OCTOBER 2017 FORBES ASIA | 41A
dam Neumann, the
frenetic cofound-
er and CEO of We-
Work, was pacing
back and forth in his
office in New York City’s Chelsea
neighborhood, ignoring the heavy
bag, the Peloton spin bike and the
generously stocked bar in favor of
something more urgent: the clock.
Softbank boss Masayoshi Son, Ja-
pan’s wealthiest man and one of the
world’s great investors, had prom-
ised the 38 -year-old former Israe-
li naval officer two hours of his
time for a full-blown tour of the co-
working innovator’s headquarters.
And he was an hour and a half late.
“Masa arrives, looks at his watch
and tells me, ‘I’m so sorry, but I
only have 12 minutes,’ ” Neumann
says in a raspy voice. And after pre-
cisely 12 minutes of walk-around,
Son said he had to go.
But he offered Neumann a
chance to join him in his car. Neu-
mann grabbed his pitch deck and
climbed into what would become a
$2 0 billion ride.
Son told Neumann to put away
his presentation, pulled out his
iPad and started sketching the out-
lines of an investment. “I thought
the valuation had been too high for
a company its size and that some-
one could easily copy it,” Son tells
Forbes. “But no one could. The idea
was easy to talk about but hard to
execute—Adam proved he can do
what he says.”
As the ride ended, Son signed
his name on the iPad sketch, drew
a line beside it and handed Neu-
mann the pen. “Even today, I still
get goose bumps thinking about
it,” Neumann says, holding up his
lanky forearm to show that the hairs are
standing straight up. “Half an hour later,
he emails me this.” Neumann retrieves on
his iPhone a photo of the digital cocktail-
napkin contract—a tangle of lines laying
out a global partnership, with Neumann’s
scrawled signature in blue ink beside Ma-
sa’s in red uppercase.
The backseat term sheet emerged fromthe lawyers as a two-part deal: Softbank
would invest $3 billion directly into We-
Work ($1. 3 billion via a tender offer of ex-
isting employee stock and $1.7 billion in
new equity). A separate $1. 4 billion was to
be spread across three new entities to ex-
pand WeWork across Asia: WeWork Japan,
WeWork Pacific, WeWork China. Neu-
mann’s team would build and manage the
offi ces, and Softbank would handle the
local relationships. Valuation: $2 0 billion.
WeWork, which straddles real estate, hos-
pitality and technology, was now worth
about the same as hotel operator Hilton
Worldwide and more than commercial real
estate giant Boston Properties and social
media sensation Snap.
At the deal closing in Tokyo in March
2 017, Neumann was joined by his co-
founder and fellow billionaire, Miguel
McKelvey, a sinewy 43 -year-old former
University of Oregon basketball play-
er. “Masa turns to me and asks, ‘In a fight,
who wins—the smart guy or the crazy
guy?’ ” Neumann says. “I say, ‘Crazy guy,’
and he looks at me and says, ‘You are cor-
rect, but you and Miguel are not crazy
enough.’ ”
“I told Adam not to be proud that We-
Work was growing organically without a
large sales force or spending big marketing
dollars,” Son says. “Make it ten times big-
ger than your original plan. If you think in
that manner, the valuation is cheap.” How
cheap? “It can be worth a few hundred bil-
lion dollars.”THE CRAZIEST ONE OF all would
seem to be Son, once you try to figure out
exactly what he’s valuing at $2 0 billion—
a figure exceeded only by Uber and Airb-
nb among U.S. startups (digital intelligence
outfit Palantir has a valuation similar to
that of WeWork). It’s an office company...
that doesn’t own any offi ces. Like Uber and
Airbnb, WeWork is essentially a middle-
man, renting space from others at whole-
sale and then upcharging for cool design,
flexible leases and built-in ser vices like in-
ternet, reception, mailroom and clean-
ing. (Free coffee and beer, too.) WeWork’s
value-added is office culture—at massive
scale. Starting with one New York City
space in 2 010, the company now has 163
locations—a figure that has tripled sinceCubicle killers: WeWork cofounders
Adam Neumann (left) and Miguel
McKelvey have built an office-space
powerhouse by combining communal
vibes with capitalist drive.
FORBES ASIA
FUTURE OF CITIES