This Week in Startups - Adam Neumann raises $350M from a16z for his new startup Flow, Bay Area housing hypocrisy | E1535

Episode Date: August 16, 2022

Molly is back for a HUGE news days! Adam Neumann has raised $350M from a16z for his new startup Flow (2:14), and his main investor, Marc Andreessen, got into some hot water over housing policy hypocrisy! (22:05) (0:00) Molly is back! J+M intro today's topics! (2:14) Jason and Molly catch up Molly's vacation and the craziness of the past week (12:36) LinkedIn Jobs - Post your first job for free at https://linkedin.com/twist  (13:56) Adam Neumann's new residential real estate company Flow has raised $350M from a16z at a valuation over $1B! (20:34) TripActions - Go to https://tripactions.com/twist and get a $500 Amazon gift card after making your first travel booking OR paying off your first $1000 of liquid spend (22:05) Marc Andreessen's blog explaining a16z's Flow investment, Jason and Molly go deep on potential business plans for Flow and why a16z made this bet (34:37) Odoo - Get your first app free and a $1000 credit at https://odoo.com/twist (35:56) Marc Andreessen's housing hypocrisy (53:35) Jason reads slides from the leaked Flow deck *JOKE*, another a16z portfolio founder in a similar market as Flow chimed in on Twitter

Hey, everybody, hey everybody. Mommy's back. Molly Wood back in the house. And the gods have gifted us with a beautiful present. Adam Newman has been funded again. And the funding amount. And who funded him? Molly, it's like the greatest gift.

The gods exist. I believe in the afterlife. They have given a sacrifice to the great God of Molly coming back from. I believe. I got to miss all of the dire business. of last week. The end of the world. Yes.

The end of the world. And I get to just roll right in to news that A16Z has written its largest single check ever to Adam Newman for his new residential real estate startup flow. Not to be confused with this other crypto project, Flow Carbon. It's, I could not be more thrilled. And of course, just on time, Mark Andreessen and his lovely wife. comment on how multi-family housing in Atherton, how these two stories drop in the same 10 days. I mean, fate loves irony. It's going to be a great show. So great. Stick with us.

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implementation pack at O-D-com slash twist. That's O-D-O-O-O-com slash twist. Hey, everybody. Welcome back. It's Monday. And I think somebody's got some Monday energy. Welcome home, sister. Oh, my God.

I missed you guys. My big sister is here. That was a long one. Turns out vacations do what they're supposed to do. They make you miss your house, your homies, and your podcast. Nice. That's great. I was a little worried.

I was like, Molly gone for six podcasts. What's going to happen? And I realize, we've got such a, you and I are so strong individually, and we've got such strong producers, and we've got such a strong bench of guests, that when one of us goes away for a couple of days, it's actually kind of like a ratings bonanza. because the producers and everybody rally to like, okay, we got to beef this up because, hey, one of the All-Stars is gone.

It's like the bench steps up, right? The other players get more shots on. Goal, there's more ball to go around. And when I went my rafting trip for three days, you had DeGrabosa on, somebody else slipped in. Alex Wilhelm. Thank you to both of them.

Then you were gone, and we had an incredible crypto roundtable with Vinnie Lingam last Wednesday and Sandeep Madra, which we're going to do every two weeks. I was going to say, please, can I get in on that?

Like, I want to do that again, too. That was so fun. I got big roundtable energy going. I would, you know, after the real estate one, I feel like the real estate one,

what do you think? Monthly would be good? Yeah, definitely. Yeah, that would feel like a monthly case. It's like back to your roots because that's what used to do

is the news roundtable. Yes. And you did on Buzz Out Loud, right? It was always a, how many people, and also Twitter, like it was always four people, three people.

So it feels like you can, you can get a nice ball movement going. And then I also had Howard Linson on, who hates me. But, you know, he's wild. He's a wild man. And he hates me, but he loves my J-Trades. Nick's favorite guest, Howard Lindon. So it's Nick's favorite guest.

Nick's favorite guest, because he just teed off on you. Nick's favorite guests are the ones who hate me. No, no, that's not true. Which is at this point, Howard Lidzin. Fascinating. Sacks, Freedberg. And Chabh, my guy. And Chuboth on the margins.

It's like, why does everybody hate me all of a sudden? What did I do? I asked for a couple extra points for being CEO. And now I'm the most hated guy in podcast. I've never had a bestie-to-hate-hated ratio like this. It's rough, not going to lie. It's hilarious. It's a rough listen at this point.

Palmer. Lucky, another one of my favorites. Parmel. I mean, what's going on? I got a stone cold Cinderella text while I'm on the beach. No, I was cruising around Mexico City. I'm in the middle of like a food tour. I think I'm on a bike or whatever, and I get this message.

It's like, what is going? What is Jason trying to even do with Palmer Lucky out here? Da-da-da-da-da-da-da. And I was like, I am off the grid, and none of this is my problem, even if I were on the grid. Like, why are you texting me? I don't even want to get into it, but oh, my God. I will tell you, I did not go back and look at the archives. I did not.

I just let that one go on by. Let it go, let it go. Yeah. I was like, you know what? But yeah, no, I'm getting a lot of inbound on episode 91 of All In. let me just tell people like, we break each other's chops on the show. I'm okay. It's okay for people to I'm the chief chop breaker on the show. Really? Because I will cut it be. No, it's fine. All the guys came at me pretty hard because we went over the same things we go over every week. But people were like,

hey, Jay Cow, why did you sit out the, the sax monologue? The sax monologue. Well, I, in a way, I don't like talking about politics. I'm more and more moving to this independent position, which is kind of where I started my political leanings, which is I just like to be an independent critical thinker. I don't like to be part of parties. I voted Republican in my youth, like in my 20s. I voted and into my 30s. Pataki, Giuliani, when he was sane. And Bloomberg, who was a Republican. And so, but Bloomberg's a Republican in the way like Clinton's, like Bill Clinton was a moderate kind of, but people are really trying to pin me that. I said, you know what? I don't have enough information on this Moralago search for me to feel like I can make a definitive decision,

I think you could wait until after we have the stuff released or even a couple of months. I'm not saying, everybody knows I'm not a fan of Trump. I hate the guy. But I just said, let me see what happens if I just lay back. And I think I prove my point largely, which is like, it's going to just lean to one side, got to be a monologue. And I don't really want to speak about politics and like just be the defender of the left. And then Bipend as like, having Trump derangement syndrome. You know, I'm a moment, right? You don't want to be Cinderella like you, right?

I find my politics, I have no home right now. I'm not at home, and either. He's probably very uncomfortable with both parties' positions on spending, on interfering people's lives. Like, both parties want to interfere and, like, just get way too involved in people's lives. I'll leave it at that. Like, between Roe v. Wade and people's rights and freedom of speech. You're mostly just talking about the one party right now, but yeah.

Yeah, that's true. I am talking about one party with that. But also with the freedom of speech stuff, like, you know, which the other party no longer believes in as much as they used to. Like, used to be, and then the working class. Yes. You know, like, I feel like the left has abandoned the working class and they've abandoned freedom of speech. And I'm just like, where was my party? Do I even have a party now?

I don't. Freedom of speech, neither party cares about. Limited spending, neither party cares about. Staying out of people's lives. It feels like everybody's up in everybody's life. I'm just like, I don't want to talk about it anymore. I find the whole thing gross. I find the polarization.

gross. I hate the media most of all. Both sides. I was listening to Fox during this one thing. You got a media break, I hope. Oh, yeah. Well, I tried, but there was a lot happening. Would you get pulled into the Twitter? Where you just, did you late night watch some news? No, I just was Twitter. I just Twitter. How are you not going to look at Twitter when that FBI situation is happening? I was like, uh, no, no, no, no. Well, you know, it's just like I, and we just give this little media commentary here. I was like, I bet you if I turn on Fox, they're going to be talking about. Hunter Biden and Hillary's email. Of course. And I was driving up to Tahoe. And whatever else.

Who knows? I kid you not. I turn on Fox. And it's exactly that hundred Biden and Hillary's email. So then I'm like, I bet you if I turn on MSNBC, it's going to be them talking about he's going to jail and like just exaggerating this thing and blowing it completely out of proportion before we even know what's up. Because we all know like this has been an ongoing issue with, you know, people take, there's people on the left who have took. stuff. Like there was that famous guy who was, I guess, part of the Clinton

administration of stolen. The one who went to jail? Yeah. He didn't, I don't know if he went to jail. I think he got sanctioned. There is nothing comparable to this. Well, no, of course not. This is the large number of documents. But there was another guy who was like going to the archives and ripping out the 9-11 stuff and putting in his pants and socks. And he was on the left. I'm like, this, this seems to be happening on some regular cadence. People take documents. They're loosey-goose with this stuff. And

it seems like the FBI and then there's the president of the United States. It's like, come on. Sure, sure. You don't execute a more. Anyway, it's a very different conversation. What I will say is that I think we all want to be, we all do want to be free of the exhausting nature of the discourse right now. There doesn't seem to be any political, any benefit personally or otherwise into waiting in and trying to debate

because one side has one set of information and the other side has another set of information. And never the twin saw me, right? It feels like no minds are being changed. Like, I listen to Saks and I'm like, I know you read that here, here, here, you heard it here. Right. Like, you could like, you could just literally go back and find the talking points and probably the email that got sent out. And it doesn't matter, you know, if you could have jumped in and said, hey, I hear what you're saying about the FBI being corrupted, acting in this way or whatever. But you do know that they also acted against Hillary Clinton right at the end there, James Comey did.

And you know that like the current director is a Trump appointee and so on and so. forth, but it doesn't matter. However, it's all tribal. There is this ongoing question about like, whatever, what gets accomplished if no one takes aside? I,

you know, I think I'm taking the side of, let the, you know, legal system take its course, right? I think that's a pretty good one. Maybe I don't assume you actually know everything because you don't.

Yeah, that's what I was saying. It's like, we don't, how can you make a judge? I mean, it's fun to play the speculation game. You could play the speculation game as long as I'm fine with playing the speculation you have to say here's like possible scenarios A, B, C, you know, B, A, D. You know, you can literally go through the permutations of the possibilities and just

admit like, none of us know exactly what's going on here. Right. We don't know. But, you know, it's, uh, I just hope it ends because now I got this seeking, sneaking suspicion that the Justice Department is not going to say anything because they're so close to the election. And so now we're going to have another six months. of just full-on media, social media, cable news,

24 hours of bay, debating each little drip drab for ratings. And I'm telling you, I'm not participating this time. I'm going to wait it out. I am not participating. Let's see what the Justice Department comes up with. I trust them. I trust the FBI overall. I trust the Department of Justice overall.

Yes, are there bad cops? There's always been bad cops. Are there bad actors in politics? Yes, there are bad actors there. I think we just wait it out and say, hey, there's other more interesting things to talk about. And that's what I would like to do is talk about the more interesting things while we figure out while the Justice Department figures it out. Great.

Good news because there's some good shit on today show. Oh my God. I mean, just when you thought he was out, he's back in. Have you seen the Rick and Morty episode that is like a takeoff on heist movies? And they just keep going and rounding up the crew. And every single person that he goes and talks to is like, you son of a I'm in. It's just like that. a good heist movie Roundup.

We get all the characters together. That's Adam Newman. Exactly. That's Adam Newman right here. You son of a . I'm in. I saw this going past my feed this morning and it was like, you know, praise Jesus. Molly comes back and we all of a sudden have a full docket.

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going to get your best candidates. Terms and conditions do apply because they give me something for free. Adam Newman has raised money

for a startup called Flow 350 million from A16Z at a valuation over a billion dollars. They're not launched. They're not launched.

They're not launched. From what we can tell, it's also not flow carbon the company that he had been starting that was going to use the blockchain to track carbon credits.

We don't think it's that, although there has been no official end of that company, nor is it flow the crypto project. Which is a separate independent crypto project. Which is a separate independent crypto project that also, I think, is backed by

Andreessen and had a big spike today as a result of this. This is none of that. This is a whole new, unlaunched real estate venture. Oh, I love it. So good. So good. I mean.

And better. And better. And better. Yeah. Okay. Let's do some fun details. Via the New York Times, the $350 million check that A16 Z wrote is the largest single check this firm has

ever written into a startup. Wow. Things we know. and I believe this is a list, this is a comprehensive list of all of the things we know about Flow, the company, and there are four whole bullet points here, five. Adam Newman has evidently purchased over 3,000 apartment units in Miami,

Fort Lauderdale, Atlanta, and Nashville. He is planning to make a sizable personal investment in Flo in the form of cash and real estate assets. And the idea, I think, is that Flow will, quote, operate the properties Newman has bought and also offer it services to new developments and other third parties. So it's like a property management.

Like when you buy a house and you rent it out on Verbo, it's just like that, I must sue me. No. No. I think what this is going to be. It's going to be a community.

Remember he was doing We Live? Yep. I thought this is a great idea. I had talked about this on the show. I had this idea years ago because I got obsessed with micro apartments. New York had approved like this concept of creating micro apartments.

It was very polarizing because people were like, oh, great, a family of five is going to live in, you know, 250 square feet and it was like, no, these are more like dorm rooms for 20 something. So like, yeah, that's what's going to happen. It's going to wind up being families of five. I'm like, okay, calm down everybody. More housing better. But the concept I had with micro apartments,

which I think is what this is going to wind up being was, what if you had a bunch of micro apartments? And then instead of them having like bathrooms in them, you go down to a gym and there's like common showers and a gym. Because when I lived in New York, a lot of people lived in illegal lofts and they would used, you know, the toilets in the, you know, in the office building or whatever common toilets. They'd have a sink maybe. And then what they would do is they go to the gym every day and they take the shower there. It was like a classic New York hack. Yeah. Yeah. I mean, it's community living. It's like commute. You know, again, we go back to he was on the kibbutz. He was on the kibbutz. He wanted to have the week. Wait, wait, wait, kibitz is when you're

talking. He was on a kibbutz. Sorry. The kibbutz. I miss hurt. So that he was on the kibbutz, which I guess is maybe where kibitz comes from. Right. He grew up on a commune. So I think that's what this is. Yeah, it's communal living. Without a doubt, that's what he's doing. But it's going to happen. But it's going to happen for nomads. For no-man.

Yes. You know, it's like an HOA combined with property management, it sounds like. And I think it's going to be that you can leave one and go to another one. So that was the other idea I had was, what if you built these micro apartments with the, you know, showers downstairs in the gym kind of situation? And it was super cheap. But you bought in for, I don't know, $200,000, right? That's what it cost to be a member. of this. But you could stay in any one of 50 of them around the world. And when you left one,

they would ship your belongings to the next one. So you'd say, hey, I put my stuff in the boxes, you know, same size boxes. They ship it to the other one. They put your boxes in the room. So imagine like that level of service where you could, or maybe you bought two units and you could give one to your friends or whatever. So that's what I have a feeling is going to go on. I'm guessing here. I'm speculating. But he did we live. And to be clear, there's no way for us to know, like there are no exact details of the business plan, at least as reported in the New York Times. They presumably presented them to A6C10 Z to get the $350 million check. Yes.

Yeah. So that's what I take this is. I think it's a pool of apartments that you'll easily be able to move around. I just want to also point out that $350 million is the size of most venture capital firms. That's number one. So the scale of this investment is extraordinary in venture. Number two, investing in two startups, because they led the 70 million. dollar round of the flow carbon crazy blockchain, which actually doesn't seem that crazy.

We talked about this. It may be a reasonable idea. So let's say they led, usually you do half if you're leading, so $35 million. They've not put $385 million into the second most disgraced founder of the last decade after, I guess Theranos, right? You'd say it was therein. I mean, I'm sure there's plenty of other ones, but I'm saying at scale. Yeah, at scale.

Yeah. At scale. Like over a billion dollar company. Number three, this breaks Jason's law, which is, it states that any startup that raises money at a billion dollar valuation before they have a product, you're going to lose all your money and it might turn out to be a fraud. I've been saying this for a long time. We've got a lot of examples of this. Quibi, failed. Don't think it was a fraud.

Darnos failed completely a fraud. We work never became worth a billion dollars before they had done like, you know, the milestone rounds. Nicola. Nicola. Mm-hmm. Then what? So that's three. What's the one in Florida that was doing AR?

Still hasn't released a product, I believe. Magically. Yeah, magically. Yeah. Good one. Again, I'm not saying it is a fraud, but it might turn out to be a fraud or a complete mismanagement. You know, what we consider a fraud here in this day and era, this, this era of we have to reinterpret every word. Like, what is a recession?

What is a fraud? What is this? What is that? I think we know what a fraud is, but okay. It could just be complete mismanagement. If we want to say Theranos was completely mismanaged and Nicola was just bad luck. Okay, fine. But I would say probably fraud.

I mean, they were convicted of fraud. So yeah. In this case, I think we have a safe legal definition, which is. You're actually to go to jail. Am I allowed to say it was a fraud? You're allowed to. You're also allowed to say whatever you want. You might get yelled at by your besties, but you can still say whatever you want.

Yeah, exactly. It might be a fraud. If you have been convicted and are going to jail for it. Listen, I've booked a ton of work trips. my day, both for myself and my teams, and it is a massive headache. Think about how much time you waste with the overhead. I have to track receipts. I have to approve the vendors, reconciliations, all of this nonsense. There are so many issues you have to deal with. That's why I'm choosing trip actions. It's the all-in-one travel and corporate card that's also an expense management

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they give you the $500 Amazon gift card as a thank you. And you want to make sure you do that at tripactions.com slash twist. Interestingly, Mark Andreessen himself was like, you know, wrote a blog post explaining why he placed this bet. And among other things, he said, blogger Mark is back. Blogger Mark is back. And we're going to get to the housing part of this in a minute. But one of the things he did point out was like, everybody wants to forget that we work was a great concept that is an ongoing concern. Right. It's an existing business that seems to be doing pretty well. It is not all the things that it was promised to be back in the day, and there was unquestionably mismanagement.

I mean, I'm just pointing out what he said when he talks about why he wanted to found, why he wanted to support and fund Adam Newman again. Here it is. And so we are excited to partner with Adam Newman and his colleagues on flow, which is a direct strike on precisely this problem, the residential real estate problem. He says, Adam is a visionary leader who revolutionized the second largest asset class in the world commercial real estate by bringing community and brand to an industry in which neither existed before.

Adam, in the story of WeWork have been exhaustively chronicled, analyzed, and fictionalized sometimes accurately. Ooh. Uh-huh. For all the energy put into covering the story, it's often underappreciated that only one person has fundamentally redesigned the office experience and led a paradigm changing global company in the process, Adam Newman. They're back in their guy.

And then he goes on to say, we understand how difficult. it is to build something like this. And we love seeing repeat founders build on past successes by growing from lessons learned. For Adam, the successes and lessons are plenty. And we are excited to go on this journey with him and his colleagues building the future of living. Fantastic. I have to say, kind of agree. I mean, we're so like torn on this, right? Because we weirdly kind of agree. I think everybody's come around with like, everybody on our team anyway, especially producer Nick is like, well, we kind of love him. He can sell anything. I mean, Here's the thing.

The guy's a madman. And he's audacious. And you're looking for an audacious person to swing for the fences and build a hundred billion dollar company. We don't have enough of those people. And so is Adam Newman a huckster, P.T. Barnum, on his worst day, sure. Did he get completely off track and become a mega narcissistic, insane, horrible leader? Yes.

Did he learn from it? Of course. How can he not? Well, we'll see. We'll see. TBD, I guess. Did he learn from it? Don't know.

How do you think the conversation went between the two of them? I think that's a great question. I think he came. Adam, what lessons did you learn from your last experience? Mark, no private jets is this time. No private jets, Mark. Cannabis is now legal. Yeah.

My pilot, he's rips the bong. I have a new pilot. He rips the bong. He flies the G550. Like autopilot. So smooth. No private jet until we EBITA positive. I have my own jet.

I bought two. Micea bought me three jets, okay? They're all going to have stuff driving. It's all pissy. Come on, Mark. Come on, Mark. I knew we had to, I knew we had to get Nick in here.

This is his guy. That's my boy, dude. Anyway. You know, I like Adam Newman because he's not, he doesn't pretend like he's someone else. He is exactly who he is. It's a level of authenticity. That is arguable.

How? Like, he seems to be pretending to be a businessman when, in fact, he is a lunatic cult leader. I think he's pretend. Hold on. Less than millions of people go to WeWorks still to the day. I mean, that's 100% true. What do is he's pretending to be a business man? If I was going to get an office space, the first thing I do is look for a we work. And they went public.

It feels like Starbucks. Like, they created a genius brand. That is absolutely true. But you cannot tell me there were business fundamentals happening there. They're absolutely where. They're profitable for the first couple of years. In the beginning. In the beginning, and then they went nuts.

He lost his mind. This is, okay, I think I can split the difference here. What you're saying, Molly, is he is, what was the word you described him? Like a lunatic cult leader? Yeah. Okay, lunatic cult leader is adjacent to mission-driven founder. I'm just putting it out there. I know.

I agree. Lunatic cult leader. There's almost no day. It's kind of overlaps about 20%. I agree. He's Steve Jobs, a bad unit, economic. That's what Adam Newman is. Thank you.

Steve Jobs with bad unit economics. Absolutely. Being amazing. That is amazing. Amazing. It is true. There's only so much margin in real estate. I think it's going to, I'll be honest, I think majority chances it works.

I think there's controls in place. Here's what I would like to say. Board control. Somebody has to leak to me what the board and governance is here. That's what I want to know to. That's going to be the detail that matters. Because if I have a feeling that those 3,000 apartments, you notice that you notice said those were already bought, I think Adam Newman has quietly bought those 3,000 on his own

with his own money. Because what, he made like a $2 billion or something. That's what it said. Yeah, so he was going to or hadn't. It was sort of like fuzzy language about how he had invested. But yeah, unquestionably, I think he bought the option on them and put down a big deposit, like a couple of hundred million dollars. Because let's say each of them, if there's $3,000 and they cost, what, 200,000 each, 300,000 each, you know, that's what I would guess. So a thousand at 200,000, be 200 million, 3,000, maybe 600 million. So if we bought 600 million dollars worth of units, um, and he does the same play where he buys the units that are distressed or in like not the cool area and they turn it and they gentrify it and make it the cool area by their

existence, that's a pretty dope model. It's a pretty dope model. Like I was like, who wants to be a Fort Lauderdale. It's like, well, if Adam Newman makes Fort Lauderdale cool, and it's a party by the pool with a bunch of young people, all of a sudden, it is cool. So he's kind of like a club promoter. He can make it, he can make anywhere cool. I mean, if apartment living became, like, the real thing that's true here, like, it's just, look, it's fun to talk about Adam Newman because he's a larger than life personality. And I think we all agree that we do sort of unironically love him in this pod, even if we wish we didn't. If there is a model to be created that allows for residential living to feel like a community, to be branded, where when you go to rent something,

you know what you're going to get. You don't have like a bunch of brokers taking a big in New York City. You know, you've got, and then you roll in and the amenities are always the same. Like, you could Starbucksify, basically, urban living. Like, yes. People will want that. It will be awesome. And it will be awesome for, like, young people just starting out. It'll be great for people who maybe want to retire, but don't want to go to like, whatever that place is called in Florida. Like, there's a ton of potential to reimagine residential real estate in this way. What's it called? It's all the pines or something?

Like, the crazy old people. Yeah, what is that called? Yeah, it's pretty crazy. You know what I'm talking about. Yeah, exactly. I know exactly. It's called like the pines or the plades. But, like, my friends and I are always talking about how we want to have a lady commune because the men die first.

Oh, yeah, that does happen, actually. Yeah. But, like, I think there is, there's increasingly this idea of communal living as being awesome, but it's really, it's hard to find. It's, I don't know, I like it. Somebody has to organize it. And then the person who organizizes it is a cult leader who winds up having like six wives and doing something crazy. It's kind of the downside.

Here's what I think is going to be great here. Cabozo is a very successful and popular. You know, you never heard of these places. This place is going to, you know, the guns. The mena, yeah, I mean, nexium. I mean, kind of always includes a crazy cult leader who, yeah. And polygamy. whatever.

Fusion ID, HM, and one of our notice points out, someone should have had a real-time reaction of Mossa when the news broke. Oh, no, Mossa's on his way, by the way. I just got a text from that kid who tracks Jets. Mossa's Jets on the way to Manhattan to go meet with him. The valuation is now $40 billion. That's my soul, all his Uber shares. He's putting $8 billion into it at an $80 billion.

Who's crazy? The crazy man or the person who backs him? Here's what I will say. Yeah. This is going to be great if he takes like some, you know, terrible apartment complex in Phoenix and then turns it into like, remember the standard hotel? They made it like really funky and cool and they had a lot of like cool vibes going on there and it was a vibe. Imagine he does this and like you go back to the beer kegs and there's beer kegs on the weekend by the pool and it's included and there's a pizza oven and there's a grill and somebody comes out. and grills a bunch of stuff and makes pizza, which was his thing, like, hey, we're going to have beer and pizza.

Like the beer and pizza playbook with young people by the pool is fine. That's appropriate. That's cool. At work, it leads to some issues. You know, obviously people drunk at work, not a great look. But if there's a melrose place at your house, it's at your house, it's not like a big deal. Like you can choose to have some beers by the pool or whatever. So I think he's going to crush this. Like the digital nomad thing, but you want to do it for a year at a time or something. If you know that you could go to any city in America and rent an apartment from this one brand and it will always be the same experience. Yes. Yes. There's something there. There's something there. There's something there. I don't know if it's a great business. I'll be totally honest.

I don't know if it's a great business. Sounds really expensive. You got to like, you're so at the mercy of economic conditions that you can't control, such as the price of, you know, housing stock, rents, all of this other stuff. And I'll tell you something. Oh, go ahead. Yes. Well, before you transition to the obvious, I just want to also say, I'm guessing four to five. I'm guessing four to five, venture capitalists who would hear this pitch from Adam Newman at a reasonable valuation would invest and I just you know if you're a founder and you're willing to go big and be audacious yeah it counts for more than your mistakes so this is a key learning audacity trumps misbehavior or shenanigans audacity trumps

shenanigans. This is Jason's law number two. If you're audacious, it forgives a lot. Dear God. Because the thing that is in short supply is audacity. No. Audacity plus, well, I mean, yes. You've got to have some success. You have some credibility, yes. Yeah. So audacity, credible audacity, thank you for the punch up, credible audacity trumps shenanigans is what I'll say. People, like, you get away with a lot of shenanigans if you have credible. execution and audacity. Credible audacity trumps misbehavior.

Full stop in our industry. I'm not saying that's the way I would have designed it. I'm not saying I'm on board for it. I'm just telling you the truth as I see it on the field. This is what happens on the playing field. Oh, yeah.

The All-Stars have one set of rules. LeBron has one set of rules. They're going to call fouls on LeBron against whoever's covering LeBron in a different way or, you know, than they do against, you know, J.R. Smith. Without a doubt.

And look, true story. I try not to be incredibly impressionable. But if Adam Newman stood in front of me and tried to sell me anything, I would write him a check. Absolutely. Like it's like a magnetic. I mean, talk about a cult leader. It's like a, like things come out from the eyes. I'm just like, yeah, sure, I'm in.

Release your anger, Molly. It's all coming to passes I have seen. I pray that I never have. I'm watching you turn into a Sith Lord from my eyes. I would have bought the resort time share, like the whole thing. Seven years ago on marketplace. Molly would be like, who's funding these people? Who's funny these people?

Is the round open? Love it. Can I just put like a cool 850 into the... Is there a... Yeah, because of one percent of the round open? Is there any room in flow? Feel like this fits under the sustainability mandate. Yeah.

It does. It does. It's housing density. Oh my God, call me Adam. Don't call me. I will write a check. I can't be trusted. Molly,

speaking of housing density. I... I kind of... I kind of feel like Mark was just talking about housing density and the housing crisis. So weird. Fate loves irony. Go. Before we get to the ad, it makes our team so happy to see our partners celebrate big wins.

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Quote, okay. Shelter is one of our most basic needs. In a world where limited access to home ownership continues to be a driving force behind inequality and anxiety, giving renters a sense of security, community, and genuine ownership has transformative power for our society. When you care for people at their home and provide them with a sense of physical and financial security, you empower them to do more. more and build things. Solving this problem is key to increasing opportunity for everyone. He says

that we have these two models, right? This is how it starts. Our nation has a housing crisis. The demographic trends driving America's housing markets are impossible to ignore. Our country is creating households faster than we're building houses. Checks out. Structural shortages and available homes for sale push housing prices higher while young people are staying single for longer and increasingly concentrating and highly desirable urban centers. There are these two historical models in housing. The first model is you own a home, you call your own, typically with a multi-decade mortgage near your current employer, if you can find a house as these locations often aren't building new housing. If you can afford that house as housing prices in many such places have skyrocketed.

Yeah, totally. We all live in the Bay Area. All two things about the housing market. I agree 100% with Mark's assessment. I agree 100% with Mark's assessment. And he also, he wrote that it's time to build blog post. It's time to build. So this all checks out, right? He all checks out. He's framed the problem so succinctly. Probably haven't heard a better summary than that summary. So good. Number two, he wrote a very passionate, seminal essay of his career. It is time to build the rallying cry to solve this exact level of problem. Continue, Molly. Yes, exactly. Also, Mark Andreessen and his wife. Okay. recently opposed strongly a proposed a proposed housing plan that would legalize the building of about

130 units in their hometown of Atherton by 2031. Atherton is a hella rich county. The richest. It's America's most expensive zip code, median sale price of $7.4 million in 2021, which is 26% larger than the next highest zip code. So the planning department proposed to modestly increase the zoned capacity of Atherton, legalizing the construction of smaller multifamily properties in a few places, a little over 130 units total to describe this problem that is so well articulated here if you can find a house as locations aren't building and if you can afford that house because the prices have skyrocketed.

It is unclear whether Mark Andreessen or his wife, Laura, wrote this email, that was submitted via public comment to Atherton's mayor and city council, but the Andresen family sent this email. It was either a joint effort or one or the other, and this is their true feelings, yes. Yes, true feelings. Your subject line. I can guess it, right? Based on what you said, I can guess. Yep.

We support dense housing. It is time to build. This is a fundamental problem. It is unfair in society. I know Laura's passionate about equity and equality, you know, in these social issues. Mark clearly, it's time to build. So go for it. You have 100% of our support.

The Andrescans. Definitely in one branch of the multiverse that happened. But this is not that branch. We play Loki in that version of the multiverse. This is the alligator Loki branch. Got it. Perfect. Where the subject line of this email said, all caps immensely against multi-family development.

Wait a second. Immensely against body of the email. Quote, I am writing this letter to communicate our immense, this is in all caps, objection to the creation of multifamily overlay zones in Atherton. Please, all caps, immediately remove all multifamily overlay zoning projects from the housing element, which will be submitted to the state in July. They will massively decrease our home value. values, the quality of life of ourselves and our neighbors, and immensely

caps. Increase the noise, pollution, and traffic. All right. That's what their email said. Yeah. I got to just take a minute to grok all this because I don't know it was time to build, but here's what I'll say. Respectfully, the Andresans are billionaires many times over on both sides.

And what people don't understand here is famously Laura's father was the major developer of Santo Road in Silicon Valley. He owned swats of property and their family continues to own those. So this is coming from a landowner beyond just their home, the primary residence, if it is that. But I'll also point out, it's also false. If you were to build 20 units, and these are townhomes, by the way, this isn't like a six-story apartment building. Yeah. Which, by the way, in Redwood City, which is the town above Atherton, they have built a ton of beautiful apartments. I've been inside one of them. I went to a poker game and one. They're gorgeous. They're, you know, perfect for somebody in their 30s with one kid.

You come downstairs. You can walk to the movies. You can walk to boxes over there. You could walk to your office. It is perfect urban living. It has had zero impact other than to take Redwood City and make it a more desirable location because of these units. The traffic is fine in that area. I've driven through that area constantly. I've gone to Sandhill Road, Stanford. University Boulevard to my friend's homes all over Atherton there is no

traffic problem in Atherton zero traffic problem and if you were to build 20 of these what it would do is people don't realize this it's $3,000 a square foot

in Atherton these apartments would go for $2,000 a square foot which means the smallest of one bedrooms would be let's say 1,200 square feet

maybe that would be like the smallest you can make a two bedroom which would make it a $2.5 million $2.00. This is not going to bring in... It's not massively.

All this would do in Atherton. But it says it's massive. It says in all caps. No, no. It would make $2.5 million units that would be available to developers or associates or maybe, you know, junior partners or the staff at Indrice and Horowitz at A16Z. The people who would live here,

is people who work for A16 Z, who make, you know, maybe they got a dual income family, they make three or four hundred thousand a year combined, and that $400,000 entitles them to make a 10K a month payment on their, you know, or five to, yeah, 10K a month payment on their mortgage for their 1,200 square foot,

$2.5 million apartment. That's what would happen. I just think this is like the level of hypocrisy that's just so. It's breathtaking. It's breathtaking. Let me quote you from its time to build, right? Because it's time to build isn't, wasn't even only about like, we got to get manufacturing back and da-da-da.

Quote, we can't build nearly enough housing in our cities with surging economic potential, which results in crazily skyrocketing housing prices in places like San Francisco, making it nearly impossible for regular people to move in and take the jobs of his future. His wife, Laura Ariaga Andresen, actually teaches a course at Stanford called Philanthropy, inclusivity, and Leadership. I mean, it just is like, you're being pretty nice about it. Like, it is, this is the grossest hypocrisy. Like, you can, if you want to be a NIMBY and assume that your money entitles you to never have a neighbor, cool.

But don't pretend you're the other thing. Yeah. That is disgusting. It's, yeah, it's not cool. I mean, come on. Disgusting. My feeling. Okay.

I'm going to let you go, Molly. I mean, you have shrunk feelings on it. I think you, I don't think you're wrong. Way too relaxed. Yeah. Welcome back from your vacation. I don't got no. All the filters are gone now.

The hypocrisy here is just stunning. It's stunning. It is gross. I'll say that. I think they need to sit and rethink their position and understand that all housing units help. And I've lived in a number of communities with this same situation where they're zoned only single family.

And now in California, they're saying you have to be multifamily. You could have two units per lot. You can't stop multifamily development. So what's happening is each of these local cities, whether it's it's Brentwood, Belair, or up here, Atherton or Redwood City, has to submit plans to have multifamily units because it's this past in California's legislation. California does not build because powerful, rich people like the Andreessen's or anybody else, own large amounts of property, multiple units, whatever, or just a large property period, you know, and it's a,

you know, for them it's not a major asset. And they also have homes everywhere else, according to, you know, public information that you read about in the news. And I think they all moved to Nevada. Didn't Ben and Mark say they were moving to Nevada? And that was going to be like their HQ. And they were kind of out of Silicon Valley and they were going to be a nomadic venture firm. So they're not even living there anymore. Yeah, maybe.

But, you know, you have to take a moment here and just think about what's best for society. And along the corridor of public transit, what should happen. is if you want to have public transit, you should have to have within the, let's just pick a number. I'm making a number up here. Two miles? Let's just say one mile. Within the 20 blocks around that station, there should be a zoning, which is 20 stories. Sounds crazy, right? 20 stories, oh my God. But it's within one mile around it. And all those people can go down and they're in walking distance. under 15 minutes, you know, some probably on average, they're six, seven minutes, right? It takes 15 minutes to walk a mile, something like that.

So on average, the people in that area would be seven minutes away from mass transit. In other words, they would have to walk. There's no reason to get in a car, take longer to pull your car out of parking spot and park it again. So they'll be within seven minutes of mass transit. This is the obvious solution. So what they should have said to this was, hey, at the CalTrans station, or if we build barred down, it goes down to Milbray now, if they're planning to build it to go down, around all those train stations, reasonably build 20 stories, make, and that, and those would become worth

you know, a thousand dollars of scruff, but they would come down another level from townhomes. Because this, what they were fighting were townhomes, which are kind of like a bridge to, you know, getting a single family home. The one before that is obviously an apartment, a proper apartment in, you know, five, six, you know, even up to 20 stories. This would solve everybody's problem. This would make life so delightful. And the easiest way to convince any rich person to do this is, do you want your chef, your nanny, your housekeepers, your firefighters, your teachers, and your own children to be able to live and have a path to housing within 20 minutes, your team at Idrisen Harwoods who have to come to the office?

Wouldn't it be nice if they could be within 20 minutes of the office and not have to suffer? And then this argument about work from home, Molly, would go away. You know why work from home is so polarizing? Because if you're the boss, you pick the location of the headquarters. and you pick it within a 20 minute drive. That's how this is done. I put our office on sixth, you know, in Soma, because it's the first exit off of the exit ramp

coming up from the bay. I picked the location. I'm the CEO. I get their quickest. People who are coming in on BART had to walk 15 minutes to the BART station. The boss picked. It would have been better, actually, for everybody.

If we put it right above a BART station, if I did it again, I would have done it that way. After seeing my team suffer through, you know, having to take BART, and walk 15 minutes each way, getting on and off. And that's a way people need to think. I bought this book, just based on a thing I saw on Twitter, called Arbitrary Lines, how zoning broke the American City and how to fix it by this guy named Nolan Gray,

who's a city planner, who basically argues that zoning itself is a flawed policy. Now, people who are honest about this do acknowledge that because supply and demand is a real thing, if you build more housing, there is a possibility the housing prices could go down. That's true, because there will be more supply. So you may not continue to benefit from artificially inflated prices in places that currently have extreme housing restriction. Like there will be a period of adjustment to that. And I'm not going to try to pretend that maybe in 100 years, if enough houses were built in Atherton, it might immensely decrease the value of the properties there.

If you don't want that to happen, sell now. It's not to admit. That's the fallacy here. But the idea of building 130 units immensely decreasing, right? Like you make a place more desirable. You have more. But nobody, this is why housing does not get built in America because it is not confined to the Andresen family, this mentality, this idea that like, yeah, I definitely want more

housing to exist. I think that's a great idea, but not in my. backyard. I mean, put a number on it. It's like we're going to have 5% more units a year. So every 12 years will double the amount of housing. Okay, that's too much? Great.

We're going to have 2%. Every 35 years will double the amount of housing in the area, the number of units, right? That seems reasonable. You know, and there's a certain density that becomes reasonable. But this is all because we're, you know, single family zoning in California. You know, that has been eliminated. So now you can have multiple units on a property, etc. There's actually really one test case for this.

The one major city that has no zoning is Houston. They have no zoning codes. Now, Dallas has like 30. That's what the guy was tweeting about. That's the tweet that got me to buy this book because he was talking about how Houston is like so vibrant. I have totally forgotten until you said it that that's the city he was referring to.

And so this is what people. And then the areas outside of Austin also have like a very permissive where if you buy, you know, 50 acres and you want to make it, you know, this section's commercial, this section's residential, this section is a retreat center. You know, you can kind of do what you want within reason, and they're very pro at your land. So I think what will happen is California is because they're clenching up like this and they're anti-development, they're going to go through this, you know, anxiety for the next decade or two. This is why I think California is not rebounding in our lifetime.

I think this will be a fight that is so intractable, Molly, that I don't think California survives the next 10 to 20 years. I think it's going to be infighting like this for another 20 years. You don't think California survives the next 10 years? No, it's going to survive, but it's not going to thrive. I think it's going to be these kind of issues. Yeah. You know, homelessness, drug policy, housing, multi-unit stuff, taxes,

all of this stuff is, it's so, intractable here. And it's so, the dynamics are like this, right? Like the Andrescans, the, you know, folks in San Francisco who want to have, you know, a very permissive drug policy or no drug policy. Other people who want it to be, you know,

lock everybody up for their first offense. Like this kind of tone, I don't think changes. And if it does, I think it takes 20 years. I think it's intractable. I think a lot of people, like one side has to leave the state. And I think that's what we're seeing. is one group is just going to opt out of this. And I think you're seeing affluent people opt out of it.

And so I do think this is going to be a challenge for the Bay Area. Yeah, hard to say. I think that California does have a lot of very intractable problems. There's no doubt about it. I don't see Mark Hendries and leaving the state. Like, they're going to fight for their enclaves. No, I think he has already. I think that's the thing is he's out.

Ben Horace and Mark Andreessen have bought homes in Las Vegas and are cutting down on board memberships. December 9th, 2021. Recently, the Bay Area-based venture capitals, Ben Horowitz took part in a popular post-pandemic pastime, updating the locations on his LinkedIn profile. Goodbye, California, hello, Las Vegas. Mark Andreessen has also purchased property in Nevada. The individual real estate decisions are a sign of significant, if slow motion shift at their company, the prominent venture capital for Andrews and Horowitz. Now, Andreessen Harwitz also said this year that they were going to go nomad, no-had. Yeah, I remember that. I remember that. So, Andreessen Horace ditches physical HQ.

The headquarters will be in the cloud. So I think this is all a part of this process. So people saying, you know what, I'm giving up on California. You know, or I'm going to invest in other places, right? There was the famous hedge fund guy from Chicago. He said he couldn't get talented young people to move to Chicago because of violence and because of Chicago. It's cold. And he moved to Miami, I think, or whatever.

I will say the other tint fight does appear to be recent. Also, I think that's true. I mean, but these are people who have the luxury of diversifying. They can keep the house here, fight against new building so that. But the, you know, so it's a good investment and then buy houses somewhere else. Look what I just got. Somebody just leaked to me the flow deck. Oh, my God.

Let me pull up a couple slides for you. Molly. Oh, my God. Live life and flow. Confidential. Let's go to the next slide. What's happening here? Hold on.

Let me just take a look. Next slide. Oh, look. Flow Atherton. They're bringing flow to Atherton. We flow. We flow, Atherton. Here it is, everybody. Confidential.

This is for A16 only. We flow. This is slide number 323. We jumped ahead in the deck, Molly. This is slide 323 of 987. Apparently, it's a long deck. But flow is coming to Atherton. Oh, look, and flow is coming to the wall in Saudi Arabia. They're going to make a wall.

Well, you know, the wall is that big Saudi project, where everybody's going to live in the well. So flow will be part of that. You'll be flowing through the wall, apparently. Oh, my God. Okay, one more. You geniuses. Oh, look. They've just repossessed Mar-a-Lago. It's in the flow network now.

Look at that is in the flow network. So you're going to be able to flow as a member from Mark and Driesan's old mansion, which is putting into the flow inventory. You kids are hilarious. Back to Mar-Lago. Young people, what could be better? There's your flow, Molly. Shout out Prash for the deck.

Shout out to Prash. You damn genius, Prash. That's my idea. Flow Mars. It's pretty great. Flow Mars, good one. That was that, Flo Mars was on my short list, too. I don't know what other flow locations you want.

Molly was like, what's happening? I was like, go tell Molly. What? You got me. You got me good. Congratulations to Adam Newman. Congratulations to Adam Newman. Don't call us.

I'm feeling I'm getting blocked by Mark Andreason on Twitter again. I'm getting blocked by Mark Andreessen. And honestly, I think I'm fine with it. I think Mark should, this is what I think Mark should do is I, this is my advice to Mark. I know he listens. So people clip this on his team. I think that he should come out and say, listen, I know it looks bad, what I said. And I've actually rethought it.

And I talked to Adam Newman. and actually I think we should collaborate. And I realized that was like a short, that was a knee-jerk reaction because we are concerned about traffic and, you know, we would be concerned about density here. But I think there's reasonable density

and looking at it, I think we could put in like 500 units and I'd love to get the contract for that for flow. Put those in flow inventory. He should just totally come out and say he's reconsidered his position and it was a really good learning moment for him.

I will point out also on my Twitter feed I noticed that another founder who is in the A-16 portfolio named Ali Resnick he tweeted about what this meant for his company so Ali Resnick is the founder of CEO of a startup called Belong

which is a vertically integrated home management rental platform. A-16 put $5 million into it in 2019 they participated in their $50 million seed this year and this is I guess one of those conflict situations you hear about and so to just

look at his tweets. Today, Mark P. Marka announced A 16's investment in flow. I'm reading Allie's tweet. And I got many questions. Ali Resnick writes, just some thought, I thought I would clarify, he says.

Our thesis is similar. We believe in a better and different future for home. Our approach is different. He writes, I believe in a future where homes are in the hands of real people. The trend here is concerning. At the pace at which hedge funds are bidding for homes in the USA, 10% of the housing stock will be owned by three corporations,

by 2030. He says, so we have built Join Belong, is the Twitter handle for Belong, a vertically

integrated system for home management that empowers small homeowners to own more homes and provide extraordinary service to residents.

In addition, with each on-time rent payment, Belong residents saved towards homeownership, so not dissimilar to get Dibby.

Yes. Very similar, which Adina Hapit's company, potentially very similar in some ways to flow. But here's some more differentiation,

He says, Flo, on the other hand, owns and operates large multi-family end-to-end apartments. Flow owns property. Belong doesn't. Belong is a system that empowers small owners to own more homes. We work exclusively with real people that are small owners. So he says that these are potentially complementary. And he says, I want to welcome extraordinary investors like P. Mark and entrepreneurs like Adam to the home space. And is that a red balloon at the bottom? I think so. emoji? Yeah, it's cute.

So like, that's sort of evoking the monster from it. Yeah, I just, the balloon. The balloon, red balloon, is that the monster from it? What, Pennywise? Oh, God, creepy. Come get me. I went as, I went as Pennywise to a Halloween party.

That's not right. And I had an outfit that was so scary. And I put it on. And my daughter was having dinner and I jumped out into the kitchen. and she screamed. It was so scared. And it was like a really, I shouldn't have done it,

but it was very funny. God. I didn't think it was that scary. A casual PTSD? A casual trauma. If this is her, if this is the total summer for PTSD from her childhood,

which I think it is, it's, you know, it's basically like a Tuesday based on my brothers and I PTSD from our childhood. I mean, we all read it way too young. We all saw Jaws way too late,

too young, like a little, you know, little traumas. Little movie trauma is fine. A little horror-based trauma is not the worst thing that ever happened. Here's my take on what he's saying. He's pissed.

He's pissed. I agree. This is like, how could you do this to me? And he got $300 million. Yeah. This is how could you do this to me? I can't believe it. You gave that maniac 350.

I'm sitting here building a real business. You gave me $5 million. You didn't even give me a heads up. We're going after the same group of buyers. this is absolutely a stab in the back. And this is why you have to be very careful when you invest in startups, because, you know, one founder,

I guarantee you they didn't clear it with him, by the way. They just did it. And Jason Hurards just did it based on the tone of this. I could be wrong, but on the tone of this, he's kind of saying, like, I have no choice but to respond to this. And so many of my friends are asking me, did Andreessen put me out, throw me under the bus?

Now, Andreessen probably said, hey, listen, we'll support your next round. It's all good, right? So he's kind of in a no-win situation. If he says like, this is not cool, then, you know, he loses injuries. And he's already lost injuries and they placed the bat on here. So it's, this is a no-win situation for him, obviously. But it feels like they're going after the same customer, which is somebody who needs a place

to live, who's a young person who wants to build equity towards a home. So these companies are, in fact, we could sit there and say like, oh, you know, iPhone's different than Android. And it's like, yeah, they're super different. One's open source. or one's proprietary. Mm-hmm. Yeah, one's cheap, one's expensive, but you don't buy both.

And so these customers will not buy both. So based on the would-you-buy-bought test of competition, this fails it. And that's the lens I look at it. Would you buy both? Now, if we invest, we invested in a story-time app for kids, and Com has sleep stories for kids as like one of 20 things they do, you would buy both. Yes, you can completely see somebody buying both. Com has 20 different features.

This one had like one little niche feature, baby massage, and, um, baby story time. And it was very young babies, in fact, not even kids, you know, like 12-year-olds or 8-year-olds. So I think that's what I try to do is run the both test. Would you buy both? And this one fails it, hands down. So yeah, feels not good. But whatever, I mean, this is a, this is a personal. This is a cult of personality investment, full stop, right? It's like it goes back to what you said about the audacity. Somebody, you know, I think this is a little bit of a, it's not a false equivalency, but it's a little frustrating, but, you know, an investor and builder pointed out that, like, if you look at the size of the average VC round of funding, an all-female-led

team averages $6.8 million in investment, and an Adam Newman team-led team, including WeWork, is $1.5 billion. Like, they're just giving this guy the money. Like, you know, sort of thesis be damned, right? Like, or like the business idea, as we have discussed, there could be something there without a doubt. Clearly something. But they have ignored every other obstacle in order to fund Adam Newman. Let's be very specific. If somebody else had brought this to him, they'd be like, oh, we have a competing company

in our portfolio, and it's capital intensive. I actually believe that. I actually believe your assessment of that. If you or I or some other entrepreneur who, you know, if a credible entrepreneur came, but it wasn't Adam Newman, but, you know, let's call reasonably credible. I don't know. Like another second time founder, right? Yeah.

They had sold their company for 50 million or 100 million, right? but it wasn't Adam Newman level success. I think they would be like, you know what? Yeah, we'll pass on this. We have something here. It's not that strong of an idea. It's got union economics issues. But if you can bet on somebody who still has energy,

and here's the other thing, Adam Newman has something to prove. It's a redemption story. And so you put all that together. I think it's a great bet by Indreason. If I'm being honest, I think this is going to be a 10-X for them. If you told me to, you know,

if they got, there's a billion dollar evaluation, put in 350, so they own 35% of this? At least over a billion. Over a billion. Okay, let's say they own 25% of this or something. I don't know. I'm going to say 25%.

If they own 25% of this and it's worth a billion three right now, you don't see Adam Newman making a $13 billion company again? I think that's what we were trading it around $10 billion last time I checked. I could see it's a 13 billion. It's still real estate. It's still real estate. It's still real estate. And it's still rents.

I don't see a, like, I'm sure that. there's like a membership play here, like you pay something like an HOA, you know, but I still don't know how you get to 10x returns on fundamentally real estate. Yeah, please do. Yeah, I can figure it out here. If they can stick to their knitting, which is buying undermarket properties, but getting premier location because of the design of them, which is what the standard hotel did and other people did, they would pick a location that was a little off the beaten path, not 57th Street

in Manhattan, but, you know, somewhere else. They pick that location that's distressed, let's call it. They get it at, you know, the apartments in that unit go for, let's say, $1,500 a month. They make it really cool and hip. It doesn't cost them anything to do that. It's like really de minimis to do it. It's more about style. Now they can charge $2,100 for it.

They get an extra $4,500 premium on it. That's profit. Now, if you just said net net, they made $200 a month and profit on it, and you said that was a subscription, and you called it a SaaS subscription, Okay, 2,400 in subscription revenue a year from this individual. I mean, there's no, the only other personal service. You still maintain their apartment. You still own a building.

Well, that's what I'm saying is like, what is the premium, Molly, you can put on top of this for it being a hip location? So, with a young person, we have a, we have two young people here. Producer Rachel, producer Nick, $1,500 a month, boring-ass apartment with no amenities. and now you have one that has the design of... Yeah, not a great location. That's why it's $1,500, because it has no amenities, no location. $500 more, but $100 a week, $125 a week, would you consider, I'm not going to say do it,

but consider a place that had all young people and a party every weekend and was designed really hip and had a cool game room and a cool barbecue area? I actually looked into this and conveniently on this, startups last week on Friday. We did have somebody on that actually did this. It's called Goal House.

It's really awesome. And the whole selling, I actually looked into doing communal living coming into the city because I kind of wanted to test out New York, didn't know how long I wanted to be here. And one cool thing I've noticed about communal living is that one of the only ways you can live in New York besides Airbnb and not have a full year lease. But the thing that got me was not having your own bedroom and having to pay a little bit more of a premium for your own bedroom. So think if I had me a

It didn't work out. How much more was it? That's hilarious. $1,500 right now. No amenities is pretty shi-appartment. And I think it came to, if I had my own bedroom, it was like $2,000. Got it.

So you'd rather be on your own for $1,500 than you're, yeah, and it would have been too bad? Okay, so you wouldn't do it. If it was $1,700, would you do it? I would definitely look into it a little bit more, depending on the application too, yeah. But I think two grand was a little too much, but 15 was kind of more reasonable with having my own bedroom. Like, I don't mind sharing my bathroom, my bathroom, but the bedroom.

So for $200 more a month, for $100 or $200 more a month, you'd consider it, but not $500. Yeah, for sure. Okay. Interesting. So that's what I think. If it was $100 a month profit, extra on top of it, and they've got, you know, I don't know, a million people living in these, it's making a billion dollars a year and profits, you know. So that's, I think, the vision they're probably looking at, which is the same thing that happens at Wii works, man, they were at that we work on Turk Street, we're paying $6,000

for a 15 by 10 foot area. I mean, it was 150 square feet, 200 square feet, and we're paying 6,000 for it. It was crazy. But whatever that is profit. What's the margin there? Well, I think it was pretty profit. Like, what's the margin on owning real estate? Well, they might own it in a treasury that is separate than the P&N. But if you look on the P&L, it's really the rental of those and how much above market would be the profit, right? So that's, that was always Newman's game. And that's why everybody gave him all that money is because when he sold it to Masta and he was like, look, Green Desk. You know, and then we worked to benchmark.

When it went from Green Desk to Benchmark, it was like, was Green Desk? It was somewhere out in Bushwick or somewhere in Brooklyn. Yeah, it was in Williamsburg. It was in Williamsburg. Before Williamsburg was really cool. So it was pretty crummy location. And but it was fun. And so people were like, ah, it's fun.

I'll pay a little extra than if I did it myself. And it's abstracting Molly, if you can abstract the arduousness in pain, which is what Rachel just talked about, not having to sign a lease, you know, just paying for it like you pay for Starbucks. That's another part of this. People don't want to be on the hook for a two-year mortgage, a two-year lease mortgage, whatever.

I 100% get the pitch. Like, I would want to do this as a young person. I get it as a smart real estate investment. I'm not sure I get it as a 10x investment. Okay. but I'm new here so I'm willing to defer I'm just thinking could there be a million people

how many people are in WeWorks you know how many unique offices are in WeWorks if there's a million of them and they make a $100 profit per month from each it's a billion to in profits I'm just doing simple back of the envelope and so could they go from 3,000 to 30,000 to 300,000 to a million units

and they have these million units and a million people living in flow spaces, that's probably the audacious pitch, and that would be a billion dollars in profits. I would also note that it seems like Newman bought these units personally, at least over a year ago, in specific areas that are incredibly pro-housing, the Southeast, and it seems like he bought them undermarket for what that is worth right now

because people are flocking to these areas. Yes, that's always his thing is Arbor. And if he makes a place, he'll make it cool. know, like, look, look what happened to Austin. A bunch of notable people move there and all of a sudden it's like, okay, it's been validated as a destination. Look at Miami. Keith Rabeoy, a bunch of other people moved there.

And all of a sudden, it becomes kind of notable, you know, and founders found an open service. It happened with New York. Sequoia's opening in New York office. Like, you know, kind of people get, places get anointed. I mean, that's why I want to leave California. It's like, I think there's other places that are more exciting and interesting. Okay.

Welcome home, Molly. We missed you. It's good to have you back, partner. I am delighted. It's good to have you back. delighted to be back Follow us on Twitter Mollywood

Jason TWA Startups Mm-hmm Producers at This Weekend Startups com We will take your scoops Your leak drafts

of flow drafts or any other information you want to send our way Thoughts comments prayers love Also I'm looking for J-Trade ideas

Yes So jatrating.com Just do the hashtag J-trading or J-Trade Either one we look at them both I'm looking for an Adam Newman

impersonation impersonator to randomly break into the show with phone calls and give me updates on flow. So if our audience could go on Instagram, like there's one kid who I watch on TikTok and Instagram who's amazing and he does Howard Stern really well and he does Rami Malick. He does also Andy Cohen. He does Howard Stern. He does who's a mouth, Goldblum, Jeff Goldblum. Incredible Jeff Goldblum.

and I think he's got, he'll be able to crush this, but somebody find me an impersonator and then we'll pay them to come on the show or we'll shout them out, whatever they want, to just come in, Molly, and we'll just have like a reoccurring segment of just Adam Newman coming on the show. Or can we just pay Jared Letto.

I mean, I think after... We could just pay Jarletto to do this. He's an angel investor, right? He's an angel investor. We'd have Jarletto come on in character would be so genius to just come on randomly and be like Friday, you know, we do like Tuesdays with

Adam. I love it. Jared Ler probably still has not left character based on what we know about him. He's probably still in character. All right, everybody, we'll see it tomorrow. Incredible. Bye-bye.