co-founder and CEO of We Co., had a talent that many on Wall Street found confusing. People loved throwing money at him.
In a funding round in January, investors were so seduced by Mr. Neumann that his rapidly growing office space, formerly known as WeWork, achieved an implied $ 47 billion valuation.
A skeptical person may have wondered if this figure was appropriate for a company that lost $ 1.6 billion in 2018 on revenue of $ 1.82 billion, but Mr. Neumann's backers believed.
This month, in front of a proposed public offering, skeptics finally pulled the fire alarm. Faced with growing concern about its business model, management and future profit potential, the company considered reducing its valuation by more than half before deciding, early this week, to postpone the IPO.
Shortly thereafter, this newspaper reported on new details of unusual personal agreements Mr. Neumann had cut with the company. It also revealed that the CEO smokes marijuana on private jets, wants to become a trillion, wants to live forever and wants to serve as president of the world.
None of this made it easier to understand how he raised so much money.
The 40-year-old Mr. Neumann is an exceptional salesman at all. But I suspect there is another, deeper reason for his investor appeal.
For about a decade, the business world has stiffened for the arrival of what can best be described as "Millennial Prophet." In a time when young, sharp, visionary CEOs have disrupted almost everything, it only seems logical that one of them will solve the biggest challenge of all ̵
In Neumann, these investors may have thought they had their husband.
The conventional modern view of what it means to have a job, and how it relates to having a life, has not changed much in 100 years. In fact, it dates all the way back to another wildly ambitious CEO, Henry Ford.
When Ford began selling cars in the early 1900s, the United States was nearing the peak of the industrial age. The old agrarian ideal of self-confidence and robust individualism had disappeared. People flocked to cities to work in factories.
Ford was an engineer, but he also had some bold, utopian and at times abominable views on how the world worked and how people should live. He knew the country was undergoing a shift and that cars would only accelerate the process. He looked at building a company as a chance to re-engineer the community .
In 1914, acc.
& # 39; s 2005 biography, "The People's Tycoon," Ford roughly doubled its workers' base salary to $ 5 a day – a fantastic move that lifted many workers to a new middle class. Ford also believed that leisure time would no longer be a luxury for the prosperous in the industrial age, and could be a great tool for boosting workers' morale and productivity. In the 1920s, he shortened the working week to five days and 40 hours.
For more than a century, companies have followed Ford's basic principle – you give me 40 hours of conscientious work, and I will give you financial means to pursue happiness at home. For decades, each time pollsters asked people to rank their priorities in life, the answers to this coup mirrored. Things like having a family, owning a home and living in peace ranked well in front of a good job.
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To understand what some investors may have seen in Mr. Neumann, it helps to assess what happened, more recently, as Gallup's opinion makers have asked people the same question. Having a rewarding job no longer ranks near the bottom – it's climbed to the top. In other words, it seems that the world has changed again. Modern workers do not only content themselves with being happy at home. They want the work to be fulfilled as well.
The first companies to address this problem were the startup of Silicon Valley in the late 1990s, which decided to install ping-pong tables in offices. The future of work, it seemed, was about making it "fun."
As this notion faded, employers wondered if people could enjoy their job more and put in longer hours if the office had a hip decor and food on site. , laundry and haircuts. It didn't work either. If anything, the evidence suggests that modern employees are less interested in benefits than feeling a sense of belonging.
Even companies that adopt open floor plans to improve communication and collaboration often end up creating new problems.
has given employees a new trade – in exchange for giving up comfort like job security and benefits, they want more control over how and when they work. However, as these informal contract jobs or "gaming jobs" explode, the regulators crack.
While companies are groping for answers, young workers have never been less likely to thrive in the old Ford system. Research shows that they are better educated, more concerned with finding social purposes at work and less resistant to changing jobs. High debt levels often force them to postpone or miss buying a home, getting married or having children.
Mr. Neumann is not technically a millennial, but he certainly looks and behaves like a serial disorder. However, what makes him different from most young CEOs is that work is the very thing he is trying to disrupt.
In exchange for rent income, Neumann's company promises workers the right to a living society. They want to work in hip, inviting, fun common rooms with organized social events, many connections and all the latest technology – or what the company describes as a "physical social network." The company also announces flexible leases that make it easier to come and go and change lanes.
However, part of Neumann's pitch is that we are just getting started. For example, the company has started an effort to develop and lease common living space. And in an employee retreat last year, Mr. Neumann suggested that the company could one day address major social problems, including hunger. "The influence and influence that we are going to have on this earth is going to be so great," he said.
Mr. Neumann may not be the Millennial Prophet, but it is easy to understand why investors may have endured, or even appreciated, his ingenuity and grand ambitions. After all,
was a deeply flawed guy with a messianic streak.
It is also possible that there simply is no profitable way to turn offices into human fulfillment zones. Maybe the problem with work is that no matter how you dress it, it still works. Maybe Henry Ford's deal is the best we get.
One thing is certain, though. It is a fortune to be gained by trying.
– Mr. Walker, a former reporter and editor in The Wall Street Journal, is the author of "The Captain Class: A New Theory of Leadership" (Random House).
Write to Sam Walker at email@example.com
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