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How Did WeWork’s Adam Neumann Build a $47 Billion Company?
“The We Company’s headquarters in Chelsea, where more than a thousand of its employees work, is something of a testing ground for how it can serve even larger organizations. (The company will eventually move into the old Lord & Taylor flagship on Fifth Avenue, which it recently bought.) The sixth-floor entrance is flanked by a full-service barista and a “living room” with an array of couches and lounge chairs roughly the size and feel of a West Elm showroom. There are Foosball and bumper-pool tables, along with three video-game consoles. Beyond that is the WeMRKT, an “in-office bodega,” as a WeWork spokesperson called it, next to a kitchen with a dozen taps serving beer, cider, cold brew, Merlot, Pinot, several kombuchas, and seltzer. On one of my visits, signs advertised astrology readings for employees that afternoon.

Aside from a few offices reserved for Neumann and a handful of executives, the headquarters has almost no assigned desks, and some WeWork employees describe a near-constant mental and physical battle to find a space with enough quiet and privacy for concentration. (The private phone booths are coveted, as they are in most WeWorks.) Joel Steinhaus, a WeWork executive, told me that his previous office at Citi allocated 200-to-250 square feet per person, while WeWork has shrunk that number to around 50. (A WeWork spokesperson says the number is higher.) WeWork claims that additional common spaces and amenities make up the difference, but also that closeness has benefits. A half-dozen WeWork employees repeated the same talking point to me about the narrowness of its staircases and hallways, which are there to foster community by forcing people to physically interact with anyone they walk past. They say any cost savings from fitting in more people is merely a bonus.

Building community is what WeWork has always promised, and its pitch to large corporations is not just hip design and flexible leasing terms but what WeWork calls its “WeOS,” referring to its expertise in helping companies optimize both space and overall culture. (In 2017, McKelvey was named WeWork’s chief culture officer, and he’s fond of using one of WeWork’s many internal slogans: “Operationalize Love.”)

But in dozens of interviews, current and former WeWork employees and executives questioned whether the company’s culture is itself one worth spreading. Despite the company’s slogan “Make a Life, Not Just a Living,” employees at all levels have often reported working 60- or 70-hour weeks, and events like Thank God It’s Monday and Summer Camp were mandatory. At its annual summit, the company keeps track of employee attendance at panels and events by scanning wristbands given to each person; excessive absences are reported to managers. A number of employees describe a regular cycle at WeWork: New people would arrive, excited by the company’s mission, only to get burned out, leave, and replaced by a fresh crop. Multiple executives told me Neumann’s cheerleading was critical to the company’s success. “From a business perspective, the cult is working,” said one executive.

Employees say turnover at the company has been dizzying. Multiple people told me Neumann has expressed a desire to turn over 20 percent of WeWork’s staff every year — he denies this — whether through attrition or firings, as a means of keeping staff on its toes. There have been two publicly reported rounds of mass departures, both of which the company said involved culling unproductive workers. But employees say that restructurings, in which entire teams are suddenly disbanded, are a regular occurrence. “When you’re at WeWork, there’s a certain lack of culture, which is ironic for a company selling culture,” one former executive told me. “If there is a culture, it is that of a revolving door.” The need to hire employees at a rate to keep up with its growth has led to occasional hiccups in its hiring process: In 2015, Neumann chastised a group of employees for not Googling a job applicant after finding out that WeWork had hired the Hipster Grifter, a Brooklynite who had become briefly famous several years earlier for scamming her way into jobs and cheating people out of money.

The focus on growth often seemed to leave little room for other concerns. Two people told me that during an early town hall when WeWork had just over 100 employees, Neumann took questions alongside two other executives, Michael Gross and Noah Brodsky, and someone asked about the lack of diversity among the executive team. Neumann disputed the point by referring to himself and the other people onstage, saying, “I’m a brunette, Michael’s blond, and we have a Noah.” (Brodsky, who is gay, went bright red.)

Employees and executives say much of the culture stems from Neumann, whose rule by fiat could be frustrating. Last summer, he announced at the end of a companywide meeting that WeWork employees would no longer be permitted to expense meals that included meat. Several senior members of the company had no idea the announcement was coming or what it even meant. Hundreds of employees joined a Slack channel to debate the policy, while some found various ways around it: A person in the New York tech world said WeWork employees have asked her to expense the meat when they go out for meals.

Especially at the top, WeWork looked to some like a boys’ club. The executive ranks have been sprinkled with Neumann’s friends from Israel as well as his extended-family members. During an executive off-site meeting in Montauk, he gave a joking toast to the virtues of nepotism. In a job interview, the first question one former executive asked a young female applicant was whether she had a boyfriend (he was later fired). Last year, two female employees reported that they were having trouble getting a meeting with Adam Kimmel, the chief creative officer, to whom they reported. According to multiple people with knowledge of the situation, Kimmel later said he hadn’t met with the women because he and his wife, the actress Leelee Sobieski, had a rule against meeting alone with a member of the opposite sex. (WeWork disputes this.) In October, Ruby Anaya, the former head of culture, sued WeWork, alleging she had been groped at both the company summit and Summer Camp by colleagues (the lawsuit is pending).

Several people told me they worried about what the company’s younger employees might absorb from their experience. A former WeWorker who now runs a company told me, “I spend a lot of my time on culture and HR, and it fucking slows you down worrying about how people feel.” But one employee told me his WeWork experience had made him think about what he would do differently if he were ever to run his own start-up. “You can move fast and break things,” he said, citing Facebook’s widely adopted empire-building ethos. “But you can’t move fast and break people.””



“Will WeWork work? The company has existed entirely in an expanding economy, and its business has never been tested by a downturn. WeWork argues that in a recession, larger companies will downsize into its spaces while laid-off workers will need them to start their solo careers. But it’s also very possible that large companies who currently have ancillary spaces in WeWork will identify those as easy costs to cut, and entrepreneurs will revert to coffee shops. A third argument goes that WeWork occupies so much space that many landlords will have no choice but to renegotiate its leases.

During the dot-com boom, a company called Regus became a stock-market darling by offering similar but much blander flexible offices. In 2000, Fast Company published a story about Regus titled “Office of the Future,” highlighting its efforts to bring “community” to the workplace. But the bubble burst and Regus went bankrupt. The company recovered and rebranded as IWG, but its existence presents another conundrum for WeWork. IWG currently has roughly 3,000 locations and 2.5 million customers worldwide, numbers that dwarf WeWork’s. IWG is profitable and now has a hipper, WeWork-ish offering. It is publicly traded and worth around $3 billion.

Everyone in real estate expects the kind of flexible office space WeWork offers to become an increasingly large part of their world, and many of the company’s rivals are grateful to Neumann for preaching the gospel of co-working and shorter-term leases. Even people critical of WeWork’s culture, or skeptical of its focus on hypergrowth, say it will likely remain a force in commercial real estate. But many, too, have begun to wonder what can explain the $44 billion in valuation difference between WeWork and IWG. In a financial disclosure last year, when it was in the process of losing $1.9 billion to fund its growth, WeWork acknowledged, “We have a history of losses, and we may be unable to achieve profitability at a company level.” It also published a financial metric it called “community-adjusted EBITDA” — earnings before interest, tax, depreciation, and amortization, which is an accountant-approved way of measuring a company’s performance — that excluded many costs, like marketing, construction, and design, that WeWork claimed would disappear once it reached maturity, in an attempt to show it could make a healthy profit; the Financial Times dubbed WeWork’s doctored version “perhaps the most infamous financial metric of a generation.” WeWork employees told me they would be happy if the company were worth half of what SoftBank said it was going to be. “Even if it goes down to $5 billion, Adam’s still worth a billion dollars,” one rival said, expressing concern about the perverse incentives of the modern economy. “So from an objective perspective, was it a mistake to take this hemorrhage-inducing risk? You could argue that was the rational mode.”

Back in his office, Neumann remained upbeat. “Before you ask, let’s set an intention,” Neumann told me, after a WeWork spokesperson said I had time for … [more]
hucksters  cults  adamneumann  wework  2019  scams  realestate  bubbles  openfloorplans  fraternities  hiring  turnover  myths  diversity  privilege 
12 weeks ago by robertogreco
The Great American Meritocracy Machine – alex posecznick
"Cheating is a thing. It happens a lot. A few years ago, I was having a conversation with Gregoire, who ran the testing center at an institution I will call “Ravenwood College.” Although Ravenwood accepted SAT and ACT scores, they also had their own in-house entrance exam which was administered on site. Gregoire was meticulous in proctoring exams, checking paperwork and especially photo identification carefully. He recalled one time, when an applicant claimed to have left her ID in the Office of Admissions and said she would be right back. Later, the applicant returned with the ID and escorted by an admissions counselor, but it was an entirely different person.

She tried to persuade Gregoire that he was mistaken – that they had just spoken and she had come back as instructed. But he responded, with a roll of the eyes and a dry comment: “Okay, who did you get to take your exam for you?”

Sound familiar?

The Operation Varsity Blues admissions scandal has splatted hard in the middle of the media, and already faded from our attention. Several days of non-stop coverage and opinion, followed by fatigue. Our attention is nothing if not fickle. It is outrageous that wealthy elites and influential celebrities and their consultants have falsified documents and bribed coaches so their kids can go to extremely selective universities. And it makes sense that this would catch our collective attention. The story fundamentally undermines our trust in American meritocracy.

Maybe it should. Maybe that’s a good thing. Because the most noteworthy thing about the scandal is not the cheating. There are other important observations to be made. And there have been many who have made important observations about how affluent families already game the system in entirely legal ways. But there is more still to consider here.

I’ve spent a lot of my professional life around colleges and universities and seen wonderful and transformative things happen there. But we have to also recognize that a big part of what colleges do is sort students into piles based on merit. “Going to college” is one sort of meritorious pile that employers pay a lot of attention to; and in some circles the most relevant pile is which college we went to. And even affluent parents are under a tremendous amount of pressure to make sure their kids are sorted into the most distinctive pile. There is thus a lot of consequence here.

The contradiction, however, is that the more people obtain degrees, the less distinctive those degrees become. This pushes people to find new ways to be distinctive: a degree from this elite college, or perhaps a master’s degree. But this is an anxiety-fueled, credentials arms race – and although it can benefit colleges and universities financially, I’m not sure it is sustainable. How many loans can the average American family bear?

Elite institutions flourish when demand is high and admission low. Demand is measured by how many people you reject every year. But admission offices need to constantly balance the demands of coaches, wealthy donors, trustees, campus executives, ranking metrics, and alumni. One’s job could be at risk if the wrong donor is unhappy, or if the institution falls in a popular ranking system. We therefore need to acknowledge that colleges and universities are not the ivory towers we like to pretend they are. Not any longer. Colleges and universities are extremely competitive, profit-focused enterprises that must reconcile competing aims: educational mission on one side and market on the other. The big secret is that admission offices are under as much pressure as parents are.

This pressure shifts in less-selective spaces, but does not diminish.

Less-selective institutions flourish based on higher enrollments, because their budgets are so closely tied to the number of students sitting in their classrooms. Such institutions may have some strong standing locally, but like “Ravenwood” College, are not household names across the country. For these colleges, the consequence to a bad year could be layoffs, contractions, budget cuts, or closures. In fact, Ravenwood itself experienced some of these challenges. And this is increasingly a concern: by some accounts, private colleges are closing at the rate of 11 per year!

Public universities are not cushioned from such pressures either; many states have so severely cut funding to public higher education in recent years that they must learn to play the market like private institutions. Colleges and universities want to appear distinctive for the same reasons that we all do.

In short, we have built a massive, comprehensive infrastructure to “objectively” identify, evaluate, measure, and sort us into piles. And this sorting machinery involves high school administrations, college recruiters, College Board test designers, marketing teams, private test prep centers, university administrations, college athletics, federal regulatory agencies, voluntary accrediting agencies, magazine publishers, student loan lenders, employers, faculty, students, and their families.

Attending college does not define our value as human beings, but it would be naïve to pretend that there was no consequence to how we get sorted. When employers take note of a particular name or brand, what they are really interested in is how we’ve been continuously sorted into the right bins across our lifetimes. This scandal (and the many editorials since it broke) has revealed that this infrastructure is not objective. The notion of meritocracy has long been at the heart of the rhetoric of education in American society, but is that machinery broken?

Students of history should know that we’ve never had an objective, merit-measuring machine; this is not the story of national decline that some have been preaching. As many have been pointing out, affluent families systemically use their resources to give their kids advantage all the time – and always have. There are boarding schools, expensive test-prep programs, legacy admissions, private counselors and coaches, private violin lessons and extravagant service trips to other countries that make for a great personal statement. And despite some recent and limited interventions through affirmative action, communities of color have been systematically and appallingly excluded for centuries.

Operation Varsity Blues reveals that although the meritocracy machine is powerful and active, we should not always accept it at face value. Not only in elite space, but at all levels, we must recognize individuals for their achievements while weighing them critically and skeptically. In short, the best measure against a broken meritocracy machine is vigilant, morally-grounded people willing to challenge what they see. As long as we have the credentials arms race, there will be cheats and scammers – and the most noteworthy part of this scandal is not that some cheated, but that the wealthy perpetrators will face consequences.

Unless of course the siren call of some new big scandal distracts us."
meritocracy  colleges  universities  highered  highereducation  2019  operationvaristyblues  alexposecznick  markets  degree  sorting  ranking  rankings  society  degreeinflation  employment  elitism  objectivity  testing  standardizedtesting  cheating  credentials  scams  corruption  admissions  anxiety  education 
april 2019 by robertogreco
A Business With No End - The New York Times
"Where does this strange empire start or stop?"



"Trying to map the connections between all these entities opens a gaping wormhole. I couldn’t get over the idea that a church might be behind a network of used business books, hair straighteners, and suspiciously priced compression stockings — sold on Amazon storefronts with names like GiGling EyE, ShopperDooperEU and DAMP store — all while running a once-venerable American news publication into the ground.

While I searched for consistencies among disparate connections, the one thing I encountered again and again on websites affiliated with those in the Community was the word “dream.” “Find the wooden furniture of your dreams” (Hunt Country Furniture). “Read your dreams” (Stevens Books). “Our company is still evolving every year, but our dream never changed” (Everymarket). “The future belongs to the one who has dreams; a company with dreams achieves the same” (Verecom).

Indeed, at some point I began to feel like I was in a dream. Or that I was half-awake, unable to distinguish the virtual from the real, the local from the global, a product from a Photoshop image, the sincere from the insincere.

Still harder for me to grasp was the total interpenetration of e-commerce and physical space. Standing inside Stevens Books was like being on a stage set for Stevens Books, Stevens Book, Stevens Book Shop, and Stevensbook — all at the same time. It wasn’t that the bookstore wasn’t real, but rather that it felt reverse-engineered by an online business, or a series of them. Being a human who resides in physical space, my perceptual abilities were overwhelmed. But in some way, even if it was impossible to articulate, I knew that some kind of intersection of Olivet University, Gratia Community Church, IBPort, the Newsweek Media Group, and someone named Stevens was right there with me, among the fidget spinners, in an otherwise unremarkable store in San Francisco."
jennyodell  2018  internet  olivetuniversity  amazon  business  scams  fraud  storytelling  gifs  animatedgifs  sanfrancisco  newjersey  nyc 
november 2018 by robertogreco
Trump as a scam — Medium
"There are three consistent features to all of conservative talk radio: Anger, Trump, and ads targeting the financially desperate.

The ads are a constant. Ads protecting against coming financial crisis (Surprise! It is Gold.) or ads that start, “Having trouble with the IRS?”

The obvious lessons being 1) Lots of conservative talk radio listeners are in financial distress. 2) They are willing to turn to scams.

Turning to scams kind of generally follows being in financial distress. But why? Well, desperation, duh. Right, but again, why?

What desperation really is about is limited options. Think about the ultimate scam: Lotto tickets.

Lotto tickets are often called stupidity taxes by economists, implying that the buyers must be dumb.

But Lotto tickets are the only form of leverage poor folks can get. The only way, no matter how long the odds, to turn $1 into a million.

As I wrote before, Lotto buyers aren’t any dumber than anyone else.

[screenshot of text]

You just have to look at people’s financial decisions within the framework of their options.

To stretch a little bit. You can reframe Trump that way (as I often have): He is a scam, selling himself as the only option to the angry.

Which is exactly Trump’s history. Selling false and expensive illusions of wealth to those who are desperate. (Trump University!)

With recent revelations it is pretty clear that Trump, no matter what the result of the election, will financially benefit.

He initially ran with the goal of increasing his brand name. For money. (He saw Sarah Palin and Mike Huckabee do exactly that)

When he started to win he realized,

A) It was profitable to run (skimming from campaign)

B) It would be very profitable to be president

He sees in the presidency amazing opportunities for graft and business connections. For him, for his friends and family.

Trump is in it for the money. (He looks at the Clintons. Not with disgust, but admiration for the wealth obtained.)

Trump fits perfectly on conservative talk radio because he is no different from the ads hawking financial scams.

Trump is nothing more than another person charging usurious rates to angry people with few options. Selling long odds at a huge cost.

And many Trump voters are angry (often rightfully), often desperate, people. And like Lotto buyers, they ain’t stupid, they just don’t have many options.

PS: As pointed out, almost all politicians are in it for the money. The difference with Trump is who he is selling himself to: Mostly the poor. Like most folks who try to make money off the poor, he is doing it by charging a lot of interest."
donaldtrump  politics  poverty  money  2016  election  chrisarnade  scams  scamartists  lottery  anger  talkradio  precarity  fear  economics  intelligence 
june 2016 by robertogreco
Mind Games Forever – The New Inquiry
"Gamification in social media turns out to be no different from Berne’s head games. Both use quantification to generate incentives that can supplant the receding master motive of intimacy. But Berne, and the generation of readers that bought into him, believed that all the games had to go if we were ever going to face up to ourselves. Today, the social-media game lets us push one another to more and more self-expression, as though info dumps were an approach to truth. Our demands for attention are no longer tactfully oblique; they are explicitly instrumental. On social ­media passive aggressiveness can show itself as open and honest aggression. At last, we can do away with the inconvenient codes of etiquette. Grove Press’s valiant crusade against censorship hasn’t been for naught.

Social media are a broad refinement of the self-help scam, offering not just texts but an entire interactive apparatus that can incite anxiety about the self while pretending to assuage it. Games People Play, like all self-help books, lets us pretend that our problems (which stem from having to relate to others) are generic and thus readily fixable with off-the-shelf solutions, while our virtues (all our own sole responsibility) are totally unique, not imbricated with our vices at all. Social media carry this further: By replacing presence with networking, and spontaneous interaction with preformatted expression, they purport to resolve the generic problems that beset us in social life, leaving us with a space in which we can’t help but elaborate our best self, in as much detail as we can muster. What is supposed to be special about us is precisely that which doesn’t admit the influence of others but that we can impose on others without shame or restraint. In practice, what that means is there is nothing special about us, and we can never shut up about it."
gamification  socialmedia  robhorning  2013  self-help  scams  presence  networking  interaction  spontaneity  influence  attention  etiquette  grovepress  ericberne  society  community  censorship  compulsivity  psychology  poppsychology  socialrecognition  games 
june 2013 by robertogreco
Bridgepoint Booms Over Troubled Waters - voiceofsandiego.org: Pounding The Pavement
"Bridgepoint's business model depends on one thing: Getting people into college who wouldn't otherwise go.

That involves paying hundreds of recruiters in San Diego office buildings to call around the country and find tens of thousands of people willing to enroll in a tiny college in rural Iowa. Ninety-nine percent of those students won't ever have to set foot in Iowa, since they'll be studying online.

And the bulk of the revenue Bridgepoint receives for educating students — at least 85 percent last year — comes straight from the federal government in the form of student loans.

Bridgepoint CEO Andrew Clark and other company officials declined interview requests through corporate spokespeople. But, as a publicly traded company, Bridgepoint's financial success story has been well-documented.

More than anything else, two factors have played into Bridgepoint's extraordinary success. One was the company's genius business idea; the other was a stroke of good fortune…"
education  andrewclark  bridgepointeducation  sandiego  iowa  scams  forprofit  highereducation  money  greed  2011  colleges  universities  freemoney  government  military  veterans 
july 2011 by robertogreco
Second thoughts about carbon offsets
"This article in the NY Times fits nicely with my belief that carbon offsets are bullshit.: ""The carbon offset has become this magic pill, a kind of get-out-of-jail-free card," Justin Francis, the managing director of Responsible Travel, one of the world's largest green travel companies to embrace environmental sustainability, said in an interview. "It's seductive to the consumer who says, 'It's $4 and I'm carbon-neutral, so I can fly all I want.'" Offsets, he argues, are distracting people from making more significant behavioral changes, like flying less.""
kottke  carbonoffsets  bullshit  scams  environment  elitism  behavior  sustainability  travel 
november 2009 by robertogreco
Black-global credit-card scamming: Fleabites and Mules | Beyond the Beyond from Wired.com
"most interesting part...vigilante getting the reporter up to speed is anonymous. We're starting to build ourselves a full-scale shadow world, where even operatives who track scammers work under pseudonyms & could be anywhere on planet"
brucesterling  scams  vigilantism  crime  cybercrime  money  shadowworlds 
february 2008 by robertogreco

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