Feb 6, 2023 · 53m · a16z
Disrupting the World's Largest Asset Class with Adam Neumann
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In an exclusive panel at Andreessen Horowitz's American Dynamism Summit, WeWork co-founder Adam Neumann and venture capitalist Marc Andreessen discuss Flow, Neumann's new real estate venture aimed at reinventing residential housing, community living, and renter equity in a post-pandemic world.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. How this is scored →
The host as informed peer 2.0 Guest teaching 3.6 Guest disagreement 2.2 The host pushing back 1.0
speaking balance: gold is the host, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 37:41 Neumann Challenges Remote Work Philosophy
Adam Neumann explicitly interrupts and pushes back on his investors Marc Andreessen and David Ulevitch, arguing that remote work kills spontaneous late-night creative breakthroughs essential for ambitious startups.
Hardest push from the host ▶ 36:39 Ulevitch Rejects Traditional Office Presence FramingDavid Ulevitch rejects the notion that continuous office presence is superior, counter-arguing that structured offsites produce far more focused, high-yield alignment than daily superficial office chit-chat.
Biggest teaching moment ▶ 46:40 Neumann Teaches Real Estate NOI EconomicsAdam Neumann educates the host and audience on apartment portfolio economics, demonstrating how lowering churn from 50% to 40% increases building net operating income by 5% and LP returns by 500 basis points.
The host holds their own ▶ 36:39 Ulevitch Outlines Modern Venture Firm OperationsDavid Ulevitch demonstrates domain expertise in modern organization design, detailing how A16Z decoupled firm geography to scale while maintaining high productivity through targeted travel and regional hubs.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | The host as informed peer | Guest teaching | Guest disagreement | The host pushing back | Why |
|---|---|---|---|---|---|---|
| Why Adam Neumann Returned to Build Flow | 2 | 2 | 1 | 1 | David Ulevitch opens by asking Adam Neumann why he chose to re-enter the entrepreneurial arena after leaving WeWork. Adam humbly outlines his period of reflection, family office investments, and how an encouraging phone call from Marc Andreessen led to their partnership. | |
| Marc Andreessen on Housing and Economic Dynamism | 1 | 5 | 1 | 0 | David Ulevitch prompts Marc Andreessen on the importance of housing in American dynamism. Marc delivers an extensive monologue detailing housing inflation, urban agglomeration effects, superstar cities, and how COVID served as a system shock to geographic work arrangements. | |
| Rethinking Residential Community and Flexible Living | 2 | 3 | 2 | 1 | The panel explores evolving residential expectations post-COVID. Adam contrasts American apartment isolation with Israeli neighbor culture, while Marc details how the destruction of corporate campus perk culture elevated the home into the primary locus of living and working. | |
| Remote Operations versus In-Person Collaboration | 3 | 4 | 6 | 2 | David Ulevitch and Marc Andreessen describe A16Z's transition to a remote-centric firm model. Adam Neumann directly pushes back on his investors, arguing that serendipitous, late-night in-person breakthroughs cannot occur over Zoom and that face-to-face companies will ultimately win. | |
| The Business Model and Four Pillars of Flow | 2 | 4 | 1 | 1 | David Ulevitch asks Adam Neumann to reveal the underlying model of Flow. Adam details Flow's four pillars—property management, asset management, financial services, and tenant value-sharing—and demonstrates how reducing tenant churn directly expands LP yield. |
Statements from this episode (19)
Neumann's family office made approximately 50 venture capital investments
“As that was happening, I started building a family office, and with my family office, we invested in about 50 venture investments.”
Neumann's family office acquired approximately 4,000 apartment units
“So we decided to go as a family office, very deep into multifamily. We bought approximately 4000 apartments”
Andreessen: Tech has had the least impact on healthcare, education, and housing
“If you look at kind of all the economic statistics by sector, healthcare, education, housing are basically increasing you know, in terms of cost, you know, at a much faster rate than the, than all the others. And they're the sectors where the tech industry has…”
Andreessen: San Francisco authorized only 6,000 new housing units last year
“San Francisco last year, like, authorized, I think, 6000 new housing units, right, which is just like an absurdly low number relative to the demand for people who want to move there.”
Andreessen: Society has a five-year window to adapt to post-COVID living
“I think we have about a five-year window, I think, as a society to kind of figure out what this means and how to adapt.”
Neumann: Over 70% of adults under 35 rent, and that will grow
“70% of thirty-five-year-olds and youngers are currently renters. They don't actually buy, and this number is not because of the interest rates that have been going up over the past six to 10 months. This is a number from 12 months ago. And we believe that that…”
Andreessen: Full-time corporate office campuses will not return for most companies
“A lot of these companies now are thinking, okay, we're gonna have people come back in the office two days a week, three days a week, or we're gonna have them come back in shifts, or this or that, but, you know, the spirit is, like, Elvis has left the building …”
Neumann: Google's corporate campus was the original inspiration for WeWork
“Google was inspiration for us that we work. Our point was, well, why can't small businesses have this great campus, have this great energy?”
Neumann: The US is short 3 million to 5 million housing units
“There's, and the numbers varies, but between three to five million apartments and single-family homes missing right now in the U.S., and that number grows by hundreds of thousands of units a year”
Neumann: Vertical integration is the only viable model for proptech
“Most prop tech companies come in and solve a point solution. They have this one solution, but then they need to take that solution, convince the landlords who are not even interested in buying anything because they're making money anyway, go to these old ERP s…”
Andreessen expects four times his pre-pandemic travel volume
“My steady state, I think, is gonna be traveling at, like, four X, the number of days that I used to travel.”
Andreessen: The post-pandemic workplace transition is a ten-year process
“I think we're three years into a, probably a ten-year process and I think the level of reinvention is gonna be actually quite staggering from here.”
Neumann: Companies prioritizing face-to-face interaction will win long-term
“I actually think if you look 10 years forward, the companies that are going to make the effort now to be face to face, now we can describe what face to face is, there are many ways to do it, but the companies that are actually going to do the face to face, I t…”
Neumann: 60% of average American equity is tied up in homeownership
“For 80 years, owning a home used to be the way that, that was the majority of us creating equity, and 60% of Americans today, in average, their equity is in the home.”
Neumann: Flow founders matched Andreessen Horowitz's capital investment
“We contributed into this business at least as much as Andreessen contributed into this business”
Neumann: Reducing tenant churn to 40% yields 500 bps extra LP return
“If the user now enjoys their experience more and feels like they have a portion of the value and chooses to stay a little longer, and that average churn goes down from 50% to 40%, without getting too deep into the numbers, the NOI of the building will go up by…”
Andreessen: Successful cities deterministically block new housing construction
“It almost seems deterministic that if a city becomes successful, it basically, the local homeownership, whatever political base devotes itself to preventing the construction of new housing.”
Neumann: Construction tech company ICON can build a home in four days
“There's a construction company here called Icon that's using technology that the government is going to need to partner with them at some point, because they have found ways to build a home In four days, that used to take, ah, that used to take a year and a ha…”
Neumann: Flow will rely on partnerships rather than owning all assets
“I think for us at Flow, and this is another lesson from the past, we used to think, and I used to think we had to own everything. I think the category is so big that the only way we're going to achieve anything is through partnership, partnership with governme…”