things and it's like they invested seven or you know 375 million dollars in a robot pizza company that didn't make its own robots and also why do you need robot pizza uh and um like that went you know to effectively zero uh they invested in wag so uh the the dog walking uber for dog walking

that that did not go well um and yeah i mean i think there was sort of like this realization of like the the you know all of the money that's flooding into silicon valley largely through the vision fund is just like the total crap. And, uh, you know, what, what's with our, our world and our economy that, that we, we thought these were smart investments and, you know, that that's changed some sense because, uh, of, uh, the, the, um, I guess when you bet macro on the, you know, unicorn economy, the startup economy, uh, it's been going really well for everyone else. Uh, So SoftBank ended up, if you look back today, they're not in the red. It's not, I don't think, a good investment.

Like if you look at how much they've made, it's gone up, like the Vision Fund's gone up like 50% in value in five years or four years. And the NASDAQ's gone up like 2x more or more. So that's not like a great investment. But it's looking a lot better because they like, you know, put $600 million into DoorDash that became like $8 billion or something like that. Elliot, the name of the book is The Cult of We, and also WeWork, Adam Neumann, and The Great Startup Delusion. Using words like cult, delusion, et cetera, how much of this is around this one business versus A Sign of the Times and kind of a more macro trend where people want to believe in the world-changing technology? They want to believe in specific things? And did you get any sense of that as you were covering this specific company, whether it was a company specific or just, hey, the whole industry, this was happening?

Totally. So we think that, you know, the main theme of the book is that WeWork was just the most extreme of a trend. So it was not this like total insane. It wasn't a completely aberrant business. It was actually just representative of stuff that was going on throughout it. So, I mean, if you rewind to when this was really kind of the rocket ship was taking off in 2015, I mean, like there was just this whole obsession with like the Uber for X. And so, you know, there were like three Uber for valet parking companies that were essentially just giving you subsidized valet parking that lost gobs of money every time you parked your car. uh and uh you know i mentioned things like casper it's like i mean you you have the same thing with scooters where suddenly everyone is obsessing over how scooters are going to disrupt walking um and you could at the time be like you know they just tried this in china with bikes and

there's like literal viral photos of graveyards of these bikes because it's such a bad business um why are you treating this as like the next disruptive software company uh and you know money would just flood in uh so i i think that it was um like and to a certain extent still is but just in different pockets uh but you you had these like consumer tech companies that were consumer companies that said they were tech companies that uh just got these extraordinary valuations just by like talking a story and to me that's not like you know journalists i think should live in in the now not the future and uh like it's the venture capitalist job to bet that one out of of these is going to make it really big but the the population at large uh the media should portray

things more in the now and it's like you have a cool app that connects people to drivers and loses like a couple bucks every time somebody takes a ride uh like it could work out but that's not like completely disrupting the whole economy to the point where you need like 50 of these uber for uber for cookies and uber for ice cream or whatever uh like let's figure out uber works first. So I think that was going on. And now I think it's kind of shifted into different areas. Like it's pulled back in the consumer area and there's just a lot of money in like software, which is probably healthier. What moving forward are you looking for from the business? Obviously you've got the book now. Um, are there specific things that you're like, you know, Hey, if they

can do a, B and C, then they'll be successful. Are you looking for a specific red flags or lack of milestones? And you're like, okay, these are gonna be the warning signs. Like how do you kind to just look at it on a forward looking basis? Yeah, we were exchanged a lot. I mean, it's like basically after it imploded in 2019 and Adam, the CEO was ousted, they put in SoftBank, put in a experienced real estate operator and former CEO of a mall company to run it. And so what's happened is it went from being a company that had a mission to elevate the world's consciousness to now a company like very much focused on uh you know real estate and and flexible office space so i think it's kind of an interesting time they they managed to survive covid you know they

burned a lot more cash um and and occupancy just you know the the people renting their desk just fled right like occupancy felt really low uh but now you know it's sort of this weather vein for the post covet economy and what happens with the office and there's like an interesting theory where a lot of companies just aren't going to know what to do with office like who's going to be there you know three days a week who's going to be there five are we going to do all remote are we you know going to have more regional offices um and for that from that perspective we work if that is is the big path like we work probably a good business to be in right now in that they like companies don't want to make 10-year leases if they don't know what the office

is going to look like so um if that happens then uh they're probably going to be well positioned like but i think the thing that is not going to happen uh i would imagine is that people like its valuation isn't going back to 47 billion anytime soon i mean it it's it's office space and there's only so much somebody's going to be willing to pay for office space and uh every time need a new desk you have to pay to build the desk so uh unlike software where you can sort of charge if there's unlimited demand you can charge gobs of money and you don't have to spend any new money every time you ship somebody some code across the internet tubes or whatever so uh yeah i think there's a cap on valuation and i imagine it'll be treated like a real estate company uh because it's

trying to go public again um but uh you know it's a real business um and it could be a good business it could be a bad we're just gonna have to see how how things work out last question for me and i don't know if you guys have any is uh did you get shit for writing the book people give you a hard time and any kind of backlash so it's actually really fascinating so it's just for years of covering we work was just like persona non grata i would have these calls with executives there where like they'd just be sighing on the other end of the line and they were sort of put on the phone to be defensive and like sort of back back my stories um and then after everything collapsed it was sort of like you know the wicked witch is dead and everyone just started like you know

saying like you were right and somebody said there was a a group chat yeah two people told me this there was a group chat of like people who were there really old that had a hashtag or slack or something where it said justice for elliott so um people were uh i'd say a lot of people who had thought i was just a villain beforehand uh were like oh i guess you were sort of focused on the right thing so so that was good i do not think adam newman is in that camp um my sense was he was not um terribly happy uh we're writing the book he didn't cooperate uh at least personally like we talked to his pr guy a little for the book but um uh yeah i can't imagine that that he's eager to have the book out there yeah i i have one more uh for you elliot what's adam up to

now um so he's kind of you know he's in the hamptons um in one of his formerly eight homes and and now it's been windowed down a little um and you know i think he's sort of plotting his next act he's not a guy who's just going to be content to sit on his one to two billion dollars and just, you know, enjoy, you know, throwing money up in the air. Like he really wants to be a player and make a dent in the world as far as we can tell. And so he's talked about like, I want to do something on the future of living, but like I'm about to do something big. But then, you know, that was like eight months ago or so.

And we haven't heard anything. He's investing in startups. He's trying to invest in more startups. You know, the founders have to take his money. So it's not always easy for anyone. And, you know, a lot of it's based in real estate. He bought he bought a couple of apartment buildings. So to be determined, I bet if he tries to raise money for something, you know, the Silicon Valley is such that it funds startup founders that are visionary, even if they had a big failure.

So and, you know, some people make money off WeWork. So my my guess is that wouldn't be that hard for him just about finding the right guy. Before I let you go, I was asking everybody the same three questions. uh first one is just what's the most important book you've ever read can't say your own what what is the most important book you've ever read important book um and then what a good question uh i would say um barbarians well this is a cop-out uh barbarians at the gate uh because it's a similar tale um but about just like the 80s and finance going totally insane Um, and sort of a true story of, of just like people losing their minds at the time.

And, and the, you know, capitalism being in this, this weird thing that goes in herds. Um, I probably have a better answer, but I think more about it. What is, uh, your sleep schedules comes from our friends over at eight sleep. Uh, I think every single one of us sleeps on an eight sleep mattress to make it super cold and, uh, has completely changed my life in terms of sleeping way more during 2019. Maybe we can do like the chaos versus now what's a sleep schedule and how has it changed? Good thing I got that Casper dig in there. So I usually go to sleep at like 1130 and wake up at like 730. But if my bosses, because I'm on the West Coast, if my bosses hear this, I wake up at six and check my email to make sure nothing has happened. That Elliot guy, man, he does not sleep. You've heard Adam Newman's sleep schedule? Elliot has the same exact one.

i love it last question uh aliens are you a believer or a non-believer i mean i don't know yeah wow what the good question sure like uh those are pretty weird videos nobody has blamed the videos yet for their belief but that uh that might be a fair way to uh to evaluate it or a brief like personal view there is like i don't get you watch all these sci-fi movies and isn't the answer always that like oh it was actually just time travel uh like how come that's not on the docket too why don't people talk about that my personal belief is that uh there's probably intelligent life out there it's just either one too far so we'll never come in contact during my or your lifetime or two uh if we had the technology it's kind of like dinosaurs

like oh they were here but like you know we just missed each other on the time scale so uh time travel kind of fits right in with that yeah rick and morty makes it seem pretty realistic so Absolutely. All right. Well, listen, thank you so much for taking the time to come on the Cult of We, WeWork, Adam Neumann, and the Great Startup Delusion. I told Vanna White here, please go buy the book. I'm going to put the link right now into the YouTube comments. Elliot, where can we send people to follow you on the internet or find more of your work? I have a lot of wry, obnoxious cynicism on Twitter. Elliot WB, Elliot with one L one T. These days I'm just promoting books. And yeah, at the journal, I just search my name, Elliot Brown, WSJ, and you'll get stories about electric vehicle companies with no revenue and SPACs and other fun things. Hopefully not any more co-working stories anytime soon. i'm gonna leave you with this because of what you just said uh i was on cnbc one day and uh it was one of these like hour-long segments and usually they just bring me on talk about bitcoin and like you know see you thanks for uh thanks for saying whatever you say but they wanted me to be on for a whole hour and i was like what else are you guys gonna talk about right like i you

know i don't want to embarrass myself and like look if we talk about stocks or whatever we'll kind of like protect you we won't really ask you about that and of course we get on and they start talking about a stock that i've never heard of before and then uh luckily while they were talking about i googled it just to see what it was and they're like you know pomp you got any thoughts and i was like are we talking about a company right now that has no product no revenue and is valued at 15 billion dollars because it just went through a spac and they're like yeah i was like okay that's what i think about it right it's like you know that's about my analysis it's just like uh you guys say venture capital is crazy like this sounds pretty nuts too yeah no no that that i

mean like some of these projections that that you look at in these investor decks like they look pretty similar to the WeWork projections, except that WeWork showed its investors, except at least WeWork had revenue. These guys have none. And it's like, you're going to be the fastest growing company ever, like faster than Google by like four years to get to $10 billion. And you haven't made a car yet. Awesome, man. Well, listen, thank you so much for taking the time to do this. Everyone go buy the book. Highly recommend it. And we'll talk soon. Thanks so much for having me. All right. Bye.