How SoftBank and WeWork Played Silicon Valley and Wall Street
The day of Daredevil founders and investors is done
In June 2017, Adam Neumann, the founder and CEO of WeWork, stood in cap and gown before the graduating class of Baruch College. More than a decade earlier, he said, he had dropped out of Baruch, realizing he had wasted several semesters partying and chasing girls, and decided to do business. Now, he was finally receiving his diploma, and had some advice to dispense to classmates — “my blueprint” for success.
The secret, he said, was to pursue “a meaningful life.” Growing up in Israel watching American television, Neumann said, he had divined all the wrong lessons. He had made heroes of pop culture figures who were “materialistic, superficial, and egocentrical… I didn’t understand what truly mattered.” But if you had purpose, devised a business model that made sense, and treated employees well, he said, “I guarantee you profits will come.”
Only, for Neumann, profits didn’t come. Neither, it appears from recent accounts of his lifestyle, would he truly shake his childhood admiration for those film idols. Instead, today, ousted from control of his company, Neumann finds himself at the center of a tale of vanity-laden excess and rocket-fueled valuations at the apex of Silicon Valley, all of it cocooned in normalcy by a celebrity-hungry investor community.
The unraveling of Neumann’s world is attracting much attention, but he is part of a larger universe of Daredevil Unicorns, a rarefied subset of multibillion-dollar tech companies that share the attributes of enormous valuation and unapologetically outlaw founders. Until a week or so ago, these were desirable qualities. Now, we appear to be watching the passing of their time, at least as we and they have known it.
On Wednesday, the CEO of Juul, Kevin Burns, was ousted, amid a maelstrom of public opprobrium over the vaping deaths of 12 people and the illness of at least 805 more. Shares of Uber — already down about 25% since its IPO in May — have plunged another 5% over the last week. And in one-two news yesterday, Peloton, the seller of $2,245 exercise bikes, saw its stock plummet 11.1% in its IPO debut; Endeavor Group, an $8 billion unicorn, canceled its plans to go public entirely.