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Speaker 1: This is Bloomberg Crypto at Daily Bloomberg. I heard podcast

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Speaker 1: and I'm Stacy Marie Ishmel, Managing editor of Crypto for

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Speaker 1: Bloomberg News. It's Wednesday, October five. Do you remember Adam

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Speaker 1: Newman when you talk about me? I can take it

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Speaker 1: when I'm ready. I will answer the things that need

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Speaker 1: to be answered or not. That We Work co founder

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Speaker 1: and former CEO who stepped down in two thousand and

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Speaker 1: nineteen in a cloud of accusations about eccentric behavior, skyhigh

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Speaker 1: expenses and general extravagance, or the Adam Newman immortalized in

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Speaker 1: an Apple TV miniseries starring Jared Leto about the rise

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Speaker 1: and fall of That We Work empire. Well, that Adam

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Speaker 1: Newman is back with Bonus Crypto and an exceptionally large

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Speaker 1: three hundred and fifty million dollar check from the venture

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Speaker 1: capitalists over at Andresen Harrowitz. I think because I'm very

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Speaker 1: comfortable talking about the lessons, I'm very comfortable sharing what

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Speaker 1: it is that worked and didn't work, entrepreneurs are coming

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Speaker 1: faster than ever before here to discuss what he's up

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Speaker 1: to and why the word flow is the new wee

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Speaker 1: is Bloomberg reporta Hannah Miller. He did take this startup,

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Speaker 1: raise a bunch of money, get it to be worth

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Speaker 1: over a billion dollars, you know, and they want to

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Speaker 1: see what he can do in the crypto space, if

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Speaker 1: he can maybe do something similar. Hall, welcome back on

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Speaker 1: the show. Thank you for having me. You are normally

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Speaker 1: in our SF office, but here you are in New

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Speaker 1: York today and I like that for lots of reason

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Speaker 1: and it's good to see you. But also there's something

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Speaker 1: about the geographic I don't know, miss of us about

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Speaker 1: to talk about a dude who got a lot of

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Speaker 1: credit for marketing coworking spaces and you know, community in

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Speaker 1: the sense of being together. It's all but we because yes,

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Speaker 1: we're gonna talk about Adam Newman today where you are,

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Speaker 1: who is somehow back. But before we get to how

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Speaker 1: he's back, would you remind our listeners of where he was,

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Speaker 1: what he was doing, and why he disappeared for a while. Yeah.

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Speaker 1: So he had a meteoric rise with we Work. It

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Speaker 1: was insane how big they got and how quickly they

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Speaker 1: were able to raise funds. We Work was focused on

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Speaker 1: building communal workspaces all over the world. Adam Newman was

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Speaker 1: the founder the CEO, and he really really sold it

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Speaker 1: and they had you know, different locations throughout the US,

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Speaker 1: and they're planning to do this big, big I p O.

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Speaker 1: And that's when things started to get really crazy. There

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Speaker 1: s one am out lots of pictures and one so

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Speaker 1: filing that a company has to give to provide information

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Speaker 1: about what they're doing, who they are prior to going public.

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Speaker 1: And in this S one, you know, he really laid

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Speaker 1: out this vision for we Work, you know, filled with

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Speaker 1: photos and images. Was not your typical S one And

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Speaker 1: really people were struck by the amount of power he

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Speaker 1: had within the company. You know, he had super voting

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Speaker 1: rights that could give him the ability to clear the

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Speaker 1: entire board. He had immense control over the company, as

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Speaker 1: did his wife, Rebecca Newman, who was also quite the force,

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Speaker 1: and people grew concerned. Not helping things was the fact

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Speaker 1: that there was questions of whether this was a workable

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Speaker 1: business model, if they could be as profitable as they

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Speaker 1: claimed to be. They were similar companies with very similar

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Speaker 1: business models, worth not nearly as much as We Work

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Speaker 1: and Avenge. Really he was ousted as CEO. So the

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Speaker 1: big news, of course is not a huge surprise, but

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Speaker 1: Adam Newman, the colorful founder of the company, is stepping down.

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Speaker 1: He's going to be decreasing his voting control of the company.

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Speaker 1: These are all things that some of the investors and

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Speaker 1: we Work, like soft Bank, had been pushing for. And

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Speaker 1: the company did go public. It is now worth significantly

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Speaker 1: less than what it claimed to be. Was valued at

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Speaker 1: forty seven billion dollars at one time. It now trades

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Speaker 1: at about three billion dollars. Just to emphasize everything that

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Speaker 1: you're saying about this s one filing. Here are some

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Speaker 1: of the headlines that I pulled from that momentous August

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Speaker 1: two thousand nineteen CNBC. The strangest and most alarming things

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Speaker 1: and we Works I p O filing the verge. We

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Speaker 1: Work isn't a tech company. It's a soap opera business insider.

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Speaker 1: The energy of we people are roasting we Work for

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Speaker 1: its cultish I p O filing fortune. Reading we Works

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Speaker 1: as one is like staring into Adam Newman's soul. These

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Speaker 1: are not the kinds of things that financial media organizations

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Speaker 1: generally right when a company is declaring its intent to

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Speaker 1: go public, it's things like, here are the risk factors,

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Speaker 1: you know, here's the expected blah, blah blah. Instead, this

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Speaker 1: was just a kind of a collective WTF around the world.

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Speaker 1: And so, as you said, you know, the meteoric rise

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Speaker 1: of Adam Newman was followed by a pretty precipitous decline

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Speaker 1: in his personal fortunes, although he seemed to have meet

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Speaker 1: out pretty well into you know, we work as an

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Speaker 1: entity itself. But now it's basically two years later and

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Speaker 1: he's back. What's he up to? He's send a crypto.

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Speaker 1: So we've seen two startups that he's helped found. One

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Speaker 1: is called Flow Carbon, which uses blockchain to track carbon credits,

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Speaker 1: and he and his wife, Rebecca Newman, they helped found it,

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Speaker 1: but they don't have operational rules. The other company is

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Speaker 1: more I would say, his baby. It's called Flow. As

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Speaker 1: you might have noticed, Flow is Adam Newman's new favorite work.

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Speaker 1: It is the new we Okay, so you know, I

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Speaker 1: got to keep that in mind. So Flow is a

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Speaker 1: real estate startup, and we don't know too much about it.

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Speaker 1: There are still a lot of details that we have

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Speaker 1: no idea what they are. And one thing though that

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Speaker 1: we did learn about Flow is that it's coming out

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Speaker 1: with a digital financial services wallet that will allow people

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Speaker 1: to interact with cryptocurrencies, so there is a clear crypto

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Speaker 1: element as of right now to Flow, though things are

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Speaker 1: subject to change. Who is writing the check? Surprise surprise

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Speaker 1: at s Andrews and Horowitz. It's a three million dollar checks,

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Speaker 1: very large, extremely large, shows a lot of faith, a

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Speaker 1: lot of confidence. Mark and Reason like wrote a whole

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Speaker 1: blog post Singing Adams praises, singing Flows praises talking about

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Speaker 1: why they invested in this new startup, and in the

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Speaker 1: Adam Newman one point oh story, the equivalent would have

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Speaker 1: been soft Bank that had provided these large checks. Three

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Speaker 1: million dollars, even by the standards of crypto, is a

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Speaker 1: dramatic amount of money. There are hedge funds in crypto

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Speaker 1: that launched with initial funds of like one and a

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Speaker 1: half to two billion, of which three million is a

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Speaker 1: very large chunk. Is this the largest check that's a

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Speaker 1: sixty and z has ever written to a single founder?

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Speaker 1: I think it's definitely. It definitely ranks up there. It

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Speaker 1: is a big check. So far, Atom has really been

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Speaker 1: the main person connected with Flow. You know, we don't

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Speaker 1: know about any co founders, and it is a huge

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Speaker 1: vote of confidence, a major stamp of approval because A

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Speaker 1: sixteen Z is a formidable force within the crypto industry.

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Speaker 1: Their crypto investing team is massive. They are constantly writing

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Speaker 1: check They are really gung ho about the space. So

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Speaker 1: is this ASICs das bet on Newman? Is this a

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Speaker 1: bet on crypto? Is it sort of some combination of

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Speaker 1: the two. How should folks understand where this conviction is

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Speaker 1: coming from. Yeah, I think it's a combo of the two.

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Speaker 1: And it's kind of interesting because I think from a

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Speaker 1: normal person's perspective, it's like, why would you ever back

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Speaker 1: this guy again? You know, after what happened with we work.

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Speaker 1: He's great in marketing. Yeah, And I think after speaking

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Speaker 1: with venture capitalists in the crypto space, you know, there

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Speaker 1: is this idea that you can't back somebody normal. You

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Speaker 1: have to back an extraordinary person with this incredible vision

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Speaker 1: who can sell what they're building. And Adam really fits

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Speaker 1: that profile. You know, say what you want about him,

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Speaker 1: but he is not normal. He is not normal, and

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Speaker 1: he knows how to get attention to his projects. What

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Speaker 1: worries me is the fact that the thing that he

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Speaker 1: is primarily known for is a as a marketing founder,

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Speaker 1: kind of a salesperson. I'm not sure that crypto necessarily

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Speaker 1: needs more hype. It has a sort of built in

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Speaker 1: mechanism for providing that on its own. Do we have

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Speaker 1: any evidence that human has crypto experience of any kind?

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Speaker 1: You know, you mentioned that there are no other known

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Speaker 1: kind of who the operations will be if not him,

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Speaker 1: Where do we think some of that talent might potentially

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Speaker 1: come from to make this successful as a business. Yeah,

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Speaker 1: I think he's definitely going to have to bring people

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Speaker 1: on who really know the space. You know, this is

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Speaker 1: a shift for him in comparison to where he was

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Speaker 1: at with we Work. He's clearly intrigued by it though

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Speaker 1: and looking at for the carbon, looking at Flow. It'll

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Speaker 1: be interesting to see with Flow if they kind of

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Speaker 1: bring on more crypto operational people to help run this.

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Speaker 1: He's going to have to get a lot of talent,

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Speaker 1: right so sort of to build out this team, people

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Speaker 1: who are actually familiar with crypto. Where do we think

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Speaker 1: that might come from the talent pool? And crypto is

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Speaker 1: growing as we see more companies do layoffs, there are

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Speaker 1: people still transitioning over from traditional tech companies who are

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Speaker 1: excited by the space. I think he is going to

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Speaker 1: have to to build out a team to do this,

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Speaker 1: and it's pretty interesting to see what other applications they

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Speaker 1: could use crypto for. These plans could change, but right now,

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Speaker 1: there is no plan to tokenize real estate rentals or

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Speaker 1: ownership with crypto. Right so this is not a we

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Speaker 1: put your apartment on the blockchain startup as of right now. No,

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Speaker 1: not at all, and it's going to be exciting to

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Speaker 1: see what happens. And we also we have to keep

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Speaker 1: in mind this is an all encompassing financial services while

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Speaker 1: it's not just crypto. You can have your bank account

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Speaker 1: in it, you know, you can you do other stuff,

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Speaker 1: so he might have to also pull in people and

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Speaker 1: from traditional finance. We'll be right back with Bloomberg reports

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Speaker 1: that Hannah Mila on how entrepreneur Adam Newman is stepping

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Speaker 1: into the world of crypto. There is a very crypto

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Speaker 1: specific part of one of the startups that's flu Carbon,

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Speaker 1: and that is the the g NT Yes, the Goddess

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Speaker 1: Nature Token. Yes, the Goddess Nature Token. Basically, they're using

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Speaker 1: these token bundles to represent carbon credits on the blockchain.

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Speaker 1: And both Adam and Rebecca Newman are super into nature.

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Speaker 1: We know Adam is a huge surfer and you know,

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Speaker 1: they also made the environment a big part of their

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Speaker 1: focus when they were at we work, like banning meat

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Speaker 1: in the communal kitchens, you know, things along those lines.

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Speaker 1: So it's very interesting that they've chosen to sort of

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Speaker 1: take this track with crypto, which is often criticized to

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Speaker 1: be not environmentally friendly, and it's kind of an exciting

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Speaker 1: use case, and that they're you know, doing carbon credit tracking.

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Speaker 1: We've seen other projects kind of do this. Chia is

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Speaker 1: one I'm thinking of, and it hasn't really taken off yet,

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Speaker 1: I would say, so it'll be interesting to see if

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Speaker 1: low Carbon can shift that up. Is the Goddess Nature

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Speaker 1: token trading anywhere? Does it currently have a price or

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Speaker 1: is it still sort of up in the air as

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Speaker 1: it relates to flu carbon itself. So they actually delayed

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Speaker 1: the token launch because of Crypto winter, so we have

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Speaker 1: to see more details. I mean, reports have circulated that

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Speaker 1: you know, flull Carbon shutting down things like that, but

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Speaker 1: I think it they're just kind of been a holding

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Speaker 1: pattern right now, waiting to see what happens, waiting for

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Speaker 1: the right time to release this token. You have in

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Speaker 1: the past reports it on pretty extensively. One of the

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Speaker 1: bigger criticisms of you know, like VC concentration in terms

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Speaker 1: of initial access to crypto projects. The idea, for example,

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Speaker 1: that if folks are delivering tokens two insiders as a

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Speaker 1: way to encourage participation in the project, a lot of

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Speaker 1: those insiders are going to be the venture capitalists who

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Speaker 1: are also backing the project. So we've got that, We've

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Speaker 1: got that kind of inherent underlying tension about something that's

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Speaker 1: supposed to be democratizing finance. We also have the fact

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Speaker 1: that A. Sixty and Z is emerging as they're functionally

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Speaker 1: not just the biggest fish in crypto, but sometimes they

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Speaker 1: feel like the only in the entire ocean, particularly as

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Speaker 1: it relates to what they like to call web three.

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Speaker 1: How are in your observations are reporting other people in

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Speaker 1: crypto kind of reacting to this dominance where you have

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Speaker 1: this one founder who he is very good at being

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Speaker 1: in the limelight. You have this one very large, very

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Speaker 1: powerful VC entity, you know, when their powers combined tbd.

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Speaker 1: But in the meantime, is it taking the oxygen out

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Speaker 1: of the room for anybody else who might be thinking

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Speaker 1: about flu carbon trading or just carbon trading in general,

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Speaker 1: or anybody else who might be looking for different kinds

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Speaker 1: of funding. Yeah. No, I think it's a mixed response

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Speaker 1: among crypto vcs. There are crypto specialized venture capital firms

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Speaker 1: that are just as big on the space as a

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Speaker 1: sixteen Z and I know there are some crypto native

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Speaker 1: vcs vcs that you know all about crypto focus on it,

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Speaker 1: this is their bread and butter, who have some resentment

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Speaker 1: towards a st You know, they see them as maybe

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Speaker 1: not fully committed into the space because they have so

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Speaker 1: many other areas that they invest in. You know, there's

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Speaker 1: this definitely a divide between quote the Sandhill set and

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Speaker 1: crypto native vcs. However, I think during crypto winter, people

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Speaker 1: are just warming up to anything that comes into the industry.

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Speaker 1: I had one VC tell me, well, the fact that

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Speaker 1: a SIXT was able to write such a big check

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Speaker 1: shows that there's capital still flowing into this industry. Well,

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Speaker 1: I just want to pose their SIXT has like billion

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Speaker 1: dollars worth of ability to write checks. You know, three

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Speaker 1: fifty is a large check, but by their standards, it's

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Speaker 1: a tiny fraction of risk to to their overalls. So

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Speaker 1: is that really do you think it's possible to extrapolate

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Speaker 1: from this like unique situation across the entire industry. Yeah,

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Speaker 1: I think people want to do that, right, Is that

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Speaker 1: really the case that's still up for debate. It is

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Speaker 1: a small fraction of what of a sixtise these war chest,

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Speaker 1: but the fact that people see this big money coming

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Speaker 1: in and this big name with Adam, Yeah, I mean,

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Speaker 1: he definitely has a mixed reputation, but he's still a

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Speaker 1: name that you know, mainstream people recognize that. People in

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Speaker 1: the exactly like he you know, he has notoriety, and

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Speaker 1: I think people also see that he does have somewhat

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Speaker 1: of a track record of success with we Work. I mean,

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Speaker 1: he did take this startup, raise a bunch of money,

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Speaker 1: get it to be worth over a billion dollars, you know,

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Speaker 1: and they want to see what he can do in

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Speaker 1: the crypto space, if he can maybe do something similar.

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Speaker 1: It's interesting that you analogize, you know, to very a

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Speaker 1: certain flavor of tech metrics of success, which is he

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Speaker 1: was an incredible fundraiser and he was a financial engineering wizard,

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Speaker 1: which for a lot of stars ups in crypto are

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Speaker 1: two of the things that they also really care about. Right.

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Speaker 1: The idea is you want to your token to be

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Speaker 1: worth as much money as possible. You want to have

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Speaker 1: the ability to have access to liquid is he especially

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Speaker 1: in a crypto winter like this, So if you you know,

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Speaker 1: if you assess him by that standard, and I'm sure

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Speaker 1: there are many folks in crypto who are like, yeah,

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Speaker 1: that that is a bar that we would like to reach.

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Speaker 1: The challenge is going to be building out an actual

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Speaker 1: company around this, because, as you've mentioned, many folks have

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Speaker 1: been trying to make you know, carbon credits on the

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Speaker 1: blockchain happen in one capacity or another and have struggled

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Speaker 1: to reach beyond interesting pilot projects or you know, relatively

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Speaker 1: small things. So for good or for ill, that that

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Speaker 1: industry is getting an injection of a huge amount of

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Speaker 1: money and the huge amount of attention very short amount

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Speaker 1: of time. Yeah, the big question is is Kenny back

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Speaker 1: it up? You know? And that's a question that's p

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Speaker 1: posed to a lot of founders, But I think with

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Speaker 1: Adam Newman the stakes are higher because he already has

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Speaker 1: this past with we work, so it's gonna be interesting

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Speaker 1: to see how he does it. I mean, they're focusing

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Speaker 1: on a problem that a lot of people have, which

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Speaker 1: is a painful relationship with their landlord. Rental company whatever.

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Speaker 1: I think that that with flow, they're trying to find

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Speaker 1: some way to make that easier, more seamless, you know,

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Speaker 1: on the blockchain, with the crypto wallet maybe yeah, yeah,

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Speaker 1: I mean they're they're talking about maybe doing like a

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Speaker 1: reward system based on blockchain. Again, stuff could change. There's

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Speaker 1: no real clear path yet, I think, but it'll be

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Speaker 1: interesting to see what happens. I do think to your

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Speaker 1: point that seeing who that team turns out to be

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Speaker 1: is going to be very interesting, and we'll probably have

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Speaker 1: you back on to talk more about it when they

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Speaker 1: start making those announcements. Thank you so much for being

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Speaker 1: on the show. Thank you so much for having me.

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Speaker 1: You can find more of Hannah Miller's reporting on the

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Speaker 1: Bloomberg Terminal on Bloomberg dot com or follow her on Twitter.

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Speaker 1: She's at h G Miller nine. That's h G m

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Speaker 1: I L L E Er nine. On the next episode

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Speaker 1: of Bloomberg Crypto, is it really possible to make a

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Speaker 1: good blockchain based video game? What would that even look like?

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Speaker 1: And is there anyone trying to do it? Right now,

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Speaker 1: we're going to talk about Anamoca Brands, a video game

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Speaker 1: studio turned crypto venture capital fund run by Yatsu. They're

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Speaker 1: betting big on making blockchain games happen, alongside a slew

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Speaker 1: of other investments in the crypto arena. This is Bloomberg Crypto,

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Speaker 1: a daily podcast from Bloomberg and I Heart Radio. For

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Speaker 1: more shows from I Heart Radio, visit the I Heart

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Speaker 1: Radio app, Apple Podcasts, or wherever you get your podcast.

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Speaker 1: Send us your comments, questions, or suggestions for the show

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Speaker 1: to Crypto at Bloomberg dot net or find us on Twitter.

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Speaker 1: We're at Crypto. The supervising producer of Bloomberg Crypto is

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Speaker 1: Vicky Vergelina. Our senior producer is Janet Babin. Our producer

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Speaker 1: is Sharon Barriro. Associate producer is Thy Butler. Desta wonder

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Speaker 1: At is our engineer. Original music by Leo Sidrn. I'm

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Speaker 1: Stacy Marie Shmal. We'll be back tomorrow