Adam Neumann on WeWork, ego, collapse, and rebuilding
Steven Bartlett interviews Adam Neumann, co-founder of WeWork, about his childhood trauma, the rise and fall of WeWork, and his new venture Flow.
Summary
Adam Neumann, co-founder of WeWork, opens with his deeply difficult childhood — including a bipolar mother, sexual abuse, and financial instability — through to the founding and explosive growth of WeWork, its catastrophic collapse, and his current real estate venture, Flow.
Neumann reveals that he did not resign as CEO but was effectively forced out through what he describes as a coordinated manoeuvre by board members and a bank, who issued a demand for $450 million in debt repayment within nine minutes of his stepping down. He also discloses that SoftBank's Masayoshi Son offered to buy WeWork outright for $20 billion in cash — a deal that board members sought to negotiate upward over an extended period, ultimately causing it to collapse entirely. Neumann argues that the single moment WeWork began to fail was the walk back from his meeting with Son, when he allowed ego and money to displace the mission that had driven the company.
The episode also details the dramatic final negotiation with SoftBank's Marcelo Claure, during which Rebecca Neumann refused to sign any settlement until the agreed funds were confirmed in the bank account — a standoff that concluded at 4:30 a.m., hours before she gave birth to their son Moses.
Key Takeaways
FULL TRANSCRIPT
Adam Neumann's early life and family background
Steven Bartlett: Adam Neumann, I've had the privilege of getting to know you briefly over the last couple of months, and it struck me almost immediately that you're unlike almost any other founder or CEO or really person I think I've ever met. There's a depth to you and a philosophy and a perspective that is just incredibly rare. My question to you is — for you to be an anomaly, if we accept that — am I right in thinking that you had some sort of anomalous early origin story? What is that story that shaped the man sitting in front of me?
Adam Neumann: For me, when I get to know someone in the beginning and they say, "Where is it coming from? Who are you?" I usually start the same way. First of all, I'm a husband. It's my first job and what I'm most proud of. Then I'm a father — a father of six. Then I'm a friend. Friendships are very important to me. And after that, I'm an entrepreneur.
I think each one of us has a phenomenal soul. I think it's perfect. And I think what we really see when we look at people is the distance between where we think they're holding and where their potential is. And I think it's that gap between those two things that actually defines a person. For me, throughout my life — sometimes out of my control when I was young, and sometimes within my control when I got older — I've always been striving to close that gap.
Steven Bartlett: You talk about not having control. Your early context is quite unstable from what I read, because your mother suffered from bipolar. Can you bring me into that world so I can understand the context that Adam was raised in?
Adam Neumann: Happily. Every story has two sides to it. My mom and my father are both doctors, and growing up I always saw both of them taking care of patients. It would feel sometimes like the patients came ahead of us. My sister and I were never sick — no matter how sick we were. My mother was an oncologist and she would say, "My patients are sicker. Go to school." That was sort of the beginning of it.
When I was in the second grade, my parents got a divorce. It was very difficult for my mom and she needed a change of scenery, so we actually moved to the United States.
Steven Bartlett: You know this photo here? You've got a kid — this is you as a child, beaming, ear to ear. Often when I see photos like that, my curiosity is about what you can't see, what that young boy is not saying but feeling underneath. What was happening?
Adam Neumann: I think the challenge started in the house. We talked about my mother being bipolar. I only observed my mother's moods when we moved to the United States. There was no one around — it was only my mom and my sister and I. All day she would work with patients, and at night at 8 p.m. she would come home and all hell would break loose.
I remember this: she would tell my sister and I we had to wash the dishes. That was our one chore. And we wouldn't — no matter what — because kids sometimes rebel by action when they can't rebel by words. She would come home, see the dishes weren't done, take them and throw them on the floor. Then she would cry and start cleaning them and mopping. Every night ended with some version of that.
For two years, I remember how crazy my sister and I thought the whole experience was. We didn't have any friends who were sharing that experience. Until one day she bought a nice set of dishes. She comes home again to throw the dishes, and we notice she's only throwing the cheap ones — not the ones she liked. That gave us a little hint that maybe there was a little more control over what was happening than this out-of-control situation suggested.
In hindsight, I know my mom and my dad very well. Probably there was a lot of arguing in the house. As a child — and I now see this with my very young kids — a child finds it very confusing when the parents are not aligned as a team, because as a child all you have to lean on are your parents.
But I think the most important thing to say is: if my mom wasn't the way she was, and if I didn't go through all those challenges growing up, I wouldn't be who I am. We're talking about bipolar — there's a lot that comes with it. Almost every single thing, if you took a piece of paper and had to put a check mark for every bad thing we think can happen to a little boy, you get to check almost all of them — including the really bad ones that we don't like to talk about.
As bad as that was, when I was 22 or 23 I remember being very angry about my childhood. Only when I met Rebecca — my then girlfriend, then wife — she very quickly introduced me to a spiritual practice. The way she introduced me, by the way, was after a week of dating. She came to me and said, "Look, you're really nice. You have a lot of potential, but you're not the guy for me." I was very surprised. I was living in New York. My sister was a supermodel. We were hanging out. I thought a lot of myself. I said, "What do you mean I'm not the guy for you?" She said, "Well, you don't have a spiritual foundation. You're very focused on material things. You want to be successful, but you're not actually understanding the game of life. The guy I'm interested in is going to want true happiness and true fulfilment. And true happiness and true fulfilment does not come from material things."
It was so different from anything anyone had ever told me that instead of running away, I thought for a second and said, "Well, how would one come to explore this spiritual life you're talking about?" She said, "You need a practice." For me, that practice started with Kabbalah. But for all of us, there can be different practices.
The thing I learned very quickly in the practice is the difference between meant to be and free choice. A lot of people don't understand it. How can there be free choice and things be meant to be at the same time? The way I explain it: you get to a fork in your life and you choose left over right and everything works out — meant to be. You get to that same fork and you choose right and you crash on your face horribly. Everybody's watching. And you stop, and you actually learn lessons from it, and you take accountability and say, "Whatever happened to me happened for a reason and I'm going to learn from it. I'm going to be stronger." Almost like a sword that's getting forged — the more times you hit it, the stronger it gets. Then you learn those lessons, you go back into the game of life, and you apply them again. Suddenly you take the catastrophe or the tragedy or the curse and you make it into a blessing. You turn it into a meant to be.
When the world did crash on me as an adult, it was nothing compared to what I had to deal with as a child. I was like, it's okay. I have a wife. I have kids. I have close friends. We'll take a deep breath and start from scratch again. That kind of fortitude, I think regretfully, comes through going through very difficult things. So if you're listening right now and you're going through something really difficult and it feels dark, I encourage you to remember that the darkest moment of the night is a second before dawn.
Sharing what has rarely been spoken publicly
Steven Bartlett: I feel like there are things in your early context that you haven't shared before, because you said there are things we don't usually share. Not publicly — but meaning you have shared some of them in front of employees at WeWork?
Adam Neumann: I used to share everything in front of our employees at WeWork. There are things I shared in front of 10,000 people that I'm not sure ever made it to the press.
Steven Bartlett: What is missing? You really want to go there?
Adam Neumann: If you're happy to, I'm happy to. I'll share two things that I'm not sure have been shared, and that maybe could be helpful for other people going through similar things.
When someone's bipolar, they get very angry or very happy very fast. When they're happy, they're the happiest — you have fun and everything's amazing. But I think what also happens a lot with bipolar is the suicide threats. And there's one thing when you threaten to. So again, if you're two children and your only parent threatens to commit suicide — who is going to take care of you?
I have a lot of memories, but one that came back to me not too long ago. We're in the kibbutz, which is where we were living after we came back from the US. My mom wanted us to have a special experience, so we went to this community where everybody shares a lot of things together. It's also the beginning of why I love communities. We get into this big fight and my mom basically says she's going to kill herself. She takes a knife — I remember she's holding this huge knife. I'm saying, "No, no, don't do it." I remember just feeling that I have to stop it, that it is up to me, and if I don't stop it, she's going to kill herself right there in front of my sister and I. So I grabbed the knife and we're fighting. My sister is sitting right there, crying. My mom is saying yes, I'm saying no. The whole thing is so crazy.
Steven Bartlett: How old were you?
Adam Neumann: Twelve at that moment. That's one. There's more if you want to go deeper, but that was one.
Steven Bartlett: I invite you to go deeper.
Adam Neumann: When I was between second grade and fourth grade, I was sexually — I think you call it molested — by someone older than me, a teenager. She was at least six or seven years older than me. This one I didn't even know that what was happening was wrong. Many years later, Rebecca and I are in the Hamptons and somehow the story comes up and she says, "Adam, understand that this is not normal for a child at that age." I didn't even fully understand. And that explained to me a lot about children.
We go back to the responsibility of parents, the responsibility of society, to take care of children — and schools to understand what's happening. Whenever we see anyone, we are so good at walking into a room and judging. "Oh, they're not acting the way I would act. They're not speaking right." Everybody's so busy judging everybody. I want to encourage every single person: next time you're about to judge, you don't know who that person is. You do not know where they come from. You do not know what happened to them as a kid. God forbid they were molested. God forbid they dealt with all these things. You don't know where they started. You only know where you see them now. And it could be that if you really got to know them and knew the distance they went from here to here, you would have been extremely impressed and you would not have measured them that way.
This is why I think it's so important for all of us when we walk into rooms to really go after unity. You and I can say the same sentence in a way that tears people apart or brings people together. It takes more effort to speak in a way that brings us together. But if we don't start acting like this, if we keep dividing and keep splitting, I'm worried.
Steven Bartlett: It sounds like as an adult you've been able to understand that early experience and create a new perspective or lens on what happened to you and what it means. And as you said, you've orientated it around the fact that it happened for a reason, or at least there's something to have learned from it. Was that always the case? I sometimes reflect on my own experience and think that for the first season of my life I was dragged, and then at some point I got hold of the steering wheel and was able to drive — one was unconscious, the other more intentional and thoughtful. Through your early teens and twenties, did you have the wisdom and perspective you have now on your early experiences?
Adam Neumann: I probably went to sleep crying every single night until I was 14 or 15. And my sister told me — I completely forgot this — that I used to tell her that one day I'll become very successful and I'll take care of us. That was what I used to say. I literally didn't remember it. She told me. I think that's how I interpreted control and how I was going to fix all those challenges.
We launched a school — Rebecca and I, more Rebecca, I helped. It's a fifth school. In the school, we teach kids how to be connected to themselves, how to be part of something greater than themselves. If someone had just taught me this as a kid and I had understood then that there's this bigger picture, I think I would have been able to handle it a lot better and skip the challenging years faster — move faster into the point where I realise that I don't control what happens, but I can control how I react to it.
So back to your point of driving — are you driving?
Steven Bartlett: I don't know. Now you've made me question it.
Adam Neumann: I would question it. My follow-up question to you would be: how do you define success?
Steven Bartlett: My definition of success these days — it's funny, I was thinking about it this morning when I got on the lift on my way here. My fiancée turned to me this weekend and said, "Steven, I think you have enough now." Then she paused and retracted the statement. But it got me thinking about what enough is. I thought: it's the motion forward in the pursuit of goals that matter to me, that are challenging, surrounded by the right people. That is the success. And that's a daily thing. There's no podium in this game I'm playing.
Adam Neumann: When she said she thinks you have enough — was she referring to material things?
Steven Bartlett: Yes.
Adam Neumann: I think society has taught us that once we gain that success, once we gain those material things, once we get to this number, suddenly that hole that we all feel inside of us will be full. Now, I know it's very hard to hear, especially for people who haven't gotten there — "Oh yeah, you got there already, so now you're saying it." I'm only going to share with you what I have learned, and from all the most successful people that I know — and I'm lucky to know quite a lot of them — I have not seen one that got happy or fulfilled from attaining a number or a material thing. I don't believe that's how the game of life works.
So when your fiancée said — which is not like her, because I think she's more on the spiritual side, tell her I said I'm surprised she said that — I think she had something deeper to say and she was holding back. I would really go back to redefining success.
I'll tell you how I define it in a second. But I think if we can agree on the definition of success, then we can start having a discussion: are we there, and are we headed there? And how do we do better to get there? If we agree on our definition of success, we can start working together towards the same goal. If one of us defines success by making the most money and the other person defines success by being the most fulfilled, the most happy, the most light they can be, then we're playing two different games.
Steven Bartlett: What's your definition?
Adam Neumann: When you're at your deathbed and you're one minute before it's all going to go and you know you're out of time — all you have left is the love that surrounds you at that moment. Your children, your grandchildren, your friends, your friends' children. All the love that surrounds you at that moment and all the love that you have cultivated for your entire life. And I think it's that love which then moves on to whatever it is that happens after.
So my definition of success is: in that last moment right before you go, how do you feel? Do you feel full and surrounded by love and like life has been this amazing journey? Or is there regret?
And I'll tell you the one thing that happens right before we pass away — the ego goes away completely. No more secrets. And again, in spiritual study, you ask: what's the definition of hell? You get to glimpse for a second the ultimate potential that your soul had — perfect as it was — and how high you could have gone, and where you really got to. And the distance between those two. That's hell.
The founding idea of WeWork
Steven Bartlett: When you were 31 years old in 2010 and you sat down with your partner Miguel —
Adam Neumann: Miguel McKelvey.
Steven Bartlett: — and you made this sketch on a whiteboard for WeWork. If I'd asked you then what your definition of success was, would you have turned to me and said love? Or would you have said something else?
Adam Neumann: I believe I would have said something else. My big shift is when I met my wife. So by this point — this picture you're showing me — I was four years into Rebecca teaching me about the game of life. So I'm starting to get advanced. It wouldn't have been love, but it would have been "we" and the point above. Because if you look at that picture, it's going to say WeWork, WeLive, WeGive, WeShare — I don't remember exactly, I haven't seen it for about 10 years. It was never about desks and chairs. It was always about creating a world where people make a life and not just a living. It was about something greater than ourselves.
Steven Bartlett: If we jump backwards in time from that day by about 10 years — if I'd asked you what you wanted to be when you were older, what would you have said?
Adam Neumann: At 21? It's embarrassing. I'm embarrassed for my 21-year-old self.
Steven Bartlett: What did you want to be?
Adam Neumann: A billionaire.
Steven Bartlett: You wanted to be a billionaire at 21. Why?
Adam Neumann: I thought that making the money was going to compensate. I thought it was going to fill that hole from my childhood. What about at 16 if you'd asked me? I think I said millionaire there. I don't think I knew the word billionaire at 16. But I thought that making money would solve it. Then I did three businesses afterwards that did not succeed, until I met Rebecca. And Rebecca was like, "You're chasing money. You will never have it. And even if you get it, it will never make you happy."
She said, "Chasing money is like chasing cool. You're cool — you just are like that. You didn't chase it." She said, "You're chasing money. It doesn't work like that. Also like chasing a girl — if you really want someone, you have to take a deep breath." But she said to me, "Even if you were to get money the way you're chasing it, it will not only not fulfil you, it will be negative for you."
I said, "Well, what should I do?" She said, "You're a very talented individual. You should figure out what your superpower is." It was the first time I'd heard anyone use the word superpower. She said, "You need to take your superpower and connect it to something that's really meaningful for the world. Something you're passionate about, but something that can make a difference. You need to bring those two things together. You need to only focus on making that a reality. Employees will want to work with a company that's doing that. Investors want to invest in a company that's doing that. Consumers want to buy from a company that's doing that. The rest will follow." Then she said, "Success — the way you define it then, that money success you think is a goal — will fall on you from the sky more than you can ever imagine."
I was like, I want to marry this woman. I proposed three months after we met.
Steven Bartlett: And the idea of "we" was central to this drawing that I have in front of me — a drawing you did on a whiteboard when you were 31 years old, in 2010, with your partner Miguel, after selling your company. I think it was called Green Desk.
Adam Neumann: Green Desk.
Steven Bartlett: You sold it for how much?
Adam Neumann: $1.5 million. There were three partners, so we each got half a million. But our partner didn't want to pay us the whole amount up front, so he only gave us $300,000. The rest was in instalments over four years for Miguel and I. And I remember telling Miguel, "Miguel, you keep the money because I'll waste it. First time I ever made money — you keep it and we'll keep it for our next business."
And the way the universe works — the signs start happening, one thing leads to another, it's almost serendipity. Our first WeWork building: to get the building, the landlord wouldn't give it to us unless we gave a cheque of exactly $300,000. The same $300,000 that was sitting in Miguel's account. It went from there to there, and WeWork was created.
The Green Desk origin story and the WeWork vision
Steven Bartlett: So tell me what that is. We're in Green Desk — just to remind everybody what Green Desk is.
Adam Neumann: Green Desk was created in May of 2008. The world was crashing — that was the downturn. Before it started, Miguel and I got to know each other. He was an architect and I had a baby clothing company and we were in the same building. My roommate introduced us and we would just talk about doing great things.
There was a landlord there and every day he would see me and say, "Adam, your baby clothing company sucks." I said, "Mr. Gutman, why do you say that?" He said, "Well, my wife — we have eight kids — she loves buying baby clothes. She didn't once buy from you. I don't know how you pay me rent. Your baby clothes suck." And I would say, "Well, Mr. Gutman, you own all this real estate around here." He goes, "Yes, I do." I said, "Your real estate sucks." He goes, "Why do you say that?" I said, "It's all empty." We would do that for four months back and forth.
One day he looks at me and says, "Adam, if I gave you one of my buildings — you keep saying it sucks — what would you do with it?" So he takes me upstairs and shows me this beautiful floor plate. I said, "How much do you get in rent?" He goes, "$5,000 a month." I said, "Well, it's empty, but let's say you would get $5,000. Look, I'm a small business — I don't need this much. Let's divide it into 15 small spaces. We'll charge $1,000 each. We'll put a receptionist. We'll pay the receptionist $2,500. We'll get $15,000. That will leave us with $12,500. You will get $7,500 and we'll get the difference." He said, "Let me think about it."
He calls me the next day. He goes, "I love it, but instead of one floor, take the whole building." It had five floors. "We'll put the receptionist downstairs so we can share the expenses. It will be even better." We put five ads on Craigslist. We launched Green Desk. It was 92% full within a week, started cash-flowing positive within a month — which was a new thing for me, because this was my fourth business and I'd never had cash flow positive before — and became very successful very fast.
After about six, maybe 12 months, we started thinking bigger. Miguel and I said we'll take this national. We went to our landlord and said we want to expand. He wasn't interested. We asked for $20 million, said we'd split the business 50/50. He wasn't interested. So we started planning to go out on our own, and very soon after he said he'd buy it from us. And we started planning the next thing.
Miguel drew this on the wall — not even a whiteboard. The walls were made of glass. This was drawn on the glass. All of our walls in Green Desk were also whiteboards because everybody was about creating and inventing. What you see here is social life, commercial, friends. This proves the fact — Ben Horowitz, in the interview he did with me on the podcast, says to me, "Adam, you've always had one idea." And then at the end he apologised and said, "Adam, I didn't mean to say you only have one idea. Of course you have all these ideas." I said, "Ben, you're right. This is not that different from what Flow is. This is all about the friends and all about the living and all about the working life essentials."
For anyone watching or listening who can't see: it's a circle that has lots of circles in it. The little circles are things like travel, health, social life, friends, co-workers, supporters, life essentials, work rituals. And this was the idea for WeWork. So sometimes people said, "Oh, you grew out of desks and chairs. You shouldn't have gone to all these categories." The idea started here — this was before there was one desk.
We wanted to make a world that really needed community. This was to deliver on a mission of creating a world where people make a life and not just a living. This was a full lifestyle, life circle, and it was very aspirational.
And it's how — for anyone starting a business — you should start with a vision. Dream as high as you can. Go all the way to the stars. Because if you don't shoot for the stars, you're never going to get to the moon. Go far. Then take a deep breath and go back to basics. What do I need to do first? What do I need to do second? What do I need to do third? The secret of life and entrepreneurship is to be able to be in both places at the same time. On the one hand, I'm going to go so far. On the other hand, I'm just starting, so I better roll up my sleeves and get the broom and start sweeping. I need to go knock on doors. I need to go meet people. I need to do whatever work needs to be done at the beginning to get the business started.
Why dreaming big matters — and the mechanics of belief
Steven Bartlett: Let's talk about both then. You've got the trenches and you've got the clouds, or the moon as you refer to it. Why is it important to dream big? Why does the scale and size of the dream matter?
Adam Neumann: I believe it's the secret of manifestation. When people ask me, "Adam, what is the secret of manifestation? How do you make something out of nothing?" I think the order is: first you have to believe. If you and I have a big idea, first we have to believe it. True belief, by the way — do you know when belief is measured?
Steven Bartlett: No.
Adam Neumann: When it's really tough. Belief is not measured when everything is going up and everybody's telling you what a genius you are and everybody wants to be your friend and everybody wants to be your investor. Belief is measured when it's all crashing.
I remember this — and I've shared this story before, but your audience is so wide that I'm sure a lot of them haven't heard it. When right after the whole explosion of WeWork occurred and it was like five days in and the whole thing was crashing and there were a million articles — my spiritual teacher, who I hadn't spoken to at that point for almost two years after studying with him for eight years, calls me. He said, "Adam, how are you doing?" I said, "I'm not doing so well right now. It's crazy." He said, "Oh great, that's why I called you." I said, "Why did you call me?" His name is Eitan. I said, "Why did you call me?" He said, "I called you to make sure that you remembered the two things we learned for eight years." I said, "Eitan, we didn't learn two things for eight years. We studied twice a week. We learned endless things." He goes, "No, you missed it. We learned two things." I said, "Please remind me." He goes, "One was: love thy neighbour as yourself, and the rest is commentary."
Steven Bartlett: Such a famous saying. We've heard it so many times. When I think about it, the way I understand it is to have empathy and compassion for all of the complexities — both the good, the bad, the indifferent, and that which you don't understand — which is like how I would treat myself. I understand that I'm a complex person, multifaceted and imperfect, and I have strengths and weaknesses and I'm okay with all of it. And in others we're less okay with all of it.
Adam Neumann: Beautiful. Let's say it in a little different words, but that was right on. "Love thy neighbour" means that you first have to love yourself. To love yourself, you have to acknowledge not only the great strengths that you have and that you love — you must acknowledge your weaknesses, your failures, your mistakes. And the only way you can love yourself after all of those is if you're able to forgive yourself. So the true secret of loving oneself is to forgive yourself, to not carry guilt, to really be able to know that all of these are lessons for you to grow and change and go to your next level. Back to the sword analogy — you're a sword getting forged, and every single time you get hit, you just get stronger. Once you feel that and you're able to love yourself, then you're able to love everybody else.
That was the first thing he told me we learned. The second thing he said — which we said before — is: I want to remind you that the darkest moment of the night is a second before dawn. Belief is not measured when everything is going up. Belief is measured when it's all crashing, when even your friends are questioning you, when the phone is not ringing. And if a person is able to have true belief, then — he says to me — if you're going to be able to take this experience and really hold your belief, hold your positivity, hold your happiness, be the person I know you can be, you can't imagine what the future has stored for you.
Steven Bartlett: What did you believe in in your hardest moment?
Adam Neumann: In God and in myself, in my wife, in my kids, and in the fact that even though I don't know at this moment why this thing happened, I am going to be stronger for it.
I remember that morning — this phone call was late at night. The next morning at 6:00 a.m. I walked down to my three employees. I went from 13,000 employees to three employees in one week. I walked down to the three employees who were my partners in the family office — not even employees, partners. I walk down to them and I'm smiling, and they're stressed out. We would meet every day at 6:00 a.m. They were saying, "We're done. We're bankrupt. It's finished." They had only joined me three months before. They came to manage what they thought was a $5 to $10 billion family office, and they're dealing with a negative $400 million compounding interest, full bankruptcy situation.
I thought about a lot of friends — not all, but a lot — who were really there with me and enjoyed with me and grew with me and made money with me. When I really needed that one small moment, a lot of them weren't there. And these three almost-strangers who I didn't really know were standing right there by my side. They see me smiling. "Adam, why are you smiling?" They thought I'd really lost my mind. And I said, "I'm smiling because I remember that the darkest moment of the night is a second before dawn. And I remember that belief is actually measured when things are difficult, not when everything is working. And I believe — and I know it's going to work out. I don't know how and I don't know why, but this is all going to work out for the best. And we're going to learn a lot from this and it will actually prepare us when a real difficulty happens. So we're ready to go and deal with it." And about 10 days later, we started coming out of it in a very positive way.
On friendship, loyalty, and falling down
Steven Bartlett: I noticed your energy shift a little when you started describing those three people.
Adam Neumann: Here's another thing I've learned. If you haven't faced this yet — if you're going big — I bet you have lots of friends. But how you define friends — we're only going to know which ones are your friend and which ones are not if, God forbid, you crash and you actually need them.
And I can also tell you: if you're going to crash or not — if you go big enough, really really big, you crash. Whenever someone says, "Oh Adam, it's never going to happen to me. My ego is never going to get the best of me. I'm always going to stay in control" — young, successful people like to say that to me. And I say, "Oh, you haven't gone big enough." Because if you really, really go big enough, that's part of the definition.
Life is not about if we fall down. We're supposed to fall down. Life is about how we get up. And the more times we fall down, the more times we get to get up. And if you practise getting up enough times, then you might not fall. Then you get very good at it. And then you can really go for the stars.
With the friends — the reason my energy changed about those three is I didn't know them that well and they stuck by me. I have a weakness with loyalty. I'm very loyal. So if you were there for me when things were tough, I'm a sucker for that. I'll be there for you even if you mess up, to a fault almost.
Steven Bartlett: A lot of founders who start businesses have this thing that pop culture calls imposter syndrome — they doubt themselves. This sits in contrast to this idea of having belief, because sometimes they don't believe and they are plagued with insecurities and doubts. They think, "Really, am I the person to do this? I've never done it before." What do you say to those people who are struggling with doubt?
Adam Neumann: A fascinating question. My level of certainty was so high when I was doing WeWork. I was sure it was going to work. A lot of times I think people confused my certainty as a different word. I was just that sure that the product is needed for the world.
WeWork's meteoric growth — what drove it
Steven Bartlett: WeWork grew astronomically quickly, really atypically quickly, especially for that type of company. I wanted to hear directly from you — why? What were the factors that contributed to this meteoric rise? A couple of years after you founded the company, I became a customer of it, both in New York and in London. What didn't I see? What was it?
Adam Neumann: WeWork started in February of 2010. I think this is the way that it should and could work. From the first day, we were so clear — as you pointed out with the circle — on the fact that this mission is bigger than us. And when you're part of a mission that's greater than yourself, urgency doesn't just become something like "we have to do it now because I said so." When you feel that your mission really needs to come out to the world, then you have to do it now because there's no time to waste because it's really important.
Part of my energy is I bring people together. I really like creating community. I also love to move fast when we're clear on the direction we're moving, and I don't believe anything is impossible. So when you connect that mission of something being greater than yourself, speed, and not accepting a no — you put those things together and real magic happens.
But before the example, one more thing that made WeWork what it was: the team. The team was so dedicated. The team believed so much. It was their essence. It was their experience of being part of something greater than themselves. And when you can bring a group of people together to all run in the same direction, you almost can't stop anything.
Give you an example. It's our second WeWork building. We need to do the floor. We only had $90,000. All the quotes were $200,000 a floor, whatever the number was. I said to Miguel and to the few people there, "We have to do it for this price." They said, "You can't. We got five quotes. That's not the price." I said, "Well, how much is the floor?" Everybody said the floors were between $30,000 to $45,000 — these were wood floors, an important part of the design. I said, "Why?" They said, "What do you mean why? These are the quotes." I said, "Well, can you break down the quote for me? How many pieces of floor? How many nails? How much glue? How much rubber? How many hours of work per person? How much does each person cost?" No one could answer.
I said, "Okay, I have an idea of how we can negotiate this differently." I called the top three guys and said, "I would like you to earn 15% above the cost. I think that's a fair margin — 15%. Do you agree?" All three of them said yes. I said, "Great. Well, I'm going to need to see the cost of each piece. I'm going to go quote it myself and we're going to get to 15%." Very quickly, the cost went down. That first floor, instead of $30,000 to $45,000, was $12,000. The guy tells me, "Adam, no one's ever worked with me that way." Before you know it, they joined us and we had our own internal construction company, and we realised that only by controlling it could we get the right price and move fast enough.
Steven Bartlett: Elon would call that reasoning from first principles.
Adam Neumann: He would call it like that. And from what I know, in Flow we look up to Elon as an entrepreneur. We think he's unbelievable. Whenever someone gives Elon as an example, we say no one is Elon — that's not an example we use. We just look at him for inspiration.
I happen to know that he can put an engineer to work on one problem for six months — one screw, one connection — but the result ends up being not twice as simple as anything NASA has done, but like 500 times as simple and cheaper and faster and lighter.
You can call it first principles. You can call it asking every question. But if you're the entrepreneur, if you're an employee or a partner — ask why. People don't, because they don't want to be rude or inconvenience others, or they're too concerned with being liked. I'm going to try to say a different reason why they don't: they don't ask themselves why. A person who's comfortable asking himself why he's doing something — questioning himself, seeing negative things, seeing problems, and then enjoying the process of growing out of them — will have no problem asking someone else why.
And whenever you ask someone why and they don't want to answer you — what are you hiding? I usually when I go into topics like this start by telling the vendor, wherever it is: "I want you to make money. No one's trying to make you lose money. But we're on a mission, and if I'm going to pay even 20% more than I should, then that's 20% less of another building, another community, another neighbourhood that this floor is not going to take part in."
Steven Bartlett: This really does make a lot of sense to me. We have this Slack channel in our company called Paper Walls. The whole idea is that we're trying to encourage our team to push on paper walls. A paper wall is something that looks solid but reveals itself to be completely made of paper the minute you try it, ask why, push on it.
There's a story of a kid that worked for me in one of my companies for four years. He animates video. I said to him, "How long is it going to take you to animate a video for us that's 30 minutes?" He said, "It takes nine days." He worked for me for four years. It took him nine days to animate a video. We decide we want to launch a weekly channel. I need him to do it in three or four days max. I say to him, "How long is it going to take you?" He says, "Nine days." And then because we had established this culture in our company of pushing on paper walls, I said to him, "Why?" And do you know what he said to me? I said something like, "What would it take to do it in two?" And he went, "Steven, you just need to buy me a new laptop. I have an old laptop." I thought, I've been paying him for four years and he's been — think about how much time I've lost in those four years simply because I didn't ask that question. But also to your point, he never mentioned it. He never knew he was in a paper wall himself.
Adam Neumann: First year of WeWork, we opened one building. Year nine of WeWork, we open two buildings a day in 130 cities, 50 countries, 70 languages, 100,000 square feet per building. So that's 200,000 square feet a day — 20,000 square metres for your European listeners — a day. A lot of the same people who were only capable of doing the one or two buildings were leaders by that time of one of the fastest physical global growths the world has ever seen.
Same people. As you learn — in your words — to go through paper walls, as you learn that anything is possible, suddenly this is the secret of high growth and momentum. Whatever you can do today, if your company starts growing fast, you'll be shocked what you'll be able to do in three months, nine months. And in two years, you're going to look back and not believe that was your capacity.
I keep telling people and they tell me, "Oh, I can't do this. This takes three months." I say, "Guys, I've seen this done before. I know we can do it. It's easier now. I've already been there. Now you just need to believe." And it goes back to the belief. Then we're going to need to put the systems and the processes in, and today with technology — and this is where I think AI is very exciting — you could shortcut a lot of these things and do much better work.
But back to what you said about your company — when's the last time you sat with your team in a circle?
Steven Bartlett: About 200 in total.
Adam Neumann: So 200 is a big number, but if you took 30 of them, sat in a room, and actually asked them: what are you working on personally? What is your internal paper wall? What is your internal challenge? What's stopping you? And they got comfortable talking about it. Then as a group, first of all, all their peers would hear, and before you know it, their peers would help them. "Hey, I remember you said this is a challenge for you — you're insecure, you don't talk in public, you're a little judgmental, you're too hard on yourself." Every person has another story.
Before you know it, the moment you get them used to growing internally, it will affect your business to grow externally. In WeWork, the business grew faster than I could grow. That's where everything went wrong. I actually think whenever a company grows faster than its founder, one of two things will occur. Either it will crash — because that's what happens — or if somehow miraculously that founder is able to keep it all together, in my experience they're not fulfilled and happy. And if they're not fulfilled and happy, why do it?
Hard work redefined — and the importance of being 100% in
Steven Bartlett: How important is hard work for the founders listening, and for the people that want to build? Because there's a real debate around it. Some people say work-life balance is the ultimate. Some people say if you're a founder, you've got to give 100-hour weeks.
Adam Neumann: It is the most important thing. But we have to define hard work. Hard work as a founder is not just limited to how many hours you put in the office. Hard work as a founder is: how much time do you put on the business? How much time are you putting on yourself? As you grow, you will be a better leader, a better money raiser, a better expresser of your business. So hard work is the only way to do it, and you can't be 50%.
And here's something else that your founders know. When I had to decide if I'm doing Flow again or not, the reason it was so hard is because I knew there's no such thing as being 80% in or 90% in. Either you're 100% in and you're all in, or it's not going to work.
So how important is hard work? Most important thing. What is hard work? Some of it is on the business, some of it is on you. If you're married, it's also on your relationship. If you have kids, it's also with your kids. By the way, for those listeners who have kids — if you're ever wondering what you need to work on, just listen to your kids. They know.
Steven Bartlett: You're alluding to this magical thing that happens when one focuses on something. You were saying if you're 90% in it doesn't work, but if you're 100% in it works. What is the magic that isn't obvious with that?
Adam Neumann: When you're 100% in, there's no time for doubt. There's no time for questions. There's no time for fear, because you're so in it. When you're thinking, "Oh, I can find this work-life balance while doing it," you're not going to do something great. And if you were to achieve something, it's not close to your potential.
But again, I'm redefining what 100% in means. We talked about Warren Buffett — was he not 100%? Of course he is. Does he have a full schedule? No way. He keeps it open so he can have the important meetings, so he can read, so he can connect. There are different ways to be 100% in. But you must, in my opinion, be 100% in.
It's why I love surfing. In surfing, when you're on the board on a wave, if you're not present and you're not in flow, you're knocked off that board.
Steven Bartlett: What about founders that are doing two different businesses, pursuing two different missions?
Adam Neumann: Remember what I told you? We say in Flow: you're not Elon. I would tell them you're not Elon. Elon can do two different — very few people can. He's one of the only examples I have. Jack Dorsey. Some of the best on the planet can do it. But it's very hard to do two businesses at the same time. It's hard enough to do one.
And even in those cases, they built up tremendous resources by doing one really, really well. Where I've met people doing two that are somewhat succeeding, they're spending no time on their own personal growth. The extra time they have, because they did their first business so well, they're using it to do another business — which usually in my experience is an excuse not to actually experience life for what it is. If you're already doing one and it's meaningful and it's fulfilling, why do you need another? What are you hiding from? What is it that you're not actually doing? That would be my question.
Choosing the right investors and partners
Steven Bartlett: We often say, in one end you're saying go fast — and I hear that from great founders like yourself and Elon — go fast, push on paper walls, go as fast as you can. But then there are other areas where you go, you have to go slow to go fast. Also know your weaknesses.
Adam Neumann: I obviously did not succeed in building great technology in WeWork. That is a known fact. So if I'm going to partner again and build a business larger than WeWork, I need to put the right partners in place.
Steven Bartlett: Know what you don't know.
Adam Neumann: Know what you don't know and let them lead. When we hired our CTO, we had four different CTOs. I'll let Ben do the final interview.
Steven Bartlett: Okay, this is what I was going to ask, because one of the things I hear from founders a lot is: they know they don't know X — let's say it's finance — and then they do an interview with someone and the person says, "I'm the best at finance." They have no idea if that's true because they don't know finance. So what did you do to mitigate the trap of accidentally hiring someone whose competence you weren't able to assess?
Adam Neumann: I chose partners that say the truth. When Mark and Ben and I do a board meeting — and Mark is our board member and Ben joins us —
Steven Bartlett: For context, Mark and Ben are two of the world's most famous investors and they have backed you with your new venture, Flow.
Adam Neumann: Mark and Ben have invested $470 million into Flow at the Series A and Series B. And I, Adam, and my family personally invested $350 million, because part of when we created the business together, we wanted to be aligned. We buy together, we sell together, we do everything together.
We have our board meetings. They usually start at 8:00 a.m. and end at 5:00 — very long board meetings. We talk about everything. We love it as a team. We really respect them. We truly prepare for these meetings. We don't spend too much time, because when you're really busy you don't have time. So it's not like we spend a month — we go a week before, look, take stock of everything we did that quarter. It's always shocking to see how much you did, because when you're not really measuring, you're just doing. When you stop for a second and look at what you did, you think, wow, we did quite a lot in three months. Very useful.
We put together our board decks. We send them a few days before and they actually read them. Then they come for the meeting — 8:30 to 5:00. When it's done, I go to dinner with the two of them. And the dinner starts by me saying, "Please tell me what I can do better." The first time I asked them, they were a little bit uncomfortable. The second time, I literally remember Mark Andreessen going like this — like he was ready. Ben taking out his notes. That's a true partnership, and we do it every single time.
And when you have — I want to say it again because I think it's worth it — Andreessen Horowitz, in my opinion the number one investor on the planet. If you're an entrepreneur today and you can, that's who you want your money from. If you're an entrepreneur today and you take it from Benchmark — the company that took me out, that took Travis out, Jack Dorsey out —
Steven Bartlett: Travis from Uber, Jack —
Adam Neumann: Travis from Uber. Jack Dorsey from Square, Twitter, Block — and many more. So when you choose your investors, look at their history. Are they the kind that support entrepreneurs like you? Are they going to take you to the next level? Or do they have a history that actually clashes with the entrepreneur? If they have a history that clashes with the entrepreneur, park them.
So there were two key things I pulled out from there. The first was around this idea of knowing when to go fast and slow — you used technology as an example. The second, which opened up the story about Andreessen Horowitz, is the right people and partners.
Steven Bartlett: So important — more important than anything, if I had to choose one. Right investors, right employees, right partners. Most important thing.
Adam Neumann: What did you learn about employees? What is a great team member?
If I have a problem with an employee, there's only one person to blame and that's me.
Steven Bartlett: And what are the mistakes that you made in choosing employees?
Adam Neumann: I think it's how I was leading that I've been learning more about. Where I used to lead from top to bottom, I'm now learning how to lead bottom to up.
Top to bottom means you think that because someone reports into you, they have to do what you say. But it's not true. This is not a dictatorship. They have free will. They can go work elsewhere. If they're talent — if you hired someone really talented — they'll go work elsewhere. Especially with great leadership. The more talented they are, the more the top-to-bottom approach does not work. They won't be willing to do it. They shouldn't. Great talent is not willing to be managed like this. Great talent wants to be inspired, wants you to see the full version of themselves even more than they see it. And they want the room to make mistakes, but also to grow. But they also need feedback.
If you have someone amazing and they're messing up — are you going to tell them? Or because you're not comfortable with conflict, are you going to wait for 90 days, and every time they make that mistake you're going to get so upset that by the time you communicate to them, it's too late? The moment they made a mistake, if you respect them, give them the feedback. That's the best thing for them. And when you give them the feedback, give them room to give you feedback back.
If you're going to manage these employees and you want to attract the best talent in the world, remember that power comes from influence, not control. If you think they need to do what you say because you're their boss, you've already lost — it's a matter of time till it doesn't work out. If they're okay with it just because you're the boss, they're not the right employee for you and you're not the right boss for them. There's no chance you're getting the best out of them.
The day Adam Neumann met Masayoshi Son
Steven Bartlett: One of the parts in your journey that I have reflected on a lot is the day that you meet Masa at SoftBank. I'm keen to understand the context of where the business was before you met Masa. Where was the business at?
Adam Neumann: It was 2017. I want to tell you about the day I met Masa and I'm going to connect it to what I think is the biggest mistake I ever made in WeWork. I'll bring it together.
Masa is one of the best investors in the world. He's also one of the biggest investors in the world. In my story, Masa is the hero — even though a lot of people who didn't know the story correctly might have misunderstood. Masa took a bet on me and he did amazing, and he deserved to have become very successful from it. He leads SoftBank.
A little history of Masa: he becomes very well known to the world when he buys a tech conference in Vegas for about $880 million. At the same time he has his own tech businesses and owns a phone company and starts growing and growing. He's famous for going to Steve Jobs when the iPhone just came out, knowing it was going to be a hit, and saying, "I'm going to give it to every subscriber in Japan." He invents the leasing model for it and gives an iPhone to everybody. Then everybody signs to his service because everybody wanted the iPhone. And then he gives Jack Ma $20 million that over time becomes — I think — $200 million.
Steven Bartlett: For Alibaba.
Adam Neumann: For Alibaba, which at its peak is worth about $80 billion.
So at the time when I meet Masa, this is 2016. Let's start with the night before. The night before I met Masa in New York City, I have a board meeting. This is the old board and we're all sitting together. I just raised — maybe six months before — at a $16 billion valuation. The business is about to do that year about $950 million in revenue. And the reason I know is because we were doubling revenue every single year. The WeWork business model was working very well and the four walls were working very well.
Steven Bartlett: What's the distinction between the four walls and everything else?
Adam Neumann: When you have a retail business, your stores could be doing really well but the state might not be making money. Let's say you're in New York City. When you're growing as fast as we're growing, you're always putting new buildings on the map. A new building has a ramp-up. Usually the ramp-up of a retail store or a restaurant could take two or three years. We like to talk about ROI — return on investment — and how long does it take. A great time to return your investment would be 24 to 36 months. WeWork at its peak was returning its money somewhere between six and nine months, and then afterwards it was going up to 12 to 18 months.
So if you're going to grow — we grew in New York City to 130 buildings. If the following year you're adding 30 more buildings, those new 30 have to by definition lose money for at least the first six months if not nine months. So you could be very profitable in these buildings but not profitable in these because they need time. Which means New York City as a city doesn't look profitable, or the country if you're looking at your P&L doesn't look profitable as a country. Which is why in a high-growth business you've got to get very specific and into the details and really understand what's working and what's not.
Even in a building you can have one floor that's profitable because you opened it first, and the new floor you opened after is not profitable yet. WeWork's technology was never able to count this way. Flow's technology — if I threw it on WeWork today — I can tell you which square foot is profitable, which building is profitable, which floor is profitable. I can tell you which corner is. It knows everything because it's a connected system, not a disconnected one.
Back to what we were saying. I'm sitting with the board and we decide that we want to turn the business profitable and take it public. How are you going to turn it profitable? All you have to do in a high-growth business that's working is stop growing. You just stop adding new buildings and give time to all the buildings to catch up. In WeWork, your problem was not demand — it was supply. So the moment you don't add more supply, the demand is greater than the supply, everything fills up. The moment everything fills up and you didn't add anything new, you go cash-flow positive. As simple as that.
So we sit in that board and we decide that I'm going to go and raise — the number was $300 to $400 million — stop the growth, meaning stop signing leases, maybe even move to management deals, and then take it public. This is 2016.
At the same time, Masa's right-hand man — his name is Ron Fischer — sends a text to one of our guys and says, "Hey, Masa wants to come see Adam." This is at the same time that Masa is raising the Vision Fund. For those who don't know, the Vision Fund was his $100 billion venture fund — the largest venture fund ever raised. Masa wants to see Adam. We schedule 90 minutes in the morning, the next morning.
As it gets closer to the morning, we keep getting text messages. He's not going to have 90 minutes. He's going to have 75 minutes. He's going to have 60 minutes. He's going to have half an hour. I'm like, "Okay, whatever it is, sounds great." At the same time, President Trump wins for the first time. This is the end of December. And Masa had a meeting with them — they wanted to talk about the future of America. He said, "I'm so sorry. I have a meeting with President Trump and I only have 12 minutes."
We all find ourselves in situations like this — you had all this planned and suddenly it all changes. I take a deep breath. Let's make it the best 12 minutes we can. But I can't help myself. I go, "Tell me something, Masa — if you're meeting the future President Trump, do you have Jared Kushner introducing you to him first?" He goes, "Adam, it's so funny you're saying that. Everybody told me it's better if Jared introduces me. I don't know him. We've been trying to get in touch." I said, "Give me a second." I'm very lucky to count Jared as one of my close friends. Jared is married to Ivanka Trump. I text Jared and say, "Masa is here." Jared says, "No problem. Send him. I will introduce him to the future president."
Now we have seven minutes left. I say, "Masa, we only have seven minutes. We're only going to stay downstairs, but this is WeWork." And he looks at me. He goes like this — smells the air. He goes, "You know what this smells like?" And I'm thinking, oh no, what is he going to say? They were serving waffles. Is he going to say it smells like waffles? He goes, "Smells like dreams. WeWork is not an office space. It's a factory of dreams."
Steven Bartlett: Oh no. Not my language — one step above my language. He took the dreamer and went one step above. He out-did the Adam.
Adam Neumann: He killed it. And I'm like, "Oh yeah, I love the smell of dreams. No one's ever defined the business better than that." He goes, "Look, Adam, we don't have time. I'm driving up to 50th Street. Do you want to come with me to the car? We'll talk in the car."
I get into the car and I remember his team had said, "No investing. Don't talk about raising money." He goes, "So — what's the number?" I said, "What do you mean?" He goes, "What's your valuation and how much money are you raising? I'm here to do business." I said, "Well, your team said —" He goes, "I am the boss. Let's talk about it."
I said, "Well, listen. Our last valuation was $16 billion. We just launched China — that's a $2 billion company. We have Latin America and we're in Europe. We have a global company and then we have a China entity." He goes, "Great. How much are you raising?" I said, "$300 to $400 million." He goes, "That's not going to work. Don't you want to build a global business?" I said, "Of course I would love to build a global business." He goes, "Don't you have a business in China?" I said, "Of course." He said, "What about Japan?" I said, "I don't have a business in Japan yet." He said, "I think it's going to work very well in Japan." I said, "I'm sure it's going to work well in Japan — it's working everywhere — but I don't have the team." He goes, "What about Southeast Asia?" I said, "Sounds amazing, but I've never been there." He goes, "Well, I think it's going to work there." Before you know it, he says, "I think we should do about $3 billion."
That was a big number. Remember, the night before with the board, we were talking about $300 to $400 million. I don't blame myself for any of this. Every decision I made was my decision. He's an investor. He saw a great business and he wanted to go big. I respect that. I've done it myself.
If you decide you have a mission or a vision and you're going to raise $300 million, and the next day someone offers you $3 billion — before you say yes, take a deep breath and ask yourself again: why? What is my intention? What is that going to do to the business? And am I ready to take that much?
We keep talking about all the different needs and different stuff. After this — we met for 12 minutes and the ride is about 16 minutes, so total 28 to 36 minutes — we agree. He says $4 billion. $4.2 to be exact.
Steven Bartlett: $4.2 billion — that he wants to invest in WeWork?
Adam Neumann: WeWork topco, WeWork China, WeWork Japan, and WeWork Southeast Asia. Remember, we were a cash machine. We were doing $980 million that year. We hit our numbers. We forecasted we were going to do $1.8 billion next year. We did our $1.8 billion. The model was working so well. All you needed was cash to build it — to build these spaces if you were going to grow that big. He had big aspirations and I had big aspirations.
We ended up agreeing on $4.2 billion. He takes an iPad, writes it all down — this is all in that same car. He writes it all down, signs his name, and hands me the pen to sign mine. I look at it. I sign. He walks out of the car, says, "Thank you very much," and goes to his meeting.
This is now about 54th Street. Our HQ is on 18th Street. I'm just standing there. I can't believe what just happened. It was not what I planned. And I start walking. I'm going to walk downtown. I'm going to take a second.
The moment everything began to go wrong
Adam Neumann: Until this point — this is 2016, five years of mission-driven work. We had all the right fundamentals in WeWork because we had the right culture. And when you have the right culture, you can deal with any challenge. We were mission-driven. We could break through any wall. We were teamwork. We worked late at night. We were together. We were friends. We were one team.
And I'm starting to walk down from 54th Street to 18th Street. And every step I take, suddenly the ego starts coming up. Oh, $20 billion valuation. Billion valuation in Japan on top of that. Billion and a half valuation in Southeast Asia on top of that. $5 billion valuation in China on top of that. A billion of that $4.2 was going to everybody — including to myself — and I owned about proportionately about 25% of the company at the time. Big numbers. Numbers I'd never seen. Miguel was getting a lot. All our employees. The investors, many times more than they ever invested. From that billion, every step I'm taking, the ego comes up. Oh, I feel so strong. I feel so big. You start doing your own math. $20 billion, 25% — that's $5 billion. Then there's all the other ones. What's my net worth?
And before you know it, the guy that sat in the car was a mission-driven entrepreneur who really believed in creating a world where people make a life and not just a living. Every step that I take, it goes higher and higher. And by the time I walk into HQ on 18th Street, I forgot what we were all about.
Here is why ego is on the one hand very good and on the other hand very dangerous. Ego and desire are the same word. Big ego just means big desire. Having huge desire is important to build huge things. But you have to manage it and control it. When I walked in, I got confused. It suddenly became about the money. All the stuff that Rebecca told me, all the stuff from when we met, all the years of spiritual practice — everything to the garbage.
And what happens when the ego gets the best of you? You become blinded. You make mistakes and bad decisions. In a high-growth business, you need to make 100 decisions a day, and as we said before, at least 98 of them need to be correct. Suddenly you're blinded and suddenly only 95 of them are correct, or 90. Those mistakes, because you're growing so fast, grow very fast also.
The other thing: we were a company led from the top. All great companies are led from the top. The moment I lost it, everybody lost it. And it just spread. And that's the beginning of the end. It took three years after that for everything to unfold, but it was that moment. That was the moment.
Steven Bartlett: Is there anything that could have been said or done to have made you, when Masa offered you that $4 billion in that cab, say no?
Adam Neumann: I used to be closer — we don't speak as much anymore today — to Marc Benioff, the founder of Salesforce. He heard about Masa's offer and he called me and said, "Adam, I only know you for a little bit and I know you're not going to listen to my advice, but I want you to fly to Japan and say no to Masa. I want you to take your company public. What was your last valuation?" I said, "$16 billion." He goes, "Great. I want you to take your company public for $5 billion. I want you to sell 20% — a billion. And I want you to learn how to be a public CEO. I promise you two things. One — because your last valuation was $16 billion, at $5 billion everybody's going to think this is a great deal. People are going to rush to invest, including myself. Two — you'll learn, because it's very different to be a public CEO versus a private one. You're going to learn about profitability. You're going to learn all these things because I think you're a very fast student. And I guarantee you, before you know it, your valuation will be much larger." And he said, "But I know you're not going to listen to me." And I didn't.
Steven Bartlett: Why didn't you listen to him?
Adam Neumann: We didn't know each other for long enough. I think it takes a lot of trust to listen when someone gives you counter-advice. And by the way, there was another person who also said no. But here's what I think is more important about it. Let's say I said no. Let's say WeWork could still be around. WeWork could be a $100 billion company today. Corona would have happened. We would have renegotiated all of our leases — instead of leases, they would have become management deals. And we would have led the return to office. We would have led that concept, because obviously people work better face to face than remote work. And WeWork would have been the leader of the return-to-office movement.
But I, Adam, wouldn't have learned all those lessons. I am so much happier today. Even as we're speaking, I'm noticing that everything you're talking about makes me feel full — even the challenging parts. I'm so happy that they happened because they made me exactly who I'm meant to be.
Falling is not bad. That's the thing that you and I are actually talking about. Falling is probably the most important part of life. And most of us learn a lot more from falling than we do from succeeding. The thing that's bad is not when you fall — it's how you get up. If you just fell and you think, "Oh no, everybody saw me fall," and you hide under the covers for four years until everybody forgets — that's what's horrible. That leads to the tragedy. That leads to the trauma. If you fail, you look around, you're like, "Wow, everybody saw." You clean up, you get up, and you say, "Let's do it again." If you have that in you, nothing will stop you. And it might take 10 times and 20 times and 50 times, but if you fall enough times, then you might avoid falling.
Focus, mission, and the danger of growing faster than you can handle
Steven Bartlett: I'm thinking also about a founder that's 21 years old. They've got a startup or an idea they want to start. When you're in that situation, you've got noise. How do you find the signal?
Adam Neumann: Two ways. One, they have to go back to the mission. If someone offers them something and it's off-mission and they're like, "Oh, I'm going to do it anyway because it's good money, but it's off-mission" — that already is a warning sign. But I think the other one, which is something I have more of today than I used to back then, is that one needs a practice. Part of the way to filter the noise is with a practice. I've been enjoying meditating lately in the past year and I've been getting better and better at it. Meditating helps drown the noise. And then the thoughts that I do get while I meditate tend to be very healthy thoughts headed in a good direction. I also do the hyperbaric chamber.
Steven Bartlett: Steve Jobs talked about meditation and his spiritual practices, and it's something I actually started really looking into in the last year. When I say looking into, I mean I started looking into what he did and why he did it, because he's someone I look at and think it was like he was able to see around the corner. For a guy running a big company, how was he able to make these really unpopular calls today that proved out to be true tomorrow? One of the conclusions I arrived at is that he spent just as much time in the trenches as he did in the clouds — he stood away from the picture enough so he could see the full picture. And that kind of correlates to what you were saying earlier about your redefinition of hard work. Not just being in the office 24/7, but actually when you're on the surfboard, you're doing hard work because you're giving yourself time to see the full picture.
Adam Neumann: Hard work is also personal growth, and personal growth is very hard work. Most people don't have the courage to even look honestly, let alone change.
Steven Bartlett: What is the exact mechanism that you think would result in me being more successful at 40 in business if I did exactly what you said and focused on personal growth?
Adam Neumann: You're going to have to start by redefining business. I'm going to have to push back on it. We are not going to measure your success just in business. We're going to measure your success in life, in relationship, in friendships, in effect on the world — and in business.
Steven Bartlett: Do you know why I'm asking this question? Because there will be some people listening right now who have heard founders come on and say, "You need to just take a moment, meditate, do these things, focus on personal growth." And for whatever reason — because of their trauma, because of how they were raised — the lens they will receive that message through, the thing that will be the carrot, will be a promise that it will make them better at the thing they currently care about. We might be tricking them a little bit, because we're going to get them to do the work and they'll realise that other things matter. But just for those people that have that lens —
Adam Neumann: We're going to help. We're going to say something, and I hope people have said it here before, but I'm not sure they did. All these founders that are listening — falling is not just okay. It's the best thing that ever happened to you. If these founders can all redefine success — think about if in school, instead of learning about all the successes, we spoke about Steve Jobs — and he's a real hero of mine — but would I have wanted his life? How old was he when he passed away? How was the relationship with everybody around him? How did he affect people? I don't know him. I'm not judging or measuring. I'm just telling you we cannot measure a person just through their business achievements. We must look at people holistically.
So I'm telling all these young founders: forget "take time to meditate." You asked how I quiet the noise and I answered meditation. But that is not my first advice to them. My first advice to all of us — and you talk a lot about AI coming and everybody's about to be a founder, everybody can start a business — have the courage to actually look inside and say, "Where can I become a better version of myself?" Don't work on three things. Work on one thing and choose that thing and work on it.
And by the way, if you do, when you fix it — how are you going to know that it's better? Because you're going to see the next thing you need to work on. It is like an onion. Every time you peel it, you will see another layer, and another layer, and another layer. That is the advice I'm actually giving them. And I'm promising them that if they look deep enough, what they're going to find is their calling. And when they find their calling, when you match that calling with that energy of wanting to be a founder, that's when everything works.
The SoftBank deal, the failed IPO, and what really happened
Steven Bartlett: Let's zoom back into the story. You're walking down towards 18th Street. You've just raised all this money. Over the next three years, you said that was the start of the end. Decisions changed specifically in terms of business.
Adam Neumann: It became about money. It became about valuation. I forgot the mission.
Steven Bartlett: That was a slippery slope. And that means you grew even faster, opened up even more leases.
Adam Neumann: We blew up. We grew. We went really fast.
Steven Bartlett: One of the things I read when doing the research is that you had lots of tangential ideas at that time. Maybe because of the money. Things like surfing —
Adam Neumann: That's fake news. This was before we ever started. I had all these ideas. Anybody who tells the story that we had a lot of ideas in 2016 because we raised money doesn't know that this was done before WeWork ever started, in a Green Desk office. All the ideas we had were right here on this whiteboard. This doesn't look like focus to me. I feel like if I showed my investors this now they would shout at me.
Today I would choose what is the real focus of all these things. I would do it one foot ahead of the other. It's a little bit more like we're doing Flow. But when you build a business, it's art, not science. If you're going to have some investor tell you, "Oh, you put this first and this second and this third," they're limiting you. You do need to have a very strong foundation — both as a human being and as a business person.
For anyone that can't see, I just circled the stick person in the middle of all of these ideas. I would have focused on this person. The mission: create a world where people make a life and not just a living. We should have only added things that are in support of that mission.
Steven Bartlett: It reminds me of Amazon and Jeff Bezos's famous saying of working backwards from the customer. We just hired a wonderful person as our CTIO from Amazon — she's called Ada — and she says that at Amazon there's often an empty seat in meetings, and that is the customer. So they leave an empty seat so they can make decisions through the lens of this person. They're always in every meeting so you don't get distracted from who you're doing it for.
Adam Neumann: I'm going to give you my best advice. I've had the pleasure of meeting Mr. Bezos and he's phenomenal — one of the best operators on the planet by far, some would say the best. My best advice for you: build a culture that is authentic and true to you. I love that you're focused on the customer, but I can tell as we're speaking that you're very honed in on your user. Multiple times you've told me how your listener is going to interpret what we're saying. You are aligned with your listener. I have no doubt about it.
Steven Bartlett: Isn't that a form of working backwards from the customer? Because I'm sat here thinking about a 21-year-old listener. Every time you answer questions —
Adam Neumann: I'm repeating myself and I don't mean to be boring. If you actually today went to the depth of your truth — what is your correction? What do you need to work on? Where are you going? And then you found that, and then you brought that back into your team — I am telling you, I don't even know how far it would be.
Steven Bartlett: So are you saying I don't need to work backwards from the customer?
Adam Neumann: I'm saying your truth has to be yours first. I'm not pushing against this theory. Of course we need to work backwards from the customer. But my truth — I know a lot of times people keep telling me what the customer wants. Rebecca and I build what we think is correct.
Steven Bartlett: You don't listen to focus groups?
Adam Neumann: No way. There's a famous saying — I think it's Henry Ford — "If I asked the customer, they would have asked for faster horses." Never invented the car. I think it's about finding our own truth. When a person finds his own truth, they can express it. Of course I'm not going to tell you we shouldn't listen to the customer. In Flow, I could tell you 10 things that the customer has pointed out to us that are of course right and we do. But we have an opinion. If we listened to our customer at Flow, we'd have prettier buildings so more influencers can take more pictures.
Steven Bartlett: So you're saying hear your customers but don't always listen to them?
Adam Neumann: I am saying: do you know yourself? Everyone rushing to build all these businesses when they don't even know who they are leads us to going into dinners and talking about nothing, going into parties and doing whatever it is we're doing. Instead of living life to the potential — life is so beautiful and amazing and full — if you're going to be busy listening to your customer because you want to build a business because you want to make money, not only do I think it's not going to work for you, where's the fun in that?
Steven Bartlett: I'm asking this in part selfishly for myself. At a stage of my business where we're being offered lots of money from lots of people — our last valuation was about $450 million — I reflect on your story a lot because although the numbers were wildly different, you were at a moment where you could raise whatever money you wanted, and with that comes opportunity and distraction dressed in the same dress potentially. And in this particular season of your story, I go — oh, Adam apparently bought a surfing thing and a thing over here —
Adam Neumann: Let's say something just because you said it. The surfing thing we bought for $7 million was 48% of a company called Wavegarden. We bought it because we thought you could build amazing communities around surf. Wavegarden today does north of — as far as I know — north of $500 million in sales for 2027. I think this year maybe around $250 million. They're extremely successful. The founders are so happy. I saw them not too long ago, because when I stepped down, WeWork famously sold it back to them for $5 million even though it was worth so much more. They own 100% of their business. Their business is thriving.
And I'll tell you again today: the best amenity for building a big global community real estate — number one is a great school, because if you have a great school, everybody wants to live around it.
Steven Bartlett: Even though Wavegarden was a great idea — a great business that went on to be very successful — in our situation there are lots of those. And I would end up giving attention to a different business. In my world, there are lots of these — we could do that and that and that. And objectively, maybe they're all good ideas, but when we talked about focus, I would be splitting myself 10%.
Adam Neumann: I have a great answer for you. My best recommendation to you would be the same one I gave you when we spoke about your fiancée. I think you need a little bit of time for yourself for a second. I think you need to soul-search and see exactly where you want to go. Ask yourself: assume that in six years you're huge — what for and why? And when you answer what for and why, then go back to the day and say, "Well, who's the right partner to get me there?" That's the only way to make that decision, because if you make your decision based on anything else, you might suffer what happened to me — God forbid — and we don't need this for you. First understand who you are. Then decide where you want to go because of it. Then go back to all of the investors and see who is the right investor.
Steven Bartlett: If I don't pause for a second and do the work and get clear on what my mission is and why I'm doing it before I make these decisions to grow — what is the mistake around the corner that I'll end up making, that you referenced, that I can't currently see?
Adam Neumann: I think the rule of thumb is this. If your business started with a mission, then you're already doing better than most, because a lot of people don't have a real mission. So first step: you needed to have had a real mission. Now let's say you actually had a real mission and you found that truth and now this growth is offered to you. If the growth of the business is going to grow faster than you're capable of handling — and handling is ego, handling is money, handling is relationships, there's a lot of handling we can translate in many ways — then by definition something is going to crack. There will be a short circuit. So before you jump on that growth without understanding it, you have to make sure that you're ready for it and that it's actually correct for you.
The technology Sabbath — a practical tool for self-knowledge
Steven Bartlett: What is the most effective practice you've ever deployed to know yourself better?
Adam Neumann: For me, it's just my truth. About 10 years ago, I started keeping Shabbat, which for those who don't know means that on Friday we disconnect from technology for 25 hours and I just spend my time with my family, my friends, and taking part in something greater than myself. That disconnection actually makes a lot more connection than anybody understands. So the best practice I can suggest is a technology Sabbath. Forget religion — this is nothing to do with religion. If you take 24 hours off your phone, completely off, put it aside — here's what I forecast.
When's the last time you were off your phone for 24 hours, by the way?
Steven Bartlett: Oh, god.
Adam Neumann: Okay. We're going to have to lead by example. So here's what I suggest to the founders, to everyone. Choose a day. Make it Saturday, make it Sunday, make it the middle of the week — it's easier on the weekend. Make it the day that's true for you. And take your phone away for 24 hours and put it in a place that you genuinely are not going to touch it. Give it to a friend if you can't trust yourself.
The first two hours, the amount of times your hand is going to go to your pocket thinking your phone is there will show you how addicted you are — because it's an actual addiction. But then what you'll notice, especially if you scheduled it in advance, you plan the dinner with your friends, some activities that include going out to nature, little things — from my experience, when those 24 hours are over and you take back that phone, two things will happen.
One, you're going to feel amazing at hour 22, 23, and 24. Amazing. And you're going to take out that phone and it's going to take you exactly 10 minutes to drop back down to the wrong frequency. Two, some of the best ideas you've had in some time are going to come to you — including who you should be surrounded with, what business you should focus on, what is your next move.
For me, the best practice is that 24 hours once a week. I have six kids. I'm married. That 24 hours where it's us together has been phenomenal. And I think if you committed to 24 hours one time and then reported back — how hard it was, which will be a definition of the addiction, and was it positive — I have a feeling it would be amazing for you and even better for your fiancée.
Steven Bartlett: I bet she wants it, by the way. I bet she's even asked me a million times.
Adam Neumann: Well, why haven't you said yes if she's asked you a million times?
Steven Bartlett: Because I don't see the upside.
Adam Neumann: It's because you're religious, not spiritual. Whenever someone can't change something, I keep saying to people: I'm spiritual, not religious. I'll change. I can change. I'm not stuck in a box. Whenever you're stuck in a box and you're not ready to change something, of course you can't see the upside.
Give you an example. Fasting. Have you ever fasted?
Steven Bartlett: Yes.
Adam Neumann: Does your brain get very clear? Fasted from water and food, or just food?
Steven Bartlett: Just food.
Adam Neumann: Have you noticed when fasting, after 12 hours, 18 hours, 24 — depending — how clear your head becomes? Your body doesn't want it. Your body doesn't see an upside in it. But you've tested it and you know that you get clarity from it. You know that there's a benefit to it. Same thing here. Saying "I don't see the benefit of putting my phone away for 24 hours" is the way an addict will speak. Try it, and after doing it two or three times, if it didn't work for you, I respect that. But I think you know that it would work.
Steven Bartlett: Conceptually, of course I know it's going to work. I've sat here with neuroscientists who've done the studies. I think there's probably a more honest answer that I've just uncovered, which is: it would be very uncomfortable, and even the thought of it is really uncomfortable.
Adam Neumann: Now you and I are going somewhere. How do we know what to do in life? Whenever we feel that we're at a crossroads — a decision, one is comfortable, one is not — keep going after the uncomfortable one. Path of most resistance, path of least resistance: always go after the path of most resistance. Long journey, short journey: go after the long. But you know what happens? It takes less time. It ends up being easier and has a lot more value. There are rules to the game of life. No one taught us.
Are we getting a commitment? I need a commitment. If your fiancée is listening — can we do one?
Steven Bartlett: We can do one time.
Adam Neumann: Can we make sure to do it this month, in September?
Steven Bartlett: Yes. Yes, we can. Just before I shake — because we're both going to keep our words — can I define it?
Adam Neumann: Let's define it. You just said something I teach my kids: if you're having a problem keeping your word, do a better job defining it before you ever say it. Go right ahead.
Steven Bartlett: It's not going on my phone or my computer or any electronic device for 25 hours.
Adam Neumann: You can drive. You can turn on the lights. Do everything else.
Steven Bartlett: I can talk, I can brainstorm on a whiteboard —
Adam Neumann: Encouraged. Okay. Next level will be we'll take business out of it so you can really connect. But let's do the first step.
Steven Bartlett: No screens — which includes your computer, your iPad, your watch.
Adam Neumann: Good. I like it. Does your car have a big screen? Some of the cars are like big iPads.
Steven Bartlett: I won't be in my car because I'll be in Europe in September.
Adam Neumann: We're done. Deal.
Steven Bartlett: Deal. I'll let you know how it goes.
Adam Neumann: Let all of us know how it goes.
The importance of focus — and knowing your superpower and super-weakness
Steven Bartlett: Let's go back to this point of focus. I'm pretty obsessed with it. I remember this Johnny Ive video I watched — I've sent it around for the last couple of years to all of my team. Johnny says Steve had this remarkable ability to focus. And he said focus isn't saying no to things you don't remotely want to do anyway. It's saying no to things that with every bone in your body you want to do and you wake up thinking about, but you say no to them because we're going to do this. And famously in Steve Jobs's story, when he came back into Apple after being fired, he was sat in a room with all of his executives. They've all got a million initiatives they're working on. And famously, he goes up to a whiteboard and draws four things — a four-quadrant thing — and says, "This is what we're going to do. Everything else is cancelled."
One of the things I concluded from the period after you'd raised all this money was that there was a lack of focus, because you ended up doing lots of things at the same time. And that's something I find myself almost at the foothills of being tempted to do. So let's answer it.
Adam Neumann: First of all, we talked about superpowers and super-weaknesses. I cannot tell you that my superpower is focus. It's not my superpower. I actually have the opposite. My challenge is — and Ben Horowitz and Mark Andreessen helped me understand this — I'm very good at zero to one. The problem with many entrepreneurs is they have a lot of ideas. The problem with me having a lot of ideas is they actually become a reality. Ben was telling me: another entrepreneur is going to come with nine new ideas, and the next board meeting maybe he did one of them. You have nine ideas. We didn't say anything at the board meeting. We come to the next board meeting. There are nine new businesses.
So focus is something I need to work on. Now let's go a little deeper. This is how I do my own personal growth. I'm a creator. I'm not a protector. I'm really good at creating. I'm not that great at protecting. Rebecca's grandfather famously said, "It takes one lion to make a fortune and 10 lions to watch it." His name was André Haddad. One lion to make a fortune, 10 lions to watch it. Very smart saying.
Because I'm now aware that I'm more a creator than a protector, there needs to be someone else around the table on the team whose job is to say, "Adam, sounds great — and maybe we should do it in three months or six months or nine months — but right now we really need to focus." Not on one thing — I'm not a one-thing kind of guy — but let's say on three things, where other people can only do one at a time. I'm probably very good at three to five. But once you go above that number — 10 to 15, which I could fall into that trap — you're not going to succeed.
So for me, with my personality, I would have to surround myself with people I trust to say no. Did you have that at WeWork?
A little, but not really. Because again, remember back to that horrible moment where I walk back into the office and the ego got the best of me. What happens next when you lose yourself? You start attracting the wrong people. The people that were hired after that were just there for the money. The energy being projected was "let's go public, let's do this, let's do that." The energy projected was wrong.
The $20 billion offer, the board's greed, and the forced IPO
Steven Bartlett: You filed for an IPO and SoftBank invested a further $2 billion into WeWork.
Adam Neumann: The challenge with what you're trying to do is there's so much context to the story missing. I'll give you the high level.
So Masa gives the money. We lose our mission a little bit. But he's very clear what he wants. He wants the fastest, he wants the largest company on the planet.
Steven Bartlett: A trillion-dollar company.
Adam Neumann: I can deliver a big company. Back then, no one said numbers like that. Today we've seen companies five years old getting to those numbers — see how the world's moving. What was impossible and made fun of 10 years ago is suddenly everyday reality. Not a big word anymore, but it's a huge number obviously, and very few companies are going to be there and stay there.
The money ends up coming in only in 2017 — it takes quite a long time between when the investment is offered in 2016 and the money coming in in 2017. But we deliver on our $960 million in sales. And the following year, we deliver on our $1.8 billion — or $1.92 billion, whatever the exact number was. We hit our number.
And Masa comes and says, "Wow, you really delivered on your number." I said, "Of course, Masa, we always deliver on our number." He said, "Well, Adam, I've invested with the Vision Fund in a lot of companies. Everybody promised me to double the revenue. You're one of the only ones who did it." I said, "Well, that's what we did." Our expenses grew. I said, "I have no problem with the expenses. When the time is right, we'll stop the growth and profitability will catch up." As we explained, that happens in businesses that are actually successful.
And he comes up with this idea. He says, "How about this — your investors are going to want an IPO and they're going to want an exit. They're going to want focus. I have no problem with how wide we're going. How about we buy the company for $20 billion?" And this is the story that a lot of people don't understand.
He said, "How about I buy the company? I'll give it a $20 billion valuation." I said, "$20 billion — isn't it a little low?" He said, "No, no — $20 billion of actual cash. We'll give $10 billion to the investors and we will put $10 billion on the balance sheet. You, Adam, won't sell. Your employees can sell some so they make money. All the investors are out. You and your management team will go down to 30%. Me and SoftBank Vision Fund will own 70%. And when you hit goals that we agree on, you and the management team will go from 30% to 51% and we will go to 49%. And I understand that we're growing too fast and I understand that we'll have too much in expenses, but I'm putting my money where my mouth is and I don't care, because I think this is going to be one of the biggest companies in the world."
This happens in March of 2018. This is before the IPO. You can't bring this story back if you don't understand this part. This is only a year after he's been with us. He's on the board. He has two board seats. They know everything that's happening in the company. No secrets.
I take the offer to our board and say, "Look at this amazing thing — $20 billion." Remember, they invested at a pre-money valuation of $84 million. This is $20 billion. They've already pulled out — because of all the secondaries — somewhere between $350 million and $700 million. Whatever the number was, at least $350 million on an investment of $21 million.
I take it to them. The offer sounds like a great offer, but I, Adam, am going to stay in the company — meaning the management team. So in boards, when someone has a deal that they're staying behind, you need to create a special committee. A special committee is created — the board member from Benchmark and another board member. They create a special committee and they decide to negotiate a $20 billion all-cash deal that would have made money for everyone. Remember, Masa came in at $20 billion — he's the only one who's not making money from this deal, and he's staying. Everybody else came in at $50 million, $100 million, $400 million, a billion. Everyone's making money.
And this word is a dangerous one, but it's greed. Because the company at that point is losing about $2 billion a year, forecasted to lose over $3 billion the next year. He knows the forecast. He wants to put $10 billion to give it a run rate of three years so we can build whatever we want between the two of us. He'll be the majority shareholder.
They say no and negotiate a $20 billion deal from March till October — for a company losing $2 billion. They have a company losing $2 billion. Masayoshi Son is offering them $20 billion in return, and they negotiate. Their number was $32 billion. They didn't know how they invented it. They were thinking $100 billion. Remember, they're the same ones sitting around the board who never gave feedback on the technology. They have one thing in their eyes and one thing only — dollar signs. But the problem with greed and dollar signs: if you're greedy, you even lose what you have in your hand.
So they're negotiating this $20 billion. Masa had from the first day said, "Guys, this is my final offer. There is no $21 billion. Even $20 is crazy. It's as high as I'm going to go because I believe in Adam and I believe in me and we're going to build together." They do that until October. And somewhere around the end of September, beginning of October, they realise he's not moving. The stock market is starting to go down, and these growth businesses are starting to take a hit. They see that things are changing. Then they decide to engage and actually negotiate the deal.
By the time they're done with documents, it's December 24th, 2018. SoftBank's stock is really down for reasons that had nothing to do with us. There's no world in which they could do a $20 billion cash deal and Masa still stays in his place. And Masa calls me and says, "Adam, I'm so sorry. I cannot do the deal anymore. It was offered in March."
Again, what these two board members should have done is gotten on a plane the next day, come to Masayoshi Son, and said, "Masa, please sign. You're on the board. You know everything about the business. You don't need any diligence. Here's our bank account. Here's the signature. We're disappointed we're not staying with Adam, but if that's what he wants and that's what you want, good luck to both of you. Thank you for the very fair price. We'll take our cash and walk away."
Travis Kalanick — the CEO and founder of Uber — said in an interview I just saw that being an entrepreneur is like playing dimensional chess. Being a venture capitalist is like watching the game again. Remember: you're choosing your investors. Choose the ones who play dimensional chess, not the watchers.
They didn't do that. Masa calls me. It's December. He says he can't do the deal. And I actually understand him — they did waste all that time. Then I found myself in trouble, because from when he offered the deal, remember he was going to have 70% and we were going to have 30%. The goal was a revenue goal that we were all already working towards. We signed the leases. We made the commitments. We were already rushing. We found ourselves in a way that if we weren't to — he gave the $2 billion to try not to really ruin the business, because he'd already put a lot of money in. We found ourselves being forced to go public. So we actually went public when we weren't ready. That's what actually happened.
It's very important, this piece of the story, because without that context you don't understand. And again, it's back to all the founders you're talking about. You've got to choose your investors wisely, because if you choose the wrong investors, when the time comes for that big move, if they're not going to prioritise you, they're going to do what's best for them and everybody's going to lose.
Steven Bartlett: Why weren't you ready? You're going back to systems?
Adam Neumann: We were growing way too fast. Our tech was not catching up with us. We couldn't measure things correctly. There's this thing called SOX compliance when you go public — our systems weren't able to do the thing I told you before, to show that one building is profitable but the neighbourhood is not, one city is profitable but the state is not. Wasn't able to divide it.
But now in hindsight, connecting to what we talked about today — I, Adam, wasn't ready. And if the founder is not ready, the business is not ready. By the way, I tried to push not to go public. Masa called me and said, "Please don't go public." All the people around me — some of them that came after this point, not all but a lot of them — were all "go public, go public, go public." I was getting pushed by the wrong people. Back to: surround yourself with the right people.
Steven Bartlett: The timeline is pretty crazy because obviously COVID is around the corner. It's called COVID-19 for a reason. We're at the end of 2018. You file. In January, SoftBank does invest a further $2 billion into WeWork.
Adam Neumann: That $2 billion was because they passed on the deal before — it's not because we filed. That was a kind of compensation, a gesture of respect between Masa and myself. Another great deal that Masayoshi Son did that he didn't have to.
Steven Bartlett: In May 2019, you have almost 500 locations, 400,000 members, 12,000 employees around the world. And then in August 2019, WeWork publicly filed its S1, company valued at around $47 billion. The S1 showed some losses.
Adam Neumann: A lot of losses, not some losses. It showed the truth. The company was losing money.
Steven Bartlett: It showed that WeWork had lost $690 million in the first six months of 2019, bringing the total losses to almost $3 billion in the past three years. WeWork was making losses of $219,000 every hour it operated. The S1 also revealed that you'd trademarked the word "we" and sold it back to the company.
Adam Neumann: That's not true.
Steven Bartlett: Which part —
Adam Neumann: It's not true. There's a story, but that's not what happened.
Steven Bartlett: It's not true. Okay. But again, all these little details — just so we understand, for the founders who are watching — you're telling a story about something that happened to me. There's supposed to be huge emotion that I'm supposed to have with this, even if it's not correct. If it's what people said, some of it is correct, not correct, so much context is missing. Not the point. Life is not about what other people say or what the press say or even what you say. It's about what kind of person I know I am. And the reason I want to tell this to you and to the listeners is: we can all be that person.
Steven Bartlett: September 2019, WeWork announced it was postponing its IPO as a result of investors questioning the company. And then around this time COVID shows up. But then you resigned as CEO of WeWork in 2019 after the IPO didn't pan out.
Adam Neumann: That's not why I resigned. I stepped down. And what people don't know is I had full control over the board and the votes. So I had to choose to step down. People sometimes think I was fired because the Wall Street Journal said so. Not true. I stepped down. I had full control. Control of the board and control of the votes.
Steven Bartlett: Why did you step down?
Adam Neumann: When people understand the context — and again, this is an old story, but I'm happy to go there — the only reason a person in control chooses to step down is because they think it's the best choice at the time. And again, this is part of the play. This is the same playbook — and now we're going to say his name again — Travis, the founder of Uber. Bill Gurley famously puts a piece of paper in front of him —
Steven Bartlett: He's one of the Benchmark partners.
Adam Neumann: He famously puts a piece of paper in front of him and says either you step down or we do this, this, and this — some threat that makes him step down. I have a different version of it, but they're pushing me very, very hard to step down. At the beginning, I'm not stepping down. Then I have a meeting with one of the heads of the two biggest banks in the world. He sits with me and says, "Adam, if you step down, then we will fund $2 billion into WeWork, which will give it time to move to profitability." Stepped down — by the way, from being CEO, becoming chairman. And at the time I had personal debt, which is a story for another time, but I had personal debt of $460 million to that bank and to other banks.
I said, "But what about my personal debt?" My board member was next to me and the guy who runs my family office was next to me. We said, "What about our personal debt?" And he said, "Don't worry about it. We'll figure it out." There was also an advisor to my board and he came in front of the whole board and said, "I spoke to the bank. They said it's all good. Everything will work out."
So I stepped down out of choice because I thought it was going to fund WeWork. I thought it was going to take care of Masa. I thought it was going to take care of the employees. I thought it was going to take care of everybody. And it sounded like it was in the best interests of everybody. But I wasn't going away — I was just stepping down from being CEO and becoming executive chairman.
I do the board call. I step down. And 10 minutes later, a legal letter comes from the bank, basically saying: because of your breach of contract — it's change of control, something very technical, something we had talked to them about before and they said no problem, but we didn't have it in writing — because of your breach of contract and because you had the change of control, you now have 15 days to pay us back our debt of $460 million, or we will take your shares. And because of my super-voting rights, my shares were 5-to-1, which means that by taking away my shares they would have taken control over the company.
Now what I'm describing — and you talked a lot about founders but you didn't know a lot of the names — it's important to know the names and the history, because I'm not describing something that happened for the first time. This famously happened to multiple entrepreneurs in history. This used to be the venture capital playbook. Today there's a new crop of venture capitalists and they're very different. But old-school venture capital — this is how it used to go a lot of times.
That was the surprise. That's how we found ourselves suddenly so low. I stepped down because I thought it was the best for everybody. And a second after I did it, we got stabbed in the back. And the only lesson there: if you're going to stab the king, kill. If you're not going to kill, we're going to take a deep breath. We're going to learn our lessons. We're going to know what's really important in life. And we're going to come back again.
And that's what actually happened. The only reason the story is a little challenging is because we never fully corrected it publicly. And the reason we didn't correct it publicly — the best way I can talk about the past is by what I do today. By how we're speaking right now. By how my kids are. By the businesses I build. By the nonprofit I do. By the friendships I have. By the relationships I hold.
And the reason a lot of entrepreneurs come to take money from us — and again we don't invest anymore, but we have a huge inbound of people wanting us to invest in them — is because we don't talk about our successes all the time. We talk about the lessons. Measure us by how we're going to be next to you when time is very tough.
So that's what actually happened there. And I found myself out of it very quickly. From there, without making the story confused, Masa came. Masa saved the day. He paid the debt to all the banks — $460 million. And in return, I gave him my control of the company. I gave him whatever shares he asked for, because we were done and the company was done and he came to save it. And then the rest was running under them.
The $450 million demand, the darkest night, and Rebecca's response
Steven Bartlett: You get an email from the bank within — I think it was nine minutes — asking you to immediately repay about $450 million.
Adam Neumann: Nine minutes. Asking for $450 million, compounding daily, because you're in default.
Steven Bartlett: Just for anyone that doesn't know what compounding daily means —
Adam Neumann: If you have debt of — let's do 12% so it's easy, which would calculate to 1% a month. Compounding daily is when your debt suddenly goes — back then I think it was 5% that became 50%. And you calculate it on daily increments. So each time it compounds again and again and again. It ends up that when you do the calculation for the year, it's more than the debt number.
Steven Bartlett: Your debt is growing by more than a million a day.
Adam Neumann: Let's say it's 15% over $400 million — that would be $60 million. It's actually more than $60 million. And if you divide it to daily, it's huge numbers that we don't have money to pay.
Steven Bartlett: So you have no money. And the bank has asked you for $450 million, giving you 15 days to pay, or they take everything. You described waking up in the middle of the night crying because you thought you had lost everything.
Adam Neumann: Yes, that's more accurate. At the moment where that happens, we were okay. A few days later, I wake up in the middle of the night next to Rebecca crying. We talked about my childhood. I don't cry — not for that. First time Rebecca ever sees me cry. She looks at me and says, "Why are you crying?" And I said, "We lost everything." She goes, "What do you mean everything?" I said, "Everything." She goes, "The cars?" I said, "The wheels on the car. Everything." She goes, "But remember we said you're going to put $100 million on my name just in case." I said, "Yeah, I remember." She goes, "And at least we have that." I said, "I never did it." She said, "Okay, but it's no problem. You didn't sign a personal guarantee. We said you'd never sign a personal guarantee." I said, "I signed a personal guarantee."
This is why who you marry is so important. How many partners do you know who a second ago thought they were worth whatever that number was and lived a high life, and find out in one minute — no preparation — that not only is it all gone, it's all gone. And on top of that, the promises that were made to them in the relationship were not kept. So it's gone, money was not put aside, and a personal guarantee was signed that was agreed not to sign. Because if I'm signing a personal guarantee, I'm signing for both of us — we're married. And a personal guarantee was signed that was agreed not to sign.
This is why you have to choose your partner really well. Choose your partner for the day something like that happens, not for any other day.
I'm lucky that I chose well — or she chose me, or the universe chose us. She looks at me and she goes, "Hmm. Okay, this is a surprise. My mom owns a house in upstate New York. She bought it 30 years ago. She has no mortgage. Let's go live with my mom. Take a few months. Think about it. If you want to go back into business, I know you'll be successful. And if you don't, we'll move to Costa Rica. I will homeschool and we will surf every morning and every night. And we'll have a great life. Both cases. Don't worry about it."
And at that moment — this is when I think I grow up for the first time. You talked about that child and the pain. As a child, when we're facing these very difficult things, we have no one to count on, only our parents. For a moment, I think I was that child again, crying. But I wasn't a child anymore, because I had an amazing wife and kids that I could lean back on. They had my back even if I messed up. Even if I didn't keep my word, even if I didn't do things the way they're supposed to, even if I took all the potential in the world and lost it — even though it was ours for the taking. And the moment I realised that, I felt a little stronger. I felt better. I stopped crying.
But Rebecca says I'm still not smiling. She goes, "By the way, when I met you, you were broke. I think you're much more sexy when you're broke." Then I smiled. Then I was happy.
Then I walked downstairs and now you're completing the story from before — that morning. After that, when I go to my three employees, two things had happened before that morning. One was the story with the spiritual teacher who taught me that the darkest moment of the night is a second before dawn, and that belief is measured when we're down, not when we're up. And two, I knew that I could rely on Rebecca, which means I had a foundation and a real partner and I could make it through anything.
So when those three employees said, "Why are you smiling?" I told them the darkest moment of the night is a second before dawn and I believe. But I also told them, "And my wife thinks I'm sexy."
Steven Bartlett: For a kid that didn't have much stability, that was a moment where you realised your foundation was probably rock solid.
Adam Neumann: I go back to where you started. The biggest decision any of us can make in our life is who is our partner. And how do we know who they are? We've now said two things. One: do they make us the best version of ourselves? Two: how will they be in that very tough day if everything was gone? And all that is left is not only our nice side — we talked before about the dark side and the light side. How are they going to treat us if for a moment it's just the dark side?
There's sometimes Rebecca is quick to anger with me and I can be upset for a second. But when I have a second to take a deep breath and remember what a great wife I have and what a great partner I have, there's nothing she can do that can actually keep me upset for more than a little bit. Because our relationship has been tested by fire.
Rebecca's stand — the SoftBank settlement
Steven Bartlett: There's another remarkable story I remember you saying about her giving you some advice to stand your ground in the post-WeWork era, where there was negotiation still going on about your compensation. She gave you some really good advice about standing your ground. What was that, for those that haven't heard that story?
Adam Neumann: It's very hard to stand our ground when we think we have a lot to lose. It's back to that fear. Rebecca has many superpowers. One of them: she has no fear, to a fault. She's all truth. She sees people for who they are. And therefore she's honest and she's not afraid of her truth. If someone's not going to be our friend because of it, she doesn't care. She calls it as it is.
At the end of this whole negotiation, when it came time to finish everything, my litigator at the time — today my partner, his name is Eric Syler — called me and we talked and said, "I think we can get to a deal." We talked about the deal.
Steven Bartlett: With who? Between —
Adam Neumann: Fast to finish for the story for everyone. I step down. The world. I get the letter from the bank. We have nothing. Masayoshi Son comes in, saves the day, funds the company, funds us, pays our debt. But we don't get the big number. He agrees in April 1st, 2020 to pay myself and all the other investors $3 billion cash — out of which we would have been 30%, so a billion dollars for us.
Corona happens really in March. And on the last day of March 2020, we get a letter from SoftBank saying that this is force majeure — for those of you who don't know what force majeure means, it's when an event happens that's greater than life, that's out of control, like a flood or something — a force of nature, something unexpected — and they don't have to pay the money. And they don't send the $3 billion.
I remember by this point I've taken so many hits. At this point I'm already practised. I look up to the heavens and say, "Thank you, God. What do we need to learn from this one?" And the lesson there was apparently litigation. Here's what we need to learn from this one. And we go into a very complicated litigation.
When the litigation ends with a settlement of a billion and a half — so instead of the $3 billion, it ends up being half — everybody gets half, but it's done. We negotiate a certain negotiation and it was going to take a certain time for the money to come in.
Rebecca was just about to give birth. This was four days before she was giving birth. And I walk in with my best friend Andrew Finkelstein, who was there with me for this whole experience. We walk in to tell Rebecca the settlement that we agreed — and we settle, but the money will come in two months, and this will happen and that will happen. And she says no.
If we don't close the deal Monday, we're going to court. And court was not going to be great for anyone. And if we weren't going to go to court, another investor was going to come and take WeWork. She goes, "No. They were supposed to pay April 1st, 2020. They didn't pay the $3 billion. Why are you now settling the $3 billion with another agreement to delay payment again? What if they don't pay and now you've missed your court date? Either they pay and then it's settled — we'll all say thank you and everybody will walk away. And it's not just paying to us. That billion and a half is to all the employees and all the investors. It's half a billion to us and a billion to everyone else. Either they pay or they don't."
I say to her, "What do you want to do?" She goes, "Tell them you agreed on it, but your wife didn't. You didn't put the money aside that we talked about. You signed the personal guarantee. It's not just your money. This is our money. And I don't accept the settlement. Go back and tell them that either they pay it tomorrow." This was Wednesday before we had a scheduled C-section. So Friday 8:00 a.m. — either they pay it before Friday 8:00 a.m. or we'll see everybody in court on Monday.
She also said, "Tell them that any horrible thing that's ever been said about you has been in the press and in public. It's all out there."
So Eric Syler calls me and I tell him. He said, "Adam, I have a question for you. Who do I work for — you or Rebecca?" I said, "Well, you work for me and I work for Rebecca. So you work for Rebecca." He goes, "That's what I thought, because she called me and told me I'm a lousy lawyer." I said, "You're not a lousy lawyer. She just doesn't like our settlement."
He said, "What do you think we should do?" He said, "You have no choice. You should tell them there's no deal." I said, "What are they going to do?" He said, "They're going to explode." I said, "And then?" He said, "I don't know. Either they'll meet you in court — and this was a horrible decision — or they'll break and send the money." I said, "What do you think's going to happen?" He said, "I've never been in this position. I don't know." I said, "Okay."
Got on the phone. We told them. They screamed, "We're going to sue you for this and sue you for that." They hung up the Zoom. I called Eric. "What now?" He goes, "We wait."
Hours later, Marcelo calls. Marcelo Claure — he was at the time a very big personality in SoftBank. Today he has his own business. Every time I've had an interaction with him, he's always kept his word and always did the right thing. Even when I didn't agree with him, he told it to me straight. So I respect him a lot.
Marcelo calls me. He's on a walker — he's a tall guy. He goes, "Call Rebecca." I was like, "Are you sure, Marcelo?" She's like on the couch. "Call Rebecca." I was like, "Okay." I called Rebecca. She's coming in again, right before birth. And she's standing there. Marcelo goes, "Rebecca, I wanted to tell you that you and Adam were ahead of your time. The world is lonely. The world is disconnected. People need 'we.' People need to bring people together. People need community. You're five years ahead of your time." He said, "I just want to tell you — the money will be in the bank before you give birth. I'm sorry we had to go through all of this. This is just business. Nothing here was personal. We'll take the keys. Hopefully we do well by the company, but we're good." Gets off the Zoom.
I looked at her. I said, "Now what?" She goes, "Fine. Sign the documents." I said, "But you said we can't do it if the money is not in." She goes, "No, no, we're all good now." We signed. At 4:30 a.m. the money hits the account. We all get on a Zoom. At 8:00 a.m. I'm in Mount Sinai Hospital. Rebecca is giving birth to Moses. Everybody took a deep breath and we're here today.
Five lessons — and closing reflections
Steven Bartlett: Adam, I have these five pieces of empty card and I wanted to give you the opportunity to write on them — or shall I write for you?
Adam Neumann: You'll write for me, for my dyslexia.
Steven Bartlett: Okay. The five most important lessons that you have learned — or how about we just do the five lessons we feel we learned today by talking?
Adam Neumann: Lesson one: choose your life partner, friends, and business partners for the worst day in your life, not for the best.
Lesson two: life is not about when we fall down. It's about how we get up.
Choose the life partner that will make you the best version of yourself. The one that you need, not the one that you think you want.
Control doesn't come from power. It comes from influence. And influence needs to be earned every single day from the beginning.
And last but not least: we all have a destiny and a journey. Get to know yourself so you can start living yours. That one's for you.
Steven Bartlett: I thought so. Adam, thank you so much. I couldn't be more excited by all the wonderful things you're doing at Flow at the moment. I also had your partner — one of the greatest investors of all time, Ben Horowitz — write me this beautiful letter where he talks about the amazing journey he's had with you, why he backed you, and how amazingly collaborative you've been, what a sponge you are for learning, and how he strongly believes that you are now building a generational business that will change the world, and how proud he is to be associated with a man like you.
He tells us all: "We should never judge a founder by his worst moment. But with Adam, that was easy because his light shined and shines so brightly. You have over-delivered in every sense of the word, including on your promises."
Adam Neumann: Thank you. Beautiful. I want to thank you, Steven. I know we had a real discussion because I learned a few things for the first time, and you made me talk out loud about a few things that I've almost never had. I appreciate it and I'm going to think about it and I'm going to learn from it.
Steven Bartlett: What's your last word? Is there anything at all that you wanted to leave the audience with?
Adam Neumann: We all came to this planet with a purpose and a destiny. We started this life as this perfect light. Noise came, challenges came, people came, ego came, everything came. It is up to all of us to have the courage to look inside. See whatever the things are that are stopping us from really becoming the best version of ourselves. Surround ourselves with the right people, with the right family — both real family, spiritual family, whatever you consider your best and closest — and go and chase your dream, your journey, your truth.
And I know as a fact that if you go through the process, if you remember that life is not about how we fall and how many people saw us fall — it's genuinely about how we get up. And if you have the courage to really be the full version of yourself and you're truthful about not just your strength but also your weaknesses, and if you remember that it truly is a journey — that when you get to that last few minutes of your life, you're going to look around. You're going to be surrounded by loved ones and by a lot of love that you've created and cultivated for your entire life. And that you're going to leave this world and this planet much better than it was before you came. I wish you and all of us good luck on this journey of life.
Steven Bartlett: Amen.
Adam Neumann: Amen.