A restrained telling of the rise and fall of WeWork's Neumann

IT took reading 50 pages of Billion Dollar Loser, Reeves Wiedeman's new book about WeWork and its co-founder Adam Neumann, before I wrote my first "Insufferable" in the margin alongside an especially galling anecdote - a testament to how steady and restrained Wiedeman's book is.

He could easily have let loose from the beginning with a sensationalist narrative of exploitation and degradation, but he bides his time, allowing his evidence to accrue.

This method gives the reader a chance to understand Mr Neumann's arc - rising, despite some critics' misgivings, before a spectacular fall in autumn of last year, when WeWork postponed its initial public offering and he left the company.

His innovation with WeWork was to repurpose office space for freelancers worldwide, rebranding precarity into community. Until the very end, he was so assured of his own brilliance that when Wiedeman visited him in April 2019 for a profile that ran in New York magazine, Mr Neumann offered some unsolicited journalism advice: "Ask a question that has an opportunity to give something to your readers that could make them grow."

Embracing oxymorons

Billion Dollar Loser is full of moments like this, when he says something that sounds like gobbledygook but is, from all we can gather, ultimately sincere. Wiedeman stops short of calling him truly delusional, but Mr Neumann seemed to believe that the pesky demands of having to turn a profit did not quite apply to him, even as he was determined to live the ostentatious life of a bohemian tycoon. He reconciled the contradictions of capitalism by embracing oxymorons. He grew up in Israel, and when he began building WeWork in 2010, he said that what he envisioned was a "capitalist kibbutz".

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Emerging in the wake of the 2008 financial crisis, WeWork took advantage of distressed building rents and essentially engaged in a simple arbitrage: taking out long-term leases, sub-dividing spaces and renting them out to short-term tenants at a markup. It was a model that could be profitable - and in fact, competitors to WeWork already existed, though none of them were run by anyone with Mr Neumann's market-dominating ambitions.

He was not content for WeWork to be another office-leasing company, and looked enviously at the technology companies that were able to scale without incurring the unavoidable costs of real estate expansion. WeWork would be a "tech-enabled physical social network," Wiedeman writes of Mr Neumann's goal. "He was a community builder, not a landlord."

From the beginning, Mr Neumann was a "deal guy" who loved to schmooze while other people sorted out the details. His co-founder, an architect named Miguel McKelvey, was tasked with translating his high-flown dreams into tangible reality. It was a division of labour that suited the media-shy Mr McKelvey, depicted in this book as hard-working but managerially useless, doing nothing to shield the growing staff from Mr Neumann's extreme demands.

WeWork pulled the classic new-economy manoeuvre of hiring idealistic young people, deploying them to the point of exhaustion and paying them peanuts, while telling them that they were part of a revolution - what Mr Neumann called "the 'We' decade".

Eventually, WeWork offered stock options, though Mr Neumann would be the one to cash out hundreds of millions in stock in order to fund an escalating lifestyle that had grown to include five children, several houses, a penchant for US$200 T-shirts and lots of pot.

Throughout it all, Wiedeman is an appropriately understated guide, aware that his subject is so laden with self-regard that it takes only a deadpan clause to convey the absurdity of it all. "From prison, McFarland told me..." Wiedeman writes, describing an exchange with Billy McFarland, the grifter impresario of the Fyre Festival, who of course crossed paths with Mr Neumann.

Another sentence pivots around a pointed discretionary comma. Writing about Mr Neumann's wife, Rebekah, who started a short-lived private school called WeGrow despite having no experience in education, Wiedeman describes the admissions certificates she sent to the students: "Rebekah signed the certificate with her name, and a heart."

Confidence game

Billion Dollar Loser would be absorbing enough were it just about one man's grandiosity, but Wiedeman has a larger argument to make about what Mr Neumann represents. He had finagled funding not only from SoftBank, the Japanese conglomerate led by billionaire entrepreneur Masayoshi Son, who liked to say that "feeling is more important than numbers", but also from venerable venture capital firm Benchmark.

Mr Neumann had passed himself off as a tech visionary, even though he rarely used a computer and WeWork's IT department was once run by a high school student from Queens, New York. Wiedeman depicts the giant sums of money churning through WeWork as the embodiment of a confidence game that flourished in the last decade.

Mr Neumann knew Jared Kushner from back in the day, when he was still a "boyish New York landlord" who watched as Mr Kushner's father-in-law ascended to the White House. "Hyperbole, autocratic leadership and a disconnect from reality were suddenly assets on the path to power," Wiedeman writes.

The Wall Street Journal reported that 2012 was the last (and only) profitable year in WeWork's history. The company's extravagant Halloween parties seemed to wink at how unsustainable it all was. The 2017 theme was "The Great Gatsby"; the following year, it was "What Is Real?" What turned out to be real were the constraints of the material world.

WeWork's business model, Wiedeman writes, "depended on squeezing people into smaller and smaller spaces - a pandemic nightmare". It is the reductio ad absurdum of Mr Neumann's "capitalist kibbutz": Everyone is deserving of "growth", but some are apparently more deserving than others. NYTIMES

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