Ten Moments From WeWork’s Incredible Rise and Crash Into Bankruptcy
After four years of mockery, it’s worth revisiting why the company once seemed unstoppable.
For close to a decade, WeWork seemed unstoppable. The company grew rapidly and spent extravagantly. On Monday, WeWork declared bankruptcy. While the co-working company could eventually emerge from the Chapter 11 process and survive in some form, the filing marks a new low for a business that was one of the world's most valuable startups as recently as 2019.
After four years of near-consistent mockery, it can be hard to remember how promising WeWork once appeared. Here are some of the highlights from the company's rise and fall:
1. Beer kegs in the office
Adam Neumann and Miguel McKelvey started WeWork in 2010 selling desks and an ideal of what an office should be like. One of their essential amenities was beer on tap. WeWork had the support of some powerful venture capital firms, including Benchmark. In 2015, Bloomberg Businessweek put Neumann on the magazine's cover for the first time, with a headline that captures the early bemusement of WeWork's VC-fueled, work-hard-play-hard vibe: “Is This the Office of the Future or a $5 Billion Waste of Space? Let's discuss over by the keg.” There would be many more magazine covers around the world.
We are now on WhatsApp. Click to join
2. Employees catching mice and cleaning up phone-booth vomit
In an episode from the WeWork-focused season of the Bloomberg Technology podcast Foundering, employees describe the exciting, chaotic and party-soaked atmosphere of the company's offices and how that affected the people working there.
3. Early warning signs
In 2016 WeWork cut some of its staff, and Neumann warned his employees in an all-hands meeting that the company had lapsed into a “spending culture.” (In the years after that, the company would spend much more lavishly than it did then.) Around the same time, employees began suing the company over alleged labor violations.
4. Summer Camp
A key part of WeWork's corporate culture included the annual summer blowout for employees and customers, which featured canoes full of beer, rah-rah speeches from executives and headlining music sets from artists such as Lorde, The Weeknd and Florence the Machine. In another episode of Foundering, former employees said the experience could be unnerving — like going to Coachella but organized by your boss — but that the celebratory energy and the sense of purpose kept them motivated.
5. A dorm for adults
WeWork already promised to blur the boundaries of work life and social life. Why not home as well? The company opened two residential apartment buildings called WeLive; the tagline was “Build a world where no one feels alone.” I lived in one for five days to find out whether the corporate-communal lifestyle it promised actually worked. “I get this amazing quality of life,” one resident told me. “The only thing I lack is a door and a wall.”
The venture capital kept coming, and SoftBank Group Corp. supercharged things when the firm got involved in 2017. WeWork poured money into a vast array of ventures. One of those was a private elementary school in Manhattan called WeGrow, which was housed in the WeWork headquarters and had interior design from the celebrated architecture firm Bjarke Ingels Group. Rebekah Neumann, Adam Neumann's wife and the company's chief brand officer, said the school's goal was “raising conscious global citizens” who “understand what their superpowers are,” she said at the time, “and use these talents and gifts to help each other and help the world.”
By 2019 WeWork had rebranded as We Co., with a mission of “elevating the world's consciousness,” and was gearing up for an initial public offering. As part of the renaming, the company agreed to a $5.9 million equity deal with Neumann for a set of trademarks related to the name We that he co-owned through a holding company. Neumann was back on the cover of Businessweek, this time pitching a real estate fund called ARK. (He joked to me that it stood for “Adam, Rebekah and Kids.”) We remained fixated on the company's unusual financial makeup and asked on the cover line: “Will it ever make money?”
8. You're a Creator
In the run-up to its 2019 IPO attempt, WeWork's visions for itself got even more grandiose. The company had spent tens of millions of dollars on the Creator Awards, a series of live pitch competitions with celebrity judges like P. Diddy and performances from bands such as the Red Hot Chili Peppers. WeWork even pitched TV networks on turning it into a show. By then the company had also bought the iconic Lord & Taylor building in Manhattan in an $850 million deal and had spent tens of millions on other tangential purchases such as a private jet, a search-engine-optimization company and stakes in a superfood startup and a wavepool maker.
9. IPO flop
In the span of a few weeks in fall 2019, WeWork's big plans to go public crashed to the ground, Neumann was ousted, and the company was scrambling for cash to stay alive. What happened? Here's the answer in a 13-minute video. In a few words, WeWork's excessive spending and loose corporate governance were its undoing.
10. The march to bankruptcy
Since 2019, WeWork has weathered a pandemic, gone public via a blank-check merger, cycled through a string of interim and “permanent” CEOs, downsized its real estate portfolio and limped along — until this August, when it raised doubt about its ability to stay in business.
One more thing! HT Tech is now on WhatsApp Channels! Follow us by clicking the link so you never miss any updates from the world of technology. Click here to join now!