The $47 Billion Cult: The Rise and Fall of WeWork
Explore the spectacular rise and fall of WeWork, a $47 billion startup accused of being a cult, as we delve into the story of obsession wealth, power struggles, and dead unicorns. Discover the insane business journey of WeWork's founder, Adam Newman, from unusual childhood experiences to the pursuit of wealth in New York City.
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$47 billion had just gone up in flames. WeWork had been one of the most valuable start-ups
on the planet, and the founder believed he was the messiah who was going to solve the
world's problems. However, WeWork was now bankrupt, being sued for billions, and accused
of being a cult.
So what really happened here? This is a story of obscene wealth, power, and dead unicorns.
And as we go deeper down this rabbit hole, things will just get crazier and crazier.
Welcome to the spectacular rise and fall of WeWork. One of the most insane business stories
you'll ever hear.
Adam Newman had an unusual childhood to say the least. His family moved to 13 different
places whilst he was growing up, meaning he never felt settled. One of those was a kibbutz
in Israel, which was meant to be a self-sustaining socialist community. Whilst Adam enjoyed the
communal feel, he didn't like that everyone in the community got paid the same amount,
no matter which job they did. And so in 2001 at 22 years old, Adam moved from Israel to
New York for one simple reason. He wanted to get rich. He told friends that New York
was where opportunity happens, and he soon set up his first business.
The idea was simple, a women's shoe with a collapsible high heel, so the shoes could
turn into flats. Adam quickly found a Chinese manufacturer to produce them. However, the
first person who actually tried the shoes said it nearly sliced their finger off. The
design was ugly and dangerous.
us. So Adam went out with some friends to drown his sorrows that his first business
idea seemed to be going nowhere. But in conversation over some beers, one friend asked why baby
clothes didn't have knee pads for all the time babies spent crawling across hard floors.
He'd said it as a joke, but Adam took it literally and thought it was a genius business
idea. The next morning, Adam registered a trademark for a new baby clothes company called
crawlers. The slogan was, just because they don't tell you, doesn't mean they don't hurt.
Adam got some seed funding from his grandmother and other connections he'd made in New York,
and then fully threw himself into this new business selling baby clothes with knee pads.
Adam was a great salesman, and through his charisma and sheer persistence, he did manage
to sell some baby clothes. It helped that he stood out so much at trade shows, which were
typically filled with mothers. And yet here was this 6ft 5 childless guy with a booming
voice, passionately telling crowds how babies couldn't possibly be happy in life without
built in knee pads. Of course, there were some obvious flaws with his idea. Babies had
managed just fine for all of human history without knee pads, and babies only crawl for
a few months so would quickly grow out other clothes. As a result, crawlers were struggling
to make a profit, and Adam was becoming increasingly stressed. As he burned through his investment
money, his hands started to shake. It was clear to Adam this business was never going to make him
rich. He needed to think bigger. Adam walked into an elevator with no shirt or shoes on,
and struck up a conversation with the strangers inside. One of those people was a guy called
Miguel McKelvey, who would go on to become WeWork's co-founder alongside Adam.
Miguel was in many ways the opposite of Adam. He was much more shy and introverted.
But one thing they did have in common was their unusual childhood. Miguel had also been raised on
a commune of sorts. It didn't seem a hugely happy childhood though, as Miguel recalled
dumpster diving and surviving largely off food stamps.
However, Adam and Miguel struck up a friendship, and soon they began talking about ways of
making money. Adam said he'd heard of someone running a profitable business simply from
renting out office space to small companies. It sounded so simple, and Adam and Miguel
figured they could do that themselves.
So Adam spoke to his own landlord, a guy called Joshua Gutman, who had empty floors in one
of his buildings. Adam said if Gutman let them use one of his empty floors, him and
Miguel would get the customers and run everything, then they'd split the profits.
