WeWork

“Uber made benchmark roughly 640 X versus around 25 X with WeWork.”

“Even in V work benchmark made money. Genchmark made money at WeWork because they invested early enough.”

“WeWork, by the way, still exists today. There are about 330 locations around the world.”

“Sort of out of sight, out of mind. It's not a great model for entrepreneurship. You know, I think you have to be responsible for everything when you're a founder.”

“Benchmark's never done a real estate transaction in the history of the firm, and We're about 30 minutes into the presentation. This is series eight, right? So there's almost nothing there. And I knew we were going to do the deal, like without even talking to t…”

“I did invest in WeWork. They pushed the price, and I did cut my order in half. Never did anymore, to the best of my memory, but it's not like it was all roses or successes.”

“He said when he first met him in a series A, so the company basically had nothing in existence. His company benchmark had never done a real estate transaction. That's what this guy was asking him to do. But he goes, within the first few minutes, I knew I was g…”

“The product was great, the vision was ambitious, the team was world class, but the financial discipline Non-existent.”

“But it makes sense there should be double digits in this era, right? There should be 10, 20 founders who walk away with nine figures whether they're WeWorks or Hoppins, there's gotta be 20 or more of them.”

“He goes, you know, the stage when you forgot everything you did and believe everything that was written about you. It's a stage. It will pass.”

“I had a thousand friends a week before. And I went down to 10. And five of them were family members.”

“And the answer was actually none. For my first investors. They came to me. I didn't know anything. I didn't know any better.”

“The things he wasn't good at WeWork, like we're very good at putting together a tech team, you know, understanding which of the six ideas are good and which ones we should probably wait on or not do, and that kind of thing. Like that's the, you know, that's th…”

“We work got to where it got with no such technological platform, just the brand.”

“Adam Newman, who raised a bunch more money, a hundred million bucks, at a two and a half billion dollar valuation, to do, like, the same thing Basically, that WeWork already tried to do that, you know, failed in a spectacular way.”

“We've actually done about 40 happy hours at the WeWorks around New York City, and we're rolling into another wave of 30.”

“It was down in the meatpacking district. It was the early days of WeWork and they actually ran out of money while they were building it.”

“I passed on that company, that was ironically another benchmark company. I passed on that company because it didn't, I remember the dot com crash and all the office buildings being cleared up. And I was like, I don't get this business model. You don't own, own…”

“My disconnect was that it just wasn't a technology company. And even as a real estate business model, it had this issue with Asset liability mismatch, right? I mean, your leases are very long-term and your tenants are frequently very short-term and that leaves…”

“I was head of product strategy at WeWork and not many people know this, but WeWork had one of the best AI ML teams in, in technology. And one of the most interesting use cases that we had, I don't think we ended up really productizing it, but it was this idea …”

“So, Embassy is still the largest shareholder. We started off owning hundred percent of it, and we've also invested, like, you know, pretty much all of our own capital, until twenty-twenty, where we were Put in some money. You know, they put in about a hundred …”

“So in 18 or 19, something like that, he sells meetup.com to WeWork. The price was rumored to be two hundred million, but who knows?”

“A guest of the pod, Kevin Ryan, who's been on the podcast, came in and actually bought meetup for peanuts out of that sale.”

“Like those products managed to achieve customer satisfaction and demand. But they never got the efficiency right. And so sort of the whole business just never worked right at scale.”

“Three years ago, I bought the company Meetup for ten million, because WeWork was getting rid of it, and had panicked, and COVID had just started.”

“We also went from a 130 people the day I bought it to 90 people a week later, which is the right amount. Today it has probably 80, or when we sold it had 82 people, and it went from a twenty million dollar loss on thirty-two million in revenue, the, when we wo…”

“And I would separate Theranos and FTX, which were just straight up fraud from something like WeWork, which was a story about what it could become, but it just became the most egregious kind of, I think Scott Galloway calls it yoga babble where it's like, no, t…”

“If you look at WeWork, it didn't fail because the product wasn't good. It was because he didn't pay enough attention to the financial aspects of the business.”

“So, so house I think is Going to be one of the biggest beneficiaries of WeWork's bankruptcy in a lot of ways. And in fact, they actually have a SoHo House workspace business as a part, like a separate business that they, from what I remember, were trying it in…”

“I actually think that some private equity player is going to buy this out of bankruptcy and make a fortune.”

“SoftBank put in a total of 16.9 billion dollars in equity and debt.”

“WeWork is one of our partners, so WeWork would be, let's, we are a marketplace, WeWork is one of the space providers, so you can just download the MyHQ, just download and you can book any of the WeWorks in India as an example, it's as simple as that.”

“We, again, we hired beyond our skis on the tech side. It's like, we don't need a team of this size to go do the things that are needed for the product to feel really great. At the end of the day, it's about booking. And yes, there are definitely technology, th…”

“The hardest moment, I actually, I remember this very vividly, like, am I going to take this new role or am I going to put myself on the layoff list, essentially, and give the role to someone else on the team who, when I really think about it, like, yes, I was …”

“Well, again, just to be super concrete, how many people do we see that were influenced by WeWork and building WeWork for X? And their entire strategy was based on WeWork. We saw the same thing. Zoom pizza. Like robotic pizza making. And so you'd see these thin…”

“Fun fact, WeWork has run out of money more than once. Ah, the first time was actually when they were outfitting that office space, and they left us with bare concrete floors, ah, in this, like, nice little, ah, oven box, ah, up on the top floor.”

“So because of that, we had to finally come to what ended up becoming the first ever franchise model for WeWork, where we said that we will Take the plunge. We will, you know, the money, we will grow the business under the WeWork brand name. And, you know, you …”

“Many developers, you know, even in the country or everywhere else have tried to do this business or replicate the business, and none of them have been successful.”

“In June of 2020, actually right in the middle of the pandemic, we, you know, got that hundred million dollars in funding, which honestly was like a lifeline to the business.”

“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?”

“I would say that every week we probably had close to 50 to a hundred events across the country of folks that rented out WeWork spaces.”

“This was when meetup was owned by WeWork, and they were going to do something very strange. They were going to try to charge free users two dollars to RSVP, to free events, They were calling it a pricing test.”

“And the first thesis turned out to be true, more or less, that you could make a bigger TAM. The second thesis was not true at all. There was no software story. There was no network effect. It's a service office company. It's a real estate business.”

“There's a whole bunch of argument about how the company was run, how what the ethics were, what's known as a whole bunch of accusations. Nobody's actually been convicted or even charged with anything.”

“Like, it's all about a very, very small narrow margin, and that's also the story for Amazon, and it's a story for grocery delivery, it's a story for all these one-hour grocery things, it's a story for restaurant delivery, it's a story for dark kitchens it's a …”

“Which is, of course, what happened when we went out and IPO'd, and the real estate investors asked what the numbers were, and they didn't know what the numbers were. They weren't in the IPO perspectives because they just said it's a movement.”

“Which is that when WeWork ultimately went public, the collective intelligence of the public markets imposed a REIT-based valuation model on WeWork, and it is now a 3.6 billion dollar public company.”

“When SoftBank made that investment, it opened us up to a new way of thinking about how do you build a company and the way that, you know, I would say they prescribed and we agreed to was that capturing as much market share as possible was the way to go.”

“In the case of the things you talked about in terms of we live and we grow, I actually think both of those were really good experiments, you know, for us to be looking at other ways to build our company, you know, with a more diversified offering. I think thos…”

“It wasn't like we were overextended in our ability to execute on the business model. I think what we were overextended in was the Ability that we could get the continuous capital we would need to continue that expansion, you know, and those are two completely …”

“The challenge that we are facing is that it's not that those losses were a surprise. They were by design. You know, again, we were a fast growing company and we were investing in our growth. And so we were making the decision to lose money.”

“If you look about what did the market want, it completely changed after Uber's IPO. And all of a sudden there was a shift in terms of the market narrative.”

“What I saw him trying to do through that process was save the company, you know, in every step of the way, his goal was to preserve WeWork and to preserve what we had built.”

“No, I haven't. And I think a lot of the reason for that was that I was always trying to make sense of it myself, and I don't really feel like participating in someone else's agenda was helpful to me in, in any way.”

“You can look at Adam as an example of a person who did a bunch of things and was attacked and vilified and sort of canceled. There was some shadow in him, and there's some shadow in me, there's some shadow in all of us, and what's the best thing is for us to b…”

“I had a coach for a few years, and that coach, like, helped me basically sell My last company Islands to WeWork, like just through the whole process, and I would say like, 30% of the stuff we worked on was literally business, like, tactical, professional stuf…”

“If you look at, you know, some real darlings of The tech VC world, companies like Uber, or Lyft, or WeWork, you see companies that have burned through an enormous amount of capital, far more than most cleantech companies ever have or ever will.”

“We used to believe that, or companies like, again, I'll say Uber or WeWork, we thought, oh, they have natural network effects, they're gonna have a gigantic moat but it turns out switching costs for consumers are actually pretty low, and maybe lower, And some …”

“And in one of my board interviews, I met Sandeep. I was interviewing for a board member. And I tell you, 30 minutes into the interview, I said, let me stop. I said, you should not be a board member. You should be the CEO of WeWork.”

“There were a bunch of other investors, pretty high profile names as well. One of them was Adam Neumann, the former founder of WeWork.”