co-founder and CEO of We Co., had a talent that many on Wall Street found puzzling. People loved throwing money at him.
In a funding round in January, investors were so stunned by Neumann that his rapidly growing office rental office, formerly known as WeWork, achieved an implied valuation of $ 47 billion.
A skeptic may have wondered if this figure was appropriate for a company that lost $ 1.6 billion in 2018 on revenue of $ 1.82 billion, but Neumann's backers believed.
This month, before a proposal for the first public offer, the skeptics finally pulled the fire alarm. Instead of growing concern over its business model, governance and future profit potential, the company considered lowering its valuation by more than half before deciding, at the beginning of this week, to postpone the IPO.
Shortly thereafter, this magazine reported new details about unusual personal business Mr Neumann had closed the company. It also revealed that the CEO smokes marijuana on private jet flights, strives to become a trillionaire, wants to live forever and wants to serve as president of the world.
None of this made it easier to understand how he raised so much money.
The 40-year-old Mr. Neumann is at least an exceptional seller. But I suspect there is another, deeper reason for his investors.
For about a decade, the business world has encountered the arrival of what can best be described as "Millennial Prophet." the greatest challenge of all ̵
In Neumann, maybe these investors thought they had their husband.
The conventional modern view of what it means to have a job and how it relates to having a life has not changed much in 100 years. In fact, it goes all the way back to another very ambitious CEO, Henry Ford.
When Ford began selling cars in the early 1900s, the United States was nearing the peak of industrial times. The old agricultural ideal of self-reliance and robust individualism had faded. People flocked to cities to work in factories.
Ford was an engineer, but he also held some bold, utopian and sometimes disgusting views on how the world worked and how people should live. He knew that the country was undergoing a shift and that cars would only speed up the process. He considered building a company a chance to re-engineer the society .
1914, according to
The 2005 biography, "The People's Tycoon," Ford roughly doubled its workers' base salary to $ 5 a day – a fantastic move that lifted lots of workers to a new middle class. Ford also believed that leisure time would no longer be a luxury for the wealthy during industrial times and could be a good tool for increasing workers' morale and productivity. In the 1920s, he covered the company's working week of five days and 40 hours.
For more than a century, companies have followed Ford's basic principle – you give me 40 hours of conscientious effort and I give you the financial means to strive for happiness at home. For decades, when the puppies asked people to rank their priorities in life, their responses reflected this finding. Things like having a family, owning a home and living in peace ranked well before they have a good job.
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To understand what some investors may have seen in Mr. Neumann, it helps to consider what happened recently, when Gallup's pollsters asked people the same question. Having a rewarding job is no longer ranked at the bottom – it climbed to the top. In other words, the world seems to have changed again. Modern workers are not only happy to be happy at home. They also want the work to be completed.
The first companies to address this problem were Silicon Valley startups in the late 1990s who decided to install office ping-pong tables. The future of work, it seemed, was about making it "fun."
When that notion fizzled, employers wondered if people might like their jobs more and spend longer hours if the office had hip decor and food in place, laundry and hairstyles. It didn't work either. If anything, the evidence suggests that modern employees are less interested in benefits than feeling affiliation.
Even companies that adopt open floor plans to improve communication and collaboration often create new problems.
has presented the workers a new finding – in exchange for giving up amenities such as job security and benefits, they will have more control over how and when they work. However, as these informal contract jobs or "gigs" explode, the regulators burst.
While companies are grumbling for answers, young workers have never been less inclined to thrive in the old Ford system. Research shows that they are better educated, more concerned with finding social purpose at work and less resistant to changing jobs. High debt burdens often force them to delay or refrain from buying a home, getting married or having children.
Mr. Neumann is not technically a millennial, but he really looks – and behaves – like a serial disorder. However, what makes him different from most young CEOs is that the work is the actual he is trying to interfere with.
In exchange for rent payments, Neumann's company promises workers preference to a vibrant society. They will work in hip, inviting, fun common spaces with organized social events, many access points and all the latest technology – or what the company describes as a "physical social network." The company also announces flexible rental agreements that make it easier to come and go and change jobs.
However, part of Neumann's pitch is that we are just getting started. For example, the company has taken the initiative to develop and lease shared housing areas. And at an employee's retreat last year, Mr. Neumann that the company could one day take on major social problems, including hunger. "The impact and impact that we will have on this earth will be so great," he said.
Mr. Neumann may not be Millennial Prophet, but it is easy to understand why investors may have tolerated or even appreciated his properties and grand ambitions. After all,
was a deeply flawed man with a messianic streak.
It is also possible that there simply is no profitable way to turn offices into human fulfillment zones. Maybe the problem with work is that no matter how you dress it up, it still works. Maybe Henry Ford's deal is the best we get.
One thing is certain, though. There is a fortune to be made by trying.
– Mr. Walker, a former reporter and editor at The Wall Street Journal, is the author of "The Captain Class: A New Theory of Leadership" (Random House).
Write to Sam Walker at [email protected]
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