Now Streaming: We Work - Or the Making and Breaking of a $47 Billion Unicorn

Throughout the new documentary WeWork: Or the Making and Breaking of a $47 Billion Unicorn, streaming now on Hulu, we witness scene after scene of WeWork co-founder Adam Neumann in his element: standing before a rapt crowd, microphone in hand, proclaiming his vision of community, collaboration and the world-changing power of “We.” Part brash entrepreneur, part hard partying frat boy, part New Age shaman, he is unquestionably a compelling presence. Brimming with drive, ambition and a seemingly infinite supply of confidence, he never wavers from his message. WeWork was, in his telling, neither a real estate company nor a co-working space. It was a community of creators working together to build the future of work and change the world. And, as the story unfolds, we see how he leveraged his powers of persuasion to build the WeWork myth, inspire employees to work around the clock, pull in billions of dollars of venture capital and achieve, by 2019, a mind-boggling $47 billion valuation. That it all came crashing down to earth seems, in hindsight, inevitable.

Directed by Jed Rothstein, WeWork provides an unvarnished portrait of Neumann and the world he created around himself. Founded by Neumann and Miguel McKelvy in 2010 just as the global economy was emerging from the Great Recession, WeWork was an instant hit with Millennials looking for slick co-working space and a sense of belonging. Neumann and McKelvy created an aura of cool around the company and its rapidly expanding network of office spaces, becoming a kind of club for urban nomads, gig workers and aspiring entrepreneurs. As one former WeWork tenant says in the film, “If you wanted your tech start-up to be successful you started it at WeWork.”

“WeWork embodied an optimism and this Millennial excitement about how to work and how to do things together, to do things flexibly and rebel against the office culture set by the 80s and 90s,” says Alex Konrad, senior editor of Forbes, in the film. “It was almost like somehow being a member of a club, beyond just where your office building was.”

It was also a clever way to exploit the surplus office space left fallow by the Great Recession. WeWork was “taking these distressed buildings and flipping them in a new way. That was an insight that no one else had. And they were validated by the smartest people in real estate,” says Alex Konrad in the film.

From the very beginning, WeWork appealed to investors on the hunt for the next generation of business innovators. They wanted to get in early on the next round of Unicorns, defined as companies valued at over $1 billion.

As Derek Thompson, a reporter at the Atlantic, says in the film, “after 2008, 2009, you had this really interesting period in US economics, where the economy itself was in recession and we’re looking for some way to get out of it, we’re looking for hope. And hope was found in technology. And people were like, ‘that’s the future, tech is the future, it’s going to be the lifeline that pulls us out of these doldrums.’ And at the time you had a lot of tech boosterism and techno optimism. The idea was not just that these companies were going to become valuable, but that they represented something really fundamental and beautiful about the future of human civilization. It was a period where you were rewarded if you could articulate a vision of your company that wasn’t just going to make money. It was going to change the world.”

And few business leaders were as articulate as Adam Neumann. He was, by all accounts, a gifted salesman and much of WeWork’s rise was driven by his energy and charisma. He not only convinced people that WeWork was a tech company (which it wasn’t) and should be valued as such, but that it was at the vanguard of a cultural shift in how people would work, connect, create and live. The “We Generation” was emerging and he was at the forefront.

“The world has shifted,” Neumann says in the film. “It used to be an I world, right? iPhone, iMac. All about me, me, me. If you take the word me and you flip it and you get the ‘we.’ You understand that we’re about to change the way people work and the way people live. But more importantly, change the world.”

It was heady, lofty stuff, and a lot of people bought into his vision, including an army of zealous Millennial employees and many of the top people in New York real estate and investment banking. By 2013, WeWork had achieved a valuation of $1 billion and was expanding at breakneck speed across the globe.

And while VC money continued to pour in and WeWork’s valuations continued to soar over the intervening years, the real turning point came in 2017, when Masayoshi Son, the head of Softbank, invested $4.4 billion into WeWork and told Neumann that he needed to think bigger and be crazier. By 2019, WeWork was valued at $47 billion.

The problem was that the fundamentals never really worked. WeWork was being treated by investors as a tech company, but it really wasn’t. And while Neumann continued to insist that WeWork was “the world’s first physical social network,” at the end of the day, it was primarily a desk rental company, and its prospects for sustained growth and profitability were limited.

By the end of 2018, Softbank had cooled on WeWork’s growth potential. Masayoshi Son pulled out of a key financing round, withdrawing a much needed $20 billion cash infusion, and soon after all the problems with WeWork’s business model, chaotic management practices and dubious finances became clear to the world. With nowhere else to turn to meet its need for additional capital, WeWork scrambled throughout 2019 to pull together an IPO, a process beset with problems from the start, including Neumann’s erratic behavior. Their S1 filing became an object of mockery. As Scott Galloway says in the film, it read like a “novel written by someone who was shrooming.” Soon after, the IPO was scrapped and Neumann stepped down as CEO, taking a huge severance package on his way out the door. The “We Generation” was not to be.

Ultimately, the film raises crucial questions about both the business world and the larger culture, many of which will probably remain unanswered. Was there ever anything truly innovative about WeWork’s business model or was it all just smoke and mirrors? Why did so many smart investors give Neumann so much money? How are valuations calculated and how could anyone have ever thought that WeWork was worth $47 billion? Did Adam Neumann believe what he was saying about the power of community, or was it a cynical marketing strategy? And, finally, what does it say about us that we thought a true community could be found at a co-working space?