WeWork, the unprofitable office startup that had roughly 4 happy customers at any given time, fell apart years ago after it became painfully obvious how terrible a business it was. The founder, Adam Neumann, took WeWork from a $47 billion valuation to a failed IPO in just a month, and then received $1.7 billion as a reward for running a stupid company incompetently.
WeWork was legendarily unsustainable and was mostly based on renting buildings from one owner and then subleasing them to an inconsistent stream of business customers. As with many dimwitted startup ideas, the problem mostly came from trying to offer a service below what was profitable in the hope of massively scaling and, well, I assume selling the company because there really is no fixing what WeWork was doing. In fact, WeWork was such a catastrophic failure that Jared Leto (famous for his role as Doctor Michael Morbius in 2022’s “Morbius”) played Neumann in a prestige TV show about how bad he was at business.
Now Neumann is back with a startup called “Flow,” which has received $350 million from Andreessen Horowitz — the largest check they’ve ever written. Flow’s business model appears to be that they have bought 3000 housing units across America, and they intend to rent them, with some sort of vague promise of “building equity” when they do so. In a long-winded blog post that said very little, Marc Andreessen suggested that Flow was somehow the solution to the housing crisis, while also delivering incredible insights such as “shelter is one of our most basic needs,” all without really saying what it is this company does, or why it is they gave them $350 million.
There is one particular quote I want to call out, though [emphasis mine]:
Adam is a visionary leader who revolutionized the second largest asset class in the world — commercial real estate — by bringing community and brand to an industry in which neither existed before. Adam, and the story of WeWork, have been exhaustively chronicled, analyzed, and fictionalized — sometimes accurately. For all the energy put into covering the story, it’s often under appreciated that only one person has fundamentally redesigned the office experience and led a paradigm-changing global company in the process: Adam Neumann. We understand how difficult it is to build something like this and we love seeing repeat-founders build on past successes by growing from lessons learned. For Adam, the successes and lessons are plenty and we are excited to go on this journey with…