A video from a wild WeWork party shows the moment a bottle is thrown at former CEO Adam Neumann’s glass office

Glass breaks after employee throws bottle
Screenshot from a video shows the moment a WeWork employee hurls a bottle through a window at company headquarters.

  • Video shows a glass bottle hurled through WeWork’s headquarters during a rowdy company party.
  • Former WeWork CEO Adam Neumann encouraged a constant hustle – and party – culture.
  • A WeWork representative claimed the incident was an accident.
  • See more stories on Insider’s business page.

Former WeWork CEO Adam Neumann and other employees threw bottles of alcohol through the company headquarters’ glass walls during one of the company’s many debaucherous parties, according to a video posted on Twitter by Eliot Brown, author of “The Cult of We.”

In the video, people can be heard whooping and laughing after a bottle hurls through Neumann’s office wall, shattering the glass.

Prior to the video, Neumann had sent a bottle of tequila flying through another wall before other employees followed suit, according to Brown. A representative for Adam Neumann told Insider’s Meghan Morris that the broken windows incident was an accident and that the glass shards were cleaned up by the morning.

Wild parties like this were a quasi-compulsory part of WeWork’s company culture, where meetings were fueled with tequila shots and company retreats brimmed with the sounds of employees having sex.

WeWork, originally an office space provider that morphed into a tech company that tried to expand into everything from education to housing, saw a spectacular rise and fall, shepherded along the way by the erratic and larger-than-life Neumann. The company expanded to over 10,000 employees and raked in billions in funding, until the company filed for an initial public offering. After its failed IPO, the company’s valuation fell by 75% and Neumann was ousted from his position. His total payout from his time at the company was millions more than previously known, according to the book.

Read the original article on Business Insider

WeWork founder Adam Neumann once said he wanted to be ‘president of the world’ and also the person that countries called to solve disputes, new book says

Adam Neumann wework we company ceo
Adam Neumann, CEO of The We Company.

  • WeWork founder Adam Neumann hoped to be countries’ first call to solve problems in war, a book says.
  • He also said he’d run for “president of the world” if anything, according to “The Cult of We.”
  • He had an exit installed in his office so he wouldn’t see staff in the main lobby, the book says.
  • See more stories on Insider’s business page.

WeWork founder Adam Neumann had some outsized goals for himself and his company, as detailed in a new book.

In the company’s early years, Neumann also thought about running to be Israel’s prime minister one day, according to “The Cult of We: WeWork, Adam Neumann, and the Great Startup Delusion.”

But a few years later, that goal was no longer enough. Neumann later said that, if he were to seek any office, it would be for “president of the world,” the book says.

In another incident, he stressed that WeWork needed to be very successful so that “when countries started shooting at one another, he’d be the one they’d have to call to solve their problems, the book claims.

When he moved offices, Neumann had a new exit designed so he could avoid running into staff in the main lobby on his way to the elevators, according to the book, adding that Neumann nonetheless “often seemed earnestly interested in helping others, particularly small businesses and employees in need.”

Neumann’s heightened sense of self-importance sometimes caused friction with world leaders.

He once tried to reschedule a meeting with Canadian Prime Minister Justin Trudeau less than a week out, the book says. In 2017, Neumann nearly missed a meeting with former UK Prime Minister Theresa May as well. May was attending a last-minute event at a WeWork location, and Neumann’s wife, Rebekah, wanted him to skip it because it conflicted with previously made plans: He had already promised to spend that time speaking to children about entrepreneurship at an experimental school that predated WeGrow. At the insistence of WeWork staff, Neumann attended May’s event, the book says.

On another occasion, after meeting Senate Majority Leader Chuck Schumer, Neumann told aides to stop scheduling meetings with mayors going forward and to only set talks with senators, the book says.

Read more: Inside WeWork’s IPO meltdown: How Adam Neumann and Wall Street’s chaotic partnership obliterated $40 billion in value

Neumann took a hard line when it came to defending his ambitions, sometimes ignoring pushback to his ideas.

The book claims WeWork’s former chief legal officer, Jen Berrent, once told company lawyers that when she or then-CFO Artie Minson expressed disagreement with the then-CEO, Neumann would sometimes say, “I don’t f*cking care. Do it.” Neumann also encouraged staff to alert him to what executives said about him in his absence, the book says.

Looking to the future, Neumann prioritized longevity in several aspects.

In his personal life, Neumann “aspired to live forever” and told staff humanity would eventually “solve the problem of death,” the book says. As far as his company was concerned, the ousted CEO said WeWork would be around for 300 years and remain in his family for generations.

WeWork declined to comment when reached by Insider.

Read the original article on Business Insider

WeWork’s earliest sales efforts involved pitching random people at Starbucks and poaching competitors’ customers with offers of free rent, new book reveals

WeWork's Adam Neumann.
WeWork’s Adam Neumann.

  • When it first started recruiting tenants, WeWork pitched people at Starbucks, a new book reports.
  • The company’s CEO Adam Neumann also authorized heavy discounts that targeted competitors’ customers.
  • Eliot Brown and Maureen Farrell broke down WeWork’s early sales strategies in their new book.
  • See more stories on Insider’s business page.

In its early days, WeWork employees would often recruit new customers by pitching the idea behind the company to random people at Starbucks, a new book reveals.

Lisa Skye, WeWork’s first community manager in charge of recruiting new customers told authors Eliot Brown and Maureen Farrell in their new book that WeWork’s early efforts relied heavily on bringing in new members through Craigslist, as well as in-person pitches. Skye said she would often wander through Starbucks in Lower Manhattan and strike up conversations with people working on laptops.

“Hi, do you come in often?” Skye told the authors she would say before launching into a carefully crafted pitch. “Offices are just $650 a month.”

While WeWork began in 2010 by spending virtually nothing on marketing and quickly gained popularity, by 2017 it was a major part of WeWork’s $1.8 billion in expenses, Brown and Farrell said. WeWork was dishing out cash to lure tenants away from competitors like Regus by calling customers based in its rival company Regus’ offices and offering massive discounts.

Former WeWork CEO Adam Neumann was far from subtle when it came to competing against companies like Regus and Industrious in the community office sector.

Read more: WeWork promises it will finally be profitable by the end of 2021. Experts think the projection ‘feels a bit aggressive.’

In the summer of 2017, the CEO took Industrious CEO Jamie Hodari for a ride on a private jet. Over Bloody Marys, Neumann threatened to poach customers from Industrious, by offering the tenant free rent for a year, Brown and Farrell wrote.

“When I push the button, they’re going to start reaching out to all your customers, letting them know they can come to WeWork for free,” Neumann said, according to Brown and Farrell’s report.

If that didn’t work, they said Neumann told Hodari he would double down and offer two years free

At the time, Hodari appeared to put little stock in Neumann’s threat, but later his staff members heard from tenants that had received discounted offers from WeWork. Brown and Farrell said Neumann employed the same tactic on other competitors as well.

“Neumann was eager to rush these companies, and steal their tenants, before any presented a threat,” they wrote.

In the book, “The Cult of We: WeWork, Adam Neumann, and the Great Startup Delusion,” Brown and Farrell pointed to Neumann’s marketing strategies and his eagerness to cut out competitors as one of the underlying reasons behind the company’s financial struggles in 2019 went it attempted to go public and the true state of the company’s financials was revealed – WeWork was overvalued and Neumann was spending far more than WeWork could bring in.

Shortly after the company’s financial status was revealed, Neumann stepped down as CEO and Artie Minson and Sebastian Gunningham took his place. WeWork did not respond to a request for comment from Insider on its current marketing and sales strategies.

Read the original article on Business Insider

WeWork founder Adam Neumann once argued to Elon Musk that getting to Mars would be easy but “building community” there was the hard part, new book says

Former WeWork CEO Adam Neumann
Former WeWork CEO Adam Neumann.

  • WeWork founder Adam Neumann told SpaceX CEO Elon Musk getting to Mars was easy, a new book says.
  • “The Cult of We” adds that Neumann said building community on the Red Planet was the hard part.
  • Musk “was unimpressed and lectured Neumann,” who wanted to collaborate on Mars plans, the book says.
  • See more stories on Insider’s business page.

WeWork founder Adam Neumann has some unconventional thoughts about space, a new book says.

Neumann once told SpaceX CEO Elon Musk, whom he considered an idol, that getting to Mars was the easy part, but building community there would be difficult, according to “The Cult of We: WeWork, Adam Neumann, and the Great Startup Delusion.”

Musk “was unimpressed and lectured Neumann about how getting there was, in fact, the hard part,” the book says, citing Neumann’s recollection of the meeting to staff.

In another meeting with a high-profile CEO, Neumann again demonstrated implausible thinking. He proposed to Airbnb CEO Brian Chesky that their companies work together to build 10,000 apartments to rent on Airbnb, the book says. When Chesky replied that the number was small compared to Airbnb’s millions of rentals and thus not worth pursuing, Neumann offered a much higher number: They should build 10 million apartment units, he said. At the $100,000 cost they’d discussed to build each unit, this meant the project would require $1 trillion.

Before a meeting with Apple CEO Tim Cook, Neumann “asked aides if he should get his hair done, noting that Cook was gay,” the book says.

Read more: Inside WeWork’s IPO meltdown: How Adam Neumann and Wall Street’s chaotic partnership obliterated $40 billion in value

Neumann’s larger-than-life thinking also often led him to ask investors for incredible sums.

He wanted to raise $100 billion by the end of 2018 for a nascent investment fund, called ARK, which Neumann hoped would become the world’s largest property owner. It took Blackstone, the world’s biggest real estate fund manager, more than 30 years to reach $100 billion in real estate assets, the book says.

In 2018, Neumann told executives WeWork’s future was three-pronged: The company would have its core office space business, the investment fund ARK, and real estate services, such as cleaners or building security, according to the book. He said each would be a $1 trillion business.

The effort was part of Neumann’s quest to control the entire real estate market, the book says. He wanted to at once build, own, and lease buildings, as well as rent apartments, rather than shell out money for others to do so. To achieve this, he asked SoftBank CEO Masayoshi Son for an astonishing $70 billion, the book says. The size of SoftBank’s entire Vision Fund — its investment arm that had already poured billions into WeWork — was $100 billion.

Neumann told Son that WeWork was on track to have 14 million members in 2023, up from 420,000 in 2018, the book says. Son was just as confident: He believed WeWork would have 100 million members by 2028. As of May 2021, WeWork had just under a half a million members, according to its website.

Son also wrote that WeWork would be worth a whopping $10 trillion by 2028, the book says; the figure was one-third of the value of the US stock market in 2018. Earlier this year, WeWork announced it would go public via an SPAC deal that values it far lower, at $9 billion.

Son’s confidence in WeWork plummeted after the company imploded in 2019 following a failed IPO attempt. The SoftBank CEO would go on to say he was “foolish” and “wrong” to invest in WeWork.

Read the original article on Business Insider

Founder Adam Neumann and his wife used WeWork’s elementary school to host weekend dinner parties and left a mess for teachers to clean up, new book says

WeWork Adam Neumann and Rebekah Paltrow Neumann
WeWork husband/wife team Rebekah Paltrow Neumann and Adam Neumann.

The third floor of WeWork’s Chelsea office was once home to a school that “resembled a meadow,” served vegan lunches, and taught Hebrew alongside daily meditation.

According to a new book out Tuesday, the elementary school was also the site of dinner parties hosted by former WeWork CEO Adam Neumann and his wife. Authors Eliot Brown and Maureen Farrell wrote that the parties often left the classrooms a mess for teachers to clean up on Mondays before students arrived.

“Teachers arrived on several different Monday mornings to see waste strewn around the floor,” the book said. “Chairs were in the wrong classrooms; nothing looked the way staff had left it the previous Friday.”

“The Cult of We: WeWork, Adam Neumann, and the Great Startup Delusion,” reveals new details about the rise and fall of WeGrow, the short-lived educational branch of WeWork that closed down after two years in operation.

According to the book, Rebekah Neumann conceived the private school after she was unable to find an institution for her own children that met her high standards.

The sought-after criteria included mindfulness, Hebrew lessons, a progressive curriculum, healthy food, and beautiful surroundings. WeGrow, she determined, would have all these things – with tuition priced at $48,000 per year.

Neumann recruited some of education’s brightest stars to help her “re-create the traditional classroom environment.” Brown and Farrell wrote that the hardest part was finding teachers with Neumann’s stamp of approval. Staff said she turned down many candidates for having “the wrong energy.”

Over the next two years, WeGrow would witness internal battles over curriculum, the color of the rugs, non-gendered bathrooms, and teacher salaries. After a group of teachers asked for raises, Neumann became agitated, according to “The Cult of We.”

“Why were teachers getting paid so much, and why did they want more?” Neumann said, “It’s an honor to be part of this… we don’t want staff who are just doing this for the money.” Staff said they were shocked that Neumann didn’t understand the high living costs of New York City.

Neumann ultimately stepped down from WeGrow after new co-CEOs Artie Minson and Sebastian Gunningham took over the company.

“As part of the company’s efforts to focus on its core business, WeWork has informed the families of WeGrow students that we will not operate WeGrow after this school year,” a representative said in a statement from the time. “WeWork and the families of WeGrow students are engaging in discussions with interested parties regarding plans for WeGrow for the following school year.”

Following Adam Neumann’s legal battle with SoftBank and eventual $500 million settlement, Rebekah bought back WeGrow and now owns the rights to the curriculum. She plans to rebrand the school as Student of Life For Life (SOLFL) or “soulful,” Forbes reported.

WeWork declined to comment for this story.

Read the original article on Business Insider

Big companies are redesigning their offices in response to COVID-19, and it might mean smaller cafeterias and the end of traditional coffee machines

Women using WhatsApp in coffee shop
The “coffee break” in the office was a moment for employees to interact with one another and have a moment of rest.

  • WeWork says its London offices will have touchless coffee machines that work by scanning a QR code.
  • This change along with others from top firms could transform the office experience as we know it.
  • The tech firm Drift is axing individual desks, while the finance giant KPMG may cut office space.
  • See more stories on Insider’s business page.

The commercial real-estate firm WeWork is planning to introduce touch-free coffee machines in all its offices across London. To use the machines, people working in WeWork offices would download a smartphone app and scan a QR code on the coffee machine.

The flexible-workspace firm did not elaborate on the date when the touchless machines would be installed, but WeWork said it would most likely introduce them soon.

With the coronavirus pandemic forcing everyone to keep to themselves and sanitize objects before and after touching them, this could mean fewer colleagues feeling inclined to make coffees for other staff members.

Businesses across the world had no choice but to adapt to a new way of working when the coronavirus pandemic made it dangerous for households to mix indoors.

With companies preparing for a return to offices, many workers are likely to notice changes when they come back.

Routine use of disinfectants to fight the coronavirus is mostly unnecessary, as the risk of transmission through touching surfaces is “low,” the US Centers for Disease Control and Prevention said in April.

In a science brief based on analysis of the latest available data, the agency said intense cleaning was needed in only a few scenarios.

This news could bring an end to what some refer to as “hygiene theater,” or routine deep cleaning of hotel rooms, business premises, and public transport. Such measures might appear reassuring but are costly and, it seems, of limited use.

Despite this, Mathieu Proust, a general manager at WeWork in the UK, told Insider that as well as having touchless coffee machines, the London offices would also have motion-sensitive doors, where people move their hand in front of a button without touching it to open a door.

He said there would be no structural change to WeWork offices and added there would be increased sanitation in the buildings and signs telling people to wear masks and dictating what they could touch.

The purpose of the office is changing

WeWork is introducing an unusual hybrid model in the UK in which its employees work three days in the company’s headquarters, one day in a WeWork location, and one day at home.

Proust told Insider the company had changed the design of its space to create more room for teamwork and social interaction, rather than solo work.

One of WeWork's collaboration hubs in London
A WeWork collaboration hub in London.

“The purpose of the office is changing,” he said. “It’s about collaboration, connection, and creating more company culture.”

These so-called collaboration hubs have lots of whiteboards, more sofas, and fewer desks, according to Proust.

Collaboration spaces where people can be face-to-face with one another are “the best way to use office space,” according to Anita Williams Woolley, an associate professor of organizational behavior and theory at Carnegie Mellon University.

Woolley, who has spoken with companies about their return-to-office plans, said many were getting rid of permanent desk assignments because they were shrinking their office footprint. She also said some were downsizing the cafeterias and other sharing facilities in the workplace because “it doesn’t make sense to have them.”

A WeWork collaboration hub in London
A WeWork collaboration hub in London.

WeWork CEO Sandeep Mathrani said at the Wall Street Journal Future of Everything conference that employers wanted open-plan offices because they could keep them cleaner and they offered better ventilation.

“If you want to collaborate, you have to create an office environment,” Mathrani said.

These office-plan changes can also be seen in the tech and finance sectors.

The artificial-intelligence-powered sales software startup Drift, based in Boston, is throwing out individual desks and converting its offices into collaboration spaces. The company’s CEO and founder, David Cancel, told Insider the company had taken all of the desks and personal belongings out of the conference rooms and made them into spaces where people could gather.

“It will probably mean we’ll need less space over time,” Cancel said.

The insurance marketplace Lloyd’s of London also told Insider it would adopt a more-flexible working model with employees using the offices for when they needed to “collaborate or innovate.” Staff members will “conduct focused work remotely,” the firm said.

Cutting down on office space

Other companies are taking a more drastic option and giving up their office space as employees prepare to work from home in the future.

Some finance giants that have introduced a hybrid working model are reconsidering what the dozens of office floors are used for in the company.

The accounting and professional-services firm KPMG is redesigning its offices and may ultimately cut down on the amount of office space, said Kevin Hogarth, KPMG UK’s chief people officer.

Hogarth told Insider the company was reconfiguring its offices to create space for collaboration, learning, imagination, and team building. The workplace will be less orientated toward work that can easily be done at home, he said.

KPMG is planning a £44 million, or $62 million, program to invest in its office estate and technology, Hogarth said. “That’s because the nature of the office is going to change,” he said.

“I think it’s probably likely that over time we will see a reduction in the amount of office space that we need,” Hogarth said, adding that the company was focusing on creating the right environment for its staff.

Lloyds Banking Group is also planning to cut its office space by 20% over the next two years, The Guardian reported in April. An employee survey revealed 77% of Lloyds’ 68,000-person workforce said they wanted to work from home at least three days a week.

HSBC is taking another approach – it’s scrapping its executive floor offices and moving top managers down to “hot-desk” on a floor with other employees. The floors have turned into client meeting spaces.

Justin Small, the CEO and founder of the consultancy and advisory firm Future Strategy Club, told Insider the pandemic had evened out the office hierarchy. He said having executives five floors up from other employees was “ridiculous” and “old-fashioned.”

Hybrid working means companies won’t need the same size office, Small said, adding that where employees sit and work had become “irrelevant.”

Read the original article on Business Insider

The Hall of Fame of ‘Benjamin burners’: Meet the CEOs most famous for tanking their companies and losing millions – of other people’s money

Adam Neumann
WeWork cofounder Adam Neumann.

  • Scott Galloway is a bestselling author and professor of marketing at NYU Stern.
  • The following is a recent blog post, republished with permission, that originally ran on his blog, “No Mercy / No Malice.”
  • In it, Galloway talks about famous CEOs, from Yahoo’s Marissa Mayer to WeWork’s Adam Neumann, who cost their companies millions.
  • See more stories on Insider’s business page.

I’ve lost a lot of other people’s money. The most stressful times in my life have been when people believed in me and invested tens (if not hundreds) of millions in my company or idea, only to see their capital go up in smoke. I’ve also made a lot of people a lot of money – but only in America would someone with my (lack of) pedigree be given this many swings at the plate.

To be a truly great investor or operator/CEO, you need to be a bit of a sociopath: You have to be able to sleep at night even as you lose other people’s hard-earned money or lay people off. Working with OPM (i.e., Other People’s Money) is often phrased as a positive, but the real luxury is to be in a position to lose your own capital. If things go wrong, it’s a private failure.

The willingness to risk capital on a captain and harpoons (the 19th century whaling sector was proto-venture capital) has always been a key ingredient in the secret sauce of the US economy. But the secret is out. While the US still produces the most unicorns, and the most mega-corporations, China is gaining … fast. Interestingly, despite the rhetoric re: China challenging US hegemony, it’s European innovation that has drowned in the rising red tide. But that’s another post.

Scott Galloway  https://www.profgalloway.com/

We should celebrate billion-dollar successes, so long as they come at the risk of failure – the whaling captain and the entrepreneur earn their wealth in part thanks to their willingness to come home empty-handed, or not at all. However, there’s a new class of billionaire in America. Meet the MeWork generation, which makes their fortunes despite returning to harbor with less than they embarked with.

To help identify members of the MeWork generation (they can be any age), we’ve devised two metrics: the Daily Benjamin Burn™ (DBB) and the Earn-to-Burn Ratio™ (EBR). The first is how much money an executive lit on fire per day during their tenure. The second is the percentage of those lost Benjamins they siphoned off for themselves – think of it as a commission on destruction. In an efficient and fair (dangerous word) market, the EBR ratio would be zero. If we can measure someone’s burn in daily stacks of 100-dollar bills, they’ve created no value and should get no compensation. Spoiler: That’s not what happens.

Daily Benjamin Burn™

What does the DBB look like in practice? A lot like Quibi. That likely won’t mean anything to you, unless you’re one of the dozens and dozens of people who subscribed to the short-lived short video service. In 2018, Jeffrey Katzenberg and Meg Whitman raised $1.75 billion, launched a bad app with worse content, and shut it down six months later. Roku combed through the rubble and found $100 million, so Jeff and Meg immolated $1.65 billion in 750 days, or $2.2 million per day. If you stacked that $1.65 billion in 100-dollar bills, you’d have a pile over a mile high, about two Burj Khalifas, the world’s tallest building.

Eating my own Benjamins

In 2008, I raised $600 million from a hedge fund, became the largest shareholder in the New York Times Company, and ran an activist campaign against the Gray Lady. They put me on the Board, where I ranted about the evils of Google, advocated for the divestiture of non-core assets, envisioned sunlit uplands of subscription revenue and … lit Benjamins on fire. During my 24-month tour of duty watching the Great Recession kick ad-supported media in the groin, I managed to turn $600 million into $350 million, for a DBB of about $350,000. The stack of Benjamins I lost would have reached only to the top of 30 Rockefeller Plaza. Only. Jesus …

I. Want. To. Throw. Up.

Scott Galloway  https://www.profgalloway.com/

Earn-to-Burn Ratio™

Jeff, Meg, and I all made an old-school mistake. We failed to find a greater fool (e.g., the public markets, gullible board members, Softbank) to secure a mega payout for our Bonfires of the Benjamins. I was paid approximately $500,000 in board fees and a retainer from the fund; I speculate that Jeff and Meg pocketed more (their compensation remains private). But none of us took home millions.

That brings us to the Earn-to-Burn Ratio™ and the hall of fame for broken compensation.

EBR hall of fame

In 2012, Yahoo replaced its CEO with an executive from Google: Marissa Mayer. But the new CEO made a series of poor decisions, including canceling the company’s telecommuting policy while working from home herself and paying $1.1 billion for a porn site, Tumblr. (Note: Six years later, Yahoo sold Tumblr for $3 million.)

When Mayer took over, Yahoo (not including a 20% ownership stake in Alibaba) was valued at $14.4 billion. In July 2016 the company sold itself to Verizon for $4.5 billion, and Mayer was gone. That’s $9.9 billion turned to ash in four years (or 13.5 Burj Khalifas), for a DBB of $6.8 million. Mayer’s compensation began with a $30 million signing bonus and went up from there, totaling an estimated $365 million, giving her a $250,000-per-day commission for destroying $7 million per day of other people’s money. That’s an EBR of 3.7%. Shocking, sure, but not the gold standard.

Adam Neumann founded WeWork in 2010, but he didn’t start burning Benjamins at epic scale until Softbank began shoveling billions into the WeWork furnace in August 2017. By the time Neumann was fired in September 2019, Softbank had invested $10.3 billion; a few months later it wrote off $9.2 billion of that. That’s a $13.1 million DBB on Softbank’s money alone, or like flying a decade-old Gulfstream G450 (I browse planes at night – pathetic) into a mountain … every day. Impressive, but only half the story. Neumann’s compensation for this value destruction was complicated by his ouster and a subsequent lawsuit, but we estimate he made off with around $1.02 billion, most of it coming out of Softbank’s deep pockets. That’s $1.5 million per day during those two years: an EBR of 11.1%.

Scott Galloway  https://www.profgalloway.com/

Joining Mayer and Neumann on the podium is Randall Stephenson, who ran AT&T from 2007 to 2020, when his chief lieutenant, John Stankey, took over. If you owned AT&T stock in 2007, you’ve collected $26 per share in dividends since, but you’ve also watched the share price drop from $39 to $29, for an aggregate annual return of 2.5%. This was a period when S&P 500 companies as a whole returned 9.8% a year – much of it on the back of AT&T’s own mobile and data networks – and AT&T’s competitor Verizon returned 7.9% to its shareholders.

How did Stephenson manage this? Among other mistakes, AT&T spent $67 billion to buy DirecTV (a pending massive write-off), blew $4 billion when it failed to acquire T-Mobile, and spent another $108 billion to buy WarnerMedia, which Stankey just sold to Discovery. To his (partial) credit, Stankey may have managed to net out the Warner deal as a wash.

Scott Galloway

So while Stephenson didn’t destroy capital outright, he was a poor steward. Had AT&T eked out even a 4% return from 2007 to today, it would have made an additional $50 billion for shareholders. That’s an implied DBB of $10 million. How did the Board respond to Stephenson’s 13-year-long sideways run at the iconic firm? His total comp was at least $250 million, including a $64 million pension as a parting gift. That’s an EBR of “only” 0.5%, but still a huge payout in the face of mediocre performance.

Honorable mention

In April 2014, toward the end of Steve Ballmer’s controversial run as CEO, Microsoft closed the $7.2 billion purchase of 1999’s leading mobile handset maker, Nokia. Just 15 months later, Ballmer was gone, and the company wrote off $10 billion for the failed acquisition – the deal was so bad it ended up costing Microsoft more than it paid, mostly due to severance for laid-off Nokia employees. That’s an incredible $22.2 million per day, the highest DBB we could find. (Ballmer only made $1.65 million his last year at the company, so a minimal EBR.)

Burning Benjamins doesn’t just happen in the US. In 1998, Daimler-Benz acquired Chrysler for $35 billion in the largest industrial merger ever at the time. After nine years of culture clash and billions in losses, Daimler unloaded 80% of Chrysler to a private equity firm for $7.4 billion, valuing the company at $9.25 billion. That equates to an impressive $7.8 million DBB.

How do these corporate money losers compare to the largest and longest-running Ponzi scheme in history? Bernie Madoff ran his fake fund for nearly 30 years, costing investors an estimated $19 billion. The date his fraud began is disputed, but assuming it was 1980, that’s a DBB of just under $2 million per day. A massive, decadelong legal project has repaid most of these losses through fines and settlements, and Madoff died in prison, but only after a multi-decade run paid for by the destruction of thousands of people’s economic security.

https://www.profgalloway.com/ Scott Galloway

MeWork

Growing up, I loved to watch my dad pack for business trips. He smelled of Aqua Velva and draped his Izod sweaters over a Ram Golf bag. He’d iron the mammoth collar of his Pierre Cardin shirts, fold them around a piece of wax paper, and lay them into his Hartmann luggage like newborns. It was ceremonial, just as when he’d wear his kilt. Elegant yet masculine. During one of these pre-business-trip ceremonies, when I was about eight, my mom walked in. I looked at my dad’s stuff and asked, “How come dad is so rich, and we’re so poor?”

My dad loves this story and laughs out loud when he tells it. But it wasn’t funny. He’s been married – and divorced – four times. There was some financial stress, there was incompatibility. But the real fissure was that there were two Americas … under one roof.

https://www.profgalloway.com/ Scott Galloway

Whether we’re executives, parents, or citizens, we need to ask ourselves: Have our interests diverged from those of the people who matter most to us and society? Do our spouses, children, neighbors, employees, and countrymen win and lose in reasonable harmony? Are we part of a family, part of a nation? Or have we become the MeWork generation?

Life is so rich,

Scott

Read the original article on Business Insider

WeWork has a hybrid work model where staff work 3 days in its central-London HQ, 1 day from a WeWork location, and 1 day at home

GettyImages 1211910015
A WeWork office.

  • WeWork is adopting a hybrid model where staff work from three locations during the week.
  • WeWork staff will work three days in the office, one day in a WeWork location, and one day from home.
  • Mathieu Proust, a WeWork general manager, said hybrid working “is what the future is about.”
  • See more stories on Insider’s business page.

Commercial real estate firm WeWork is going the extra mile with its hybrid work model as it plans to bring staff back to the office.

From June 21, WeWork staff in the UK will work three days in the main company headquarters, one day from a WeWork location, and one day from home, Mathieu Proust, the company’s UK general manager told Insider.

“Working at home is really efficient when you have a specific task to do,” he said. “Working in the office is more about having impromptu conversations and meeting one another.”

Proust said that a company-wide survey showed that WeWork staff who have returned the office have seen a 54% jump in morale. “They’re happier to see colleagues,” he said, adding that “it’s good for morale.”

WeWork, which plans to go public via a SPAC, have introduced a “hub-and-spoke” model for their employees, where there’s one main “hub” office and smaller ‘spokes’ throughout London.

WeWork’s main hub in the UK is located in Waterloo, central London, and the company has a further 50 spokes spread across the city which employees and members can access whenever they like.

Read more: WeWork members are getting fed up paying rent while the coworking giant tries to catch a break on its own leases. Here’s how 4 entrepreneurs are trying to get out.

One day a week, WeWork staff will be working in one of the spokes which are closer to their home. Within these office buildings, there are separate workspaces for WeWork employees.

WeWork offices remained open during lockdown as essential businesses, such as law firms, used its facilities, Proust said. Small to medium businesses then returned to its offices in between the lockdowns.

Proust said the company has seen a need for flexibility in its workforce, which has led to an improvement in wellbeing. During the pandemic, WeWork organised meditation, yoga, and other activities online – it’s now going to carry these on face-to-face as “we’ve seen how important they were,” he said.

Payments firm Klarna, which has recently chosen a WeWork location for a new office hub in London, is also opting for a more hybrid working culture whereby employees work two days in the office and choose where they want to work for the rest of the week.

“The notion of hybrid working is a notion of flexibility,” said Proust, adding that the hybrid model trend is accelerating. “That’s what the future is about.”

Are you a WeWork employee? What do you think of this new hybrid working model? Get in touch with this reporter via Twitter or email kduffy@insider.com.

Read the original article on Business Insider

Tech CEOs are savagely mocking WeWork’s chief exec for saying the ‘least engaged’ employees enjoy working from home

GettyImages 1211910015
A WeWork office in Beijing.

  • WeWork’s Sandeep Mathrani said that only the “least engaged” workers want to stay at home.
  • It’s inspired taunting from Uber’s Dara Khosrowshahi and Box’s Aaron Levie.
  • As a commercial real estate firm, WeWork has a vested interest in workers returning to the office.
  • See more stories on Insider’s business page.

Tech CEOs are piling on online following the WeWork chief exec’s assertion that only the “least engaged” employees want to keep working from home.

During The Wall Street Journal’s Future of Everything festival on Wednesday, Sandeep Mathrani, who took the helm of WeWork in 2020, discussed the future of the office, saying that he’s seeing employees who want to work at the office a few days every week and work remotely on other days.

But he added that the number of days workers want to stay at home is directly correlated to how engaged they are with their work.

“It’s also pretty obvious that those who are overly engaged with the company want to go to the office two-thirds of the time at least. Those who are least engaged are very comfortable working from home,” Mathrani said.

Since the interview, Mathrani’s fellow CEOs haven’t hesitated to point out that, as the the CEO of a commercial real estate company, he has a vested interest in employees returning to the office.

Aaron Levie, CEO of cloud content management firm Box, pointed out the absurdity of viewing your most engaged employees as the ones who use your product the most.

Dara Khosrowshahi, the CEO of Uber, chimed in with his own version.

Read more: WeWork released an investor deck outlining ambitious occupancy projections ahead of a proposed SPAC deal. Here are 4 big takeaways.

As a coworking startup, WeWork relies on people returning to the office to boost its business. Though the company’s current occupancy rate is below 50%, WeWork recently told investors it expects occupancy to soar to 75% by the fourth quarter of this year.

Marcelo Claure – WeWork’s executive chairman and the CEO of WeWork’s largest financial backer, SoftBank Group International – told Insider in a statement earlier this year that “WeWork is incredibly well positioned to springboard into a future” thanks to its technology and “a new appreciation of the value of flexible workspace.”

Read the original article on Business Insider

The founder of a startup bought by WeWork describes how he almost destroyed his 7-year-old company in the span of 24 hours over one simple mistake

Adam Neumann, CEO of WeWork
Adam Neumann, CEO of WeWork, one of the big, private companies held by mutual funds at different valuations.

  • David Fano is the founder of CASE, a startup bought by WeWork in 2015.
  • On Twitter, Fano said the acquisition process moved quickly, closing in just 25 days.
  • But the process almost destroyed his company when employees were faced with a snap decision.
  • See more stories on Insider’s business page.

The founder of a company acquired by WeWork described the lessons from a whirlwind process of joining Adam Neumann’s startup in a Twitter thread on Wednesday.

Dave Fano worked at WeWork for nearly four years after his architecture and planning company, CASE, was acquired in 2015, according to his LinkedIn profile. But it almost didn’t happen.

“We spent 7 years building an amazing culture of trust and transparency, and in a span of 24 hours, almost lost it all,” Fano wrote. “Caught up in trying to get the deal done, we lost sight of how this process would make everyone feel.”

Fano said CASE told its workers of the WeWork acquisition and asked them to return signed documents within 24 hours. The entire process took less than a month from when a verbal agreement was reached to when the deal officially closed.

The transaction put many of the firm’s employees in a tailspin, Fano said. CASE was given less than two weeks after the letter of intent was signed to officially close the deal by informing employees and getting the workers to review WeWork’s employment agreement.

According to data from Forbes, most mergers and acquisitions take about four to six months, but can also encompass a period of several years. Even at that rate, many employees choose to leave companies after mergers and acquisitions. Data from the MIT Sloan Management School found that within the first year of a company’s acquisition 33% of workers leave the company as compared to the standard rate of 12%.

“That was one of the worst business decisions I’ve been a part of in all my career,” Fano, who’s now the CEO of career planning company Teal, said in his Twitter thread.

At the time, WeWork was considered a promising startup. It was chosen by Fortune magazine as one of its three unicorns to bet on in 2016 but went downhill fast when it filed to go public in 2019.

Fano left his position at WeWork as the company’s chief growth officer about five months before it filed to go public. Within six weeks of filing, WeWork spiraled down from a $47 billion valuation to talk of bankruptcy when its S-1 filing revealed the company had suffered heavy financial losses.

Since then, the company appears to have turned around for WeWork. In March, the company announced it had reached a deal to go public via a SPAC.

Eventually, Fano said, he asked for more time from CEO Adam Neumann, who agreed to give the team several extra weeks.

Despite the extra time, he said the company still lost many employees as a result of the acquisition. But he does not regret his decision to join WeWork.

Fano said the situation opened his eyes to the importance of company values. By asking employees to make a 24-hour decision, he felt he violated a culture of trust and dependency.

“As intense as that moment was, I would not trade it for the following 4 years at WeWork,” he wrote. “Everyone experienced incredible career growth. WeWork enabled people to explore new career paths, take on new responsibilities, and build relationships that will stay with them forever.”

Read the original article on Business Insider