This epic takedown of WeWork will go down in the history of journalism as one of the defining pieces which captured the craziness of the post-QE world. Matt Levine has written a rip-roaring piece designed to enliven even the most down-at-heel start-up owner.
The article begins on a business-like note: “A lot of kids starting at Harvard Business School next fall will be hanging up posters of Adam Neumann in their dorm rooms. Neumann, the founder of WeWork, will walk away from this corporate bonfire with a billion dollars and a bunch of fancy houses. His great-grandchildren will be prominent philanthropists with their names on museums and universities, the strange origin of their fortunes long forgotten. Neumann did a certain sort of capitalism—one with some cachet at HBS!—as well as anyone has ever done it… Neumann created a company that destroyed value at a blistering pace and nonetheless extracted a billion dollars for himself. He lit $10 billion of SoftBank’s money on fire and then went back to them and demanded a 10% commission….”
The Levine steps on the gas and says: “My very favorite part of the Adam Neumann legend might be the story of his first encounter with Masayoshi Son, who runs SoftBank Group Corp. and invests its vast piles of money. (One insane aspect of this encounter is that it happened in 2017. A busy two years!) “Mr. Neumann has told others that Mr. Son appreciated how he was crazy—but thought that he needed to be crazier.” I like to imagine that conversation with the hindsight of the last few months:
Son: What does your company do?
Neumann: We lease office buildings, spruce up the space and sublet it in small chunks.
Son: Hmm I invest in visionary tech stuff, this doesn’t really sound like my thing.
Neumann: Did I mention we are a state of consciousness. A generation of interconnected emotionally intelligent entrepreneurs.
Son: Okay yeah that’s more like—
Neumann: The world’s first physical social network. We encompass all aspects of people’s lives, in both physical and digital worlds.
Son: You’re crazy! I love it! But could you be, say, ten times crazier?
Neumann: You’re going to invest $10 billion in my company, which I will use as kindling to light the whole edifice on fire, and then when we are both standing in the ashes you will pay me another billion dollars to walk away while I laugh at you.
Son: All my life I have dreamed of meeting someone as crazy as you, but I never really believed this day would come.
Neumann: I’m gonna use your money to buy a mansion with a room shaped like a guitar, where I will play the world’s tiniest violin after all your money is gone.
Son: YES PUNCH ME IN THE FACE.
Neumann: Also I’ll rename the company “We” and charge it $6 million for the name.
Son: RUN ME OVER WITH A TRUCK.”
After this the article gets even better as Levine overlays sarcasm and analysis in equal measure. Wouldn’t it be fun if Indian crony capitalists were also subjected to the Matt Levine treatment?
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