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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 Rise of the WeWorking Class - The New York Times
"IMAGINE YOU TRAINED an artificial intelligence on a comprehensive stock-photo set of every boutique-hotel lobby from Palm Springs to Stockholm to Milan, then connected it to a five-story 3-D printer fully furnished with pendant-dome lamps, waxy leaves and old-school hip-hop lyrics. The output would be a WeWork. So much serene, lavish and mechanical attention is allocated to every detail: the neon and the daybeds and the fiddle-leaf figs, the wallpaper and the playlists and the typefaces. The newest iteration of its ever-emergent design concept may be indebted to Luis Barragán and Carlo Scarpa, but the degree of thought and investment that goes into its terrarium construction is something its busy occupants are expected to register only as background noise. WeWorks feel voguish but never threatening; comfortable but never shabby; rousing but never intemperate; detailed but never ostentatious.

There’s also free top-shelf coffee, the sort of minor frill most office workers might take for granted in a way the self-employed never would. One premise of the company’s existence is that it’s good business to provide such minor luxuries to the otherwise unfrilled. The coffee — and the draft kombucha, which has come to supplement beer as WeWork distances itself from the frattier aspects of entrepreneurship — is, at any rate, only part of an environment engineered for felicitous exchange. This strategy is supported by narrow hallways, boxy plate-glass enclosures, distant bathrooms and centralized fruit-water dispensers, but the company’s architects never indulged the belief that if they built it, people would come. The spaces themselves are the staging ground for yoga classes, wine tastings, make-your-own-trail-mix bars and vendor workshops about how to cut cloud costs. For what remains of life outside the workplace, there are cross-promotional discounts on 1-800-Flowers.com and Crunch gym memberships.

Most of us have serious reasons to worry about the future of work, and it’s easy to object to WeWork’s thin consolations on the basis of aesthetic or moral principle. Once you get accustomed to the basic product, however, it’s hard not to find it ... pretty nice. Over the course of about a year, I stopped into locations in six or seven cities, and in each of them I sat in front of my computer alongside other people in front of their computers and felt at once marginally more productive and slightly less unmoored."



"The relentless sociability inspired by WeWork was always one of the founders’ aims, even as the composition of its membership has changed. When the company first opened in 2010, its spaces catered to entrepreneurs. The founders soon understood that the increasingly fluid and anxious labor market — its conditions exacerbated by the downturn but likely to exist in perpetuity — presented them with a much larger potential customer base. Uber and TaskRabbit and other labor-platform intermediaries positioned themselves to match those who needed something done with those who needed something to do, but they based their recruitment drives on a cynical reading of the economic mood. The subway I took to WeWork was plastered with tough-love ads from services like Fiverr, which made naked appeals to stoic virtues. (“Actually, it hasn’t all been done before”; “In doers we trust”; “Reading about starting your own business is like reading about having sex.”)

That sort of campaign felt manipulative: The platforms’ emphasis on self-reliance for the economically precarious merely disguised their rent-seeking. WeWork, by contrast, just charged rent. The company was perceptive enough to realize that disaggregated workers (or at least those of a certain class) did not want to hear that they should just kill it on their own, bro. They wanted to hear that nobody ever can. What WeWork offered was not just rhetoric — a more sympathetic description of the restless, fretful life of the deinstitutionalized worker — but true shelter from a pervasive sense of alienation. Where Fiverr issued an invitation to gladiatorial combat, WeWork promised a work environment remodeled for solace and dignity.

Thus is the business model of WeWork, recently valued at $47 billion, now only facially about commercial subletting. All its accessories serve to buttress its real product: “office culture” as a service. When people at the company try to explain that culture, they invariably resort to talk of positive energy sources and the obligation to heal the social fabric — a vocabulary traditionally associated with utopian architecture, 1980s academic communitarianism or ayahuasca experimentation. They affirm that all the ostensibly small incremental niceties add up to more than the sum of their parts, and on some level I couldn’t help agreeing. The market certainly seems to. As of this January, WeWork has 400,000 members in 425 locations in 27 countries, at least 30 percent of whom are employees of large existing businesses. This latter category has helped double that membership in only a year. Some of these enterprise customers are merely outsourcing their facilities management the way they outsource manufacturing or payroll; others anticipate the revitalization — or even wholesale procurement — of their corporate culture. The conviction behind the rapid growth of WeWork is that the office culture of the future is likely to be the culture of the future, full stop, and that it is WeWork’s special vocation to bring it to market.

THE IDEA OF “CORPORATE CULTURE,” long before it was identified and cultivated as such, emerged as a solution to the problems of the large, distributed mass-industrial firm. Ransom Olds is credited with inventing the concept of the assembly line in 1901, and it was over the following decades that businesses began to feel an imperative to address the question of what work was supposed to “mean.” This was both an internal bottom-line matter — employees who toiled in exchange for only a paycheck were difficult to retain and unlikely to prioritize efficiency or innovation — and a social one. By midcentury, large companies like the car manufacturers had come to represent the predominant institutional affiliation for legions of American men. Even if these firms had no explicit philanthropic interest in civic cohesion, they certainly had a stake in the preservation of the social order. If they could invest piecemeal labor with something like dignity, they could neutralize the political and economic threats posed by union solidarity.

What they arrived at was a generic set of strategies, applicable at any industrial organization, designed to help workers recognize the value of their personal contributions to the final product. The classic formulation of this approach was Peter Drucker’s “Concept of the Corporation”; though it’s now seen — if not much read — as a foundational text in the study of management, it reads like a sober contribution to midcentury sociology. The simplest form of recognition is advancement. Workers, Drucker believed, ought to be viewed not as exploitable resources but as human capital to be fostered, and thus provided with the training necessary to secure a path upward. Programs like project rotations — which exposed otherwise specialized employees to the breadth of company operations — should be put in place even if they seemed, in the short term, economically irrational; in the long term, they represented an investment in worker potential. Employees unlikely to advance might more gladly accept their place in the corporate scheme when given a holistic perspective on production: The maker of a car’s door hinge, for example, might be shown where his discrete, repetitive effort fits into the fully realized car.

The anthropologist Clifford Geertz defined culture as a collective act of interpretation, the stories we tell one another about ourselves in an attempt to make ongoing sense of why we do what we do. A car manufacturer could just point to a sensible Oldsmobile, something the world self-evidently needed. Because cars were public goods, corporate culture could easily borrow its energy from civic culture.

It could also borrow civic culture’s prevailing norms — and, in turn, reinforce them. The management classic “Built to Last” describes how Walt Disney, for example, did not manage a corporation so much as lord over an extended brood of subordinates, each of them expected not only to abide by the letter of company decorum but also to embody its founder’s spirit. Hourly theme-park workers were held to an imperious standard of personal upkeep: for men, no facial hair; for women, no dangly earrings or excessive makeup. As one biographer described it, “When someone did, on occasion, slip in Walt’s presence and use a four-letter word in mixed company, the result was always immediate dismissal, no matter what type of professional inconvenience the firing caused.” The people making the country’s cars could be forgiven a coarse exclamation; the people making the country’s cartoons were held to a loftier code.

As the economy shifted from industrial manufacturing to the service and knowledge sectors, it became increasingly necessary for businesses to articulate their “core purpose” as an organizational and motivational principle — and a way to differentiate “their” ethereal knowledge work from whatever it was other companies’ employees did. The separation of corporate culture in particular from general civic culture was also encouraged by the ascendancy of free-market economics; Milton Friedman told executives that their sole remit was to tend to their own shareholder garden. Shared goals, while important, ought to be strictly values-agnostic."



"Over the past year, as WeWork has been folded into what is now called the We Company — which encompasses WeGrow, its school, and WeLive, its communal housing projects — its Powered by We product has been refined and … [more]
wework  work  labor  workplace  2019  culture  gideonlewis-kraus  cliffordgeertz  economics  organization  peterdrucker  solidarity  unions  facilities  fiverr  uber  taskrabbit  business 
march 2019 by robertogreco
After Authenticity
"Meanwhile, years of semantic slippage had happened without me noticing. Suddenly the surging interest in fashion, the dad hats, the stupid pin companies, the lack of sellouts, it all made sense. Authenticity has expanded to the point that people don’t even believe in it anymore. And why should we? Our friends work at SSENSE, they work at Need Supply. They are starting dystopian lifestyle brands. Should we judge them for just getting by? A Generation-Z-focused trend report I read last year clumsily posed that “the concept of authenticity is increasingly deemed inauthentic.” It goes further than that. What we are witnessing is the disappearance of authenticity as a cultural need altogether.

Under authenticity, the value of a thing decreases as the number of people to whom it is meaningful increases. This is clearly no longer the case. Take memes for example. “Meme” circa 2005 meant lolcats, the Y U NO guy and grimy neckbeards on 4chan. Within 10 years “meme” transitioned from this one specific subculture to a generic medium in which collective participation is seen as amplifying rather than detracting from value.

In a strange turn of events, the mass media technologies built out during the heady authenticity days have had a huge part in facilitating this new mass media culture. The hashtag, like, upvote, and retweet are UX patterns that systematize endorsement and quantify shared value. The meme stock market jokers are more right than they know; memes are information commodities. But unlike indie music 10 years ago the value of a meme is based on its publicly shared recognition. From mix CDs to nationwide Spotify playlists. With information effortlessly transferable at zero marginal cost and social platforms that blast content to the top of everyone’s feed, it’s difficult to for an ethics based on scarcity to sustain itself.

K-HOLE and Box1824 captured the new landscape in their breakthrough 2014 report “Youth Mode.” They described an era of “mass indie” where the search for meaning is premised on differentiation and uniqueness, and proposed a solution in “Normcore.” Humorously, nearly everyone mistook Normcore for being about bland fashion choices rather than the greater cultural shift toward accepting shared meanings. It turns out that the aesthetics of authenticity-less culture are less about acting basic and more about playing up the genericness of the commodity as an aesthetic category. LOT2046’s delightfully industrial-supply-chain-default aesthetics are the most beautiful and powerful rendering of this. But almost everyone is capitalizing on the same basic trend, from Vetements and Virgil Abloh (enormous logos placed for visibility in Instagram photos are now the norm in fashion) to the horribly corporate Brandless. Even the names of boring basics companies like “Common Threads” and “Universal Standard” reflect the the popularity of genericness, writes Alanna Okunn at Racked. Put it this way: Supreme bricks can only sell in an era where it’s totally fine to like commodities.

Crucially, this doesn’t mean that people don’t continue to seek individuation. As I’ve argued elsewhere exclusivity is fundamental to any meaning-amplifying strategy. Nor is this to delegitimize some of the recognizable advancements popularized alongside the first wave of mass authenticity aesthetics. Farmer’s markets, the permaculture movement, and the trend of supporting local businesses are valuable cultural innovations and are here to stay.

Nevertheless, now that authenticity is obsolete it’s become difficult to remember why we were suspicious of brands and commodities to begin with. Maintaining criticality is a fundamental challenge in this new era of trust. Unfortunately, much of what we know about being critical is based on authenticity ethics. Carles blamed the Contemporary Conformist phenomenon on a culture industry hard-set on mining “youth culture dollars.” This very common yet extraordinarily reductive argument, which makes out commodity capitalism to be an all-powerful, intrinsically evil force, is typical of authenticity believers. It assumes a one-way influence of a brand’s actions on consumers, as do the field of semiotics and the hopeless, authenticity-craving philosophies of Baudrillard and Debord.

Yet now, as Dena Yago says, “you can like both Dimes and Doritos, sincerely and without irony.” If we no longer see brands and commodity capitalism as something to be resisted, we need more nuanced forms of critique that address how brands participate in society as creators and collaborators with real agency. Interest in working with brands, creating brands, and being brands is at an all-time high. Brands and commodities therefore need to be considered and critiqued on the basis of the specific cultural and economic contributions they make to society. People co-create their identities with brands just as they do with religions, communities, and other other systems of meaning. This constructivist view is incompatible with popular forms of postmodern critique but it also opens up new critical opportunities. We live in a time where brands are expected to not just reflect our values but act on them. Trust in business can no longer be based on visual signals of authenticity, only on proof of work."
tobyshorin  2018  authenticity  culture  anthropology  hispters  sellouts  sellingout  commercialism  kanyewest  yeezy  yeezysupply  consumerism  commercialization  commodification  personalbranding  branding  capitalism  shepardfairey  obeygiant  tourism  sarahperry  identity  critique  ethics  mainstream  rjaymagill  popculture  aesthetics  commentary  conformism  scale  scalability  venkateshrao  premiummediocre  brooklyn  airbnb  wework  local  handmade  artisinal  economics  toms  redwings  davidmuggleton  josephpine  jamesgilmore  exclusivity  denayago  systems  sytemsofmeaning  meaning  commodities  k-hole 
april 2018 by robertogreco

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