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His earlier project today is a case study of how to make a bubble that ends up bursting, but that wasn’t an obstacle to his new $1,000 million business. And that we have months before his release.
We are talking about Adam Newmanan eccentric businessman who In 2010 he founded WeWorka workspace rental company or joint work At its peak, it was valued at $47,000.
By 2019, when it was about to go public, it became clear that its true value was far below its estimated value – its losses were as staggering as its valuation – and Newman was forced to step down as CEO.
However, it seems that the entrepreneur has not lost an iota of his ability to convince the largest investors to bet on him.
In the same way that he got billions from SoftBank – one of the most important venture capital funds in the world – for WeWork, he already has good financial backing for his new initiative, about which little is known about his name, flowThis has to do with real estate.
Although this is not the only talent that accompanies him from his past. As well as the ability to stir controversy.
But let’s go through the parts…
From a kibbutz to WeWork
Neumann was born in Tel Aviv in 1979. He suffers from dyslexia, did not learn to read and write until the third grade, and served for five years in the Israeli army. “There I met most of my best friends today,” he told the Israeli newspaper. Ha’aretz in 2017.
In 2001 he decided to move to New York.
His goal was in the American city “Get a great job, have a lot of fun and earn a lot of money”As he told tech media in 2017 Take Crunch.
He began by enrolling in the Zickling School of Business at Baruch College, a public center part of the City University of New York, and by frequenting nightclubs in the Big Apple with his sister and roommate Ari, a model and former Miss Israel. .
With only four credits left to graduate, Newman decided to drop out of college and plunge into the business world (he will finish his bachelor’s degree in 2017).
It’s been something I’ve been dealing with since I was a student, first with a foldable heel shoe design that went unnoticed, then with a brand of baby clothes with built-in knee pads, Krawlers.
This last idea led to Egg Baby: Founded in 2006 It became his first successful company.
At that time he met Miguel McKelvey, who will be his partner at WeWork.
They quickly called and McKelvey convinced him to move his business to the building in the Brooklyn neighborhood where he worked.
In that place, in one of his frequent brainstorming or BrainstormingIt occurred to them that there could be a business of renting empty office space to others who wanted to occupy it temporarily.
This is how Green Desk, a co-working company, was born. They soon sold it, but stuck with the idea and built it into what became WeWork.
Newman also linked the origin of the company to his personal history, relating it to his wandering childhood and time spent living on a kibbutz, a collective farming colony. In fact, he told the Israeli newspaper Ha’aretz who sometimes referred to WeWork as “kibbutz 2.0”.
The creation of the company’s slogan “Do what you love” is credited to his wife Rebecca Newmanwhom he met during his school years is the first cousin of actress Gwyneth Paltrow (née Rebecca Paltrow) and a friend of his daughter Ivanka Trump.
The company opened its first space joint work In New York’s Little Italy neighborhood, and with Newman’s presidency and a group of major investors such as Japanese Masayoshi Son, owner of SoftBank, it continued to expand throughout 120 cities from 40 countries and turned start of greater value to the United States.
That was the peak from which he would start to fall.
Falling from grace
Being in a growth spiral, Neumann is no longer an office rental company and has begun to form The “we” empire.
WeLive, community housing, WeGrow, the school where Newman enrolled their four oldest children (they now have six) and at which they wanted to start an international network of schools for nomadic children, and Rise by We, a chain of gyms.
He also had other failed ideas, while giving Unleash your eccentricityLike walking around desks barefoot, install a plunge pool and an infrared sauna in your office.
It is already known fondness for party And doubts about its management ability, which were added to operations that might be seen as unfaithful to the company — such as the acquisition of properties that it later leased to WeWork — soon began to make an impression on investors.
They began to wonder if WeWork was actually worth $47 billion.
In 2019, due to the lack of confidence in the markets and before risking the failure of the operation, the company decided to postpone its public offering and find out its true situation.
This was followed by the resignation of Newman’s CEO, which some investors came to denounce in court.
Demand did not boom, and 1,000 million US dollars obtained from the sale of his shares added 185 million US dollars to continue working as an advisor to the company.
Of course, by the time WeWork went public last year, its valuation had already been reduced to $9,000 and today it’s barely $4.1 billion.
The story gave rivers of ink in the media, a audio notation From Ten Chapters directed by David Brown, We Crashed: The Rise and Fall of WeWork, It later inspired a mini-television series, which premiered on Apple TV+ this past March, in which Jared Leto and Anne Hathaway rekindle Newman’s marriage.
But that story doesn’t end with the enterprising Newman, who seems ready to get back into the fray with a new idea, Flow, and good support.
Not much is known about the company.
In January the economic environment The Wall Street Journal I mentioned that Neumann Bought over 4,000 shares families in the United StatesLtd., from Miami and Fort Lauderdale, to Atlanta and Nashville, with the goal of creating “a widely recognized brand of apartments, equipped with all kinds of amenities.”
as progress The New York TimesAnd the Andreessen Horowitz,Legendary venture capital company Who bet his day on Facebook and Airbnb, he would have invested $350 million in Newman’s new adventure.
According to US media, which cited three sources familiar with the investments so far in Flow, it will have a valuation of more than $1,000 million.
Andreessen Horowitz this week confirmed his endorsement of Flow on his blog, calling Newman a “visionary leader” who “fundamentally redesigned the office experience” and bet he would do the same for rental housing.
“We love to see entrepreneurs build on past successes and grow from lessons learned,” the blog says.
“We think it’s only natural, for his first WeWork initiative, for Adam to reconnect with people, change their physical spaces and build communities where people spend the most time: their homes,” he continued.
“Real estate, the world’s largest asset, is ready for exactly that change”.
Neither Flow, whose website says it will launch in 2023, nor Horowitz have responded to interview requests from BBC business correspondent Natalie Sherman.
But not all of this was in praise of Neumann.
Some investors have raised eyebrows about the level of support someone has received with this record, and others have emphasized the The gap between the funding received Projects “White men in Silicon Valley” and Startups Led by women or entrepreneurs of other ethnic origins.
Allison told the BBC: “There’s a reason this is causing such a stir… It’s because of the size of the check, the unprecedented funding that someone known to be an unethical businessman is receiving. It creates an emotional response.” Founder and CEO of Scroobious, which aims to help startups run by underrepresented groups find funding.
She was one of many users who have taken to social media to express their frustration with investing in Flow. “We are bound by these impossible standards. That is the outrage.”
Newman’s big bet also comes at a time when the tech industry is facing a slowdown, making it difficult for startups to raise money and leading to layoffs and a slowdown or freeze in hiring.
Investor Leslie Finzaig, founder and managing director of venture capital fund Graham & Walker, also describes the news of Newman receiving an award “hit in the stomach”.
My immediate reaction was, ‘I wish women would have the same opportunity to fail spectacularly as Adam Newman.’
Last year, only 2% of US venture capital went to companies founded exclusively by women, the lowest percentage since 2016, according to Pitchbook, a company that manages data on private capital markets.
And the percentage going to companies with African-American founders was even lower, according to Crunchbase, a platform that aggregates business information on private and public companies.
“Real entrepreneurship is about the ability to recover from mistakes and setbacks, but Andreessen not only gives that to Neumann, he seems to celebrate it,” Finsage concludes.
Whatever the case, it remains to be seen whether the outcome of this new adventure will resemble WeWork.
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