Centered around Adam Neumann’s office space rental company WeWork, The Cult of We tells the story of one of the biggest start-up failures of all time.
Adam Neumann was an entrepreneur who craved success and aimed to build a company that would have an impact on the world. Neumann co-founded WeWork in 2010 after several other failed business attempts.
The company began as a coworking space provider, renting out offices in New York City. But WeWork was not just any office space provider. With their focus on community, WeWork offices were known for their untraditional feel. There was access to free beer, alcohol, and fully stocked fridges and constant office comradery – all of which was meant to make WeWork feel different from a typical office.
WeWork created buzz immediately, and Neumann gained the attention of investors, expanding quickly. He was raising more money than he could’ve ever expected. But he had a problem. He was greedy for more. A lot more.
Neumann became obsessed with the idea of a high business valuation. All he cared about was sending WeWork’s valuation into the billions without focusing on properly managing its existing locations.
The Cult of We emphasizes the impact that blurring the line between partying and professionality can have on a company. Reckless spending combined with poor decision making led to a dysfunctional workplace in which everyone feared what Neumann might do next.
WeWork began bleeding money. In the first six months of 2016, the company was losing one million dollars every day. Instead of using typical profit and loss reporting measures, WeWork created its own “Community-Adjusted EBITDA”, which reported income net of many major operating expenses. This allowed WeWork to give the impression of financial success without being profitable.
When the company inevitably ran out of money and tried to go public, it was met with more backlash than it could’ve imagined. Now that people were able to see WeWork for what it truly was – an irresponsibly-managed company that couldn’t turn a profit – they wanted nothing to do with it. After billions of dollars of deals fell through and its IPO failed, Adam Neumann had to step down as CEO. The Cult of We gives insight into the perils of overconfidence and greed. It proves that bigger isn’t always better, and thoughtless expansion can drive the seemingly best companies into the ground.