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Library:The Cult of We

From bullshitopedia
The Cult of We: WeWork, Adam Neumann, and the Great Startup Delusion
Author Eliot Brown and Maureen Farrell
First published 2021
ISBN 978-0-593-23711-3 unverified
Role Analysis
Domains Business, Finance & Scams
Tactics Statistical & Evidentiary Distortion
Propaganda Technique

The Cult of We: WeWork, Adam Neumann, and the Great Startup Delusion is a 2021 book by Eliot Brown and Maureen Farrell.

Summary

Eliot Brown and Maureen Farrell, reporters for The Wall Street Journal, tell the story of WeWork, the shared office company co-founded by Adam Neumann in 2010, which was valued at $47 billion by early 2019 and collapsed in a failed public offering months later. The book explores how a business that leased office space and sublet it at a markup was marketed as a technology company that would "elevate the world's consciousness," and how investors, led by SoftBank, poured billions of dollars into it.

The pitch

Neumann, a charismatic Israeli entrepreneur, described WeWork not as a real estate company but as a community and a lifestyle brand, with plans for apartments, schools and gyms. He presented it as a technology company, which justified valuations far higher than those of traditional landlords. The authors describe how this narrative attracted venture capital during a period of cheap money.

SoftBank

The Japanese conglomerate SoftBank and its Vision Fund, led by Masayoshi Son, invested billions of dollars in WeWork, encouraging rapid expansion and pushing its valuation ever higher. The authors show how the availability of enormous funding allowed WeWork to grow despite heavy losses.

The IPO

In August 2019 WeWork filed documents to go public. The filing revealed large losses, unusual governance arrangements and transactions that benefited Neumann personally, including properties he partly owned that were leased to the company and a payment of about $5.9 million for the rights to the trademark "We." It promoted a metric called "community-adjusted EBITDA," which excluded many ordinary costs and was widely ridiculed. Investor skepticism forced the company to withdraw the offering, Neumann stepped down as chief executive and SoftBank took control. WeWork went public through a merger in 2021 and filed for bankruptcy in 2023.

Relevance to Bullshitopedia

The Cult of We illustrates how storytelling, charisma and invented financial metrics can inflate a company's value far beyond its business fundamentals. It is a reminder to ask what a company actually does and how its profits are measured.

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