WEBVTT - WeWork Part 1: Capitalist Kibbutz 0:00:00.080 --> 0:00:03.440 Let me take you back to spring. It was a 0:00:03.480 --> 0:00:06.840 simpler time in Silicon Valley when the world's most valuable 0:00:06.880 --> 0:00:11.039 startups seemed poised to make it big. Uber Lift and 0:00:11.119 --> 0:00:14.680 Pinterest We're all going public, and next in line was 0:00:14.720 --> 0:00:19.000 we Work. We Work was valued at forty seven billion dollars, 0:00:19.000 --> 0:00:21.599 and investment banks were saying that the price tag could 0:00:21.600 --> 0:00:24.520 go even higher during the I p O. That meant 0:00:24.520 --> 0:00:27.680 that on paper, we Works co founder and CEO Adam 0:00:27.760 --> 0:00:30.680 Newman could be worth as much as ten billion dollars. 0:00:31.320 --> 0:00:35.200 His company was the most valuable startup in America. Another 0:00:35.240 --> 0:00:37.600 tech unicorn has filed to go public. This time it 0:00:37.760 --> 0:00:40.360 is we Work, now known as the we Company. It 0:00:40.440 --> 0:00:43.800 has announced that it has confidentially submitted its paperwork to 0:00:44.000 --> 0:00:46.879 the SEC for an I p O. We Worked has 0:00:46.920 --> 0:00:50.440 revolutionized the leasing of office space. Co founder and CEO 0:00:50.520 --> 0:00:53.360 Adam Newman, as well as strategic partner who else but 0:00:53.680 --> 0:00:57.160 actor Ashton Kutcher ten billion dollars invest in this company. 0:00:57.440 --> 0:01:01.400 It's the second largest venture capital investment of all time. 0:01:03.640 --> 0:01:05.920 These may have been some of the best times of 0:01:05.959 --> 0:01:09.920 Adam's adult life. He was getting photographed for magazine covers, 0:01:10.000 --> 0:01:13.200 grinning at the camera posing on office furniture and bounding 0:01:13.240 --> 0:01:16.319 up flights of stairs. In TV interviews, he talked about 0:01:16.319 --> 0:01:18.640 how we Work had made billions in revenue and was 0:01:18.680 --> 0:01:22.160 doubling in size every year. They were helping Fortune five 0:01:22.600 --> 0:01:26.400 companies make their employees happier by building them better, beautiful 0:01:26.480 --> 0:01:29.600 and inspiring offices. If the I p O went off 0:01:29.640 --> 0:01:33.680 as planned, Adam We Works employees and we Works bankers 0:01:33.720 --> 0:01:37.360 would become rich, very rich. And for a startup, going 0:01:37.440 --> 0:01:41.400 public is the ultimate milestone. Very few companies make it, 0:01:41.760 --> 0:01:44.400 and it can take years to get there. And IPO 0:01:44.480 --> 0:01:47.760 means you're established, You've arrived in the halls of global business. 0:01:48.440 --> 0:01:50.880 That August, it looked like Adam Newman was about to 0:01:50.920 --> 0:01:55.760 make it very soon. But then in the span of 0:01:55.800 --> 0:02:00.320 one month, everything changed. The scrutiny that fall in the 0:02:00.440 --> 0:02:02.600 lead up to we Works I p O quickly turned 0:02:02.680 --> 0:02:05.920 the company into a laughing stock exhibit a of the 0:02:06.000 --> 0:02:10.400 over hyped money losing, conflict of interest written stereotype of 0:02:10.440 --> 0:02:14.160 tech startups. Suddenly, a few investors were willing to buy 0:02:14.160 --> 0:02:16.840 a stock and we Work had no choice but to 0:02:16.960 --> 0:02:20.080 cancel its I p O office space startup. We Work 0:02:20.160 --> 0:02:22.720 has officially postponed a plan to go public. We work 0:02:22.760 --> 0:02:26.360 as having trouble finding investor demand at one third of 0:02:26.440 --> 0:02:29.480 the forties seven billion dollar price tag that soft bank 0:02:29.520 --> 0:02:32.600 assigned in its latest funding round. That big markdown could 0:02:32.600 --> 0:02:35.960 spell big trouble for soft banks that work a potential 0:02:36.000 --> 0:02:38.239 investor in and we work. We think this thing is 0:02:38.280 --> 0:02:41.760 an absolute mess. I don't want work. I wish they 0:02:41.800 --> 0:02:44.840 would just go away. The real concern is Adam Newman, 0:02:44.880 --> 0:02:48.080 the CEO. Everything is on him. His performance will determine this. 0:02:48.720 --> 0:02:52.000 It was a disaster and almost everyone was blaming it 0:02:52.080 --> 0:02:55.760 on Adam. People started saying that his biggest investors wanted 0:02:55.840 --> 0:02:59.240 him gone, and we're meeting without him to plan his exit. 0:03:00.200 --> 0:03:03.080 And in the midst of all this chaos, someone snapped 0:03:03.080 --> 0:03:05.760 a photo of Adam walking down the street in Manhattan. 0:03:06.320 --> 0:03:09.320 We know this because it was posted on Reddit. In 0:03:09.360 --> 0:03:12.600 the photo, he's outside on the sidewalk. He's wearing a 0:03:12.639 --> 0:03:16.560 gray T shirt and black jeans. He's tall six ft five, 0:03:17.120 --> 0:03:21.000 His long brown hair is blowing in the wind. Bizarrely, 0:03:21.480 --> 0:03:25.920 he's barefoot, and remember he's walking on a sidewalk in Manhattan. 0:03:26.440 --> 0:03:29.840 It all looks a little unhinged, but I guess you 0:03:29.840 --> 0:03:32.800 could also say it's on brand with his unconventional ways. 0:03:33.320 --> 0:03:37.440 More on that later anyway. In the photo, he's midstride 0:03:37.480 --> 0:03:40.000 holding a cell phone up to his ear. It's hard 0:03:40.000 --> 0:03:42.920 to tell if he's angry or smiling. Was he trying 0:03:42.920 --> 0:03:45.520 to sweet talk an investor into letting him keep his job. 0:03:46.120 --> 0:03:49.440 Was he venting to a friend. According to someone who 0:03:49.480 --> 0:03:52.000 spoke to him the day that photo was taken, Adam 0:03:52.000 --> 0:03:55.480 found the prospect of leaving WE Work unimaginable. He was 0:03:55.520 --> 0:03:57.800 determined to stay on at the company he had spent 0:03:57.840 --> 0:04:03.280 the last decade building into a global empire. That day 0:04:03.360 --> 0:04:06.440 was a Friday. Over the weekend, Adam and his board 0:04:06.440 --> 0:04:09.600 members debated whether he should step down, a move that 0:04:09.640 --> 0:04:12.040 would cut him off from his company but just might 0:04:12.120 --> 0:04:15.000 save It's I p O. Depending on who you ask, 0:04:15.400 --> 0:04:18.800 Adam either agreed calmly that he should go, or he 0:04:18.880 --> 0:04:21.200 shouted at his investors when he realized he was being 0:04:21.200 --> 0:04:24.760 forced out. What's clear is that by Monday night, the 0:04:24.800 --> 0:04:28.520 debate was over. The Next morning, Adam dialed into a 0:04:28.520 --> 0:04:31.440 conference call with his board of directors. At this point 0:04:31.520 --> 0:04:34.760 it was just a formality. One by one, the board 0:04:34.800 --> 0:04:38.440 members voted to remove Adam as CEO. When it was 0:04:38.560 --> 0:04:47.920 his turn, he voted against himself too. So what happened 0:04:47.920 --> 0:04:50.479 with We Work? How did Adam Newman get to the 0:04:50.520 --> 0:04:52.840 top of the world and how did he fall so 0:04:52.960 --> 0:04:55.880 quickly to the point where he was roaming the streets 0:04:55.920 --> 0:04:59.080 of Manhattan barefoot? Then, as if he were in some 0:04:59.200 --> 0:05:02.960 Shakespearean drama, he voted to oust himself from the job 0:05:03.040 --> 0:05:11.040 he loved. I'm Ellen Hewitt, and you're listening to Foundering, 0:05:11.240 --> 0:05:15.240 a new podcast from Bloomberg Technology. In this series, we're 0:05:15.240 --> 0:05:18.080 going in depth to chronicle the most memorable dramas in 0:05:18.120 --> 0:05:22.240 Silicon Valley. This season, we're telling the legendary story of 0:05:22.279 --> 0:05:30.600 Adam Newman and his controversial company We Work. You might 0:05:30.640 --> 0:05:32.680 have read the news describing how it all went wrong. 0:05:33.120 --> 0:05:35.280 I wrote a lot of those stories for the past 0:05:35.320 --> 0:05:38.039 four years I've been reporting on We Work for Bloomberg News, 0:05:38.600 --> 0:05:40.240 and in the blur of it all, I think I 0:05:40.279 --> 0:05:42.760 forgot how crazy this all was, how crazy it all 0:05:42.760 --> 0:05:46.039 still is. Remember we Work as just a company that 0:05:46.080 --> 0:05:49.200 rents out short term office space. You pay to access 0:05:49.200 --> 0:05:51.640 at desk and we work inside. You sit next to 0:05:51.640 --> 0:05:54.440 people who work at sock companies or pr agencies or 0:05:54.480 --> 0:05:57.240 AI startups. Maybe you discuss the weather with each other 0:05:57.240 --> 0:06:00.719 by the keg at the office happy hours. How this 0:06:00.800 --> 0:06:04.200 turned into the buzziest technology startup of our time, only 0:06:04.240 --> 0:06:07.040 to come crashing down in a matter of weeks. You've 0:06:07.040 --> 0:06:10.160 all heard about other famous corporate collapses like Lehman Brothers 0:06:10.160 --> 0:06:13.280 and Enron. In the tech world we work might very 0:06:13.279 --> 0:06:16.200 well be remembered the same way. It's a story that 0:06:16.240 --> 0:06:19.719 captures the last decade of the global economy, free money, 0:06:19.800 --> 0:06:24.680 unrelenting growth, and few consequences for bad behavior. I've gone 0:06:24.720 --> 0:06:27.919 back and re reported this story from scratch. Over the 0:06:27.960 --> 0:06:30.960 course of the season, you'll hear from people who lived, worked, 0:06:31.040 --> 0:06:34.240 and partied with Adam. Will play you past interviews with 0:06:34.279 --> 0:06:37.360 the man himself, who sat down with me on multiple occasions, 0:06:37.640 --> 0:06:39.920 including one that took place just a few months before 0:06:39.920 --> 0:06:44.000 it all collapsed. And you'll hear recordings of internal staff 0:06:44.040 --> 0:06:46.040 meetings that we work that were never meant to be 0:06:46.080 --> 0:06:49.039 heard outside the company. Over the course of the show, 0:06:49.200 --> 0:06:51.360 I think you're going to find that the real story 0:06:51.600 --> 0:06:53.400 is a little different from what you think it is. 0:06:54.320 --> 0:06:56.960 But first, I want to tell you about Adam's life 0:06:57.320 --> 0:07:00.320 right up until the founding of We Work. Let me 0:07:00.360 --> 0:07:02.960 start from the very beginning, when Adam Newman was just 0:07:03.000 --> 0:07:06.200 another kid at a kibbutz in Israel, dreaming of the 0:07:06.279 --> 0:07:12.280 day he'd get rich in America. So you know, first 0:07:12.320 --> 0:07:14.000 of all, guys, thank you for having us, and for 0:07:14.040 --> 0:07:16.080 all of you have ever been to Rework. Thank you. 0:07:16.640 --> 0:07:19.240 So I actually grew up in a kibbutz. Who here 0:07:19.280 --> 0:07:21.880 knows what the kibbutz is raise your hand. Wow, very 0:07:22.000 --> 0:07:24.320 educated in crowd. So there's a few things to know 0:07:24.360 --> 0:07:27.520 about Adam Newman as a kid. Adam was born in Israel. 0:07:27.720 --> 0:07:31.160 He struggled with dyslexia. His parents divorced when he was seven. 0:07:31.440 --> 0:07:34.560 By his count, he moved thirteen times growing up. He 0:07:34.600 --> 0:07:37.480 says he had a pretty scattered childhood, and when he 0:07:37.520 --> 0:07:40.080 was eleven, his family moved to kibbutz near arm in 0:07:40.160 --> 0:07:43.040 southern Israel, and he points at this as the thing 0:07:43.120 --> 0:07:46.160 that originally inspired We Work. So for those of you 0:07:46.160 --> 0:07:48.640 who don't know what kibbutch is a failed social experiment 0:07:48.680 --> 0:07:53.720 that happened in Israel. As a teenager and as a child, 0:07:53.800 --> 0:07:56.080 it was the most unbelievable place to grow up. I 0:07:56.120 --> 0:07:58.240 was with all my friends from morning till night. We 0:07:58.440 --> 0:08:00.440 ate in the same dining hall, which of to the 0:08:00.480 --> 0:08:02.520 same school, and then we all did a homework together, 0:08:02.880 --> 0:08:05.440 or we didn't do a homework together. Was awesome. A 0:08:05.520 --> 0:08:09.040 kibbuttz is a collective community in Israel. Usually they have 0:08:09.080 --> 0:08:12.920 a few hundred members. Everyone lives on the same compound. Traditionally, 0:08:13.000 --> 0:08:15.800 the members pool their money, so for example, if you're 0:08:15.800 --> 0:08:18.360 a doctor who works in town, you donate your entire 0:08:18.400 --> 0:08:21.440 salary to the kibbutz. Hundreds of these communities have been 0:08:21.440 --> 0:08:24.160 built in Israel in the last century. They were part 0:08:24.160 --> 0:08:27.560 of a movement, a movement to settle Israel with these socialist, 0:08:27.680 --> 0:08:31.600 utopian communities. Adam likes to call we work it kibbutz 0:08:31.600 --> 0:08:34.920 two point oh or a capitalist kibbutz. So if you're 0:08:34.920 --> 0:08:36.960 a wee Work member, you've got to work every day 0:08:37.080 --> 0:08:40.680 alongside other entrepreneurs and small businesses. Sure, you might be 0:08:40.720 --> 0:08:43.120 trying to get rich, but you're also part of a movement, 0:08:43.320 --> 0:08:49.599 the we generation. If you squint hard enough at a 0:08:49.640 --> 0:08:51.599 wee Work I guess you can see a reflection of 0:08:51.679 --> 0:08:54.520 kibbutz life. When you walk into a we Work office, 0:08:54.559 --> 0:08:57.760 you notice all these communal resources. The brightly lit common 0:08:57.800 --> 0:09:01.200 spaces with couches, plants, and coffee tape ables. There's kimbucha 0:09:01.280 --> 0:09:04.560 and beer on tap. All of this is shared, much 0:09:04.559 --> 0:09:07.120 like a kibbutz might have a swimming pool, a mess hall, 0:09:07.240 --> 0:09:11.640 a pantry, daycare available for all its members. I've covered 0:09:11.679 --> 0:09:14.280 we work for the last four years, so I've heard 0:09:14.320 --> 0:09:18.200 Adam emphasize his kibbutz roots again and again. He says 0:09:18.200 --> 0:09:21.240 it on stage, He's quoted in magazines talking about it, 0:09:21.559 --> 0:09:24.240 and I always wondered if it really did inspire we 0:09:24.400 --> 0:09:29.120 work or if it was just a convenient talking point. Recently, 0:09:29.160 --> 0:09:30.840 I was at a party and I met someone who 0:09:30.880 --> 0:09:33.480 also grew up on kibbutz near Arm. She was a 0:09:33.520 --> 0:09:36.000 few years younger than Adam. She described him as a 0:09:36.040 --> 0:09:38.440 kid who served and had long hair that he sometimes 0:09:38.480 --> 0:09:41.720 wore in a ponytail. She told me that she remembered 0:09:41.760 --> 0:09:44.320 him as part of this group of older, rowdy boys 0:09:44.320 --> 0:09:47.480 who often caused trouble on the Kibbutz. She recalls them 0:09:47.480 --> 0:09:50.120 sneaking snacks out of the dining hall and making mess. 0:09:50.160 --> 0:09:52.360 She said that they would break into the swimming pool 0:09:52.400 --> 0:09:55.200 and go skinny dipping. Of course, this made me even 0:09:55.240 --> 0:09:58.360 more curious about Adam's kibbutz life. I wanted to know 0:09:58.720 --> 0:10:01.040 what was he like as a kid. Was he like 0:10:01.120 --> 0:10:06.320 the Adam Newman portrayed and all those headlines last year, reckless, aggressive, charming, 0:10:06.720 --> 0:10:10.080 maybe a little delusional. And was the kibbutz he lived 0:10:10.080 --> 0:10:13.320 on anything like a wee work? So I called my 0:10:13.360 --> 0:10:16.560 colleague Kobe ben Miller, who's based in Tel Aviv, and 0:10:16.600 --> 0:10:18.800 I asked him to drive a couple hours south to 0:10:18.880 --> 0:10:23.640 visit Adam's childhood kibbutz. So we're pulling up now to 0:10:26.000 --> 0:10:29.959 it's uh winter in southern Israel, so blue sky is 0:10:30.000 --> 0:10:34.479 a bit of clouds, but a light sweater will do. Um. 0:10:34.600 --> 0:10:37.840 We're pulling up through here in the entrance there's um 0:10:37.880 --> 0:10:42.800 some palm trees. The terrain is a desert, doesn't rocky 0:10:42.840 --> 0:10:46.320 desert um Today Kibbutz near arm is right on the 0:10:46.360 --> 0:10:49.000 border with Gaza. There was rocket fire just a week 0:10:49.080 --> 0:10:53.160 before our reporter Kobe came in. Traditionally, every kibbutz has 0:10:53.160 --> 0:10:55.800 a few ways of making money, like growing crops or 0:10:55.800 --> 0:10:59.160 selling goods. Well, the main income is really the factory, 0:10:59.360 --> 0:11:05.400 so silvero and agriculture. We have mainly wheat. We have potatoes. 0:11:05.880 --> 0:11:10.120 We have a nice orchard. Now we're we have planted avocados. 0:11:11.280 --> 0:11:14.320 Sooner we're going to plant bananas. Cob We met up 0:11:14.320 --> 0:11:16.199 with a former school teacher who was his tour guide 0:11:16.200 --> 0:11:19.000 for the day. Well, my name is Micha Benny Little. 0:11:20.559 --> 0:11:24.000 I've been a member of the Ski Boots for over 0:11:24.120 --> 0:11:30.080 fifty fifty five years and the vivid. Adam's mother lived 0:11:30.160 --> 0:11:33.000 in one of these buildings here one of their partments. 0:11:33.800 --> 0:11:35.839 Adam's mother was an oncologist and she worked at a 0:11:35.920 --> 0:11:38.439 nearby hospital. She also did shifts as an on call 0:11:38.559 --> 0:11:41.440 doctor for the Kibbutz. And in a crazy coincidence, not 0:11:41.559 --> 0:11:44.120 only did me have remember Adam, he actually taught him 0:11:44.120 --> 0:11:47.320 in school. I was his home room teacher for three 0:11:47.400 --> 0:11:50.199 months before they left, so he was in my class. 0:11:50.240 --> 0:11:54.800 He was always the center of attention. He was very restless. 0:11:54.880 --> 0:11:58.760 It was very I mean the girls in his class 0:11:58.800 --> 0:12:04.040 with the was right, but he was a guy with 0:12:04.200 --> 0:12:08.600 the already that age, very tall. Yes he was good. 0:12:08.640 --> 0:12:13.920 Look yes, So miha to Kobe around the Kibbutz, and 0:12:13.960 --> 0:12:15.880 they asked the residents what they thought about we work. 0:12:16.280 --> 0:12:31.640 Shout out Bloomberg, Bloomberg, Kiloomberg, podcasting, we were okay, did 0:12:31.640 --> 0:12:34.480 you hear that? It's a little subtle, But when Kobe 0:12:34.480 --> 0:12:38.080 said we work the Kibbutz resident kind of scoffed. Many 0:12:38.120 --> 0:12:40.000 of the people of near Arm were sick of talking 0:12:40.040 --> 0:12:43.280 about the kibbutz is most famous resident in their minds. 0:12:43.520 --> 0:12:47.839 He hadn't even lived there that long for for about 0:12:47.880 --> 0:12:51.760 two hours, he said. To be fair, Adam's family actually 0:12:51.800 --> 0:12:54.240 lived on Kibbutz near Arm for about four years in 0:12:54.280 --> 0:12:57.880 the nineties, so more than two hours and at a 0:12:57.880 --> 0:13:01.559 pretty formative age for Adam. But to the Kibbutz members, 0:13:01.920 --> 0:13:04.240 most of whom have spent their whole lives living and 0:13:04.240 --> 0:13:08.040 working on the Kibbutz, Adam was an outsider. Here's Kobe 0:13:08.120 --> 0:13:14.800 meeting another woman who remembers Adam from when she was younger. Kobe, 0:13:15.320 --> 0:13:24.080 why ask your question? She asked Kobe to stop recording, 0:13:24.160 --> 0:13:26.120 and she told him that other kids from the school 0:13:26.200 --> 0:13:28.800 used to beat Adam up. In her words, the kids 0:13:28.880 --> 0:13:30.880 used to smack him around because he was an outsider 0:13:30.880 --> 0:13:32.800 coming in from the city who thought of himself as 0:13:32.800 --> 0:13:36.160 a big shot on the Kibbutz. Then Miha, Kobe's guide 0:13:36.240 --> 0:13:39.440 cuts in. He tells Kobe Cee, I told you it's 0:13:39.480 --> 0:13:42.760 not easy to break into the Kibbutz. This feels poignant 0:13:42.800 --> 0:13:45.520 to me. Whenever Adam talks about his childhood years on 0:13:45.559 --> 0:13:48.080 the Kibbutz, he describes it as a happy time. But 0:13:48.160 --> 0:13:50.439 the people who live on the Kibbutz remember how he 0:13:50.520 --> 0:13:53.120 stuck out and how he got beat up. Here's me 0:13:53.240 --> 0:13:56.480 Hi again. I think it took time, I think for 0:13:56.559 --> 0:14:03.320 him to to integrate into very conservative place. Very why 0:14:03.320 --> 0:14:08.960 do you say conservatives in general? Kibbutz kids were not 0:14:09.240 --> 0:14:13.600 very open to people who came from from outside. I mean, 0:14:14.000 --> 0:14:17.880 but but basically to have somebody enter their society, entered 0:14:17.920 --> 0:14:21.760 there in a group, you know, it was I think 0:14:21.760 --> 0:14:28.120 it took him time to to integrate. There's another reason 0:14:28.160 --> 0:14:32.479 that Adam's family stuck out at the Kibbutz. They were renters. Basically, 0:14:32.560 --> 0:14:34.880 there are two kinds of people who lived on the Kibbutz, 0:14:35.160 --> 0:14:38.360 members and renters. If you were a member, you put 0:14:39.160 --> 0:14:41.200 of your salary into the kibbutz, and you were probably 0:14:41.240 --> 0:14:44.560 a lifetime resident, maybe even born on the Kibbuttz itself. 0:14:45.080 --> 0:14:48.640 Adam's family, on the other hand, were renters. As a renter, 0:14:48.840 --> 0:14:50.800 you paid in order to live on the land and 0:14:50.800 --> 0:14:53.920 take part in the kibbutz offerings like childcare and meals 0:14:53.920 --> 0:14:56.640 at the dining hall, a model kind of similar to 0:14:56.640 --> 0:15:00.640 a we work actually, but more importantly to Adam experience, 0:15:01.080 --> 0:15:03.920 renters on the kibbutz were seen as temporary and that 0:15:03.960 --> 0:15:08.120 would have marked Adam socially. Renters were almost seen as outsiders. 0:15:08.920 --> 0:15:11.520 This reminded me of something Adam told me last year 0:15:11.840 --> 0:15:14.000 when I was interviewing him from a magazine story. I 0:15:14.040 --> 0:15:16.960 was writing many different cities, so I grew up in 0:15:17.000 --> 0:15:19.640 thirteen different places. Growing up as a child. When you 0:15:19.760 --> 0:15:23.480 moved to the place, it's very difficult because child are tough. 0:15:24.120 --> 0:15:26.720 It's always hard fitting it. So there's always a big 0:15:26.720 --> 0:15:30.920 craving for community. This is a surprisingly vulnerable thing for 0:15:31.000 --> 0:15:33.560 him to say that as a kid he had this 0:15:33.680 --> 0:15:36.840 big craving for community and that he struggled sometimes to 0:15:36.880 --> 0:15:40.240 find it. Anyway, let's go back to the Kibbutz. On 0:15:40.280 --> 0:15:42.440 this tour, Kobe stopped in to look at the old 0:15:42.480 --> 0:15:45.080 dining hall, and that's the dining room of the kot. 0:15:45.400 --> 0:15:48.040 That's where Adam, that's where he ate his meals and 0:15:48.080 --> 0:15:50.680 in this in this dinue. So now we're walking into 0:15:51.760 --> 0:15:54.920 the coworking space. Yeah, the coworking place. Yeah. I hope 0:15:54.960 --> 0:15:58.040 it's somebody can open it for me, because there's this 0:15:58.120 --> 0:16:01.320 dining hall isn't serving food anymore, in part because at 0:16:01.320 --> 0:16:03.720 this Kibbutz and others it's been more and more difficult 0:16:03.760 --> 0:16:07.200 economically to keep offering shared meals. So a few years 0:16:07.240 --> 0:16:10.480 ago they converted the hall into a coworking space. It 0:16:10.760 --> 0:16:12.880 does actually kind of resemble that we work, doesn't it. 0:16:13.520 --> 0:16:15.760 They could have turned it into anything, and they decided 0:16:15.760 --> 0:16:18.800 to make it a coworking space. We went to the 0:16:18.880 --> 0:16:22.520 Kibbutz for two reasons. We wanted to understand how strong 0:16:22.560 --> 0:16:26.400 Adam's connection was to the Kibbutz. People definitely remembered him, 0:16:26.440 --> 0:16:29.120 but to some he was an interloper, someone just passing through. 0:16:29.760 --> 0:16:31.720 And the second reason we went to the Kibbutz was 0:16:31.760 --> 0:16:34.840 to learn how a place like that actually works, to 0:16:34.920 --> 0:16:36.920 see if it could be shaped into a fast growing 0:16:36.920 --> 0:16:40.880 tech startup without losing its core values. Parts of traditional 0:16:40.920 --> 0:16:44.520 Kibbutz life seemed pretty extreme by American standards. There was 0:16:44.560 --> 0:16:47.360 no personal ownership. You can't show off with a new 0:16:47.400 --> 0:16:50.280 car because no one owned a car. You could borrow 0:16:50.280 --> 0:16:52.440 one of the kibbutz cars by signing up on a sheet. 0:16:52.880 --> 0:16:56.440 Even clothing circulated. Kids wore hand me downs distributed by 0:16:56.440 --> 0:16:58.600 the Kibbutz, and when they outgrew them, they'd give them 0:16:58.600 --> 0:17:01.640 back to be passed on to other kids. And remember, 0:17:01.760 --> 0:17:04.960 members gave all their income to the Kibbutz. That money 0:17:05.040 --> 0:17:08.760 was redistributed to everyone equally, no matter what you earned. 0:17:09.480 --> 0:17:13.560 This part of the system seemed to bother Adam as adults, though, 0:17:13.600 --> 0:17:15.560 I remember looking at the kibbutz and saying, so in 0:17:15.600 --> 0:17:17.959 the kiboats, everybody makes the same amount of money. So 0:17:18.000 --> 0:17:20.480 one of my friend's dad's was the head of the factory. 0:17:20.560 --> 0:17:23.040 He worked sixteen hours a day, and other friend's dad 0:17:23.080 --> 0:17:25.000 was the head of the gardening, he worked six hours 0:17:25.000 --> 0:17:27.080 a day. They both made the same amount of money. 0:17:27.240 --> 0:17:29.640 And it's interesting because later when he builds we work. 0:17:29.800 --> 0:17:32.800 This is the part of kibbutt's life that Adam ultimately rejects. 0:17:32.840 --> 0:17:34.760 So even though for us as kids it was amazing, 0:17:34.800 --> 0:17:37.320 I always remember thinking that it's not fair that someone's 0:17:37.359 --> 0:17:39.880 effort is not getting rewarded based on what he puts in. 0:17:40.119 --> 0:17:42.760 Because remember that clip earlier, So for those of you 0:17:42.760 --> 0:17:45.240 who don't know what kibuch is a failed social experiment 0:17:45.280 --> 0:17:49.200 that happened in Israel. In Adam's mind, the kibbutz was 0:17:49.240 --> 0:17:52.119 a failed social experiment, but we work was not going 0:17:52.119 --> 0:17:55.480 to fail because he would change the broken economic model 0:17:55.480 --> 0:17:58.600 of kibbutz life to make it more fair so that 0:17:58.640 --> 0:18:01.679 people doing more work got more money. But I think 0:18:01.720 --> 0:18:04.000 a little bit of a capitalistic kiboats on the one hand. 0:18:04.040 --> 0:18:07.560 Community on the other hand, still you you eat what 0:18:07.680 --> 0:18:09.560 you kill, and you get what it is that you did, 0:18:09.640 --> 0:18:11.680 and every person is allowed to have a different level 0:18:11.760 --> 0:18:14.760 of a desire and a different level of of what 0:18:14.920 --> 0:18:17.080 they want to put effort into whatever it is they're doing. 0:18:17.720 --> 0:18:20.560 So that's how kibbutz two point oh and capitalist kibbutzs 0:18:20.560 --> 0:18:23.600 get coined. Adam uses these terms all the time when 0:18:23.640 --> 0:18:27.160 explaining what we work is. It's funny because people who 0:18:27.200 --> 0:18:29.560 grew up on kibbutz has told me that those communities 0:18:29.600 --> 0:18:33.040 are so socialist that a capitalist kibbutz just doesn't make sense. 0:18:34.240 --> 0:18:37.199 Here's what struck me about this notion though it kibbutz 0:18:37.280 --> 0:18:39.840 is more than just a plot of land. It's this 0:18:39.960 --> 0:18:44.560 powerful vision, this myth of utopia for decades, volunteers from 0:18:44.600 --> 0:18:47.119 around the world traveled to Israel to work on a 0:18:47.160 --> 0:18:50.040 kibbutz and bring those values back home with them. It 0:18:50.119 --> 0:18:52.879 has this meaning bigger than itself, a set of beliefs 0:18:52.920 --> 0:18:56.600 and values and purpose to make we work. Adam took 0:18:56.640 --> 0:18:59.359 the most romantic parts of the kibbutz and reshaped them 0:18:59.400 --> 0:19:01.760 for a millennia audience. You can hear it when he 0:19:01.800 --> 0:19:05.080 talks about the so called We Generation. The members might 0:19:05.119 --> 0:19:07.879 speak a different language and dress a little differently, but 0:19:08.040 --> 0:19:11.440 inside they're all parts of the Switch generation. They're all 0:19:11.440 --> 0:19:15.720 part of the awakening, and they they all feel the same. 0:19:15.760 --> 0:19:18.879 They're global citizens of the world. They want to work 0:19:19.000 --> 0:19:22.560 to create their life's work. In his mind, we work 0:19:22.600 --> 0:19:26.760 as a place that values community but also entrepreneurship, where 0:19:26.800 --> 0:19:29.199 people hold onto their own money and don't share it 0:19:29.240 --> 0:19:33.000 around too much. He had that idea early on. Maybe 0:19:33.000 --> 0:19:34.920 the seed was already planted when he was a kid 0:19:35.080 --> 0:19:38.240 watching his friends dad's it's that eat what you kill 0:19:38.440 --> 0:19:42.480 policy that years later will make Adam much wealthier than 0:19:42.520 --> 0:19:45.320 any of his employees. And at the end of it all, 0:19:45.400 --> 0:19:47.760 when Adam is set to walk away with more than 0:19:47.800 --> 0:19:50.479 a billion dollars, while thousands of we Work staff are 0:19:50.520 --> 0:19:54.480 laid off. It'll leave everyone questioning whether he ever believed 0:19:54.560 --> 0:19:57.679 in the power of we, of being better together, or 0:19:57.680 --> 0:20:03.120 if he just wanted to get rich. We'll be right back. 0:20:06.200 --> 0:20:08.840 A few years after leaving the Kibbutz Adam moved to 0:20:08.920 --> 0:20:12.080 New York City. He started as a student at Baruke College. 0:20:12.520 --> 0:20:14.800 He was twenty two years old, a little older than 0:20:14.840 --> 0:20:17.960 his American classmates, but he embraced all that college had 0:20:17.960 --> 0:20:20.840 to offer. I spent my first two years in Baruq, 0:20:21.320 --> 0:20:25.440 studying a little bit and partying a lot. I majored 0:20:25.480 --> 0:20:28.760 in entrepreneurship and marketing, and I thought the best way 0:20:28.800 --> 0:20:31.560 to practice what I learned at school, because we talked 0:20:31.600 --> 0:20:35.080 a lot about mentorship, was to practice with every bouncer, 0:20:35.240 --> 0:20:38.960 convincing him to let me in the club, every promoter, 0:20:39.440 --> 0:20:43.399 convincing him to give me free drinks, and basically hitting 0:20:43.400 --> 0:20:46.680 on every girl in the city. It was while Adam 0:20:46.720 --> 0:20:48.760 was in college that he dreamed of his first business. 0:20:49.320 --> 0:20:51.480 I came up with a genius idea. Was gonna be 0:20:51.520 --> 0:20:54.560 a women's high il shoe with a collapsible hill. And 0:20:54.640 --> 0:20:57.000 the point was that as the women of New York 0:20:57.040 --> 0:20:59.639 City navigate through the urban jungle. They can walk on 0:20:59.680 --> 0:21:01.840 flat still be comfortable, and then go to hills and 0:21:01.880 --> 0:21:05.320 be fashionable. I thought it was sort of a Hunger 0:21:05.359 --> 0:21:09.800 Games meet sex in the city come together. So he's 0:21:09.800 --> 0:21:12.280 describing a high heel shoe where the heel folds down 0:21:12.280 --> 0:21:14.880 and the shoe becomes flat. It doesn't totally make sense 0:21:14.920 --> 0:21:18.119 to me, because obviously a two with a heel has 0:21:18.160 --> 0:21:20.560 a completely different shape from a shoe that's flat. The 0:21:20.640 --> 0:21:23.879 first sample came in and to our astonishment, one of 0:21:23.880 --> 0:21:27.080 our employees fingers almost got cut off when that hill collapse. 0:21:28.080 --> 0:21:30.760 Very quickly, I realized I know nothing about this category 0:21:30.840 --> 0:21:33.879 and this is definitely not my passion. Okay, so not 0:21:33.920 --> 0:21:37.520 passionate about women's shoes. Also probably no firsthand knowledge there. 0:21:38.040 --> 0:21:40.840 Adam then founded his second company. It's a baby clothing 0:21:40.880 --> 0:21:44.040 company that still exists called Crawlers spelled with the K. 0:21:44.520 --> 0:21:47.240 This one I knew was gonna make it big. Crawlers 0:21:47.320 --> 0:21:49.720 was baby pants with kneepads on them to protect the 0:21:49.720 --> 0:21:52.720 baby's knees for the crawling age. The tagline is pretty funny. 0:21:53.040 --> 0:21:55.960 Just because they don't tell you doesn't mean they don't hurt. 0:21:56.560 --> 0:21:58.720 And Adam dropped out of college during his last year 0:21:58.760 --> 0:22:01.280 to work on crawlers. All this tape that I've played 0:22:01.320 --> 0:22:03.440 for you over the last few minutes, it's actually from 0:22:03.440 --> 0:22:07.000 a speech Adam gave at Brute College in ten He 0:22:07.080 --> 0:22:10.160 was the commencement speaker. He was also his own graduation. 0:22:10.600 --> 0:22:13.000 He got his diploma more than a decade after he 0:22:13.080 --> 0:22:16.640 dropped out to pursue this baby clothing business. Of course, 0:22:16.880 --> 0:22:21.639 the business was a tremendous failure. For the next five years, 0:22:21.680 --> 0:22:24.040 I slaved. I worked so hard. I thought it was 0:22:24.080 --> 0:22:26.320