4. The WeWork Scandal With Eliot Brown [FourWeekMBA Podcast]

What this episode covers

In this session, I interview Eliot Brown, a reporter at Wall Street journal since 2010, and author of:The Cult of We: WeWork, Adam Neumann, and the Great Startup Delusion(https://i0.wp.com/fourweekmba.com/wp-content/uploads/2022/02/cult-of-we.png?resize=676%2C1024&is-pending-load=1#038;ssl=1)We recount one of the most incredible startup stories of the last decade. The story of WeWork (https://fourweekmba.com/wework-business-model/), and how it went from being the most valuable startup on earth in a few years to almost risking going bankrupt, in a series of dramas, conflict of interests, and turns of events!This story is also turning into an Apple TV+ series.What was your background when you actually started to cover WeWork? What actually prompt you to cover the WeWork story?Eliot Brown:Yeah, so it was many years ago that I first came upon them. I was at the Wall Street Journal in 2013 covering commercial real estate and the office market. I was just interested in new trends in the office market and how people were working. A lot of people were talking about co-working spaces. So I went down to lower Manhattan and met this one company that was leasing a lot of space. I heard the CEO was kind of fun and talkative, so that’s when I first came upon them when I met with Adam Neumann.Gennaro [FourWeekMBA]:Oh. I guess at the time, WeWork was one of the hottest companies in New York. It was very easy to end up hearing about that. But can you tell us a little bit more about the background of Neumann, who was the founder of WeWork. How was Adam Neumann’s life before getting in New York and the experiences that brought Neumann to actually create WeWork in the first place? Eliot Brown:Yeah. He had a pretty interesting life. He grew up in Israel largely. He did a brief stint in the U.S., but his parents were doctors, they were divorced. His mom was kind of unstable and always moving them around, always spending all the money she had. So they were running out of money, even though she had a decent-paying career. He spent some time on a Kibbutz, which communal socialist experiment type thing in Israel. Someone we talked to remembers that even then when he was just a teenager, he was always brash and had this real desire to make money, which is kind of a funny thing to come out of a socialist-communist little village.Fast forward, he did some time in the Navy in Israel, as is compulsory. Then he just wanted to get to New York and become rich. So he moved there. His sister was a supermodel, lived with her. She mostly supplied the money and he tried to start a baby clothes company, or he did start a baby clothes company that tried to make clothing that had knee pads for babies when they’re crawling. It was called Krawlers. The idea was that babies, their knees must hurt so here’s a way to make it so they don’t, and didn’t go very well.Gennaro [FourWeekMBA]:Yeah. Also, because I mean, at the time he was a guy in his 20s, and he was selling like a product for babies. He didn’t have babies, actually, probably didn’t even understand what being a parent was at the time. But also there is another interesting paradox of this whole story, which is quite curious. As you said, when he was a kid he had the chance to actually hang out in a Kibbutz, which is a sort of closed, gated community where there is this sort of communism where you share everything. How important was this experience to Adam Neumann, on the negative side and also on the positive side?Eliot Brown:Yeah. I mean, well, I’ll tell you what he said. Though,

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