So in some sense I think asking what Adam Neumann and Elizabeth Holmes really believe is a category error. Knowing the truth makes lying really hard. If you spend a lot of time figuring out what's true, that builds mental habits that make lying feel bad. But if mostly ignore "true", then it's much easier to focus only on what Nixon's press secretary called the "operative statement" [1]. For narcissist CEOs, I think they treat the objective truth like a child sometimes treats a scary closet: if they never look at it or think about it, it's not a problem.
[1] https://www.nytimes.com/2003/02/16/weekinreview/the-nation-t...
If the facts don't align with your vision, figure out a different vision.
A good CEO who is very strong on vision will build a team that keeps him in check by having balancing strengths. But narcissists don't like balance. So they build teams that let them do what they want. And when they hire somebody who isn't an enabler, that person soon ends up gone one way or another. And it's not just CEOs. You can find a good example of this in recent US politics.
If your CEO is delusional, it's usually possible to reign him or her in... From what I understand, Neumann had some special votes that basically allowed him to fire the board at any point.
I imagine that anyone with a pragmatic mindset willing to ask "wait, but the numbers are..." was pushed out of the picture either explicitly or implicitly by the power imbalance.
https://www.vox.com/recode/2019/9/24/20882133/wework-adam-ne...
Thanks for the tip! I didn't realize that.
Vision is fine but cold, hard facts are essential too. If you let your vision get the better of you and you ignore the facts then you're on the path to self destruction.
If those two factors are strong (say, cultural reasons), a lot of red flags can fall by the wayside.
This problem is fed by the fact that they surround themselves with yes men, who only benefit by feeding the beast, until the beast eats itself.
It's called Michael Jackson Syndrome.
The best part: https://www.youtube.com/watch?v=XAeEpbtHDPw
Everyone has their own peculiar mental model of reality, sometimes more optimistic, sometimes more pessimistic, almost always with strange boundaries on the thinkable universe.
I estimate this is how the majority of bad financial situations happen, whether untenable mortgages, huge credit card bills, excessive student debt, etc.
People are usually not fundamentally stupid or poor decision makers, but they do usually ignore uncomfortable thoughts.
It's easy for that to happen to one person; it's more surprising when it happens to dozens of people.
-Margin Call
SV ran out of the first two because they are much harder. We are left with the dying gasps of companies trying the third way.
This is called "Being disruptive." Basically, just ignore the law, but make sure you get enough workers and customers that love you so that they turn against politics when you break the law.
The issue is that not every industry is so inefficient as to be possible to legally disrupt profitably, so people try to do an end-run around the law.
Uber's autonomous car fatally collided with a woman, raising questions of negligence and liability in automation.
Uber acquired some of Alphabet/Waymo's trade secrets when they aqui-hired one of their former engineers who apparently kept a bunch of Waymo's IP he worked on. That engineer himself is now facing a federal indictment, and Uber and Waymo have settled.
E-scooters are facilitating a number of city-specific crimes (it's usually illegal to operate a vehicle, bike, or skate on a city sidewalk and the e-scooters do not provide helmets but neither do the riders). To say nothing of the legally dubious use of public property to deploy them.
Move fast and break stuff indeed.
If anything, I'd expect it to work against them.
What was/were the other crime(s)?
As it was originally proliferated in reference to tech ventures, it referred to a very specific pattern highlighted by Clay Christensen's writings out of HBS.
In classical "disruption," a product or technology that is notionally "worse," but as a result greatly cheaper or more easily distributed, takes over a market from notionally "better" but more expensive legacy approach. Often includes de-skilling of the use case too.
It's sort of like guerilla warfare in that way.
The successful recent IPOs people are pointing to in this comment section -- like Zoom, Datadog, and Cloudflare -- all tend to have a version of this classical disruption if you try and see it.
I say this not for mere pedantry but because taking "disruptive" to mean "F---ing things up (rules, laws, etc.)" dilutes a useful concept in thinking about technology adoption approaches.
This is more an inditement of modern society, highlighting how much freedom we have lost
When an app like uber is "illegal" one can not call that society free in the least bit.
The fact that most things are by default a violation of some law or regulation is the #1 reason we are no longer innovating as fast as we used to.
Some might see this as a good thing, I do not
You don't ask the question, why should an app like Uber be illegal? Why should taxi medallion holders have a monopoly on on-demand transportation in a city? To make hedgefunds rich?
Transportation across cities in North America sucked before Uber. You are completely delusional if you think pre-Uber and pre-Lyft cities were some kind of transportation mecca. It was horrible. I used to wait in the rain at UCSF for 30 - 45 minutes on the curb waiting and hoping for a taxi and finally just pitifully walking home getting drenched.
I love having a ride-hailing app and not having to waste money on a car or motorcycle.
I really think people that love static bureaucratic states should go live in France or some communist nation.
Uber and Lyft can't start up in a city if they have to wait for all the politicians and bureaucrats to give them an okay, when these people are bought and sold by unions and hedgefunds. Only delusional people think there's a path to disrupt that kind of logjam by waiting in line like a "good boy".
Medallions are just a mechanism for limiting the number of cabs to what the street network can support; isn't that obviously necessary?
On the other hand, it appears from what I read that Uber may have actually been dealing with the problem by charging surge rates and then keeping most of it, thereby reducing demand without increasing supply which is just what is needed. But that outrages everybody, so the argument for having the government ration things is that it's more socially acceptable - which is a valid reason!
The apps of Uber and Lyft seem to me like valuable innovations in that they allow you to get information on your ride, predict the cost, and pay with a credit card which are great improvements on regular cabs.
But cheering unregulated cabs makes no sense to me - the streets in a given city seem obviously a commons that needs regulation. Uber and Lyft are forms of regulation, so really, people only debate the details. Freedom vs. non-freedom is a caricature.
Unfortunately, this seems to be the only way that's not outright massive violence such as Hongkong or France to get politicians to do their goddamn job. Taxi services have had a really massive lobby power in the US.
If not then this is just a silly point. Some of the regulations were unreasonable and the result of corruption - but Uber also skirted insurance and background check related laws at various times.
The end result is a safer, better-functioning street transit system (in New York at least). I don't care if they were in it for social change or for the money. They delivered results, both themselves and by kicking taxis up a notch.
(Many activists aren't in it for altruistic purposes. That doesn't make their work less meaningful.)
Yes, the rise of the Internet meant it was time to change how we did cab dispatch. And it would have been great to see what else we could improve, including getting the cab companies to be less oligopolistic. But Uber was clearly after a monopoly [1] so Kalanick could jack rates up enough to justify the billions of investment they took. But national monopolies are way more harmful to both workers and customers than local, strongly regulated oligopolies. Uber was ultimately trying to make things worse, but with them skimming the monopoly rents.
[1] https://www.amazon.com/Super-Pumped-Battle-Mike-Isaac/dp/039...
It's better to have two parties competing for user's money than just one party fixing the price and service quality.
> Unfortunately, this seems to be the only way that's not outright massive violence such as Hongkong or France to get politicians to do their goddamn job. Taxi services have had a really massive lobby power in the US.
This was strongly implying that Uber was causing political change. I don't disagree that the competition has been healthy or that the taxi companies were bad actors - or even that the regulations were legitimately onerous sometimes... I object to the statement that "disruption = positive social change".
I think that Uber's case is particularly weak because, while skirting regulation may have gotten accolades, the company itself was toxic to work at and brought in a bevy of sexual harassment charges.
by and large consumers don't care if the company is for social change or not.
it's difficult for a company to succeed in getting customers to pay based purely on social change intentions. That's how a market works
The wonderful board room scene:
They borrowed short, lent long and then pretended it was as sustainable business. To their credit, they abundantly disclosed their shenanigans. (I haven't seen any evidence suggesting investors can reasonably claim fraud.) But they were playing fast and loose with basic economics.
At its core, sure, WeWork could have been a business. Its thesis, that office space should be treated as a service versus capital expense, is plausible. But there was so much garbage--the party-at-work hypothesis, thoughtless cross-selling, nepotism, consciousness nonsense, self-dealing, et cetera--that the value got diluted while the price was pumped.
SoftBank and Masayoshi Son's hypothesis is:
1. Find a market which can be captured by a business with access to massive capital
2. Provide massive capital
3. Extract profits once a monopoly has been established
WeWork is a terrible example of this, because in no way does scale give them unique advantages. And furthermore, "scale" in this context means "scale in the office property market" -- that's a pretty big pool to expect to overflow.
I run a small digital agency, as a WeWork member when I'm on the road being able to know I can find and book space for meetings or work is invaluable. We've also spun up offices in new cities (Mexico City for us) easily and quickly with a confidence in the level of service and support that we're getting.
There is a premium for this and we've moved on from those offices sometimes as we settle in. But its not a non-existent advantage.
Within the original thesis per se it gave them a possible demand-side advantage. (Commercial real estate is too big for any meaningful sell-side advantages.)
Being able to say "let's open a branch in Singapore and see how it goes for 6 months" with a few clicks is quite awesome. If I trusted it to be around in a few years, it would change how I think about deploying people.
To be able to deliver that value prop, you need seats available in Singapore. (And New York and London and Dubai.) Hence a potential scaling advantage.
I'd have thought that for most businesses, the two big obstacles for doing this are a) getting skilled people to suddenly move to Singapore at your will, and b) getting the Singapore office well integrated with the rest of the company.
Compared to those two, setting up an office lease is about as hard as tying your shoelaces.
This has not been my experience. Given how localized real estate markets are, they haven't been subjected to efficiency-driving global competition. The result is every market has hidden oddities. Little details that are a nuisance if you know about them but a disaster if you bumble through the process.
For long-term commitments to a market, sure, it makes sense to own your plot. But for short-term assignments? Toes in the water? Being able to spin up an office with flown-in staff committed to for the short-term, to develop leads and/or find those skilled locals to hire, is a tactical advantage which doesn't presently exist.
Uber's product isn't rides. Uber's product is being the market-maker between riders and drivers.
Austin has a non-profit rideshare business that matches riders and drivers.
You've just described almost every company in the financial sector.
They do have some scale, and there's always the idea that you can move to a different office or reconfigure your space quickly. This has real value. Just not $50 billion worth.
Matt Stoller wrote a great post about it:
https://mattstoller.substack.com/p/wework-and-counterfeit-ca...
"Generally speaking, Softbank’s model is to manipulate private capital markets as a way of drowning out competitors with cash. For instance, there were several ‘rounds’ of WeWork investment where Softbank was buying more shares at higher valuations. WeWork ostensibly became more valuable because Son said it was more valuable, and bought shares for higher prices. And since there was no public market for these shares, the pricing of the shares was totally arbitrary. WeWork then used this cash to underprice competitors in the co-working space market, hoping to be able to profit later once it had a strong market position in real estate subletting or ancillary businesses.
Engaging in such a strategy used to be illegal, and was known as predatory pricing. There are laws, like Robinson-Patman and the Clayton Act, which, if read properly and enforced, prohibit such conduct. The reason is very basic to capitalism. Capitalism works because companies that thrive take a bunch of inputs and create a product that is more valuable than the sum of its parts. That creates additional value, and in such a model companies have to compete by making better goods and services.
What predatory pricing does is to enable competition purely based on access to capital. Someone like Neumann, and Son’s entire model with his Vision Fund, is to take inputs, combine them into products worth less than their cost, and plug up the deficit through the capital markets in hopes of acquiring market power later or of just self-dealing so the losses are placed onto someone else."
No evidence of fraud, no. But cheating is not necessarily fraud because not all rules are codified as law. There is cleverly devious cheating, like a lot of what Gates and Jobs did in the 80s. That's cheating, but it's clever and it's cute so we think of it positively.
Then there's cheating as in pretending to defy the laws of economics, which is what WeWork did. They were trying to scale out of a business that loses money on the marginal dollar. Nothing illegal about that. But together with Masa Son's spigot of Saudi cash and Neumann's rampant self dealing, I'd go ahead and qualify it as cheating.
WeWork's revenues already cover its rent costs even at just 70% occupancy.
I still don't see this "cheating" you speak of.
The social focus is indeed different but I wouldn't call that alone a massive paradigm shift.
Plus companies like Uber don't exactly own assets, its more tech company than not.
For all the promise of the Web, people live in the real world, that's where the money is to be made, mega tech companies are necessarily going to live at the interface.
Except Buffett did it with non-tech, capital-heavy companies. Where it arguably works a lot more reliably.
How so?
I don't think he invests so much in capital starved businesses, more he just uses the cash generated by eg insurance to invest in high quality businesses. I suppose the difference here is the high quality part. Wework doesn't seem to have much of a moat, have particularly good governance, or have much of a track record of anything.
Holding it for a period of time is "generating float." For many of these companies the float is a large multiple of the profit.
https://www.theverge.com/2019/7/10/20689644/apple-zoom-web-s...
https://www.se-radio.net/2013/12/episode-199-michael-stonebr...
Only on a tangent - it's an otherwise fascinating episode from a database wizard.
>In fact, I would be wary of software companies without a base of free users, as that means the company needs to keep spending a lot of its revenue on sales and marketing. I am much more wary of companies that keep or burning cash for years and years with the only excuse that "Amazon did that as well".
I think about this a little differently. Spending money on free users is actually a much more efficient "marketing expense" than classic outbound strategies (e.g., online advertising).
Are these good examples, though? Dropbox is down ~35% since IPOing, and Slack is down almost 50%. This certainly suggests the market thinks they were both overvalued when they IPO'd.
Slack went public at $26, it is at $23.50 today. It is less than 10% less than the IPO price.
What happens when the inevitable correction comes? The Fed will run out of monetary tricks, eventually.
No, it won't.
It might run into a monetary-policy resistant situation (e.g., stagflation), but the Fed has infinite range of monetary policy tricks available (literally, there's no floor to rates now that the Fed has taken notice of the use of negative rates elsewhere.)
When a consumer realizes they are getting 50% off of a service or product they didn't want or need in the first place, they stop signing up for deals. Also, once the businesses realize these customers don't provide repeat business and they are devaluing their product for consumers who do want it, they stop offering the discounts. Finally, it's trivial to sign up for each of their competitors and play them off of each other.
When does a Cloudflare customer stop needing secure, performant content delivery, and how easy is it to switch to a competitor?
I think wework just has too many things wrong with it. (1) Recent IPOs (eg uber), weren't great. (2) Financial performance from uber and other recent IPOs isn't great. (3) Theranos is old-ish news by now, but it's a good example of what public investors are looking out for: bubble excesses. Public markets atm are moneyed, but skeptical. Worried about this new, enormous private equity market pumping and dumping on them.
Once you add in the (4) difficult-to-understand ownership structure (with dubious scent), (5) complex leveraging/debt/liabilities and (6) complicated entanglement in the real estate market movements.....
It just adds up to too much, IMO. Every one of those 6 "problems" could make wework look like a "you should have known better" investment, CEO scandals cultural weirdness aside.
^IMO it's more about monopolies (thiel's definition) than software. Selling software doesn't guarantee "software margins" long-term. What uber, wework, etc. lack is monopoly mechanisms: lock-in or network effects. Even though uber is a market/network, the market can happily bear more than one ride hailing app. That means margin-killing price competition.
Also, valuations are so nebulous and ungrounded in reality at this point. Who is to say what anything is worth. You put something out there and someone is willing to pay billions for it, who are you to say that isn't the right value. There are a lot of problems to pin on Adam, I don't think the valuation is one of them.
Softbank bought in, so this is more valuable, so Softbank will buy in again at a higher valuation, so this is more valuable, so Softbank will buy in again at a higher valuation; and round and round it went until we hit ~$40B
Both Goldman and Morgan Stanley gave the BoD much higher valuation numbers, which made members believe the stock price was going to go up... and when your options are going up in price, it's easiest not to rock the boat, and ignore misdeeds or conflicts.
You only realize who has been swimming in the ocean without trunks when the tide goes out ;)
Think about the construction of the Panama Canal. The first few attempts were total fails, because canal-building technology wasn't as advanced as people thought, and eventually the funders got tired of what they perceived as "throwing good money after bad."
Eventually the canal did get built. Technology improved and the winning venture had enough funding to make it happen.
As a thought experiment, if We/Neumann/Softbank had enough money to buy or lease all the great real estate in the world, and to educate all the population in We schools, so that they needed/wanted We offices when they grew up, it could have ruled the world. Putting it that bluntly makes it sound silly, which is probably the right way to view the Neumann era in retrospect.
But when We's future liquidity seemed almost endless, it was possible to dream big dreams. What got them undone is the reality that capital markets do not stay giddy forever. At the top of every cycle, there's always someone who ginned up an enormous flop -- losing their funding partway through for a dream that would not work without more capital.
The only "tech" part of WeWork is their app and related community. Which is a ghost town used mostly by businesses to spam their services to uninterested members.
The mis-calculation that I made was that I thought using software to enhance a legacy business was something that public market investors would apply a high valuation multiple to. What it looks like is happening is that public market investors are comparing these companies to traditional industry companies they already know.
The interesting note is that Amazon, Google and Facebook all stumbled out of the gate, but they were able to pivot to selling software. Amazon with AWS, Google with Search Ads, and Facebook with Mobile Ads. I think this is the pivot that's going to have to happen for the latest round of companies that aren't doing so hot right now to start throwing off cash and increasing their valuations.
[1] - https://avc.com/2019/09/the-great-public-market-reckoning/
Wall St. et al, didn't care about anything but off loading this POS onto Investors and then taking their money and running.
That's how it works. Thank goodness it rolled over and now the race to zero. Couldn't have happened to a bunch of nicer guys.
What I don't understand, and this is an honest question for this crowd: aren't these viable businesses, in and of themselves? Maybe this is a stupid question. This is probably what allowed them to run so far on what they actually were, but here's the question anyway.
For instance, WeWork seems to be an AWS-for-office-space. Is that not a useful business? If I own a contract for space that can be slotted into anywhere in the world I might want to sit, is that not a useful thing to pay for? One might argue that, if I had the resources to truly care about a world-wide smorgasbord of office spaces to choose from at any given time, I'd have enough resources to lease my own building(s). But it still seems like something the market needs. Did it have to be a one-hundred-billionaire-minting business to rent space into that kind of market?
Theranos seems like a useful thing, and there seems to be an opening in the market for it. Are the cost mechanics of the available technology and the opportunity not aligned? Is there no way to run an economically-viable company providing a blood tester unit with a more-limited set of tests? Did it have to be a unicorn, end-all-be-all, existing-testing-company-destroyer to make any money?
You see where I'm going now. Does Uber need to suck all the money into their pockets to fund their self-driving car efforts (or wherever all this money is going) in order for any of it to work? Surely there's a model of ride sharing through an app that doesn't have to suck, pay their drivers well, and is a sustainable business, right? Does it really have to be the "Uber-of-cars," so to speak, in order to exist at all?
Is the only game left in the Valley, now, unicorns? All others need not apply?
I think about it from the other direction. WeWork leases office space and parcels it out to temporary tenants. But, what's to stop the management companies that already own the office space to do the same thing? Why pay a middle man? WeWork would take the risk and prove the model effective in a particular area, then their own suppliers could undercut them.
Theranos was trying to sell technology that doesn't exist.
WeWork's business model kind of reminds me of MoviePass in that they are very dependent on vendors who could also be their competitors. And there's the risk that the economy slows down and people cancel their memberships but they still have long term leases to pay...
Assuming their kind of risk in a robust economy is lucrative. But I fail to see how WeWork could ever weather a recession, US or global.
It has long leases for buildings, and short leases for customer, so it's basically failure scenario number 1 for an economic downturn.
And yes, if you act as a startup, and hire engineers assuming you are startup, you better be a unicorn.
This was going to be one of the largest IPOs of all time. This means a huge amount of fees for bankers. In addition, WeWork is an opportunity for those bankers to also win business putting together the various kinds of debt WeWork throws off.
When bankers want a deal that will generate a huge amount of fees for them, they're not going to tell a potential client they won't get the valuation they want or that he needs curb his spending habits and reduce his control. That's a great way to lose a deal.
No, they tell Adam he's a genius, We Company is revolutionary, and once the company is public he should buy a second jet just in case the first one is grounded because a mishap like a cereal box of weed being found on it.
But if there's a silver lining here, it's that VCs can pull this shit until the cows come home without causing the same systemic problems that led to the first dot-com crash. They tend to have a small handful of wealthy LPs, and the financial system doesn't really give a shit if they get wiped out - grandma's pension may not be growing fast enough, but it's not going to evaporate.
In this case, SoftBank and the Saudis run away with their tail tucked, and everyone else just looks at them like they were idiots and moves on.
One of the root issues is that way way too much capital has shifted out of the public markets into private equity. Public markets are significantly more regulated, transparent, and liquid. Public markets are almost always more favorable for regular investors. Whereas privately funded companies tend to be structured to primarily benefit connected insiders.
WeWork's ridiculous valuation is a prime example. Private companies can easily manipulate their valuation, by only making sure to sell shares at pre-arranged prices so that they never down round. In contrast public companies shares are traded thousands of times a day. If investors stop believing in a valuation that's reflected in the stock price in microseconds.
The industry has built up this cult around "unicorns"- multi-billion tech companies that never go public. As if that's a desirable thing. It's mostly been empowered by a mythical cult of the brilliant founder. Said founder-CEO need be unchained from any accountability whatsoever, lest trivialities like quarterly earnings reports or short-sellers constrain his creative vision.
And of course the private equity firms behind the VC capital are more than happy with this arrangement. Again, it's significantly easier to manipulate the valuation of private companies than public ones. Keeping your ventures private forever enables the fund sponsors to massage the return stream on their portfolios, which makes their risk-adjusted performance look far more impressive than it actually is.
Then we have WeWork. Which looks like a technical savvy landlord but under it all is subletting from one of the founders. Which I suppose would make this closest in structure to an IPO for a franchisee? That’s the sort of investment opportunity a bank would be into but makes no sense on the NYSE.
WeWork needs to get to a point where some to half of its properties were acquired under their own steam instead of through the founders. Otherwise it’s just a sucker’s bet.
After reading some of the stories, I'm minded to believe maybe he didn't...
But I have trouble squaring that with extremely hard-nosed moves like cashing out $700 million, and getting loans from the company to buy buildings to lease back to the company.
For private rounds valuation is part of the equation, but liquidation preferences and ratchets are likely more important. As the famous finance saying goes "You set the price - I set the terms, you set the terms - I set the price".
SoftBank has negotiated downside protection. Everything from there is just gravy on top.
The press never seems to discriminate between preferred and simple shares, so why not reach for the moon, e.g. https://www.latimes.com/business/la-fi-hy-uber-ipo-20181016-...
The major thing is usually first dibs if the company sells for a lot less than the later valuations. In this case that doesn’t seem likely to happen with Softbank getting back most of their investment
>The [ratchet] provision could grant existing shareholders $200 million to $500 million worth of additional shares, most of which would go to SoftBank, Kennedy said. For example, if WeWork’s market cap came in at less than $14.5 billion post-IPO, the total value of additional shares issued to SoftBank under the provision would be more than $400 million.
$400 million doesn't seem to be much of a compensation for losing billions of dollars in investments.
And that assumes that the company will IPO before it goes bankrupt (e.g., from investors pulling the plug on any future investments to cut their losses).
But it didn't work. Sanity has prevailed.
Stripe. Recently valued at $35 Billion, although they being profitable is unlikely now considering their phase of international expansion; IMO it does check rest of your questions just because their growth is directly tied to the growth of their customers.
Softbank was hoping Vision Fund II will be closed once this collapses so pumping it up to 47B made sense to juice the returns on Fund I.
Adam N. already took 700M of his chips off the table before the IPO as well, so he clearly expected the music to stop playing as well.
But that's always the goal: get someone to pay you for somethig more than you think it is worth. And, conversely, they always want to buy it for less than it's really worth. Each side is hoping the other side’s value assessment is BS.
Willing dupes. It's a one-step jackpot if you can handwave all that stuff away, or if it never comes up in the first place.
wikipedia.org/wiki/Escalation_of_commitment
wikipedia.org/wiki/Dollar_auction
What’s annoying to me is that these companies that are making huge losses were able to hoover up so much of the VC funding, while actual profitable businesses were not :-(
I recall reading an article a few years ago from a profitable startup talking about trying to get VC funding, and all their interactions were basically “you should stop charging so you can get market share”. Essentially demanding that they make their profitable company unprofitable.
I wish I could remember where it was.
We're due for another venture backed capital burst. DropBox, Lyft, Uber .. the article posted on here a earlier about Counterfeit Capitalism comes to mind. There are too many companies trying to 'get there first' at all costs and squeeze out everyone else.
I honestly wonder if we're going to see another 2000 era dotcom burst for many of these smaller companies. I'm curious how taxi companies will retake their local markets once the big ride sharing companies are gone.
I'm just glad we finally had a sanity check on something.
> Wag has a post-money valuation in the range of $500M to $1B as of Jan 30, 2018 according to PrivCo.
I don't know at what point we can decide that the vision fund isnt, well, visionary. As things stand though, if you have faith in Weworks business model, this seems like a reasonable move.
To be clear, I don't have any particular faith in that business model, but I don't have any money on the line either way.
As for Adam N, I have to think some part of him knew that it was a bullshit valuation and all the hand-wavy "we are a tech company that also happens to do real estate" doesn't pass the smell test to me. He has personally enriched himself quite a bit so even if the whole thing falls apart he will be ok. I don't know if there is a bubble in SV or not, but it seems that the last couple of really huge unicorn companies have all been based on BS(We Work), Fraud(Theranos), and untenable business models (Uber). I'm far removed from that whole scene so maybe I'm showing my ignorance by stating this. I am, however, very curious to hear about any startup unicorns that are profitable or at least have a clear roadmap to profitability and not based on a business model that will be outlawed in a few years.