The Shocking True Story of WeCrashed

The Shocking True Story of WeCrashed

Welcome to MsMojo, and today we’re discussing The Shocking True Story of WeCrashed.

For this video, we’ll be looking at the rise and fall of WeWork, which inspired the 2022 AppleTV+ series.

Would you work in a WeWork? Share your thoughts in the comments.

In 2001, 22-year-old Adam Neumann made his way to the big apple where his sister lived as she began a career as a supermodel. He took business classes at Baruch and started unsuccessful businesses, like baby clothes with knee pads called Krawlers. But his luck would change when he met young architect Miguel McKelvey. Adam and Miguel bonded over their similar upbringings. Adam lived in Israel on a kibbutz, and Miguel in a single-mother collective in Oregon. Both knew the value of community and how today’s world was lacking connection. This inspired Green Desk, an eco-friendly space split into multiple offices in 2008. The company did well, even in the recession. But Adam and Miguel had bigger ideas, so they sold it to the landlord for millions and carried the core business model over to their next project, which would be based on more open communal spaces than the previous one.

Adam and Miguel launched the first WeWork in January 2010. Their business model was leasing big properties then subletting smaller spaces at a higher price. Nothing revolutionary, but like many startup leaders, Adam was a master storyteller, who was charismatic and eccentric, and he naturally connected with almost anyone. He also marketed WeWork more as a tech startup than a commercial real estate company, attracting big investments from venture capitalists. By 2013, WeWork was valued at $450 million.

Adam’s excitement for the company persuaded millennials just entering the workforce to come be a part of something “greater than [themselves.]” The pay didn’t match the amount of work they’d be doing, but Adam promised them shares of WeWork— a revolutionary company soon to be worth billions. WeWork’s headquarters in Chelsea had a cafe, game rooms, and beer kegs. Adam created a frat party atmosphere that offered (and encouraged) alcohol during work hours.

In 2012, WeWork kicked off what would become its annual Summer Camp, a music festival-like event with yoga, partying, and big-name music acts like Lorde. Employees were required to attend Summer Camp as well as all of WeWork’s over-the-top events. Adam even had employees wear tracking bracelets to confirm their attendance. It didn’t take long for some people to see the company’s inspirational vocabulary sounded more and more cult-like, especially with things like “Thank God It’s Monday” (TGIM) meetings that featured chanting and gongs. It’s this “fun” atmosphere that Adam would use to attract investors. Before an investor arrived for a tour, he’d tell everyone to “activate the space,” which meant hanging out in the common areas, pretending to have a good time.

Fun isn’t really fun when it’s mandatory, especially when employees have already worked long hours and were frequently burnt out. The allure began to wear off and many realized that a cool workplace wasn’t worth the toxic environment.

In the late 2000s, Adam met his future wife Rebekah Paltrow, cousin of actress Gwyneth Paltrow. He’d repeatedly tell the story of their first date when Rebekah called him out, and often said he’d be nothing without her. She introduced him to Kabbalah, essentially becoming his spiritual guru, and later called herself his “strategic thought partner.” At Cornell University, Rebekah studied both business and Buddhism, then landed a job on Wall Street before becoming a certified Jivamukti yoga teacher. She also tried her hand at acting and filmmaking which, like Krawlers, didn’t take off.

Rebekah held many titles at WeWork including “chief brand and impact officer,” and, at one point, was surprisingly named a cofounder. In 2017, Rebekah became the head of WeGrow, an elementary school, even though neither of them had a background in education. This arm of WeWork came from her frustration with finding a suitable school for their children that she felt would “nurture… [their] spirit.” WeGrow was met with heavy criticism, particularly due to the fact that tuition could cost over $45,000.

WeGrow wasn’t the company’s only venture. In 2016, they opened WeLive, a coliving space meant to combat loneliness. WeLive consisted of small, furnished apartments with big communal spaces. Residents pretty much lived in expensive dorms. Next came Rise by We, luxury wellness centers, followed by what TechCrunch called “office space as a service,” Powered by We. Adam also expressed interest in expanding further with ideas like WeBank and WeSail. With Elon Musk, he talked about the difficulty of “building community” on Mars. Unsurprisingly, these latter ones never came to fruition.

In 2016, then-employee Joanna Strange came across internal documents that demonstrated that WeWork wasn’t meeting financial expectations. Joanna leaked the information to the press, which led to a lawsuit from WeWork for “company theft.” But this was just the beginning.

Adam vied for a meeting with Masayoshi “Masa” Son, founder of SoftBank and one of the richest men in Japan. In 2017, Masa allotted Adam 12 minutes (plus the duration of his car ride) to pitch WeWork. He then invested $4.4 billion into the company, largely because he admired Adam’s craziness. Masa told him he actually wasn’t “crazy enough” so Adam obliged. Adam made random investments like an indoor wave pool company and coffee creamer brand. He also spent $60 million on a private jet.

In January 2019, WeWork was rebranded as the We Company, and on April 29, it was announced that they’d filed the paperwork for an initial public offering (IPO). The next month, the company filed to go public via S-1, drawing major criticism. WeWork appeared to have an impressive revenue, but its major losses made the company ultimately unprofitable. It also revealed many conflicts of interest, with the company essentially being its own landlord. Adam also trademarked “We” and sold it to the company for $5.9 billion, which he later returned. Due to the backlash, the IPO was postponed.

Everything crumbled after the Wall Street Journal published an article detailing Adam Neumann’s lavish lifestyle and erratic behavior. The company’s troubling financials on top of the CEO’s questionable activities concerned current and potential investors. The board of directors soon strongly encouraged Adam to step down as CEO. However, employees and the public alike were shocked that he received over $1 billion, plus a $185 million consulting fee.

In the end, the people who lost the most were the hard-working employees. After years of chaos, thousands have been laid off and left without any of the equity they were promised. Meanwhile, all of the big guys got rich.

The story of Adam Neumann and WeWork is undeniably fascinating, so it’s no surprise that it’s been retold in a number of media. In April 2021, Hulu premiered their documentary on the subject, and that same month, HBO Max covered the story in an episode of “Generation Hustle.” Two books have been written, including one co-authored by Wall Street Journal reporters Eliot Brown and Maureen Farrell. In March 2022, AppleTV+ released “WeCrashed,” a limited series starring Jared Leto and Anne Hathaway, based on Wondery’s podcast of the same name.