the money game

Why Is Anyone Still Betting on Adam Neumann?

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Adam Neumann loves a theme. In his previous corporate life, the billionaire Silicon Valley mogul was all about “we”: WeWork, WeLive, Rise by We, the We Company. At one point, his commercial-real-estate behemoth was worth $47 billion. But since he got booted from the company three years ago (it’s now worth about $4 billion), Neumann has moved on to something more dynamic, and its theme is “flow.” In May, he came out as the force behind Flowcarbon, a way for companies to trade in the gimmicky carbon-credits market. Now he’s making an even bigger splash with a residential-real-estate company called — you guessed it — Flow. Little is known about it except that Andreessen Horowitz, the venture-capital kingmaker, invested $350 million, its largest-ever check, into the enterprise, valuing it at more than $1 billion before it even starts. “We understand how difficult it is to build something like this and we love seeing repeat-founders build on past successes by growing from lessons learned,” Marc Andreessen wrote in a blog post announcing the investment. “For Adam, the successes and lessons are plenty and we are excited to go on this journey with him and his colleagues building the future of living.”

Maybe you know of Neumann through the Jared Leto and Anne Hathaway series WeCrashed or the documentary WeWork: Or the Making and Breaking of a $47 Billion Unicorn and you’re unsure why someone who’s so weird and lost so much money would now be entrusted to possibility lose it all again. There aren’t many good answers to this, but here’s about as much as we know about Neumann’s second act.

What does Flow do exactly?

Who knows? But as my colleague Kim Velsey at Curbed pointed out earlier this year, it basically looks like landlording. The website (its address: offers no details except that it’s coming next year. The rollout for Flow is already quintessentially Neumannian in that there are a lot of buzzwords and very little when it comes to concrete business plans. (Remember, WeWork’s goal was to “elevate the world’s consciousness,” something more likely to be a tagline for a silent retreat than an office-space company). The most information comes from two points made in Andreessen’s 961-word blog post. The first is that the “theme” of Flow is “connecting people through transforming their physical spaces and building communities where people spend the most time: their homes.” In this way, it is very much like WeWork — and builds on the dorm-style vision of the fizzled-out WeLive — though what it will look like is still unclear.

The other part, though, is probably what makes Flow worth so much. “You can pay rent for decades and still own zero equity — nothing,” said Andreessen, the NIMBY venture capitalist who’s trying to kill home-building in his neighborhood. Of all the aspects about rental life (the reliance on superintendents, the rising rents, the precarity of having to move), this one sticks out as the biggest hint to what Neumann’s endgame is. It’s possible this is a rent-to-own play, which would put it in a segment of the real-estate business that’s notoriously predatory, one the Federal Trade Commission has warned is full of high fees and catches that end up burning would-be owners. This wouldn’t be that much of a surprise since Silicon Valley has essentially flipped itself from an engine of American innovation to a funnel for money into scammy high-margin businesses that can be scaled through the use of an app.

Why is it worth $1 billion?

That actually might not be as crazy as it sounds. Remember: The guy got a $445 million golden parachute after botching WeWork’s initial public offering in a deal that also allowed him to refinance another roughly $500 million in debt and sell another $500 million or so in stock. While it’s not exactly clear what he spent all that money on, it would be a pretty good guess that he plowed it into buying up the real estate that makes up Flow’s portfolio. According to a January Wall Street Journal article, entities connected to Neumann have already bought up more than 4,000 apartments in areas such as Nashville, Miami, Atlanta, Fort Lauderdale, and other U.S. cities. One of them, Stacks on Main in East Nashville, has a kind of Pee-wee’s Playhouse vibe to it with bright colors and garish patterns that would probably make for a fun or interesting place to live if you’re free of too many responsibilities and had some money to throw around. Whatever you think of the hype, these apartments are worth something.

How does this work with his other new business?

So far, unclear. Flowcarbon is “financially separate,” according to the New York Times, but this is Adam Neumann we’re talking about — the guy who bought a wave-pool company and folded it into WeWork because he could. Look, it’s probably all related, and at some point in the future, when people want more than wispy feel-good linguistic tricks about a real-estate company, there will probably be some synergistic master plan that shows how the two operate together. For now, both are merely run by Neumann and have backing from Andreessen Horowitz funds.

How is Neumann able to do this? 

There’s a vision of justice in which the people who fail and lose billions of people’s dollars get exiled, making room for other people who haven’t made colossal mistakes to get some of the billions of dollars in investment capital to realize their dreams. But in reality, that doesn’t really happen. Unlike other notorious Silicon Valley CEOs — Elizabeth Holmes, for one — Neumann didn’t commit fraud. Yes, he reportedly smoked weed and burned bridges with Wall Street, but if you’re an investor looking to make money, you’re more likely to value other things about him: his knowledge of the real-estate world, his connections with Silicon Valley, and the fact that he got to a $47 billion valuation in the first place. “For all the energy put into covering the story, it’s often under appreciated that only one person has fundamentally redesigned the office experience and led a paradigm-changing global company in the process: Adam Neumann,” Andreessen writes. At the end of the day, it was other people, including SoftBank’s Masayoshi Son, who made the mistake of giving him so much money.

Why Is Anyone Still Betting on Adam Neumann?