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lective of activist single mothers who valued causes over cash. It
was a childhood in which homes changed often and boxes of fed-
erally funded food arrived at the front door. In the family Volvo,
McKelvey would drop rubber balls through the rusted-out holes
in the floor so he could watch them bounce behind the car. He
loved the annual trip to the King’s Table buffet. “It was a privilege
to eat as much as you wanted rather than scrap for what you could
get,” McKelvey says, surveying a headquarters overflowing with
free coffee, beer and snacks. “I’d eat bowls of soft-serve ice cream
until I felt sick.” A gifted student, the 6 -foot- 8 McKelvey played
basketball at Colorado College before transferring to the Univer-
sity of Oregon, where he juggled big-time college sports and de-
manding architecture studies.
The two met in New York through a mutual friend and bond-
ed quickly over their backgrounds and competitive streaks. Neu-
mann had started a baby-clothes company, Egg Baby (a big sell-
er: pants with built-in kneepads called Krawlers), subletting part
of his space to make rent. McKelvey was an architect (grinding out
store designs for clients like American Apparel), and Neumann
talked up a plan to rent cheap space that they could divide and up-
sell as offices.
Neumann persuaded his landlord, Joshua Guttman, to rent
him a floor in Brooklyn, and they launched Green Desk—an
earth-friendly co-working space. It was a hit. Neumann and
McKelvey looked to expand to Manhattan. Guttman instead want-
ed to fill vacant space in his Brooklyn buildings. They sold him
their stake for $3 million and bet their winnings on a Manhattan
co-working play based on the lessons learned from the kibbutz
and the collective. Real estate meets culture. That was 2010 ; seven
years later, their combined stake in WeWork is worth $4. 3 billion.
IN THE HEART OF WEWORK headquarters sits a 6 0-inch
touchscreen monitor with the company’s 163 locations pinned
on a Google Map. WeWork’s proprietary software turns the hip-
pie-sounding special sauce into data. Finger taps reveal updates
on construction, deliveries and maintenance. A swipe gives you
data on potential new neighborhoods, listing public transporta-
tion, coffee shops, gyms and nearby retail brands that signal a ripe
location (Equinox and Urban Outfitters are strong indicators).
“They have to buy aluminum and glass, build desks and make sure
the plumbing and the air-conditioning and the Wi-Fi all work,”
Benchmark’s Dunlevie says. “It’s a grubby, execution-sensitive
business.”
WeWork has built a complex technology and logistics system
to handle all that grubbiness, and in September, it opened ten new
locations, more than it launched in a typical year until 2014. In
some ways WeWork looks less like a property manager than like
an airline—squeeze in the maximum number of seats while pro-
viding enough amenities and perks so that no one hates flying
coach. A single extra desk, over the span of a decade, can translate
into about $80,000 in sales. But unlike, say, a Boeing 777, with its
standardized space, each project has unique dimensions and de-
mons. WeWork has opened in former customs houses, breweries,
warehouses and, in Shanghai, an old opium factory.
To make the most of every millimeter, WeWork uses 3 -D scan-
ners to measure space and builds virtual-reality models to help de-
sign each floor before turning a single screw. Heat-mapping tech-
nology tracks traffic and usage to find the right balance of shared
space, desks and conference rooms. “Landlords just sell alumi-
num. We make iPhones,” says Dave Fano, the growth officer and
resident mad scientist.
Scale has created price advantages and provided WeWork with
unique expertise. Since 2 010, Neumann’s team has installed 9. 6
million pounds of aluminum framing, hung 12 million square feet
of glass walls, laid 8. 8 million square feet of oak flooring and built
12 ,000 phone booths. WeWork does everything itself: location
scouting, contracting, interior design. It even makes the thousands
of braces that secure the miles of glass walls that WeWork installs.
This year, increased tech efficiency and massive buying power
have pushed the cost of adding a new desk down 45 %, to $8, 55 0.
Solving the construction side looks easy compared with the
human problems that arise when a company grows from 2 peo-
ple to more than 2 ,000 in seven years. Neumann has recruited
seasoned executives from real estate, hospitality,
media and tech to manage the once scrappy start-
up, including CFO Artie Minson (Time Warner),
president Rich Gomel (Starwood), COO Jenni-
fer Berrent (WilmerHale), vice chairman Michael
Gross (Morgan Hotels) and chief product officer
Shiva Rajaraman (Spotify, YouTube).
There have been growing pains: a public scuffle with a clean-
ers union in 201 5; leaked documents showing lowered forecasts
in 201 6; layoffs that hit 7% of the staff that same year. Former
employees have sued the company, claiming they were over-
worked and underpaid. Partly in response to these problems,
McKelvey has recently taken the role of “culture officer”—a soft-
sounding, ironic title at a company that claims culture as its core
product. He oversees HR, training, compensation and benefits
for thousands of employees deployed across countries, lan guages
and customs.
Neumann, for his part, has swapped a macho, military style
for a more professional stance. “He’s realized that motivating with
fear is not effective. He used to think fear was a positive thing,”
McKelvey says. “Adam now understands that treating people with
dignity and respect, and fueling them with positive energy, is a
much better way, and he has an incredible ability to do it.”
Asked about this shift, Neumann spends a moment contem-
plating the surface of his desk. “How many organizations are going
to be comfortable with a cofounder saying that to a reporter? I’m
good with it—it’s kind of the culture we talk about.”
Neumann says he owes the change to his wife, Rebekah, who
served as WeWork’s first brand officer and pointed out the flaw
after a month watching her husband in the office. Neumann took“LANDLORDS JUST SELL ALUMINUM.
WE MAKE IPHONES.”FORBES ASIA
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