◼ TECHNOLOGY Bloomberg Businessweek October 7, 2019
21toselect a replacement for her 40-year-old
husband if he died.
There were a lot of things about WeWork that
made public investors recoil. For every $1 of rev-
enue, it incurred about $2 in expenses and didn’t
make a convincing case it could reverse that equa-
tion. It sought to be valued as a technology busi-
ness but operated much like a real estate company.
Its corporate structure looked like a schematic for a
microwave. WeWork’s disclosures in its initial pub-
lic offering prospectus in August offered a litany of
apparent conflicts of interest, though the company
wrote in the filing that it provided them to “avoid
the appearance of any conflict of interest.” Adam
Neumann hired multiple family members besides
his wife, including her brother-in-law, who also left
the company in recent days. Neumann borrowed
company money, collected rent from WeWork on
space in buildings he owned, and charged the com-
pany $5.9 million for the rights to a trademark he
held on the name “We.” He had effective control
of management decisions through stock with spe-
cial voting rights, though it ultimately wouldn’t
be enough to keep him in power. On Sept. 30,
WeWork’s new co-CEOs withdrew the prospectus,
officially putting the plan to go public on hold.
This account of Adam and Rebekah Neumann’s
nine-year reign and swift fall is based on interviews
with seven current and former WeWork employees,
advisers, investors, and other people familiar with
the company. SoftBank declined to comment, as did
representatives for the Neumanns and WeWork.
After an initial onslaught of investor criticism in
recent weeks, WeWork took steps to address many
of its apparent conflicts and lessen Neumann’s grip
on the company, but he still held on to his job. Son,
a 62-year-old Japanese billionaire known for his own
eccentricities and mystical pronouncements, had
been an enthusiastic supporter of Neumann for
years. He still appeared to be on board as recently
as mid-September, when SoftBank named Neumann
a speaker at its corporate retreat in Pasadena, Calif.
But after Neumann postponed the IPO at the urg-
ing of SoftBank and other investors and advisers, he
backed out of the speech, saying he might come on
the last day of the conference. Ultimately he didn’t
appear at the gathering at all.
On Sunday, Sept. 22, Neumann returned from the
Hamptons. The same day, SoftBank’s plan to remove
him as CEO became public. Among those support-
ing the move were Benchmark’s Bruce Dunlevie
and John Zhao, founder and CEO of Chinese pri-
vate equity firm Hony Capital, both members of the
board. By Tuesday, Neumann relented. Everyone,
including Neumann, knew that he didn’t have the
board support to continue as CEO before the direc-
tors met on a call that day to vote on the matter.
Neumann voted with the rest to oust himself, mak-
ing the decision unanimous, according to a person
familiar with the matter. Rebekah also agreed to
relinquish her role at the company.
The Neumanns’ departure marks a dramatic
shift for WeWork and its culture, which was shaped
by the idea that personal and professional life
should be indistinguishable. This ethos is on dis-
play at the company’s coworking offices, where
beer kegs are a fixture. And it’s reflected in the pri-
vate elementary school within WeWork, which
Rebekah said they built to give their children a wor-
thy education, and the time Adam was seen visiting
his kids at the school wearing nothing but an open
robe and Speedo. (He was coming from the steam
room attached to his office.) In Neumann’s email to
staff announcing his departure, he suggested the
mission hasn’t changed. “When Miguel, Rebekah
and I founded WeWork in 2010, we set out to cre-
ate a world where people work to make a life and
not just a living,” he wrote.
When WeWork got its start, Rebekah, who
descends from Hollywood royalty and is a cousin
of Gwyneth Paltrow, was acting; she appeared in a
handful of films alongside stars such as Lucy Liu and
Rosario Dawson. She wasn’t around the office much
in those days, according to an early employee. When
she was there, she had strong opinions. She asked
to change the color of the T-shirts employees wore
during move-in day for tenants at new offices. She
also wanted to make one floor of an early WeWork
headquarters a film production area, two former
employees say, and the company built video editing
stations and a screening room. Over time, Rebekah’s
roles in the company took on greater importance. In
2014, WeWork began describing her publicly as chief
brand officer. The next year she became a founding
partner and by 2016 a co-founder. In the IPO pro-
spectus, she’s listed second, behind her husband
and ahead of McKelvey.
Professional life at WeWork frequently over-
lapped with the personal. Adam, a connoisseur of
tequila, often partied with colleagues in WeWork
offices, and in 2014, after an investment that granted
him majority voting control of the company, he cel-
ebrated so hard he broke a floor-to-ceiling window
in his office, according to a person familiar with
the incident. He called in maintenance workers to
replace the glass overnight so it wouldn’t be visi-
ble in the morning, the person says. WeWork also
fostered family ties within its executive ranks. The
company disclosed two connections in the IPO pro-
spectus: One was Adam’s brother-in-law, who ranThe IPO
prospectus
offered a litany
of apparent
conflicts of
interest