In 2010, self-described “serial entrepreneur” Adam Neumann and architect Miguel McKelvey founded the shared-workspace company WeWork. It seemed they’d found a profitable way to take advantage of two significant trends: the surplus of relatively low-cost office space left vacant following the 2008 financial crisis, and a rise in the number of workers turning to freelancing or creating their own start-ups. The company grew quickly from its first location in New York’s SoHo district, and within a few short years it was being described using the much sought-after name given by investors to any start-up valued at over $1bn. WeWork was a unicorn.
That was only the beginning. As WeWork grew so did the scale and grandiosity of Neumann’s ambitions. They rapidly opened hundreds of new locations across North America, Europe and Israel, as well as expanding into luxury gyms (Rise by We), private schools (WeGrow) and co-living accommodation (WeLive). Neumann pitched his company to excitable investors as more than just a real estate company. WeWork, he claimed, was actually more like a tech start-up, and he was offering the chance to invest in a “physical social network”. By January 2019 the company had achieved a valuation of $47bn, making it the third-highest valued privately-owned company in the world, placed just behind Uber and Airbnb.
In September 2019, that valuation came tumbling down almost overnight. WeWork was preparing for its initial public offering (IPO), when it would begin offering shares on the stock market and transition from private to public ownership. It also meant that for the first time the company would have to make its internal finances public. They weren’t good. WeWork was losing $219,000 every hour it operated, putting it in a position where it was too broke to even lay off staff as it couldn’t afford to pay their severance packages. At least one job loss was guaranteed by these revelations: on 24 September 2019, Adam Neumann was forced to resign as CEO of WeWork.