Adam Neumann is the co-founder and former CEO of the famous co-working company WeWork an American real estate company that offers office space to start-up companies. He stepped down from his duty in September 2019 and a great deal of controversies has been around since then. So without any further ado, let’s find out more about Neumann and WeWork!
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Adam Neumann and WeWork
The Journey of Neumann
Adam Neumann was born in Israel and later moved to Indianapolis with his mother, after the divorce of his parents. As a child, he traveled a lot and spent most of his time in the kibbutz. Newman started his career as an entrepreneur while he was at Baruch College. Back then he came up with his very first business idea of collapsible-heels for women. But as you can guess already it did not work out.
Later, he moved out of this Tribeca apartment to start his second venture, Krawlerz. It was an apparel line for crawling babies with the tagline “just because they don’t tell you, doesn’t mean they don’t hurt.”. Not to mention this venture couldn’t see the light of success either. But shortly after attempting all of his “weird” business ideas this Israeli entrepreneur came up with WeWork. Nine years later the company has a whopping 47 billion dollars of net worth as of 2019.
Since 2013, Neumann has invested in several start-ups including Tunity, Selina, Hometalk, and EquityBee, etc. Best known for his unusual investments Neuman has also invested in a superfood company WaveGarden. Wich sells “performance mushroom” and turmeric-infused coconut water on behalf of the WeWork group. Keeping his story of strange investments aside. This self-made billionaire has donated over a hundred million dollars to date.
Neumann became popular within a very short time for being an Israeli self-made billionaire, smoking weed on planes and wandering barefoot in the streets of NYC. Despite all the controversies it is safe to acknowledge that, it was the effort of Neumann and his wife Rebecca Paltrow that has brought WeWork this far. Since the very start Neumann has shaped and managed WeWork. But recently his journey with the company has come to an abrupt end.
What is WeWork and How It Started
While working on his kid’s apparel venture, Neumann met Miguel McKelvy and their unusual upbringing and other similarities made them friends. When Newman was looking for new office space, McKelvey suggested Neumann move into the same building of his architecture firm. They would always share business ideas and plans and this is how they came up with WeWork.
In 2010 WeWork opened the first workplace at Soho in New York to rent office space to small businesses and start-ups. The business has expanded to a great extent since then. WeWork currently has nearly 800 offices in 124 countries around the world and maintains office spaces of approximately 1.5 million square meters. London has the second-largest market for the company after New York with 23 operating offices across the city.
But last year both Neumann and his company have been heavily criticized since he presented his IPO paperwork in mid-August. WeWork was soon out of investors since the paperwork was published and they declared their plan to go public. The IPO filing gave the public a glimpse of the financial state of the company which had losses of $1.6 billion on sales of $1.8 billion.
Soon the attention shifted to Neumann. His business investments and complicated network of personal relations were scrutinized inside WeWork and established conflicts of interest. To make the situation better WeWork imposed some changes but it was not sufficient to have the IPO back on track.
Amidst the controversies, in September 2019 Neumann stepped down as CEO for the betterment of the company and he called himself “a major threat” for the company. He has also called it quits with the board of the company. Neumann managed to come out from the disaster with $1.7 billion and some luxurious real estate.
The Controversy and Downfall
Soon after the revelation of the IPO file concern was raised for both WeWork and Adam Neumann. In a blink of an eye, the investor’s interests became low and the company lost its value by more than 50%.
Neumann and WeWork received another round of criticism when the filing showed that WeWork paid $6 million to Neumann for the trademark rights for the word “We”. However, Neumann returned the money after widespread criticism.
A study in late August 2019 also showed that WeWork was running out human resource managers. And everyone held Neumann responsible for this as it was revealed later that he used to criticize his workers behind their backs.
The IPO file has also revealed that Neumann has a special kind of share in WeWork that gave him a whopping twenty votes per share and the controlling power over the company. His power, though, was constrained when the company cut its value from $47 billion to $20 million.
Days after WeWork revealed its IPO, a Wall Street Journal came out depicting Neumann’s hard-partying habits and excessive drug and alcohol consumption. Another thing that hit people with outrage was how Neumann once announced layoffs and threw a huge party and concert to celebrate that.
Amidst all these controversies marijuana was found at his private get in Israel. But the worst of it all was when a former employee of WeWork filed a lawsuit against the company identifying issues of sexual harassment and inappropriate behaviors she faced at her workplace. All these incidents only added fuel to people’s rage and made Neumann step out of his duty as a CEO of WeWork.
To conclude, now that you are done reading the writing, we hope that now you know how the whirlwind journey of Neumann and WeWork has come to an end.