How many business myths do you go through the disillusionment of $ 47 billion?

Global business history

One of the most incredible rising stories

A real estate company packaged into the Internet received high valuations and was also questioned.The history of Wework’s rise and fall reveals the cause of the second ten -year entrepreneurial boom in the 21st century.

In the first crisis of WeWork, “Savior” Sun Zhengyi appeared. He used capital to help WeWork built the “moat” and helped him become a super unicorn company with a valuation of $ 47 billion.

After a failed IPO, the capital bubble of the US unicorn with the highest valuation of the first -level market was pierced, but the company’s founder still tried to get a comeback.

Sortors 丨 Cao YiContent source 丨 “Billionaires and Weng”

From zero, to becoming a super unicorn company valued at $ 47 billion, how long does it take for it as soon as it takes?

The answer is less than ten years.

From 2010 to 2019, WeWork developed from a shared office space to a global brand with a valuation of $ 47 billion. It jumped to the first place in the valuation of American startups. At its peak business, more than 700 communities in about 40 countries around the world.

But the good times did not last long. This company that is essentially the second landlord but wearing a technology coat. Within a year after climbing the peak, the valuation quickly evaporated by 40 billion US dollars.Since the IPO failed, its business has been declining.During the stacking epidemic, more and more people have begun to work at home, the demand for sharing office space has fallen sharply, and Wework gradually slipped to the abyss.In the end, the originator of the shared office applied for bankruptcy protection in November 2023.

The business best -selling book “Billion Dollar Loser” tells the inside story of Wework’s rise and decline.

WeWork’s core business is simple: rental venue, segmentation space, and then rent.The company mainly achieves profitability by providing services such as fashion design, flexible division and regular theme activities.But unlike a similar service company, the founder Adam Neumann (hereinafter referred to as Jane Nameman) is so scary of the company’s future ideas.

Noonman insisted that Wework belongs to technology startups, is a social network company and community company, and is also an organization that is committed to reshaping society.He used an ambitious triangle to depict the future of WeWork. The vertices of the three corners are office leasing, real estate and services.He asserted that every “horn” will become an independent enterprise worth $ 1 trillion.

Regarding Sun Zhengyi, the founder of SoftBank Group, Neuman described the contact of the two as a “special relationship”.Baba founder Ma Yun. “

The speed of the weWork bubble rupture is so fast that it makes Bloomberg sigh, “In the distant future, when historians recall a large amount of cash injected by banks and venture capitalists, they will almost definitely collapse the catastrophic collapse of Wework.As a warning story “.

The author of this book, Reeves Wiedeman, is in -front. Based on more than 200 interviews, it shows the company’s epic of the company with an objective perspective and wonderful narrative technique.The story of the rise and rapid decline.

We tried to get a glimpse of this crazy era from this WEWORK’s entrepreneurial story, which may be one of the most incredible rise and fall stories in global business history.

A carefully packaged subversion

Each generation will transform the office according to needs.In the 1980s, work compartments and desktop computers rose at the same time.Until the startups of Silicon Valley pushed down the wall and began to use lazy sofas and desktop football to attract employees using laptops, and the appearance of “collaborative office” was the branch of this movement.

Established in 2008, the “Green Desk” was the first shared office space of Wework in a sense, which was repaired by a century -old coffee factory.At that time, the global economy was in a “free fall”, and some people warned Neuman that people would not rent a new office when the market was sluggish.But after the green desk was opened, it was welcomed by the local unemployed, because they did not want to stay at home in depression.

Taking this as an opportunity, Neuman decided to create a new company and hope to cultivate the same success in the new office space.Under the advice of a Hollywood agent, the name of the new company is WeWork.

Although people wearing pointed shoes cannot sign a contract, the exposed brick walls and the creaking century -old flooring are beautiful for those who have been unemployed, unwilling to make, and longing for real workers.When it opened in February 2010, there were 17 tenants in WeWork. They were musicians, technology startups and architects.

Neuman believes that people want to maintain a connection with reality in the digital age, and the road to wealth after the economic recession is to start a startup and then subvert the tradition.Therefore, the company’s core positioning is not limited to the office rental business, but provides another choice for people, that is, it is no longer necessary to spend decades on the corporate ladder.

For Neuman, it is not difficult to find a wealthy man who invests in a steady growth of a real estate company in New York. However, what he needs to expand the global expansion is a specific investment.He claims to use technology to subvert the industry.In 2012, at the party to celebrate the second anniversary of the establishment of the company, Neuman announced that WeWork was not a real estate company, but a company that had interconnected companies with many mainstream companies rising with Silicon Valley.He himself is a community builder, not a landlord.

Neuman told potential investors that as long as they are willing to provide funds, WEWORK can develop at any speed they want.The market’s demand for the company’s office space is so strong that the only obstacle of the company’s growth is how much money is to build a new office space.

In the eyes of the venture capitalists, a successful real estate leader may allow investors to believe that the company’s value is 5 times the revenue, and those founders who promise to build a network of technology companies that achieve cross -order growth may suddenly get 10 times the sudden gain of 10 timesEven 20 times valuation.Even the world’s largest real estate company accounts for only 1%of the market share, but wework may break this model.Even if it occupies a 2%real estate market share, it can make Amazon’s litter look insignificant.

But in fact, WeWork is just a person who pays the office space rental and pays the rent. Its business seems to be as much as those who are about to take off.In this case, development software is very important. WeWork hopes to sell various products and services to members: from the medical care plan to the discount software subscribe, the company can get a share from it.

Therefore, when Goldman Sachs proposed $ 220 million in valuation investment, Neuman had rejected it on the grounds of low valuation.In 2014, after obtaining the funds of investors such as DAG Capital and JPMorgan Chase, the total valuation of Wework reached $ 5 billion, making it among the most valuable unicorn companies in the world.

However, it is easy to build a “moat”.By 2013, there were almost no WeWORK members using this network in a meaningful way.By 2016, the data analysis of the WeWork office space startup THINKNUM employees found that only 21%of members have published a message through WeWork’s internal platform.By the end of 2017, the service accounted for only 5%of WeWork’s revenue.

In 2016, Neuman began to worry about the company’s expenses.In July of the year, a wealth report obtained by Bloomberg broke the fantasy of WeWork’s high growth of WeWork.The file shows that WeWork cuts the revenue expectations of the year, and has reduced the profit expectations by 78%. The reason is that the new employee’s business is not proficient, resulting in the delay of the opening time of the new space and resulting in “overdue”.

As a company that has raised more than 1 billion US dollars of risk capital, the number of investors who are willing to provide funds for WeWORK’s losses at the price price are declining.At that time, for WeWork, there seemed to be no choice except for listing.

But suddenly, the only person in the world who could provide a life -saving drug in the world appeared at the door.

“Second Jack Ma” in Sun Zhengyi’s eyes

Sun Zhengyi often claims to see the soul of the company and entrepreneurs through numbers.He often gives up directly to the founders who “do not have true faith in his heart”, and if the founders like Ma Yun, he can often be beyond the imagination of the other party.

In Nurmann, Sun Zhengyi not only found a container that enriched the cash, but also found a dreamer who was eager to shape his own image -Sun Zhengyi 2.0.

In Sun Zhengyi’s eyes, the WeWork industry is “a game of grabbing the site” in the future. The party with the most sites will eventually win, and his own funds can make WeWork defeat any competitors.Therefore, Sun Zhengyi was indifferent to Neuman’s dream of “opening the 100th branches in 2016″.He told Neuman that if he was high enough and was willing to act quickly, the opportunity to be in front of him would far beyond imagination.”No matter what strategies are adopted, make it ten times larger.”

For Vision Fund, WeWork also provides a unique opportunity.The former needs to find a large enterprise in the level of the world to break the industry barriers with cash, and the theoretical returns of these industries should be considered enough to compensate the cost.Industries such as real estate have expensive leasing costs and huge potential markets, and need a lot of capital expenditures.

In August 2017, SoftBank officially announced its investment in WeWork, with a total investment of 4.4 billion US dollars.As a result, the valuation of WeWork has jumped to $ 20 billion, becoming the fourth largest startup in the United States after Uber, Airbnb and Space X.

In the eyes of WeWork’s competitors, Sun Zhengyi’s funds have become an indispensable model, and this money is used to provide a large number of services to attract customers.Capital is the moat.Although there are almost none of the companies that squander are close to profit, these transactions are also difficult for competitors to keep up.

In the process of WeWork’s “assault expansion”, the role of the vision fund is to break some basic rules of capitalism, so that WeWork and other companies are pricing for product pricing for profit, but to obtain market share.Because in a “perfect” world, the enterprise is not big.

Through the vision fund, he put a lot of funds to the start -ups, and Sun Zhengyi felt that he was a gift to young companies to “maintain privatization gifts.”In the company investing in the vision fund, Sun Zhengyi seemed to have a favorite.”WeWork will be the next Alibaba.”

In the summer of 2018, Sun Zhengyi and Neuman planned SoftBank and Vision Fund to acquire shares from the existing shareholders of WeWork, thereby eliminating any disgusting person who had a doubt about their common wishes.

However, Sun Zhengyi’s “gift” made WeWork executives realize that with the company’s quickly exhausting funds, SoftBank can be extravagant or carefully calculated.They are worried that SoftBank may take the time of drag as a strategy to force WeWork to accept less favorable conditions, so they start considering listing listing as a reserve plan.

47 billion US dollars of disillusionment time

On December 18, 2018, what was worried about Sun Zhengyi and Neumann happened. The Japanese mobile phone department of SoftBank was listed on the market, the first public offering of the world’s second largest public offering in the world after Alibaba.However, the stock lost a market value on the first day of transactions.Sun Zhengyi’s investment returns were not only failed, but his hands and feet were still restrained because several financial institutions pursued the deposit of his personal shareholding.

On Christmas Eve, Sun Zhengyi called Neumanman.He said that the plan had been born to die.The market collapse scared away potential investment partners, and then conducting such a scale is too risky.

Four days later, WeWork secretly submitted the S-1 draft to the US Securities Regulatory Commission, and this was a moment when Neuman wanted to avoid.A senior deputy of Neuman said, “For Neuman, this person like his father made him so disappointed that he could not say how much a blow this was.” “I don’t think he really returns to normal.Almost all his actions were related to this matter from the end. “

The S-1 draft disclosed by WeWork made people know that the founder of the long-haired founder founded an office space rental company without the speed of spending money.In the file, we see that WeWork is more like a family business, seeing the fact that Neuman has sold the related trademarks he held to the company at a price of $ 5.9 million, and also saw the loss of nearly $ 2 billion in 2018 in 2018the truth.

To make matters worse, Nomanman’s performance and transaction ability have always been the key driving force for WeWork’s growth, but it is difficult for him to establish a connection with the small and medium investor groups of doubts in the process of roadshow.Some bankers even claimed that “every road show in Neuman, the company’s valuation will reduce $ 1 billion.”

After the company’s valuation was shrinking and the IPO was forced to postpone the blow, the fate of Nomanman finally made a final game: From the day when weWork held a company’s board meeting on September 24, 2019, he no longer served as the company’s CEO.

In 2019, SoftBank announced a loss of more than $ 12 billion, which is the first loss in 15 years.At the conference call with the vision fund investor, Sun Zhengyi acknowledged that he was too trusting in Neumanman.He said: “We have created a monster.” He warned other companies CEOs invested by the vision fund to know the limit of our company.

Neuman has created a perfect enterprise for the second decade of the 21st century: filling a large number of new freelancers with vacant real estate with a large number of newly emerged, and then convinced large companies to integrate this community spirit and embrace excess global capital.Let anyone with dreams and guts be able to create a behemoth.

According to “Famous Field” report, after being expelled from the company, Neuman hid on his desk and put a cards on his own desk, hoping to remind himself 3 lessons from the experience: listen, keep time and make a good partner.

However, Neuman’s story is not over.Although he was expelled from WeWork, he was still a super rich worth $ 2.2 billion.One year before WeWork applied for bankruptcy, he began to sell his new unicorn entrepreneurial story from the capital market.

In recent years, Neuiman has founded a new real estate platform Flow, hoping to seize the opportunity of the rise of the remote office and the shortage of supply in the US housing market.In 2022, Flow received a $ 350 million investment from venture capital company A16Z.Neuman told Fortune magazine:

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