Speaker 1: Marine. Jensko was a we Work customer in Dallas. She
Speaker 1: worked in sales for a software company, and when she
Speaker 1: was at her we Work office, Maureen liked to work
Speaker 1: in the phone booths. These are small, padded rooms that
Speaker 1: you can step inside to take phone calls and not
Speaker 1: bother your neighbors. I came into work one day, I
Speaker 1: used opened up my computer and up pops an article
Speaker 1: about how there's formalde hyde in the we Work phone booths,
Speaker 1: which I spent upwards this three hours every day. In
Speaker 1: formalde hyde is really bad for you. It's a known carcinogen,
Speaker 1: and it's sometimes used in building materials, especially in glue.
Speaker 1: In this case, it was in we Works phone booths
Speaker 1: where Maureen sat for hours a day breathing in fumes
Speaker 1: that were possibly toxic. It was extra scary because I
Speaker 1: was eighteen weeks pregnant at this time, my first child.
Speaker 1: I mean a normal person would be concerned about that,
Speaker 1: let alone so on pregnant. We Work staff had printed
Speaker 1: out signs and taped them on the booths. Caution not used.
Speaker 1: We have been made aware that this phone boose doesn't
Speaker 1: meet our safety standards due to a defect caused by
Speaker 1: the manufacturer. Maureen was understandably freaked out. My first thoughts were,
Speaker 1: is there something wrong with my baby? And the thought
Speaker 1: of me putting her through that for three hours a
Speaker 1: day just tore me apart. She and her co workers
Speaker 1: were already following the news about we Works business failures.
Speaker 1: It had been kind of entertaining to watch until this
Speaker 1: newest development. I think it turned from joking of what happened,
Speaker 1: like what's going to happen next, to like, Okay, are
Speaker 1: you guys serious? Like this is this is not a
Speaker 1: joke anymore. This is, you know, kind of a serious issue.
Speaker 1: It's not like running out of cold brew, you know,
Speaker 1: this is, you know, potentially deadly. We Work said it
Speaker 1: removed more than two thousand phone boots, but they were
Speaker 1: also criticized for not acting sooner. I wrote a story
Speaker 1: at the time that said customers had noticed a weird
Speaker 1: smell before we were closed off the phone booths, but
Speaker 1: we Work told us in a statement that they moved
Speaker 1: as quickly as they could. In the fall of it
Speaker 1: felt like we Work was cursed. Every week there was
Speaker 1: more bad news. The I p O flopped, the CEO
Speaker 1: Adam Newman, resigned. They were potentially poisoning their customers. One
Speaker 1: of my colleagues even joked that We Work was having
Speaker 1: such a stretch of bad luck that maybe Adam had
Speaker 1: disturbed a mummy's tomb. You're listening to Foundering this week.
Speaker 1: In our final episode, we'll take a look at We
Speaker 1: Work after Adam, layoffs, lawsuits, and a pandemic that has
Speaker 1: completely derailed what it means to work in an office.
Speaker 1: Will also delve into Adam Newman's motivations and hear from
Speaker 1: people who knew him well. Once again, we've asked representatives
Speaker 1: for WE Work and Adam Newman for Common Adam spokesman
Speaker 1: didn't want to give us a statement, but you'll hear
Speaker 1: we Works comments throughout. So in the last episode, we
Speaker 1: talked about how when Adam left We Work, he negotiated
Speaker 1: a very very generous exit package with soft Maake. He
Speaker 1: was set to walk away with more than a billion dollars. Meanwhile,
Speaker 1: his employees, who were still dragging themselves to work every day,
Speaker 1: learned that thousands of them would be losing their jobs.
Speaker 1: When it was clearer that layoffs were coming, it just
Speaker 1: became this like dark cloud hanging over everybody. It was
Speaker 1: something that sort of paralyzed the whole company. That's Andrew Human,
Speaker 1: a former WE Were employee based in New York. He
Speaker 1: said that the impending layoffs killed morale inside the company.
Speaker 1: Everybody was just spending all day dreading what was coming
Speaker 1: and gossiping about who they thought was going to be
Speaker 1: cut first, and you know, keeping up to the minute, uh,
Speaker 1: you know, updates on slack as people found out new information.
Speaker 1: People were just nervous and demotivated and you know, disappointed
Speaker 1: by the old thing. And it just was it was
Speaker 1: really hard to do any work. And here's another we
Speaker 1: Work employee I spoke to. She asked not to be
Speaker 1: named in the show, but this is her real voice.
Speaker 1: No one wants to work in this Like basically, people
Speaker 1: are just not showing anymore to work. No one had
Speaker 1: the motivation to work. Everyone was basically waiting for the layoff.
Speaker 1: And then it came out the news that company was
Speaker 1: running out of cash, and then everyone was like, oh,
Speaker 1: are we going bankrupt or are we People are just
Speaker 1: waiting for bankruptcy and layoff for a while. We Work
Speaker 1: did seem close to bankruptcy. They narrowly avoided it when
Speaker 1: Soft Bank bailed them out. But what that means is
Speaker 1: that now this is SoftBank's company, and they laid off
Speaker 1: more than two thousand people in one round after another.
Speaker 1: The mood of the workplace was pretty seriously in decline
Speaker 1: for a place, you know, a workplace really prided itself
Speaker 1: on being this sort of like active and lively and
Speaker 1: fun and contemporary way to work. You could just feel
Speaker 1: it in the air. The degree to which people it
Speaker 1: just like wasn't as much fun anymore. People were not celebrating,
Speaker 1: people were not you know that the spirit around communal events,
Speaker 1: which were happening less anyway, was definitely dampened. Just just
Speaker 1: get out, like this is just is crashing, this is
Speaker 1: going down. Some meetings, people would not show up, like
Speaker 1: it was not normal. It was going for months, it
Speaker 1: was going for three months. Almost Eventually many of the
Speaker 1: employees just didn't want to be there anymore, Andrew ended
Speaker 1: up leaving on his own. At a certain point, a
Speaker 1: lot of people were actually like actively gunning to be
Speaker 1: laid off. Maybe they already had plans to leave and
Speaker 1: we're hoping for severance, or maybe because of everything that
Speaker 1: had happened, Yeah, please lay me off, Like I just
Speaker 1: want to leave, Like I'm done with this drama. Just
Speaker 1: too much drama. It's very hard to concentrate, is very
Speaker 1: hard to be motivated, It's very hard to be happy
Speaker 1: at work. Also not a good company, to be honest.
Speaker 1: Not everyone was so nonchalant about the layoffs. A group
Speaker 1: of we Work employees got together and wrote a public
Speaker 1: letter demanding fair severance. They wrote, we are not the
Speaker 1: Adam Newman's of this world. We are a diverse workforce
Speaker 1: with rents to pay, households to support, and children to raise.
Speaker 1: Newman departed with a one point seven billion dollar severance package.
Speaker 1: We are not asking for this level of graft. We're
Speaker 1: asking to be treated with humanity and dignity so we
Speaker 1: can continue living life while searching to make a living elsewhere.
Speaker 1: You can hear how painful it is for the employees
Speaker 1: to compare their outcomes to atoms. They called that exit
Speaker 1: package graft. A different group of employees sued WE Work,
Speaker 1: claiming the company's board hadn't fulfilled it's fiduciary duty to
Speaker 1: them as shareholders. We were called the lawsuit meritless. Keep
Speaker 1: in mind, we worked in have a great history of
Speaker 1: handling layoffs. Well, here's sethist Martinick, who joined the company
Speaker 1: after we Work bought his business. Once he was on board,
Speaker 1: he felt that the company had a bad culture around layoffs.
Speaker 1: You know, we Work for for a while was pretty
Speaker 1: brutal when people would leave the company, you know, like
Speaker 1: they would let someone go and they just like walk
Speaker 1: them out the front door. I was very vocal about
Speaker 1: it's harder we work, and I'm like, this is not right.
Speaker 1: You know, can't just walk people out the door when
Speaker 1: you let them go. You have to give them severence
Speaker 1: and be respectful and treat them with a lot of respect.
Speaker 1: And um Adam actually agreed with that and we ended
Speaker 1: up changing things. But the company would do that, and
Speaker 1: I think that would be like in Adam's blind spot.
Speaker 1: I spoke to multiple people at we Work who said
Speaker 1: the company had a history of laying off people who
Speaker 1: had been working there for a long time. They told
Speaker 1: me that we were called these terminations Mission Accomplished. The
Speaker 1: idea was that these people had been useful at some point,
Speaker 1: and we Work wanted to celebrate them for what they
Speaker 1: had done. But the name landed in a pretty tone
Speaker 1: deaf way. We Work eventually changed the name internally, but
Speaker 1: it had already spread through part of the company, and
Speaker 1: while thousands of his employees were losing their jobs, Adam
Speaker 1: left the country. He took his family and decamped to Israel,
Speaker 1: and for a while it looked like things couldn't get
Speaker 1: worse for we Work, But then came coronavirus. Curious what
Speaker 1: this means for we work now, not only financially, if
Speaker 1: we think about the long term consequences of what this
Speaker 1: coronavirus has done. We Work is known for crowding people
Speaker 1: together in one shared work space and playing together and
Speaker 1: sneezing on each other. If you will, you know what
Speaker 1: I mean. So how does this sort of change the
Speaker 1: way that people now even really think about we work?
Speaker 1: We Work started closing locations. They temporarily shut down a
Speaker 1: lot of offices in China, where lockdown orders were pretty strict,
Speaker 1: but in the US, a lot of we Work offices
Speaker 1: stayed open even under shelter and place orders. We Work
Speaker 1: said they were taking precautions. They gave us a statement
Speaker 1: saying they were cleaning the elevator buttons and countertops more often,
Speaker 1: but more controversially, they continued charging their members fees that
Speaker 1: piste off some of their customers. Who felt like they
Speaker 1: were being charged for a service they weren't going to use.
Speaker 1: I spoke to one customer named Adam Mutchler, who worked
Speaker 1: out of a WE Work in DC for years. If
Speaker 1: I didn't sign an amendment in October, I would have
Speaker 1: been on a month a month agreement and I would
Speaker 1: have canceled immediately in March. He's upset that we Work
Speaker 1: is still charging him. He would have stopped paying, except
Speaker 1: that last year he signed a new contract that locked
Speaker 1: him into a longer agreement. We Work said they stayed
Speaker 1: open because some of their customers are essential businesses, and
Speaker 1: they sent us a statement adding that they provide important
Speaker 1: services like mail handling for all their customers, essential or not.
Speaker 1: Adam Muchler was so convinced WE Work hasn't on any
Speaker 1: communication about what types of essential businesses. Who are the
Speaker 1: essential businesses. They've just had this really vague where an
Speaker 1: essential business because we create space for other essential businesses.
Speaker 1: In early June, Adam Muchler had had enough. He went
Speaker 1: into we Work one last time to take out all
Speaker 1: his stuff. This was early in the morning, and he
Speaker 1: said the place was deserted. Zero other people. A lot
Speaker 1: of the small offices had their logos peeled off to
Speaker 1: the glass. We she took as a signal that they
Speaker 1: had moved out. He was disappointed and We Work he
Speaker 1: saw this as a final push to squeeze money out
Speaker 1: of its customers. There was a point where I had
Speaker 1: a lot of love for We Work and it felt
Speaker 1: like this really like depressing breakup. I was just kind
Speaker 1: of walking away and they're not the company that I
Speaker 1: thought they were. And they've shown me through their actions.
Speaker 1: You know what their priorities, which I get you have
Speaker 1: to make money, but like you were all about community,
Speaker 1: and the duct was not attractive anymore. For years, we
Speaker 1: Work pitched the benefits of working closely next to others, excitement,
Speaker 1: new ideas, energy. Now coworking looked like a cloud of disease.
Speaker 1: In this moment, We Work wasn't recognizable to some of
Speaker 1: its longtime fans, in part because We Work wasn't we
Speaker 1: Work anymore. Soft Bank CEO Masa Yoshi Son had put
Speaker 1: all these billions of dollars into We Work, and after
Speaker 1: pushing out Adam, he was finally going to take the reins.
Speaker 1: He installed another Soft Bank executive as chairman of the company,
Speaker 1: and a real estate executive came in as the new CEO.
Speaker 1: They were running a pretty tight ship. Their goal was
Speaker 1: to turn the company around and make it profitable. That
Speaker 1: was already going to be a challenge, but now coronavirus
Speaker 1: made it seem nearly impossible. In an earnings presentation for SoftBank,
Speaker 1: Massa stood on stage and talked about their new predicament today.
Speaker 1: In my unique don't know, the situation is exceedingly difficult.
Speaker 1: Our unicorns have fallen into this sudden coronavirus ravine, but
Speaker 1: some of them will use this crisis to grow wings.
Speaker 1: In this same earnings called, Massa presented a new valuation
Speaker 1: for we Work, the lowest it had been in years.
Speaker 1: The company he had put ten billion dollars into is
Speaker 1: now worth only three billion dollars. Teddy Kramer, who had
Speaker 1: been an early we Work employee, was watching it all unfold.
Speaker 1: He had a sense that We Work was going to
Speaker 1: be hit hard by the virus. I have one word
Speaker 1: to describe how coronavirus is going to affect coworking clusterfuck Um.
Speaker 1: Nobody knows what to do. All the things they're doing,
Speaker 1: extended cleaning partitions. How do you enforce these things? Telling
Speaker 1: me to sit six ft away. I don't think anyone
Speaker 1: knows how to operate, mostly because we're getting zero guidance
Speaker 1: from the federal government. We're getting zero guidance from our
Speaker 1: state governments, We're getting zero guidance from our city governments.
Speaker 1: I am very um skeptical of anyone who says that
Speaker 1: we know how to operate a space. I don't think
Speaker 1: anybody has really done it yet. The sudden panic of
Speaker 1: coronavirus wouldn't have come at a worse time for We Work.
Speaker 1: We Work was waiting on the payout from an important deal.
Speaker 1: As part of their bailout, Soft Bank had agreed to
Speaker 1: buy three billion dollars and we Work stoff from employees
Speaker 1: and investors. This is called a tender offer, when you
Speaker 1: buy out existing shareholders. In March, the tender offer had
Speaker 1: been agreed to, but it hadn't actually come through yet.
Speaker 1: For Teddy, this was pretty high stakes. He was one
Speaker 1: of the few We Work employees who might actually get
Speaker 1: a significant payout because he joined so early. At first,
Speaker 1: he thought he might be able to cash out during
Speaker 1: the I p O, and when that sputtered out, the
Speaker 1: tender offer gave him some new hope. I have no
Speaker 1: belief in the long term prospects. I just want to
Speaker 1: get out as quickly as I can. The I p
Speaker 1: O fails, I go, look, this isn't great. I now
Speaker 1: have to sit on this. What's going to happen? And
Speaker 1: then the tender comes through. You know, I was I
Speaker 1: was intending to recee between a hundred and three thousand
Speaker 1: dollars from the tender and under the terms of the agreement,
Speaker 1: the tender offer was supposed to be done by April one.
Speaker 1: So for months we were employees thought that okay, they
Speaker 1: might still get some money out of their stock. They
Speaker 1: waited and kept waiting, and nothing was really happening. Every
Speaker 1: once in a while they'd get an investor update letter,
Speaker 1: but without a solid plan. Then in March, just as
Speaker 1: cities across the US were shutting down to prevent the
Speaker 1: spread of the virus, Teddy and all the other shareholders
Speaker 1: got a letter and it made him really nervous. Great, wonderful,
Speaker 1: I'm getting a note from them. I'm sure it's great news.
Speaker 1: I opened it up and I apparentially much see this
Speaker 1: cover your ask one to two page letters saying it's
Speaker 1: essentially that we work has not met the terms in
Speaker 1: order for the tender offer to complete. We are fully
Speaker 1: confident that these terms will be met within the next
Speaker 1: two weeks, but we just want to let you know
Speaker 1: that we can back out. And it was like, oh great,
Speaker 1: So Teddy knew how to read between the lines. This
Speaker 1: was a bad sign. So uh. Once I got the
Speaker 1: notice in mid March, Um, I looked at it, and
Speaker 1: I mean he said, Oh, we're fucked. This isn't this
Speaker 1: isn't happening, Um and lo and behold. Two weeks later,
Speaker 1: on April one, the day they were supposed to pay out,
Speaker 1: the order was canceled. My fears came true. What do
Speaker 1: I do you know? I was relying on this money
Speaker 1: to keep me afloat like a lot of other people.
Speaker 1: When soft Bing backed out of the deal. There was
Speaker 1: one person who had the most money at stake, Adam Newman.
Speaker 1: He was supposed to be able to sell close to
Speaker 1: a billion dollars in stock. It was like Masa had
Speaker 1: snatched the check right out of Adam's fingers, saying, ha,
Speaker 1: just kidding. So a few weeks later, Adam sued soft Being.
Speaker 1: He alleged that Softing had unfairly pulled out of the deal.
Speaker 1: Soft Bank said they were totally justified and not going
Speaker 1: through with the tender because we Work hadn't met all
Speaker 1: these criteria. For one, soft Bank sited some ongoing investigations
Speaker 1: into we Work from various regulators, attorneys General, the SEC,
Speaker 1: and others. Soft Bank's Vision fund has filed a motion
Speaker 1: to dismiss. So just when you thought he was out,
Speaker 1: Adam Newman came roaring back in and he's locked in
Speaker 1: another battle with Masa, this time about getting his billion dollars.
Speaker 1: It's like Alien versus Predator, the sequel. But We Worked
Speaker 1: employees were out of luck. They just sat back and
Speaker 1: watched the stock plummet and value. Here's Carl Pierre, who
Speaker 1: used to run the community team for We Work in
Speaker 1: d C. The side piers were a lot of people
Speaker 1: that we were holding on to a lot of options,
Speaker 1: thinking they were gonna become homeowners. Won the Company of
Speaker 1: Republic who were getting ready to buy cars, getting ready
Speaker 1: to possibly even retires start their own company, and all
Speaker 1: those gyms are dashed in the course of a couple
Speaker 1: of weeks, you know. Bummer. Carl says he even watched
Speaker 1: colleagues turned down other offers because they thought they might
Speaker 1: get rich from we work. I had like two guys
Speaker 1: I know, um, do you know? They got job offers
Speaker 1: some other places, and I talked to them about it,
Speaker 1: and they refused both offers, and they were like, no,
Speaker 1: we're gonna stick with this, Like it's gonna we're so
Speaker 1: much money. Man's like, don't You're gonna be a millionaire.
Speaker 1: I've heard stories of other employees making similar miscalculations. One
Speaker 1: former employee told me they bought a house thinking they'd
Speaker 1: be able to pay it off by selling their shares.
Speaker 1: Another said they took out a loan right before the
Speaker 1: I p O so they could buy their stock early
Speaker 1: and save on taxes down the road. Who once the
Speaker 1: I p O was canceled, they were stuck with a
Speaker 1: six figure tax bill. These employees felt financially screwed, but
Speaker 1: their disappointment went beyond that. They were hurt. I asked
Speaker 1: Dave Fanno, who's a former work executive. He said that
Speaker 1: the promise of equity made employees feel like owners, but
Speaker 1: they didn't have the same rights as actual investors. Equity
Speaker 1: continues to be used as a mechanism to create a
Speaker 1: sense of ownership, and I kind of use ownership and
Speaker 1: air quotes. It's emotional, it's not practical. They don't have
Speaker 1: the information rights and investors too, they don't really know
Speaker 1: the profitability, they don't really know the cash burn of
Speaker 1: the company. Dave said employees were also blinded by famous
Speaker 1: stories of some early start up employees who got rich
Speaker 1: from their stock because they're just thinking about, you know,
Speaker 1: those successful stories that they hear of those early employees
Speaker 1: getting a ton of you know, some some big liquidity
Speaker 1: event and and life changing amounts of money. And that's
Speaker 1: not to say those aren't true, but I think it's
Speaker 1: important to state that those are the minority in terms
Speaker 1: of the total number of people that have gotten equity
Speaker 1: relative to those that have had real pay days. Dave
Speaker 1: says he understands that some employees feel tricked, almost betrayed
Speaker 1: by their own employer. That's tough for people to navigate.
Speaker 1: They're probably remorseful, they're angry, they wish they would have
Speaker 1: had more information. And this feeling of betrayal was compounded
Speaker 1: by we works inspiring mission, which Dave says the company
Speaker 1: used to get employees bought in. I think it went
Speaker 1: a really long way. You know, you'd often hear things
Speaker 1: like it's a really great mission. It's a really it's
Speaker 1: a mission that can be a part of you know,
Speaker 1: why are you here? I really believe in the mission.
Speaker 1: That mission really meant something too WE Works employees. Here's
Speaker 1: Cody Quinn, a former executive assistant. They made people feel
Speaker 1: like they were like, then you're part of this huge
Speaker 1: thing that's going to change lives. And they were really
Speaker 1: good at sending that message that people really eiaved it.
Speaker 1: I mean I really believed it, Like dancing and fist
Speaker 1: pumping during an orientation, like they really got people to
Speaker 1: believe in what they were saying. Adam was like just
Speaker 1: a big lie to you know, and I feel I
Speaker 1: can't imagine how those people are feeling. Former employees were
Speaker 1: mad because they felt lied to by WE Works messaging,
Speaker 1: we over me Better Together authenticity, especially after they learned
Speaker 1: about the conflicts of interest, the huge payout, Adam leaving
Speaker 1: the country. In retrospect, Adam's old WE Work slogans felt hollow.
Speaker 1: Here's Cody again. If I could ask Adam one question,
Speaker 1: did you really believe all that bullshit that you told us?
Speaker 1: Did you ever really believe it? Did you ever really
Speaker 1: believe that you were changing the world. Did you ever
Speaker 1: really believe that you were elevating the world's consciousness or
Speaker 1: was it really all for that parachute you ended up
Speaker 1: with anyway, Remember, others had told me they thought Adam
Speaker 1: was manipulative and savvy, that he knew exactly what to
Speaker 1: say to get people to agree with him, that he
Speaker 1: was so charming that it was hard to know whether
Speaker 1: he believed something or not. It was hard for employees
Speaker 1: like Cody to trust that Adam had been genuine to
Speaker 1: her and to others, his actions undercut his words. Here's
Speaker 1: Andrew again. We were was sort of a dream. It
Speaker 1: was really like, it was really exciting to me. And
Speaker 1: to have that dream dashed was, you know, pretty devastating.
Speaker 1: And when Adam, you know, after the fact, you know,
Speaker 1: takes his money and runs off to Israel, it just
Speaker 1: causes you to question the whole thing, like was it
Speaker 1: ever real? Was this always the plan in the first place?
Speaker 1: And it just sort of poisons everything that felt positive
Speaker 1: about that this message that we were sold, I wasn't
Speaker 1: just a way to get some money out of the world,
Speaker 1: Like maybe it wasn't. I don't know to this day.
Speaker 1: I suspect it's probably somewhere in between. I think that
Speaker 1: you know, he's both an idealist and a realist, and
Speaker 1: you know, really believed it at the beginning and also
Speaker 1: took some pretty selfish evasive action when he saw the
Speaker 1: writing on the wall. There was something about Adam though
Speaker 1: a lot of people told me about this. They'd say
Speaker 1: that he seemed to have so much conviction and enthusiasm
Speaker 1: and energy for what he was doing, they felt it
Speaker 1: just couldn't be a sustained artifice. There's something about Adam's
Speaker 1: charisma and magnetism. I'm sure you've heard it from everyone
Speaker 1: you've talked to, Like, there's a reason why he was
Speaker 1: as successful as he was, and it's because he just
Speaker 1: radiates this energy and this passion and this excitement about
Speaker 1: what he's doing. He's a he's a zealot, and so
Speaker 1: it's hard not to believe that that's genuine. And recently
Speaker 1: I had a conversation with a former we worked executive
Speaker 1: who had some great insight into Adam's beliefs. He asked
Speaker 1: for anonymity, so we had someone else read his words
Speaker 1: out loud. He felt that Adam knew exactly how to
Speaker 1: use belief to his advantage as a leader. So I
Speaker 1: think he understood that people wanted to believe in those things.
Speaker 1: I believe that he understood the perceived benefit of those things.
Speaker 1: I think he very well understood how to deliver a
Speaker 1: message that people could connect with and believe in. I think, ultimately,
Speaker 1: at the end, his action showed that he didn't really
Speaker 1: believe in the things he was saying. Adam believe these
Speaker 1: ideas in principle, but in practice sometimes things played out differently.
Speaker 1: He very much believed that people should do those things,
Speaker 1: and that people should believe in a wee over me,
Speaker 1: and that people should struggle together. Then when it applied
Speaker 1: to him, I'm not sure he believed that so much.
Speaker 1: He felt he knew like what was right for people,
Speaker 1: but but didn't ultimately think that those things were right
Speaker 1: for him, at least not in the actions he took
Speaker 1: to this executive. This is how you reconcile the gap
Speaker 1: between Adam's words and his actions. This is how Adam
Speaker 1: could seem genuine when he talked on stage about the
Speaker 1: value of community and then turn around and do things
Speaker 1: that looked really selfish. Summer Camp was a glaring example
Speaker 1: when you know, the whole company has to wake up
Speaker 1: at six am or five am and struggled to sign up,
Speaker 1: you know, to wait in lines to go to summer
Speaker 1: camp and riding a bus. And he takes a seaplane.
Speaker 1: And look, you're all like you woke up at four
Speaker 1: thirty or five to get on the stupid bus to
Speaker 1: to a summer camp to sleep in a tent for
Speaker 1: three or two nights or whatever. You're just getting off
Speaker 1: the bus in the Adirondacks and you're kind of like
Speaker 1: you're cracked out, and you've got like one eye open,
Speaker 1: and you see the seaplane just like gloriously land in
Speaker 1: the lake, and you see these people doating on him
Speaker 1: and carrying his suitcases, and you're just like, what the
Speaker 1: fuck this executive saw Adam get special treatment again and again.
Speaker 1: The people needed to share hotel rooms to save money,
Speaker 1: yet he's got like a big Airbnb mansion. We're all
Speaker 1: told to save money and be frugal and fly coach
Speaker 1: to China. He takes a private plane. And so there's
Speaker 1: just this kind of like, well, my time is more
Speaker 1: important than your time in general, like his approach to
Speaker 1: life is the rules don't apply to me. We'll be
Speaker 1: right back. I want to spend a little time now
Speaker 1: talking about Adam and his life after we work. A
Speaker 1: few months after Adam was pushed out of his company,
Speaker 1: he left for Israel, and then he laid low. He
Speaker 1: didn't talk to any media outlets, and since he had
Speaker 1: been a fixture in the news for so long, his
Speaker 1: silence was notable. The clearest view into Adam's life came
Speaker 1: from his mom. She gave a revealing interview to an
Speaker 1: Israeli news site about his self imposed exile. She said
Speaker 1: that he was leading an idyllic life as a small
Speaker 1: time celebrity in this remote beachfront community. He was getting
Speaker 1: free meals, hanging out with family. He was still partying
Speaker 1: with rich people. Adam's mom said that the wives of
Speaker 1: billionaires would approach him to take selfies. She said that
Speaker 1: Adam told her, no one has loved me as much
Speaker 1: as when I fell from grace. But even in his
Speaker 1: new life, every once in a while his actions still
Speaker 1: popped up in the news. He was clearly still scratching
Speaker 1: his lifelong itch making deals. He considered investing in Barney's
Speaker 1: the Dying Department store. He and Rebecca listed some of
Speaker 1: their luxury homes on the market for tens of millions
Speaker 1: of dollars. He sold to an investor his stake in
Speaker 1: one of his controversial buildings that he intended to rent.
Speaker 1: We work, but mostly he stayed quiet. To some of
Speaker 1: his employees back in the States, it felt like Adam
Speaker 1: had taken the money and run, but some people understood
Speaker 1: that even if he had gotten a big payout, he
Speaker 1: was probably still hurting about his damaged reputation. Here's Carl,
Speaker 1: you know. Can you imagine being a god amongst New Yorkers,
Speaker 1: being the largest commercial tenant in New York, having the
Speaker 1: respect of everybody, people knowing you when you walk down
Speaker 1: the street, to being the ultimate social pariah where nobody
Speaker 1: wants to be associate with you. He must have hurt
Speaker 1: on some level to have it all dashed away, Like
Speaker 1: the stink of this will ride him for a long time.
Speaker 1: People will people say his name and laugh. So he
Speaker 1: lost something for sure to in all of this. Imagine
Speaker 1: having a sea of employees who thought you were god
Speaker 1: now think you are the worst human of the world.
Speaker 1: Like I don't care again, I don't care how much
Speaker 1: money you have. When people hate you, people hate you.
Speaker 1: You know what I mean like it's it's just done.
Speaker 1: What Carl is describing here is a snapshot in time
Speaker 1: fall of when people were mocking Adam all over the place.
Speaker 1: I don't mean just on Twitter and read it. It
Speaker 1: was on TV and in the newspapers. In the New
Speaker 1: York Post, they wrote that Adam was quote hiding behind
Speaker 1: his surfboard to kill a bottle and read cabul a bracelet.
Speaker 1: I wanted to talk to someone who knew Adam personally,
Speaker 1: someone who might be able to explain with some sympathy
Speaker 1: Adam's mind and motives at a moment when Adam just
Speaker 1: looked like a villain. Adam profoundly impacted my life in
Speaker 1: a positive way. That's seth Beist Martinick. He spoke a
Speaker 1: little earlier in the episode. He and Adam were friends,
Speaker 1: and he said Adam was almost like a mentor to him.
Speaker 1: Adam's advice was very a holistic. It wasn't just about
Speaker 1: how you do your job better, but it's about how
Speaker 1: you'd be a better person in all aspects, being a
Speaker 1: better father, being a better husband, being a better CEO,
Speaker 1: you know, being a better friend, being a better contributor
Speaker 1: to society at a broader level. Seth knows Adam well
Speaker 1: and from way back. They actually attended college together in
Speaker 1: two thousand two. Then years later they reconnected. Seth ran
Speaker 1: a marketing company called Conductor we Work ended up acquiring them.
Speaker 1: It was kind of an unusual acquisition because Conductor didn't
Speaker 1: specialize in real estate, but it gave Seth a chance
Speaker 1: to work closely with Adam. He said, Adam was unusually
Speaker 1: generous with him, and at no other and no other
Speaker 1: point in my career did anyone really comment, sit down
Speaker 1: to me with me and give me that kind of
Speaker 1: feedback and and share it from their own personal experience.
Speaker 1: Seth said Adam was a unique person, someone who had
Speaker 1: this unstoppable energy, piece of boisterous is that right, right?
Speaker 1: Boisterous person. I mean he's and he's got like an
Speaker 1: insane amount of energy. I mean wakes up super early
Speaker 1: and then it's like up super late and like doesn't sleep.
Speaker 1: I worked hard, and I would I have spent time
Speaker 1: with Adam, and like it was like I couldn't keep
Speaker 1: up with him. He worked, He worked really hard, and
Speaker 1: it was long days and traveling and you know, fly
Speaker 1: into China for a day and then coming back and
Speaker 1: then coming right off the plane and run into the
Speaker 1: office and staying there for twelve hours, and then going
Speaker 1: home and sleeping for three hours, and waking up the
Speaker 1: next day and go into you know, Brazil. I mean
Speaker 1: he was he worked hard. In Seth's mind, Adam would
Speaker 1: not have worked so hard unless his convictions were real.
Speaker 1: I think, without question, he did believe. I think he
Speaker 1: believed that everything he was saying. And I think that
Speaker 1: he thought that the company was going to be one
Speaker 1: of the biggest companies in the world. And I think
Speaker 1: he thought that was with such great certainty that people
Speaker 1: were inspired by his certainty. But also that certainty can
Speaker 1: lead to over confidence, and over confidence can lead to mistakes.
Speaker 1: Over Confidence can lead to mistakes, Optimism can lead to
Speaker 1: blind spots. To Seth, Adam's greatest strengths were also his
Speaker 1: fatal flaws. When you think you're going to change the world,
Speaker 1: and when you think that you're going to make such
Speaker 1: a big difference, you sometimes could lose sight of some
Speaker 1: of the small things. And I think Adam one of
Speaker 1: Adam's greatest strengths and and you can also say one
Speaker 1: of his weakness is right. It was like his incredible
Speaker 1: optimism and belief that things would work out. Seth saw
Speaker 1: that Adam felt free to make bold decisions as a
Speaker 1: leader precisely because he was unencumbered by the details. But
Speaker 1: not being a detail oriented guy also led Adam to
Speaker 1: act insensitively, sometimes to his own employees. One of the
Speaker 1: great things Adam did was he kept himselves very distant
Speaker 1: from things, so he was able to make decisions without
Speaker 1: thinking about all the minutia. Like when I make decisions
Speaker 1: a conductor, I'm like, Okay, well this is going to
Speaker 1: affect this guy and this guy and this guy is
Speaker 1: really stressed out right now, and like so it screws
Speaker 1: up my thinking where it affects my thinking, even that
Speaker 1: screws it up, it affects my thinking very sensitive to that.
Speaker 1: Adam was the opposite. Adam didn't wasn't sensitive to that.
Speaker 1: So he was able to make big decisions and and
Speaker 1: bold ones. But that's that he over indexed to the
Speaker 1: other side. If he was, you know, if he had
Speaker 1: more empathy towards all the people that were doing all
Speaker 1: the all the work, then he might have made different decisions.
Speaker 1: But he also might have um been able to foster
Speaker 1: more loyalty with the people. Even Adam's friend is pointing
Speaker 1: out a lack of empathy. The way Seth sees it,
Speaker 1: Adam had these blind spots to the needs of others,
Speaker 1: and he made some choices that only benefited himself. And
Speaker 1: some of these choices, which looked like conflicts of interest,
Speaker 1: reflected really poorly on Adam. He went too far and
Speaker 1: and then also had credibility issues things that he did
Speaker 1: with his own stuff, you know, and I think he
Speaker 1: underestimated how much that would come back to haunt him.
Speaker 1: The reward was big, but the risk was there. He
Speaker 1: took a bott of risk and it didn't pan out.
Speaker 1: By the time I spoke to Seth a few months
Speaker 1: after we were canceled their I p O, it was
Speaker 1: hard to see the company or Adam as anything but
Speaker 1: a failure. But others who were close to Adam reminded
Speaker 1: me that Adam had pulled off some incredible feats as
Speaker 1: a businessman. Here's former We Work executive Dave Fano. Again,
Speaker 1: I don't think anyone thought that he could close his
Speaker 1: Series A and to get a prestigious firm like Benchmark
Speaker 1: to invest, and they did, and that then he could
Speaker 1: get some of the prestigious landlords to do leases with us,
Speaker 1: and then they did that we could double the size
Speaker 1: every year for ten years in a row. And then
Speaker 1: we did you know, and that you could raise the
Speaker 1: largest private equity round ever, and then he did. You know.
Speaker 1: It's just across the board he was able to do it.
Speaker 1: I mean, as a collective, I think we did it.
Speaker 1: I don't think he did it on his own, But
Speaker 1: I do give him credit for setting the sort of
Speaker 1: audacious goals that people then rallied around and achieved. We
Speaker 1: work kept beating expectations over and over again. Dave credited
Speaker 1: this in part to Adam's personality. He said, Adam never
Speaker 1: asked himself what could go wrong. I don't think he
Speaker 1: hardly ever operated out of a place of fear, like
Speaker 1: there's I think in business there are folks that play
Speaker 1: not to lose, and there are people that play to win.
Speaker 1: He was playing to win, like optimizing to not lose
Speaker 1: was not part of the way that he operated. He
Speaker 1: is not a defensive player. And then, of course things
Speaker 1: did go horribly wrong. Billions of dollars vanished into thin air.
Speaker 1: A lot of people started comparing Adam to Elizabeth Holmes.
Speaker 1: The founder and former CEO of theres You can understand
Speaker 1: why they were with these stars of the startup world.
Speaker 1: Reporters wrote big profiles about them, Their investors said they
Speaker 1: were changing the world, and they held cult like sway
Speaker 1: over their own companies until things fell apart and all
Speaker 1: of a sudden everyone was mocking them and tearing them down.
Speaker 1: I spoke to Matt Levine, a Bloomberg opinion columnist, and
Speaker 1: he says that the comparison to Elizabeth Holmes isn't justified.
Speaker 1: The crime that people get in trouble for usually and
Speaker 1: when company implodes is some variation on securities fraud. Right. Um,
Speaker 1: Like Elizabeth Holmes was arrested for securities fraud because she
Speaker 1: allegedly lied to the investors. Um, Adam Newman just clearly
Speaker 1: didn't lie to his investors. Like at all. Well, Adam
Speaker 1: didn't lie to his investors as far as we know.
Speaker 1: There are some ongoing investigations, but he hasn't been charged
Speaker 1: with wrongdoing. Like, the problem here was not fraud. The
Speaker 1: problem here is not that Adam Newman went to naive
Speaker 1: investors and stole their money on false pretenses. That's Adam
Speaker 1: Newman went to a very aggressive investor, and he was
Speaker 1: very aggressive, and they sort of built each other up
Speaker 1: and ended up in a place where they were both
Speaker 1: kind of unhappy. So the story of We Work from
Speaker 1: this lens isn't so dramatic. Adam was just a guy
Speaker 1: who knew how to take advantage of venture capital. He
Speaker 1: worked within the system. Matt even thinks that something good
Speaker 1: can come from the We Work story. It might push
Speaker 1: other businesses to behave more responsibly. He calls it a
Speaker 1: triumph of corporate governance. It gives the market some ability
Speaker 1: to push back on future I p o s. Because
Speaker 1: before We Work, if you said I want to go public,
Speaker 1: but I want to keep control of my company forever
Speaker 1: and give the public non voting stock, your bankers would
Speaker 1: have said, any they won't like that. And then you'd say, well, Bill,
Speaker 1: it matter, and the bankers would say, honestly, like, there's
Speaker 1: never been a deal pulled for a deal that people
Speaker 1: rejected because of bad governance. Right like now after Weird,
Speaker 1: that's changed. Right now after were you can say, actually,
Speaker 1: like if your governance is bad enough, it will be
Speaker 1: a huge disaster and you won't get your deal done
Speaker 1: and you'll have to go for a rescue financing and
Speaker 1: then you'll sue and they'll be home mess. Uh. And
Speaker 1: so it's a good like cautionary tale for the next
Speaker 1: company and those glory days of WE Works, big investments,
Speaker 1: work hard, play, hard, partying mentality. Some already remember those
Speaker 1: as the good old days, a thing of the past.
Speaker 1: Here's Carl Pierre, the former community worker in d C.
Speaker 1: I look back, I still believe, I still believe and
Speaker 1: I still defend that we did create community and we
Speaker 1: did do some amazing things. It's one of those things
Speaker 1: I'm really wistful for where it's like, yeah, wow, like
Speaker 1: talk about a company that was an absolute, you know,
Speaker 1: ship show in so many ways, like completely insane, like
Speaker 1: the things that happened in those walls crazy. But if
Speaker 1: you think about, you know, could anything else have brought
Speaker 1: together thousands of twenty for read a, twenty seven year
Speaker 1: olds who starry eyed dreamers believing that they can instead
Speaker 1: of working for a hedge fund or something, that they
Speaker 1: can work for the startup and maybe change the world
Speaker 1: a different way. Yeah, I don't know. It's amazing to
Speaker 1: me that Carl is so nostalgic for his time at
Speaker 1: WE Work. He told stories about throwing out used condoms
Speaker 1: and dealing with aggressive customers on this podcast, but he
Speaker 1: loved his time there clearly. Yeah. I've had guys yelled
Speaker 1: at me for the dumbest stuff. I' had guys threatened
Speaker 1: to beat me up. I've had so many things happened
Speaker 1: to me at we work. It's nuts. I've had to
Speaker 1: call the cops more than I ever have my entire
Speaker 1: life that we work. But at the end of the day,
Speaker 1: it's just um, I mean, the stories I have, the
Speaker 1: connections that made worth it. Would I do it again, Yeah,
Speaker 1: I mean I would probably drink less alcohol, But what
Speaker 1: I do it again? Yeah, of course I would do
Speaker 1: it again. It was It was absolutely nuts, and Carl
Speaker 1: wanted to remind us that at the center of it
Speaker 1: all was Adam. Guys, this is his company. He built
Speaker 1: this from He literally built this from nothing. He convinced
Speaker 1: scores of investor sort of give him billions be billions
Speaker 1: of dollars to do whatever he wanted to grow his company.
Speaker 1: It's his cookie visions, his crazy madmen thing, and we
Speaker 1: filled buildings on like hopes and dreams. Everyone has a
Speaker 1: lot of hatred towards him. I mean, you would have
Speaker 1: had that job to begin with. It wasn't for him anyways.
Speaker 1: This was a whole company with more than ten thousand
Speaker 1: people working for it, but for almost a decade it
Speaker 1: was centered so completely around the vision and personality of
Speaker 1: its founder, Adam. The myth of the founder has been
Speaker 1: such a potent force in Silicon Valley. People idolize guys
Speaker 1: like Steve Jobs, Jeff Bezos, and Elon Musk. Think about
Speaker 1: all the best selling biographies, even the occasional Hollywood movie.
Speaker 1: There's this idea that founders had this special vision that
Speaker 1: no one else can really grasp, that the founder can
Speaker 1: do no wrong, and that myth gives their opinions incredible
Speaker 1: weight their own companies. I think that Adam Newman is
Speaker 1: changing that he may be remembered as the founder who
Speaker 1: put a dent in the founder myth. In the end,
Speaker 1: we works, demise may become bigger than the company itself.
Speaker 1: The company's bust may signal the end of the party,
Speaker 1: the death knell for this unicorn moment where people thought
Speaker 1: that if you could just get your company big enough,
Speaker 1: don't worry about profits. If you can just get big enough,
Speaker 1: everything will work out. Foundering is hosted by me Ellen Hewitt,
Speaker 1: Sean When is our executive producer. My Aquava is our
Speaker 1: associate producer. Raymondo mixed the show today. Mark Million and
Speaker 1: Vander May and Alistair Barr are our story editors. Francesco
Speaker 1: Levy is the head of Bloomberg Podcasts. This is our
Speaker 1: last episode of the We Work season, but please stay
Speaker 1: subscribed in your feed. We'll have more exciting episodes of
Speaker 1: Foundering in just a few months. At the Prepared to
Speaker 1: Account of Proper to Pasport, the Path again, to again,
Speaker 1: to Prepare to Company again to again, to the AGA,
Speaker 1: to the PI