Marine. Jensko was a we Work customer in Dallas. She worked in sales for a software company, and when she was at her we Work office, Maureen liked to work in the phone booths. These are small, padded rooms that you can step inside to take phone calls and not bother your neighbors. I came into work one day, I used opened up my computer and up pops an article about how there's formalde hyde in the we Work phone booths, which I spent upwards this three hours every day. In formalde hyde is really bad for you. It's a known carcinogen, and it's sometimes used in building materials, especially in glue. In this case, it was in we Works phone booths where Maureen sat for hours a day breathing in fumes that were possibly toxic. It was extra scary because I was eighteen weeks pregnant at this time, my first child. I mean a normal person would be concerned about that, let alone so on pregnant. We Work staff had printed out signs and taped them on the booths. Caution not used. We have been made aware that this phone boose doesn't meet our safety standards due to a defect caused by the manufacturer. Maureen was understandably freaked out. My first thoughts were, is there something wrong with my baby? And the thought of me putting her through that for three hours a day just tore me apart. She and her co workers were already following the news about we Works business failures. It had been kind of entertaining to watch until this newest development. I think it turned from joking of what happened, like what's going to happen next, to like, Okay, are you guys serious? Like this is this is not a joke anymore. This is, you know, kind of a serious issue. It's not like running out of cold brew, you know, this is, you know, potentially deadly. We Work said it removed more than two thousand phone boots, but they were also criticized for not acting sooner. I wrote a story at the time that said customers had noticed a weird smell before we were closed off the phone booths, but we Work told us in a statement that they moved as quickly as they could. In the fall of it felt like we Work was cursed. Every week there was more bad news. The I p O flopped, the CEO Adam Newman, resigned. They were potentially poisoning their customers. One of my colleagues even joked that We Work was having such a stretch of bad luck that maybe Adam had disturbed a mummy's tomb. You're listening to Foundering this week. In our final episode, we'll take a look at We Work after Adam, layoffs, lawsuits, and a pandemic that has completely derailed what it means to work in an office. Will also delve into Adam Newman's motivations and hear from people who knew him well. Once again, we've asked representatives for WE Work and Adam Newman for Common Adam spokesman didn't want to give us a statement, but you'll hear we Works comments throughout. So in the last episode, we talked about how when Adam left We Work, he negotiated a very very generous exit package with soft Maake. He was set to walk away with more than a billion dollars. Meanwhile, his employees, who were still dragging themselves to work every day, learned that thousands of them would be losing their jobs. When it was clearer that layoffs were coming, it just became this like dark cloud hanging over everybody. It was something that sort of paralyzed the whole company. That's Andrew Human, a former WE Were employee based in New York. He said that the impending layoffs killed morale inside the company. Everybody was just spending all day dreading what was coming and gossiping about who they thought was going to be cut first, and you know, keeping up to the minute, uh, you know, updates on slack as people found out new information. People were just nervous and demotivated and you know, disappointed by the old thing. And it just was it was really hard to do any work. And here's another we Work employee I spoke to. She asked not to be named in the show, but this is her real voice. No one wants to work in this Like basically, people are just not showing anymore to work. No one had the motivation to work. Everyone was basically waiting for the layoff. And then it came out the news that company was running out of cash, and then everyone was like, oh, are we going bankrupt or are we People are just waiting for bankruptcy and layoff for a while. We Work did seem close to bankruptcy. They narrowly avoided it when Soft Bank bailed them out. But what that means is that now this is SoftBank's company, and they laid off more than two thousand people in one round after another. The mood of the workplace was pretty seriously in decline for a place, you know, a workplace really prided itself on being this sort of like active and lively and fun and contemporary way to work. You could just feel it in the air. The degree to which people it just like wasn't as much fun anymore. People were not celebrating, people were not you know that the spirit around communal events, which were happening less anyway, was definitely dampened. Just just get out, like this is just is crashing, this is going down. Some meetings, people would not show up, like it was not normal. It was going for months, it was going for three months. Almost Eventually many of the employees just didn't want to be there anymore, Andrew ended up leaving on his own. At a certain point, a lot of people were actually like actively gunning to be laid off. Maybe they already had plans to leave and we're hoping for severance, or maybe because of everything that had happened, Yeah, please lay me off, Like I just want to leave, Like I'm done with this drama. Just too much drama. It's very hard to concentrate, is very hard to be motivated, It's very hard to be happy at work. Also not a good company, to be honest. Not everyone was so nonchalant about the layoffs. A group of we Work employees got together and wrote a public letter demanding fair severance. They wrote, we are not the Adam Newman's of this world. We are a diverse workforce with rents to pay, households to support, and children to raise. Newman departed with a one point seven billion dollar severance package. We are not asking for this level of graft. We're asking to be treated with humanity and dignity so we can continue living life while searching to make a living elsewhere. You can hear how painful it is for the employees to compare their outcomes to atoms. They called that exit package graft. A different group of employees sued WE Work, claiming the company's board hadn't fulfilled it's fiduciary duty to them as shareholders. We were called the lawsuit meritless. Keep in mind, we worked in have a great history of handling layoffs. Well, here's sethist Martinick, who joined the company after we Work bought his business. Once he was on board, he felt that the company had a bad culture around layoffs. You know, we Work for for a while was pretty brutal when people would leave the company, you know, like they would let someone go and they just like walk them out the front door. I was very vocal about it's harder we work, and I'm like, this is not right. You know, can't just walk people out the door when you let them go. You have to give them severence and be respectful and treat them with a lot of respect. And um Adam actually agreed with that and we ended up changing things. But the company would do that, and I think that would be like in Adam's blind spot. I spoke to multiple people at we Work who said the company had a history of laying off people who had been working there for a long time. They told me that we were called these terminations Mission Accomplished. The idea was that these people had been useful at some point, and we Work wanted to celebrate them for what they had done. But the name landed in a pretty tone deaf way. We Work eventually changed the name internally, but it had already spread through part of the company, and while thousands of his employees were losing their jobs, Adam left the country. He took his family and decamped to Israel, and for a while it looked like things couldn't get worse for we Work, But then came coronavirus. Curious what this means for we work now, not only financially, if we think about the long term consequences of what this coronavirus has done. We Work is known for crowding people together in one shared work space and playing together and sneezing on each other. If you will, you know what I mean. So how does this sort of change the way that people now even really think about we work? We Work started closing locations. They temporarily shut down a lot of offices in China, where lockdown orders were pretty strict, but in the US, a lot of we Work offices stayed open even under shelter and place orders. We Work said they were taking precautions. They gave us a statement saying they were cleaning the elevator buttons and countertops more often, but more controversially, they continued charging their members fees that piste off some of their customers. Who felt like they were being charged for a service they weren't going to use. I spoke to one customer named Adam Mutchler, who worked out of a WE Work in DC for years. If I didn't sign an amendment in October, I would have been on a month a month agreement and I would have canceled immediately in March. He's upset that we Work is still charging him. He would have stopped paying, except that last year he signed a new contract that locked him into a longer agreement. We Work said they stayed open because some of their customers are essential businesses, and they sent us a statement adding that they provide important services like mail handling for all their customers, essential or not. Adam Muchler was so convinced WE Work hasn't on any communication about what types of essential businesses. Who are the essential businesses. They've just had this really vague where an essential business because we create space for other essential businesses. In early June, Adam Muchler had had enough. He went into we Work one last time to take out all his stuff. This was early in the morning, and he said the place was deserted. Zero other people. A lot of the small offices had their logos peeled off to the glass. We she took as a signal that they had moved out. He was disappointed and We Work he saw this as a final push to squeeze money out of its customers. There was a point where I had a lot of love for We Work and it felt like this really like depressing breakup. I was just kind of walking away and they're not the company that I thought they were. And they've shown me through their actions. You know what their priorities, which I get you have to make money, but like you were all about community, and the duct was not attractive anymore. For years, we Work pitched the benefits of working closely next to others, excitement, new ideas, energy. Now coworking looked like a cloud of disease. In this moment, We Work wasn't recognizable to some of its longtime fans, in part because We Work wasn't we Work anymore. Soft Bank CEO Masa Yoshi Son had put all these billions of dollars into We Work, and after pushing out Adam, he was finally going to take the reins. He installed another Soft Bank executive as chairman of the company, and a real estate executive came in as the new CEO. They were running a pretty tight ship. Their goal was to turn the company around and make it profitable. That was already going to be a challenge, but now coronavirus made it seem nearly impossible. In an earnings presentation for SoftBank, Massa stood on stage and talked about their new predicament today. In my unique don't know, the situation is exceedingly difficult. Our unicorns have fallen into this sudden coronavirus ravine, but some of them will use this crisis to grow wings. In this same earnings called, Massa presented a new valuation for we Work, the lowest it had been in years. The company he had put ten billion dollars into is now worth only three billion dollars. Teddy Kramer, who had been an early we Work employee, was watching it all unfold. He had a sense that We Work was going to be hit hard by the virus. I have one word to describe how coronavirus is going to affect coworking clusterfuck Um. Nobody knows what to do. All the things they're doing, extended cleaning partitions. How do you enforce these things? Telling me to sit six ft away. I don't think anyone knows how to operate, mostly because we're getting zero guidance from the federal government. We're getting zero guidance from our state governments, We're getting zero guidance from our city governments. I am very um skeptical of anyone who says that we know how to operate a space. I don't think anybody has really done it yet. The sudden panic of coronavirus wouldn't have come at a worse time for We Work. We Work was waiting on the payout from an important deal. As part of their bailout, Soft Bank had agreed to buy three billion dollars and we Work stoff from employees and investors. This is called a tender offer, when you buy out existing shareholders. In March, the tender offer had been agreed to, but it hadn't actually come through yet. For Teddy, this was pretty high stakes. He was one of the few We Work employees who might actually get a significant payout because he joined so early. At first, he thought he might be able to cash out during the I p O, and when that sputtered out, the tender offer gave him some new hope. I have no belief in the long term prospects. I just want to get out as quickly as I can. The I p O fails, I go, look, this isn't great. I now have to sit on this. What's going to happen? And then the tender comes through. You know, I was I was intending to recee between a hundred and three thousand dollars from the tender and under the terms of the agreement, the tender offer was supposed to be done by April one. So for months we were employees thought that okay, they might still get some money out of their stock. They waited and kept waiting, and nothing was really happening. Every once in a while they'd get an investor update letter, but without a solid plan. Then in March, just as cities across the US were shutting down to prevent the spread of the virus, Teddy and all the other shareholders got a letter and it made him really nervous. Great, wonderful, I'm getting a note from them. I'm sure it's great news. I opened it up and I apparentially much see this cover your ask one to two page letters saying it's essentially that we work has not met the terms in order for the tender offer to complete. We are fully confident that these terms will be met within the next two weeks, but we just want to let you know that we can back out. And it was like, oh great, So Teddy knew how to read between the lines. This was a bad sign. So uh. Once I got the notice in mid March, Um, I looked at it, and I mean he said, Oh, we're fucked. This isn't this isn't happening, Um and lo and behold. Two weeks later, on April one, the day they were supposed to pay out, the order was canceled. My fears came true. What do I do you know? I was relying on this money to keep me afloat like a lot of other people. When soft Bing backed out of the deal. There was one person who had the most money at stake, Adam Newman. He was supposed to be able to sell close to a billion dollars in stock. It was like Masa had snatched the check right out of Adam's fingers, saying, ha, just kidding. So a few weeks later, Adam sued soft Being. He alleged that Softing had unfairly pulled out of the deal. Soft Bank said they were totally justified and not going through with the tender because we Work hadn't met all these criteria. For one, soft Bank sited some ongoing investigations into we Work from various regulators, attorneys General, the SEC, and others. Soft Bank's Vision fund has filed a motion to dismiss. So just when you thought he was out, Adam Newman came roaring back in and he's locked in another battle with Masa, this time about getting his billion dollars. It's like Alien versus Predator, the sequel. But We Worked employees were out of luck. They just sat back and watched the stock plummet and value. Here's Carl Pierre, who used to run the community team for We Work in d C. The side piers were a lot of people that we were holding on to a lot of options, thinking they were gonna become homeowners. Won the Company of Republic who were getting ready to buy cars, getting ready to possibly even retires start their own company, and all those gyms are dashed in the course of a couple of weeks, you know. Bummer. Carl says he even watched colleagues turned down other offers because they thought they might get rich from we work. I had like two guys I know, um, do you know? They got job offers some other places, and I talked to them about it, and they refused both offers, and they were like, no, we're gonna stick with this, Like it's gonna we're so much money. Man's like, don't You're gonna be a millionaire. I've heard stories of other employees making similar miscalculations. One former employee told me they bought a house thinking they'd be able to pay it off by selling their shares. Another said they took out a loan right before the I p O so they could buy their stock early and save on taxes down the road. Who once the I p O was canceled, they were stuck with a six figure tax bill. These employees felt financially screwed, but their disappointment went beyond that. They were hurt. I asked Dave Fanno, who's a former work executive. He said that the promise of equity made employees feel like owners, but they didn't have the same rights as actual investors. Equity continues to be used as a mechanism to create a sense of ownership, and I kind of use ownership and air quotes. It's emotional, it's not practical. They don't have the information rights and investors too, they don't really know the profitability, they don't really know the cash burn of the company. Dave said employees were also blinded by famous stories of some early start up employees who got rich from their stock because they're just thinking about, you know, those successful stories that they hear of those early employees getting a ton of you know, some some big liquidity event and and life changing amounts of money. And that's not to say those aren't true, but I think it's important to state that those are the minority in terms of the total number of people that have gotten equity relative to those that have had real pay days. Dave says he understands that some employees feel tricked, almost betrayed by their own employer. That's tough for people to navigate. They're probably remorseful, they're angry, they wish they would have had more information. And this feeling of betrayal was compounded by we works inspiring mission, which Dave says the company used to get employees bought in. I think it went a really long way. You know, you'd often hear things like it's a really great mission. It's a really it's a mission that can be a part of you know, why are you here? I really believe in the mission. That mission really meant something too WE Works employees. Here's Cody Quinn, a former executive assistant. They made people feel like they were like, then you're part of this huge thing that's going to change lives. And they were really good at sending that message that people really eiaved it. I mean I really believed it, Like dancing and fist pumping during an orientation, like they really got people to believe in what they were saying. Adam was like just a big lie to you know, and I feel I can't imagine how those people are feeling. Former employees were mad because they felt lied to by WE Works messaging, we over me Better Together authenticity, especially after they learned about the conflicts of interest, the huge payout, Adam leaving the country. In retrospect, Adam's old WE Work slogans felt hollow. Here's Cody again. If I could ask Adam one question, did you really believe all that bullshit that you told us? Did you ever really believe it? Did you ever really believe that you were changing the world. Did you ever really believe that you were elevating the world's consciousness or was it really all for that parachute you ended up with anyway, Remember, others had told me they thought Adam was manipulative and savvy, that he knew exactly what to say to get people to agree with him, that he was so charming that it was hard to know whether he believed something or not. It was hard for employees like Cody to trust that Adam had been genuine to her and to others, his actions undercut his words. Here's Andrew again. We were was sort of a dream. It was really like, it was really exciting to me. And to have that dream dashed was, you know, pretty devastating. And when Adam, you know, after the fact, you know, takes his money and runs off to Israel, it just causes you to question the whole thing, like was it ever real? Was this always the plan in the first place? And it just sort of poisons everything that felt positive about that this message that we were sold, I wasn't just a way to get some money out of the world, Like maybe it wasn't. I don't know to this day. I suspect it's probably somewhere in between. I think that you know, he's both an idealist and a realist, and you know, really believed it at the beginning and also took some pretty selfish evasive action when he saw the writing on the wall. There was something about Adam though a lot of people told me about this. They'd say that he seemed to have so much conviction and enthusiasm and energy for what he was doing, they felt it just couldn't be a sustained artifice. There's something about Adam's charisma and magnetism. I'm sure you've heard it from everyone you've talked to, Like, there's a reason why he was as successful as he was, and it's because he just radiates this energy and this passion and this excitement about what he's doing. He's a he's a zealot, and so it's hard not to believe that that's genuine. And recently I had a conversation with a former we worked executive who had some great insight into Adam's beliefs. He asked for anonymity, so we had someone else read his words out loud. He felt that Adam knew exactly how to use belief to his advantage as a leader. So I think he understood that people wanted to believe in those things. I believe that he understood the perceived benefit of those things. I think he very well understood how to deliver a message that people could connect with and believe in. I think, ultimately, at the end, his action showed that he didn't really believe in the things he was saying. Adam believe these ideas in principle, but in practice sometimes things played out differently. He very much believed that people should do those things, and that people should believe in a wee over me, and that people should struggle together. Then when it applied to him, I'm not sure he believed that so much. He felt he knew like what was right for people, but but didn't ultimately think that those things were right for him, at least not in the actions he took to this executive. This is how you reconcile the gap between Adam's words and his actions. This is how Adam could seem genuine when he talked on stage about the value of community and then turn around and do things that looked really selfish. Summer Camp was a glaring example when you know, the whole company has to wake up at six am or five am and struggled to sign up, you know, to wait in lines to go to summer camp and riding a bus. And he takes a seaplane. And look, you're all like you woke up at four thirty or five to get on the stupid bus to to a summer camp to sleep in a tent for three or two nights or whatever. You're just getting off the bus in the Adirondacks and you're kind of like you're cracked out, and you've got like one eye open, and you see the seaplane just like gloriously land in the lake, and you see these people doating on him and carrying his suitcases, and you're just like, what the fuck this executive saw Adam get special treatment again and again. The people needed to share hotel rooms to save money, yet he's got like a big Airbnb mansion. We're all told to save money and be frugal and fly coach to China. He takes a private plane. And so there's just this kind of like, well, my time is more important than your time in general, like his approach to life is the rules don't apply to me. We'll be right back. I want to spend a little time now talking about Adam and his life after we work. A few months after Adam was pushed out of his company, he left for Israel, and then he laid low. He didn't talk to any media outlets, and since he had been a fixture in the news for so long, his silence was notable. The clearest view into Adam's life came from his mom. She gave a revealing interview to an Israeli news site about his self imposed exile. She said that he was leading an idyllic life as a small time celebrity in this remote beachfront community. He was getting free meals, hanging out with family. He was still partying with rich people. Adam's mom said that the wives of billionaires would approach him to take selfies. She said that Adam told her, no one has loved me as much as when I fell from grace. But even in his new life, every once in a while his actions still popped up in the news. He was clearly still scratching his lifelong itch making deals. He considered investing in Barney's the Dying Department store. He and Rebecca listed some of their luxury homes on the market for tens of millions of dollars. He sold to an investor his stake in one of his controversial buildings that he intended to rent. We work, but mostly he stayed quiet. To some of his employees back in the States, it felt like Adam had taken the money and run, but some people understood that even if he had gotten a big payout, he was probably still hurting about his damaged reputation. Here's Carl, you know. Can you imagine being a god amongst New Yorkers, being the largest commercial tenant in New York, having the respect of everybody, people knowing you when you walk down the street, to being the ultimate social pariah where nobody wants to be associate with you. He must have hurt on some level to have it all dashed away, Like the stink of this will ride him for a long time. People will people say his name and laugh. So he lost something for sure to in all of this. Imagine having a sea of employees who thought you were god now think you are the worst human of the world. Like I don't care again, I don't care how much money you have. When people hate you, people hate you. You know what I mean like it's it's just done. What Carl is describing here is a snapshot in time fall of when people were mocking Adam all over the place. I don't mean just on Twitter and read it. It was on TV and in the newspapers. In the New York Post, they wrote that Adam was quote hiding behind his surfboard to kill a bottle and read cabul a bracelet. I wanted to talk to someone who knew Adam personally, someone who might be able to explain with some sympathy Adam's mind and motives at a moment when Adam just looked like a villain. Adam profoundly impacted my life in a positive way. That's seth Beist Martinick. He spoke a little earlier in the episode. He and Adam were friends, and he said Adam was almost like a mentor to him. Adam's advice was very a holistic. It wasn't just about how you do your job better, but it's about how you'd be a better person in all aspects, being a better father, being a better husband, being a better CEO, you know, being a better friend, being a better contributor to society at a broader level. Seth knows Adam well and from way back. They actually attended college together in two thousand two. Then years later they reconnected. Seth ran a marketing company called Conductor we Work ended up acquiring them. It was kind of an unusual acquisition because Conductor didn't specialize in real estate, but it gave Seth a chance to work closely with Adam. He said, Adam was unusually generous with him, and at no other and no other point in my career did anyone really comment, sit down to me with me and give me that kind of feedback and and share it from their own personal experience. Seth said Adam was a unique person, someone who had this unstoppable energy, piece of boisterous is that right, right? Boisterous person. I mean he's and he's got like an insane amount of energy. I mean wakes up super early and then it's like up super late and like doesn't sleep. I worked hard, and I would I have spent time with Adam, and like it was like I couldn't keep up with him. He worked, He worked really hard, and it was long days and traveling and you know, fly into China for a day and then coming back and then coming right off the plane and run into the office and staying there for twelve hours, and then going home and sleeping for three hours, and waking up the next day and go into you know, Brazil. I mean he was he worked hard. In Seth's mind, Adam would not have worked so hard unless his convictions were real. I think, without question, he did believe. I think he believed that everything he was saying. And I think that he thought that the company was going to be one of the biggest companies in the world. And I think he thought that was with such great certainty that people were inspired by his certainty. But also that certainty can lead to over confidence, and over confidence can lead to mistakes. Over Confidence can lead to mistakes, Optimism can lead to blind spots. To Seth, Adam's greatest strengths were also his fatal flaws. When you think you're going to change the world, and when you think that you're going to make such a big difference, you sometimes could lose sight of some of the small things. And I think Adam one of Adam's greatest strengths and and you can also say one of his weakness is right. It was like his incredible optimism and belief that things would work out. Seth saw that Adam felt free to make bold decisions as a leader precisely because he was unencumbered by the details. But not being a detail oriented guy also led Adam to act insensitively, sometimes to his own employees. One of the great things Adam did was he kept himselves very distant from things, so he was able to make decisions without thinking about all the minutia. Like when I make decisions a conductor, I'm like, Okay, well this is going to affect this guy and this guy and this guy is really stressed out right now, and like so it screws up my thinking where it affects my thinking, even that screws it up, it affects my thinking very sensitive to that. Adam was the opposite. Adam didn't wasn't sensitive to that. So he was able to make big decisions and and bold ones. But that's that he over indexed to the other side. If he was, you know, if he had more empathy towards all the people that were doing all the all the work, then he might have made different decisions. But he also might have um been able to foster more loyalty with the people. Even Adam's friend is pointing out a lack of empathy. The way Seth sees it, Adam had these blind spots to the needs of others, and he made some choices that only benefited himself. And some of these choices, which looked like conflicts of interest, reflected really poorly on Adam. He went too far and and then also had credibility issues things that he did with his own stuff, you know, and I think he underestimated how much that would come back to haunt him. The reward was big, but the risk was there. He took a bott of risk and it didn't pan out. By the time I spoke to Seth a few months after we were canceled their I p O, it was hard to see the company or Adam as anything but a failure. But others who were close to Adam reminded me that Adam had pulled off some incredible feats as a businessman. Here's former We Work executive Dave Fano. Again, I don't think anyone thought that he could close his Series A and to get a prestigious firm like Benchmark to invest, and they did, and that then he could get some of the prestigious landlords to do leases with us, and then they did that we could double the size every year for ten years in a row. And then we did you know, and that you could raise the largest private equity round ever, and then he did. You know. It's just across the board he was able to do it. I mean, as a collective, I think we did it. I don't think he did it on his own, But I do give him credit for setting the sort of audacious goals that people then rallied around and achieved. We work kept beating expectations over and over again. Dave credited this in part to Adam's personality. He said, Adam never asked himself what could go wrong. I don't think he hardly ever operated out of a place of fear, like there's I think in business there are folks that play not to lose, and there are people that play to win. He was playing to win, like optimizing to not lose was not part of the way that he operated. He is not a defensive player. And then, of course things did go horribly wrong. Billions of dollars vanished into thin air. A lot of people started comparing Adam to Elizabeth Holmes. The founder and former CEO of theres You can understand why they were with these stars of the startup world. Reporters wrote big profiles about them, Their investors said they were changing the world, and they held cult like sway over their own companies until things fell apart and all of a sudden everyone was mocking them and tearing them down. I spoke to Matt Levine, a Bloomberg opinion columnist, and he says that the comparison to Elizabeth Holmes isn't justified. The crime that people get in trouble for usually and when company implodes is some variation on securities fraud. Right. Um, Like Elizabeth Holmes was arrested for securities fraud because she allegedly lied to the investors. Um, Adam Newman just clearly didn't lie to his investors. Like at all. Well, Adam didn't lie to his investors as far as we know. There are some ongoing investigations, but he hasn't been charged with wrongdoing. Like, the problem here was not fraud. The problem here is not that Adam Newman went to naive investors and stole their money on false pretenses. That's Adam Newman went to a very aggressive investor, and he was very aggressive, and they sort of built each other up and ended up in a place where they were both kind of unhappy. So the story of We Work from this lens isn't so dramatic. Adam was just a guy who knew how to take advantage of venture capital. He worked within the system. Matt even thinks that something good can come from the We Work story. It might push other businesses to behave more responsibly. He calls it a triumph of corporate governance. It gives the market some ability to push back on future I p o s. Because before We Work, if you said I want to go public, but I want to keep control of my company forever and give the public non voting stock, your bankers would have said, any they won't like that. And then you'd say, well, Bill, it matter, and the bankers would say, honestly, like, there's never been a deal pulled for a deal that people rejected because of bad governance. Right like now after Weird, that's changed. Right now after were you can say, actually, like if your governance is bad enough, it will be a huge disaster and you won't get your deal done and you'll have to go for a rescue financing and then you'll sue and they'll be home mess. Uh. And so it's a good like cautionary tale for the next company and those glory days of WE Works, big investments, work hard, play, hard, partying mentality. Some already remember those as the good old days, a thing of the past. Here's Carl Pierre, the former community worker in d C. I look back, I still believe, I still believe and I still defend that we did create community and we did do some amazing things. It's one of those things I'm really wistful for where it's like, yeah, wow, like talk about a company that was an absolute, you know, ship show in so many ways, like completely insane, like the things that happened in those walls crazy. But if you think about, you know, could anything else have brought together thousands of twenty for read a, twenty seven year olds who starry eyed dreamers believing that they can instead of working for a hedge fund or something, that they can work for the startup and maybe change the world a different way. Yeah, I don't know. It's amazing to me that Carl is so nostalgic for his time at WE Work. He told stories about throwing out used condoms and dealing with aggressive customers on this podcast, but he loved his time there clearly. Yeah. I've had guys yelled at me for the dumbest stuff. I' had guys threatened to beat me up. I've had so many things happened to me at we work. It's nuts. I've had to call the cops more than I ever have my entire life that we work. But at the end of the day, it's just um, I mean, the stories I have, the connections that made worth it. Would I do it again, Yeah, I mean I would probably drink less alcohol, But what I do it again? Yeah, of course I would do it again. It was It was absolutely nuts, and Carl wanted to remind us that at the center of it all was Adam. Guys, this is his company. He built this from He literally built this from nothing. He convinced scores of investor sort of give him billions be billions of dollars to do whatever he wanted to grow his company. It's his cookie visions, his crazy madmen thing, and we filled buildings on like hopes and dreams. Everyone has a lot of hatred towards him. I mean, you would have had that job to begin with. It wasn't for him anyways. This was a whole company with more than ten thousand people working for it, but for almost a decade it was centered so completely around the vision and personality of its founder, Adam. The myth of the founder has been such a potent force in Silicon Valley. People idolize guys like Steve Jobs, Jeff Bezos, and Elon Musk. Think about all the best selling biographies, even the occasional Hollywood movie. There's this idea that founders had this special vision that no one else can really grasp, that the founder can do no wrong, and that myth gives their opinions incredible weight their own companies. I think that Adam Newman is changing that he may be remembered as the founder who put a dent in the founder myth. In the end, we works, demise may become bigger than the company itself. The company's bust may signal the end of the party, the death knell for this unicorn moment where people thought that if you could just get your company big enough, don't worry about profits. If you can just get big enough, everything will work out. Foundering is hosted by me Ellen Hewitt, Sean When is our executive producer. My Aquava is our associate producer. Raymondo mixed the show today. Mark Million and Vander May and Alistair Barr are our story editors. Francesco Levy is the head of Bloomberg Podcasts. This is our last episode of the We Work season, but please stay subscribed in your feed. We'll have more exciting episodes of Foundering in just a few months. At the Prepared to Account of Proper to Pasport, the Path again, to again, to Prepare to Company again to again, to the AGA, to the PI

Marine. Jensko was a we Work customer in Dallas. She worked in sales for a software company, and when she was at her we Work office, Maureen liked to work in the phone booths. These are small, padded rooms that you can step inside to take phone calls and not bother your neighbors. I came into work one day, I used opened up my computer and up pops an article about how there's formalde hyde in the we Work phone booths, which I spent upwards this three hours every day. In formalde hyde is really bad for you. It's a known carcinogen, and it's sometimes used in building materials, especially in glue. In this case, it was in we Works phone booths where Maureen sat for hours a day breathing in fumes that were possibly toxic. It was extra scary because I was eighteen weeks pregnant at this time, my first child. I mean a normal person would be concerned about that, let alone so on pregnant. We Work staff had printed out signs and taped them on the booths. Caution not used. We have been made aware that this phone boose doesn't meet our safety standards due to a defect caused by the manufacturer. Maureen was understandably freaked out. My first thoughts were, is there something wrong with my baby? And the thought of me putting her through that for three hours a day just tore me apart. She and her co workers were already following the news about we Works business failures. It had been kind of entertaining to watch until this newest development. I think it turned from joking of what happened, like what's going to happen next, to like, Okay, are you guys serious? Like this is this is not a joke anymore. This is, you know, kind of a serious issue. It's not like running out of cold brew, you know, this is, you know, potentially deadly. We Work said it removed more than two thousand phone boots, but they were also criticized for not acting sooner. I wrote a story at the time that said customers had noticed a weird smell before we were closed off the phone booths, but we Work told us in a statement that they moved as quickly as they could. In the fall of it felt like we Work was cursed. Every week there was more bad news. The I p O flopped, the CEO Adam Newman, resigned. They were potentially poisoning their customers. One of my colleagues even joked that We Work was having such a stretch of bad luck that maybe Adam had disturbed a mummy's tomb. You're listening to Foundering this week. In our final episode, we'll take a look at We Work after Adam, layoffs, lawsuits, and a pandemic that has completely derailed what it means to work in an office. Will also delve into Adam Newman's motivations and hear from people who knew him well. Once again, we've asked representatives for WE Work and Adam Newman for Common Adam spokesman didn't want to give us a statement, but you'll hear we Works comments throughout. So in the last episode, we talked about how when Adam left We Work, he negotiated a very very generous exit package with soft Maake. He was set to walk away with more than a billion dollars. Meanwhile, his employees, who were still dragging themselves to work every day, learned that thousands of them would be losing their jobs. When it was clearer that layoffs were coming, it just became this like dark cloud hanging over everybody. It was something that sort of paralyzed the whole company. That's Andrew Human, a former WE Were employee based in New York. He said that the impending layoffs killed morale inside the company. Everybody was just spending all day dreading what was coming and gossiping about who they thought was going to be cut first, and you know, keeping up to the minute, uh, you know, updates on slack as people found out new information. People were just nervous and demotivated and you know, disappointed by the old thing. And it just was it was really hard to do any work. And here's another we Work employee I spoke to. She asked not to be named in the show, but this is her real voice. No one wants to work in this Like basically, people are just not showing anymore to work. No one had the motivation to work. Everyone was basically waiting for the layoff. And then it came out the news that company was running out of cash, and then everyone was like, oh, are we going bankrupt or are we People are just waiting for bankruptcy and layoff for a while. We Work did seem close to bankruptcy. They narrowly avoided it when Soft Bank bailed them out. But what that means is that now this is SoftBank's company, and they laid off more than two thousand people in one round after another. The mood of the workplace was pretty seriously in decline for a place, you know, a workplace really prided itself on being this sort of like active and lively and fun and contemporary way to work. You could just feel it in the air. The degree to which people it just like wasn't as much fun anymore. People were not celebrating, people were not you know that the spirit around communal events, which were happening less anyway, was definitely dampened. Just just get out, like this is just is crashing, this is going down. Some meetings, people would not show up, like it was not normal. It was going for months, it was going for three months. Almost Eventually many of the employees just didn't want to be there anymore, Andrew ended up leaving on his own. At a certain point, a lot of people were actually like actively gunning to be laid off. Maybe they already had plans to leave and we're hoping for severance, or maybe because of everything that had happened, Yeah, please lay me off, Like I just want to leave, Like I'm done with this drama. Just too much drama. It's very hard to concentrate, is very hard to be motivated, It's very hard to be happy at work. Also not a good company, to be honest. Not everyone was so nonchalant about the layoffs. A group of we Work employees got together and wrote a public letter demanding fair severance. They wrote, we are not the Adam Newman's of this world. We are a diverse workforce with rents to pay, households to support, and children to raise. Newman departed with a one point seven billion dollar severance package. We are not asking for this level of graft. We're asking to be treated with humanity and dignity so we can continue living life while searching to make a living elsewhere. You can hear how painful it is for the employees to compare their outcomes to atoms. They called that exit package graft. A different group of employees sued WE Work, claiming the company's board hadn't fulfilled it's fiduciary duty to them as shareholders. We were called the lawsuit meritless. Keep in mind, we worked in have a great history of handling layoffs. Well, here's sethist Martinick, who joined the company after we Work bought his business. Once he was on board, he felt that the company had a bad culture around layoffs. You know, we Work for for a while was pretty brutal when people would leave the company, you know, like they would let someone go and they just like walk them out the front door. I was very vocal about it's harder we work, and I'm like, this is not right. You know, can't just walk people out the door when you let them go. You have to give them severence and be respectful and treat them with a lot of respect. And um Adam actually agreed with that and we ended up changing things. But the company would do that, and I think that would be like in Adam's blind spot. I spoke to multiple people at we Work who said the company had a history of laying off people who had been working there for a long time. They told me that we were called these terminations Mission Accomplished. The idea was that these people had been useful at some point, and we Work wanted to celebrate them for what they had done. But the name landed in a pretty tone deaf way. We Work eventually changed the name internally, but it had already spread through part of the company, and while thousands of his employees were losing their jobs, Adam left the country. He took his family and decamped to Israel, and for a while it looked like things couldn't get worse for we Work, But then came coronavirus. Curious what this means for we work now, not only financially, if we think about the long term consequences of what this coronavirus has done. We Work is known for crowding people together in one shared work space and playing together and sneezing on each other. If you will, you know what I mean. So how does this sort of change the way that people now even really think about we work? We Work started closing locations. They temporarily shut down a lot of offices in China, where lockdown orders were pretty strict, but in the US, a lot of we Work offices stayed open even under shelter and place orders. We Work said they were taking precautions. They gave us a statement saying they were cleaning the elevator buttons and countertops more often, but more controversially, they continued charging their members fees that piste off some of their customers. Who felt like they were being charged for a service they weren't going to use. I spoke to one customer named Adam Mutchler, who worked out of a WE Work in DC for years. If I didn't sign an amendment in October, I would have been on a month a month agreement and I would have canceled immediately in March. He's upset that we Work is still charging him. He would have stopped paying, except that last year he signed a new contract that locked him into a longer agreement. We Work said they stayed open because some of their customers are essential businesses, and they sent us a statement adding that they provide important services like mail handling for all their customers, essential or not. Adam Muchler was so convinced WE Work hasn't on any communication about what types of essential businesses. Who are the essential businesses. They've just had this really vague where an essential business because we create space for other essential businesses. In early June, Adam Muchler had had enough. He went into we Work one last time to take out all his stuff. This was early in the morning, and he said the place was deserted. Zero other people. A lot of the small offices had their logos peeled off to the glass. We she took as a signal that they had moved out. He was disappointed and We Work he saw this as a final push to squeeze money out of its customers. There was a point where I had a lot of love for We Work and it felt like this really like depressing breakup. I was just kind of walking away and they're not the company that I thought they were. And they've shown me through their actions. You know what their priorities, which I get you have to make money, but like you were all about community, and the duct was not attractive anymore. For years, we Work pitched the benefits of working closely next to others, excitement, new ideas, energy. Now coworking looked like a cloud of disease. In this moment, We Work wasn't recognizable to some of its longtime fans, in part because We Work wasn't we Work anymore. Soft Bank CEO Masa Yoshi Son had put all these billions of dollars into We Work, and after pushing out Adam, he was finally going to take the reins. He installed another Soft Bank executive as chairman of the company, and a real estate executive came in as the new CEO. They were running a pretty tight ship. Their goal was to turn the company around and make it profitable. That was already going to be a challenge, but now coronavirus made it seem nearly impossible. In an earnings presentation for SoftBank, Massa stood on stage and talked about their new predicament today. In my unique don't know, the situation is exceedingly difficult. Our unicorns have fallen into this sudden coronavirus ravine, but some of them will use this crisis to grow wings. In this same earnings called, Massa presented a new valuation for we Work, the lowest it had been in years. The company he had put ten billion dollars into is now worth only three billion dollars. Teddy Kramer, who had been an early we Work employee, was watching it all unfold. He had a sense that We Work was going to be hit hard by the virus. I have one word to describe how coronavirus is going to affect coworking clusterfuck Um. Nobody knows what to do. All the things they're doing, extended cleaning partitions. How do you enforce these things? Telling me to sit six ft away. I don't think anyone knows how to operate, mostly because we're getting zero guidance from the federal government. We're getting zero guidance from our state governments, We're getting zero guidance from our city governments. I am very um skeptical of anyone who says that we know how to operate a space. I don't think anybody has really done it yet. The sudden panic of coronavirus wouldn't have come at a worse time for We Work. We Work was waiting on the payout from an important deal. As part of their bailout, Soft Bank had agreed to buy three billion dollars and we Work stoff from employees and investors. This is called a tender offer, when you buy out existing shareholders. In March, the tender offer had been agreed to, but it hadn't actually come through yet. For Teddy, this was pretty high stakes. He was one of the few We Work employees who might actually get a significant payout because he joined so early. At first, he thought he might be able to cash out during the I p O, and when that sputtered out, the tender offer gave him some new hope. I have no belief in the long term prospects. I just want to get out as quickly as I can. The I p O fails, I go, look, this isn't great. I now have to sit on this. What's going to happen? And then the tender comes through. You know, I was I was intending to recee between a hundred and three thousand dollars from the tender and under the terms of the agreement, the tender offer was supposed to be done by April one. So for months we were employees thought that okay, they might still get some money out of their stock. They waited and kept waiting, and nothing was really happening. Every once in a while they'd get an investor update letter, but without a solid plan. Then in March, just as cities across the US were shutting down to prevent the spread of the virus, Teddy and all the other shareholders got a letter and it made him really nervous. Great, wonderful, I'm getting a note from them. I'm sure it's great news. I opened it up and I apparentially much see this cover your ask one to two page letters saying it's essentially that we work has not met the terms in order for the tender offer to complete. We are fully confident that these terms will be met within the next two weeks, but we just want to let you know that we can back out. And it was like, oh great, So Teddy knew how to read between the lines. This was a bad sign. So uh. Once I got the notice in mid March, Um, I looked at it, and I mean he said, Oh, we're fucked. This isn't this isn't happening, Um and lo and behold. Two weeks later, on April one, the day they were supposed to pay out, the order was canceled. My fears came true. What do I do you know? I was relying on this money to keep me afloat like a lot of other people. When soft Bing backed out of the deal. There was one person who had the most money at stake, Adam Newman. He was supposed to be able to sell close to a billion dollars in stock. It was like Masa had snatched the check right out of Adam's fingers, saying, ha, just kidding. So a few weeks later, Adam sued soft Being. He alleged that Softing had unfairly pulled out of the deal. Soft Bank said they were totally justified and not going through with the tender because we Work hadn't met all these criteria. For one, soft Bank sited some ongoing investigations into we Work from various regulators, attorneys General, the SEC, and others. Soft Bank's Vision fund has filed a motion to dismiss. So just when you thought he was out, Adam Newman came roaring back in and he's locked in another battle with Masa, this time about getting his billion dollars. It's like Alien versus Predator, the sequel. But We Worked employees were out of luck. They just sat back and watched the stock plummet and value. Here's Carl Pierre, who used to run the community team for We Work in d C. The side piers were a lot of people that we were holding on to a lot of options, thinking they were gonna become homeowners. Won the Company of Republic who were getting ready to buy cars, getting ready to possibly even retires start their own company, and all those gyms are dashed in the course of a couple of weeks, you know. Bummer. Carl says he even watched colleagues turned down other offers because they thought they might get rich from we work. I had like two guys I know, um, do you know? They got job offers some other places, and I talked to them about it, and they refused both offers, and they were like, no, we're gonna stick with this, Like it's gonna we're so much money. Man's like, don't You're gonna be a millionaire. I've heard stories of other employees making similar miscalculations. One former employee told me they bought a house thinking they'd be able to pay it off by selling their shares. Another said they took out a loan right before the I p O so they could buy their stock early and save on taxes down the road. Who once the I p O was canceled, they were stuck with a six figure tax bill. These employees felt financially screwed, but their disappointment went beyond that. They were hurt. I asked Dave Fanno, who's a former work executive. He said that the promise of equity made employees feel like owners, but they didn't have the same rights as actual investors. Equity continues to be used as a mechanism to create a sense of ownership, and I kind of use ownership and air quotes. It's emotional, it's not practical. They don't have the information rights and investors too, they don't really know the profitability, they don't really know the cash burn of the company. Dave said employees were also blinded by famous stories of some early start up employees who got rich from their stock because they're just thinking about, you know, those successful stories that they hear of those early employees getting a ton of you know, some some big liquidity event and and life changing amounts of money. And that's not to say those aren't true, but I think it's important to state that those are the minority in terms of the total number of people that have gotten equity relative to those that have had real pay days. Dave says he understands that some employees feel tricked, almost betrayed by their own employer. That's tough for people to navigate. They're probably remorseful, they're angry, they wish they would have had more information. And this feeling of betrayal was compounded by we works inspiring mission, which Dave says the company used to get employees bought in. I think it went a really long way. You know, you'd often hear things like it's a really great mission. It's a really it's a mission that can be a part of you know, why are you here? I really believe in the mission. That mission really meant something too WE Works employees. Here's Cody Quinn, a former executive assistant. They made people feel like they were like, then you're part of this huge thing that's going to change lives. And they were really good at sending that message that people really eiaved it. I mean I really believed it, Like dancing and fist pumping during an orientation, like they really got people to believe in what they were saying. Adam was like just a big lie to you know, and I feel I can't imagine how those people are feeling. Former employees were mad because they felt lied to by WE Works messaging, we over me Better Together authenticity, especially after they learned about the conflicts of interest, the huge payout, Adam leaving the country. In retrospect, Adam's old WE Work slogans felt hollow. Here's Cody again. If I could ask Adam one question, did you really believe all that bullshit that you told us? Did you ever really believe it? Did you ever really believe that you were changing the world. Did you ever really believe that you were elevating the world's consciousness or was it really all for that parachute you ended up with anyway, Remember, others had told me they thought Adam was manipulative and savvy, that he knew exactly what to say to get people to agree with him, that he was so charming that it was hard to know whether he believed something or not. It was hard for employees like Cody to trust that Adam had been genuine to her and to others, his actions undercut his words. Here's Andrew again. We were was sort of a dream. It was really like, it was really exciting to me. And to have that dream dashed was, you know, pretty devastating. And when Adam, you know, after the fact, you know, takes his money and runs off to Israel, it just causes you to question the whole thing, like was it ever real? Was this always the plan in the first place? And it just sort of poisons everything that felt positive about that this message that we were sold, I wasn't just a way to get some money out of the world, Like maybe it wasn't. I don't know to this day. I suspect it's probably somewhere in between. I think that you know, he's both an idealist and a realist, and you know, really believed it at the beginning and also took some pretty selfish evasive action when he saw the writing on the wall. There was something about Adam though a lot of people told me about this. They'd say that he seemed to have so much conviction and enthusiasm and energy for what he was doing, they felt it just couldn't be a sustained artifice. There's something about Adam's charisma and magnetism. I'm sure you've heard it from everyone you've talked to, Like, there's a reason why he was as successful as he was, and it's because he just radiates this energy and this passion and this excitement about what he's doing. He's a he's a zealot, and so it's hard not to believe that that's genuine. And recently I had a conversation with a former we worked executive who had some great insight into Adam's beliefs. He asked for anonymity, so we had someone else read his words out loud. He felt that Adam knew exactly how to use belief to his advantage as a leader. So I think he understood that people wanted to believe in those things. I believe that he understood the perceived benefit of those things. I think he very well understood how to deliver a message that people could connect with and believe in. I think, ultimately, at the end, his action showed that he didn't really believe in the things he was saying. Adam believe these ideas in principle, but in practice sometimes things played out differently. He very much believed that people should do those things, and that people should believe in a wee over me, and that people should struggle together. Then when it applied to him, I'm not sure he believed that so much. He felt he knew like what was right for people, but but didn't ultimately think that those things were right for him, at least not in the actions he took to this executive. This is how you reconcile the gap between Adam's words and his actions. This is how Adam could seem genuine when he talked on stage about the value of community and then turn around and do things that looked really selfish. Summer Camp was a glaring example when you know, the whole company has to wake up at six am or five am and struggled to sign up, you know, to wait in lines to go to summer camp and riding a bus. And he takes a seaplane. And look, you're all like you woke up at four thirty or five to get on the stupid bus to to a summer camp to sleep in a tent for three or two nights or whatever. You're just getting off the bus in the Adirondacks and you're kind of like you're cracked out, and you've got like one eye open, and you see the seaplane just like gloriously land in the lake, and you see these people doating on him and carrying his suitcases, and you're just like, what the fuck this executive saw Adam get special treatment again and again. The people needed to share hotel rooms to save money, yet he's got like a big Airbnb mansion. We're all told to save money and be frugal and fly coach to China. He takes a private plane. And so there's just this kind of like, well, my time is more important than your time in general, like his approach to life is the rules don't apply to me. We'll be right back. I want to spend a little time now talking about Adam and his life after we work. A few months after Adam was pushed out of his company, he left for Israel, and then he laid low. He didn't talk to any media outlets, and since he had been a fixture in the news for so long, his silence was notable. The clearest view into Adam's life came from his mom. She gave a revealing interview to an Israeli news site about his self imposed exile. She said that he was leading an idyllic life as a small time celebrity in this remote beachfront community. He was getting free meals, hanging out with family. He was still partying with rich people. Adam's mom said that the wives of billionaires would approach him to take selfies. She said that Adam told her, no one has loved me as much as when I fell from grace. But even in his new life, every once in a while his actions still popped up in the news. He was clearly still scratching his lifelong itch making deals. He considered investing in Barney's the Dying Department store. He and Rebecca listed some of their luxury homes on the market for tens of millions of dollars. He sold to an investor his stake in one of his controversial buildings that he intended to rent. We work, but mostly he stayed quiet. To some of his employees back in the States, it felt like Adam had taken the money and run, but some people understood that even if he had gotten a big payout, he was probably still hurting about his damaged reputation. Here's Carl, you know. Can you imagine being a god amongst New Yorkers, being the largest commercial tenant in New York, having the respect of everybody, people knowing you when you walk down the street, to being the ultimate social pariah where nobody wants to be associate with you. He must have hurt on some level to have it all dashed away, Like the stink of this will ride him for a long time. People will people say his name and laugh. So he lost something for sure to in all of this. Imagine having a sea of employees who thought you were god now think you are the worst human of the world. Like I don't care again, I don't care how much money you have. When people hate you, people hate you. You know what I mean like it's it's just done. What Carl is describing here is a snapshot in time fall of when people were mocking Adam all over the place. I don't mean just on Twitter and read it. It was on TV and in the newspapers. In the New York Post, they wrote that Adam was quote hiding behind his surfboard to kill a bottle and read cabul a bracelet. I wanted to talk to someone who knew Adam personally, someone who might be able to explain with some sympathy Adam's mind and motives at a moment when Adam just looked like a villain. Adam profoundly impacted my life in a positive way. That's seth Beist Martinick. He spoke a little earlier in the episode. He and Adam were friends, and he said Adam was almost like a mentor to him. Adam's advice was very a holistic. It wasn't just about how you do your job better, but it's about how you'd be a better person in all aspects, being a better father, being a better husband, being a better CEO, you know, being a better friend, being a better contributor to society at a broader level. Seth knows Adam well and from way back. They actually attended college together in two thousand two. Then years later they reconnected. Seth ran a marketing company called Conductor we Work ended up acquiring them. It was kind of an unusual acquisition because Conductor didn't specialize in real estate, but it gave Seth a chance to work closely with Adam. He said, Adam was unusually generous with him, and at no other and no other point in my career did anyone really comment, sit down to me with me and give me that kind of feedback and and share it from their own personal experience. Seth said Adam was a unique person, someone who had this unstoppable energy, piece of boisterous is that right, right? Boisterous person. I mean he's and he's got like an insane amount of energy. I mean wakes up super early and then it's like up super late and like doesn't sleep. I worked hard, and I would I have spent time with Adam, and like it was like I couldn't keep up with him. He worked, He worked really hard, and it was long days and traveling and you know, fly into China for a day and then coming back and then coming right off the plane and run into the office and staying there for twelve hours, and then going home and sleeping for three hours, and waking up the next day and go into you know, Brazil. I mean he was he worked hard. In Seth's mind, Adam would not have worked so hard unless his convictions were real. I think, without question, he did believe. I think he believed that everything he was saying. And I think that he thought that the company was going to be one of the biggest companies in the world. And I think he thought that was with such great certainty that people were inspired by his certainty. But also that certainty can lead to over confidence, and over confidence can lead to mistakes. Over Confidence can lead to mistakes, Optimism can lead to blind spots. To Seth, Adam's greatest strengths were also his fatal flaws. When you think you're going to change the world, and when you think that you're going to make such a big difference, you sometimes could lose sight of some of the small things. And I think Adam one of Adam's greatest strengths and and you can also say one of his weakness is right. It was like his incredible optimism and belief that things would work out. Seth saw that Adam felt free to make bold decisions as a leader precisely because he was unencumbered by the details. But not being a detail oriented guy also led Adam to act insensitively, sometimes to his own employees. One of the great things Adam did was he kept himselves very distant from things, so he was able to make decisions without thinking about all the minutia. Like when I make decisions a conductor, I'm like, Okay, well this is going to affect this guy and this guy and this guy is really stressed out right now, and like so it screws up my thinking where it affects my thinking, even that screws it up, it affects my thinking very sensitive to that. Adam was the opposite. Adam didn't wasn't sensitive to that. So he was able to make big decisions and and bold ones. But that's that he over indexed to the other side. If he was, you know, if he had more empathy towards all the people that were doing all the all the work, then he might have made different decisions. But he also might have um been able to foster more loyalty with the people. Even Adam's friend is pointing out a lack of empathy. The way Seth sees it, Adam had these blind spots to the needs of others, and he made some choices that only benefited himself. And some of these choices, which looked like conflicts of interest, reflected really poorly on Adam. He went too far and and then also had credibility issues things that he did with his own stuff, you know, and I think he underestimated how much that would come back to haunt him. The reward was big, but the risk was there. He took a bott of risk and it didn't pan out. By the time I spoke to Seth a few months after we were canceled their I p O, it was hard to see the company or Adam as anything but a failure. But others who were close to Adam reminded me that Adam had pulled off some incredible feats as a businessman. Here's former We Work executive Dave Fano. Again, I don't think anyone thought that he could close his Series A and to get a prestigious firm like Benchmark to invest, and they did, and that then he could get some of the prestigious landlords to do leases with us, and then they did that we could double the size every year for ten years in a row. And then we did you know, and that you could raise the largest private equity round ever, and then he did. You know. It's just across the board he was able to do it. I mean, as a collective, I think we did it. I don't think he did it on his own, But I do give him credit for setting the sort of audacious goals that people then rallied around and achieved. We work kept beating expectations over and over again. Dave credited this in part to Adam's personality. He said, Adam never asked himself what could go wrong. I don't think he hardly ever operated out of a place of fear, like there's I think in business there are folks that play not to lose, and there are people that play to win. He was playing to win, like optimizing to not lose was not part of the way that he operated. He is not a defensive player. And then, of course things did go horribly wrong. Billions of dollars vanished into thin air. A lot of people started comparing Adam to Elizabeth Holmes. The founder and former CEO of theres You can understand why they were with these stars of the startup world. Reporters wrote big profiles about them, Their investors said they were changing the world, and they held cult like sway over their own companies until things fell apart and all of a sudden everyone was mocking them and tearing them down. I spoke to Matt Levine, a Bloomberg opinion columnist, and he says that the comparison to Elizabeth Holmes isn't justified. The crime that people get in trouble for usually and when company implodes is some variation on securities fraud. Right. Um, Like Elizabeth Holmes was arrested for securities fraud because she allegedly lied to the investors. Um, Adam Newman just clearly didn't lie to his investors. Like at all. Well, Adam didn't lie to his investors as far as we know. There are some ongoing investigations, but he hasn't been charged with wrongdoing. Like, the problem here was not fraud. The problem here is not that Adam Newman went to naive investors and stole their money on false pretenses. That's Adam Newman went to a very aggressive investor, and he was very aggressive, and they sort of built each other up and ended up in a place where they were both kind of unhappy. So the story of We Work from this lens isn't so dramatic. Adam was just a guy who knew how to take advantage of venture capital. He worked within the system. Matt even thinks that something good can come from the We Work story. It might push other businesses to behave more responsibly. He calls it a triumph of corporate governance. It gives the market some ability to push back on future I p o s. Because before We Work, if you said I want to go public, but I want to keep control of my company forever and give the public non voting stock, your bankers would have said, any they won't like that. And then you'd say, well, Bill, it matter, and the bankers would say, honestly, like, there's never been a deal pulled for a deal that people rejected because of bad governance. Right like now after Weird, that's changed. Right now after were you can say, actually, like if your governance is bad enough, it will be a huge disaster and you won't get your deal done and you'll have to go for a rescue financing and then you'll sue and they'll be home mess. Uh. And so it's a good like cautionary tale for the next company and those glory days of WE Works, big investments, work hard, play, hard, partying mentality. Some already remember those as the good old days, a thing of the past. Here's Carl Pierre, the former community worker in d C. I look back, I still believe, I still believe and I still defend that we did create community and we did do some amazing things. It's one of those things I'm really wistful for where it's like, yeah, wow, like talk about a company that was an absolute, you know, ship show in so many ways, like completely insane, like the things that happened in those walls crazy. But if you think about, you know, could anything else have brought together thousands of twenty for read a, twenty seven year olds who starry eyed dreamers believing that they can instead of working for a hedge fund or something, that they can work for the startup and maybe change the world a different way. Yeah, I don't know. It's amazing to me that Carl is so nostalgic for his time at WE Work. He told stories about throwing out used condoms and dealing with aggressive customers on this podcast, but he loved his time there clearly. Yeah. I've had guys yelled at me for the dumbest stuff. I' had guys threatened to beat me up. I've had so many things happened to me at we work. It's nuts. I've had to call the cops more than I ever have my entire life that we work. But at the end of the day, it's just um, I mean, the stories I have, the connections that made worth it. Would I do it again, Yeah, I mean I would probably drink less alcohol, But what I do it again? Yeah, of course I would do it again. It was It was absolutely nuts, and Carl wanted to remind us that at the center of it all was Adam. Guys, this is his company. He built this from He literally built this from nothing. He convinced scores of investor sort of give him billions be billions of dollars to do whatever he wanted to grow his company. It's his cookie visions, his crazy madmen thing, and we filled buildings on like hopes and dreams. Everyone has a lot of hatred towards him. I mean, you would have had that job to begin with. It wasn't for him anyways. This was a whole company with more than ten thousand people working for it, but for almost a decade it was centered so completely around the vision and personality of its founder, Adam. The myth of the founder has been such a potent force in Silicon Valley. People idolize guys like Steve Jobs, Jeff Bezos, and Elon Musk. Think about all the best selling biographies, even the occasional Hollywood movie. There's this idea that founders had this special vision that no one else can really grasp, that the founder can do no wrong, and that myth gives their opinions incredible weight their own companies. I think that Adam Newman is changing that he may be remembered as the founder who put a dent in the founder myth. In the end, we works, demise may become bigger than the company itself. The company's bust may signal the end of the party, the death knell for this unicorn moment where people thought that if you could just get your company big enough, don't worry about profits. If you can just get big enough, everything will work out. Foundering is hosted by me Ellen Hewitt, Sean When is our executive producer. My Aquava is our associate producer. Raymondo mixed the show today. Mark Million and Vander May and Alistair Barr are our story editors. Francesco Levy is the head of Bloomberg Podcasts. This is our last episode of the We Work season, but please stay subscribed in your feed. We'll have more exciting episodes of Foundering in just a few months. At the Prepared to Account of Proper to Pasport, the Path again, to again, to Prepare to Company again to again, to the AGA, to the PI