The Cult Of We Vs Billion Dollar Loser
Introduction
The Cult of We is a Canadian start-up that promised to revolutionize the office-sharing industry. The company was valued at $47 billion before its IPO in 2019, making it one of the most valuable start-ups in the world. However, things took a turn for the worse when the company went public. The stock tanked, and the CEO stepped down amid allegations of mismanagement and fraud. The company was eventually acquired by a competitor, and its value plummeted to just a fraction of its former worth.
The Rise of WeWork
WeWork was founded in 2010 by Adam Neumann and Miguel McKelvey. The company started as a co-working space for freelancers and small businesses. However, it quickly expanded, opening locations in major cities all over the world. The company's success was due in part to its innovative approach to office-sharing. WeWork offered flexible leases, fully furnished offices, and a range of amenities, including free beer on tap. The company also fostered a sense of community among its members, hosting networking events and social activities.
The Cult of We
The Cult of We was the brainchild of Adam Neumann. The company started as a side project, offering wellness programs and spiritual guidance to WeWork employees. However, it quickly grew into a full-fledged business, offering services such as private jet rentals and a private school for children of WeWork members. The company's name reflected its philosophy: that WeWork was more than just a business, it was a community that members should be fully committed to.
The IPO
WeWork filed for its initial public offering in August 2019. The company was valued at $47 billion, making it one of the most valuable start-ups in the world. However, the IPO was met with skepticism from investors, who were concerned about the company's massive losses and its corporate governance structure. The company's S-1 filing revealed that Adam Neumann had near-total control over WeWork, despite owning only a small percentage of the company's shares.
The Fallout
The IPO was eventually shelved, and Adam Neumann stepped down as CEO. The company was forced to lay off thousands of employees and close dozens of locations. WeWork was eventually acquired by SoftBank, a Japanese conglomerate, for a fraction of its former value. The fallout from the WeWork debacle was felt throughout the tech industry, as investors became more cautious about investing in high-growth, high-loss companies.
The Lessons Learned
The WeWork saga taught us several lessons about the dangers of corporate hype and the importance of good governance. It also highlighted the risks of investing in high-growth, high-loss companies without fully understanding their business models. The Cult of We was a cautionary tale about the dangers of buying into a charismatic leader's vision without questioning their motives or methods.
Conclusion
The Cult of We was a cautionary tale about the dangers of corporate hype and the importance of good governance. The WeWork saga showed us that even the most valuable start-ups can be brought down by mismanagement and fraud. It also taught us that investing in high-growth, high-loss companies is risky, and that we need to be vigilant about the companies we invest in. The fall of WeWork was a stark reminder that even the most successful companies can fall from grace.
