Welcome to Marketing School, the only podcast that provides daily top level marketing tips and strategies from entrepreneurs that practice what they preach and live what they teach. Let's start leveling up your marketing knowledge with your instructors, Neil Patel and Eric Sue. All Right, guys, before we start, we got a special message from our sponsor. If you want to rank higher on Google, you gotta look at your page speed time. The faster website loads, the better off you are with Google's Core Vital update. That makes it super super important to optimize your site for low time. And one easy way to do it is use the host that Eric and I use, dream Hosts. So just go to dream host or google it, find it, check it out, and it's a great way to improve your low time. Welcome to another episode of Marketing School. I'm Eric Sue and I'm Neil Patau, and today we are going to talk about what you can learn from we Works Debacle. So as of this recording, it's already been it's been a while. This will come out kind of the week of Thanksgiving, I believe, but it's still very fresh because we Work was previously valued. They're a office space company. We used to use we Work as well. I believe you did too as well, Neil correct, Yeah, we used we Work for a long time. Yeah, and they're great. I mean, we love the office space and everything. But what happened was they raised a ton of money and their valuation popped up to about forty seven billion, I believe, and they were trying to IPO, and what ended up happening was all the people that started digging in doing due diligence on their financials, how the company's run and everything. What ended up happening was people started uncovering all these things like the CEO had us the sixty million dollar private jet. You know, they're just crazy things happening around the company where the wee parties all the time, and then there's like this weird stuff going on where you know, he was planning to have his wife was like number two at the company or something like that. Just a lot of stuff going on that people just were like, whoa, whoa, we got to pump the brakes here. And you know, long story short, their IPO basically had to be canceled and they alse did the CEO. And what happened was, as of this recording. Basically a couple of weeks ago, Softbaing, their largest investor basically had to bail them out. And I think they bailed them out to the tuitive about ten billion bucks or something like that. And the craziest part about this is that the CEO, former founder, Adam Newman, he got to pay out. I think it totaled about a billion dollars with two hundred million dollars seven billion crazy, right, It's like all this stuff happens and he still gets a fat payout, becomes a billionaire. So, Neil, I mean, what's your take on this? Unlucky him, good for him? Can talk him from being successful? You know, I loved We Work, dude, So yeah, yeah, I wish I got the one point seven billion dollars. The biggest thing that I ended up learning for this whole debacle is you can't and markers we tend to do this. You can't put lipstick on a pick. A pig is a pig. You need to create a great product, great service. You need to have good economics. A good example of this is We Work. You know, they're pitching themselves as this new tech company. They're just a real estate company. And I'm not trying to talk crap, but they straight up just are a real estate company. And when you look at we work, everything that they're doing is it's fine, but their valuations aren't. Like a real estate company, They're too expensive. As you grow within them, it becomes way too costly and it's just going to create more and more problems. And when you look at that is it's like, that's something that the markets, their investors all need to keep in mind. And when you're doing your company, you know, don't try to be like one of these companies that be like, oh, we're actually not an e commerce company. Our value should be better and we should operate like where a software company and have higher valuations or whatever. It is like, just be realistic with yourself. Know what you are, know what you're good at, and just focus on that and double down. And it's okay not being the biggest company out there or the sexiest company. Just keep your head downe and keep pushing forward. This is so crazy. I'm reading this right now. The software's latest investment will enrich him further. He will be able to sell nine hundred and seventy million dollars if his stock in exchange for control of the company and receive a nearly two hundred million dollars quote unquote consulting payment in exchange for a non compete agreement and he's super voting rights. That is so crazy. So the one thing I'll say too is Adam worked out a really good deal for himself. So I think one takeaway here is learn how to negotiate. Even when things aren't really working well in your favor, you still have some upside. Learn what the other party wants, and learn how to negotiate well. The book I'd recommend The Secrets of Power Negotiation, great book. Right. Second thing I would say is this, you have to take care of your people because he's getting this fat payout, and while he's getting this fat payout, we're talking thousands of employees are getting laid off. We work bought all these random companies too, So they bought like Conductor, which is an SEO company, and they bought all these other random companies that they tried to get there they basically got rid of tried to sell and so so take care of people, but also have some governance too. It's not just buy whatever company. It's not just you know, smoke weed party, you know, when you're doing meetings, which is basically what I read. I'm not sure if that really happened. But also take care of your cash too. To Deal's point, you know, we work birds so much cash. It was just a cash birding machine. Considering how much money they raised it. You know, they're really good at kind of branding, really good at marketing themselves. But at the end of the day, what ended up happening. So I think it's still very salvageable. I think it's just you know, a couple of points that Deal I talked about. If you're not being realistic, you're not taking care of these items, maybe the company well maybe the company is just something that's going to go on fire. Yeah, and time will tell. But I think there's also going to be less companies like this. I bet you the vcs and stuff in the future are going to be pushing more for profitability than just grow, grow, grow, and trying to get people to like a seventy or eighty or one hundred billion dollar valuation when they should have never had that valuation in the first place. Yep, agreed. And by the way, the employee stock options are not worth nothing. So we work added about ten thousand between the end of twenty seventeen up to kind of twenty nineteen. And so when they're issued stock options, they're exercisable about twenty six bucks, around twenty six and twenty seven bucks. But the key thing is to not confuse you guys. The shares now based on the new kind of SoftBank save with their money. The shares are worth about like eleven bucks per share now, which basically means their shares are now worthless. Right, So these employees not only they are losing their jobs, but you know the risk that they took it just sucks. Right, So again, you know, I come back to it again. You got to take care of your people because it's the people that end up making the business at the end of the day. Even if you have a marketing campaign, it's the people that are running the marketing campaign. So that is it for today, and don't forget to check out the Growth Accelerator. This is the live event that Neil and I do three times a year. Amazing spots, amazing people, amazing speakers, and you can apply at marketing school the ioslash Live. That's live and before we go, don't forget to rate, review and subscribe helps us grow, and we'll see you tomorrow. We appreciate you joining us for this session of Marketing School. Be sure to rate, review and subscribe to the show and visit marketingschool dot io for more resources based on today's topic as well as access to more episodes that will help you find true marketing success. That's marketingschool dot io until next time. Class dismissed

Welcome to Marketing School, the only podcast that provides daily top level marketing tips and strategies from entrepreneurs that practice what they preach and live what they teach. Let's start leveling up your marketing knowledge with your instructors, Neil Patel and Eric Sue. All Right, guys, before we start, we got a special message from our sponsor. If you want to rank higher on Google, you gotta look at your page speed time. The faster website loads, the better off you are with Google's Core Vital update. That makes it super super important to optimize your site for low time. And one easy way to do it is use the host that Eric and I use, dream Hosts. So just go to dream host or google it, find it, check it out, and it's a great way to improve your low time. Welcome to another episode of Marketing School. I'm Eric Sue and I'm Neil Patau, and today we are going to talk about what you can learn from we Works Debacle. So as of this recording, it's already been it's been a while. This will come out kind of the week of Thanksgiving, I believe, but it's still very fresh because we Work was previously valued. They're a office space company. We used to use we Work as well. I believe you did too as well, Neil correct, Yeah, we used we Work for a long time. Yeah, and they're great. I mean, we love the office space and everything. But what happened was they raised a ton of money and their valuation popped up to about forty seven billion, I believe, and they were trying to IPO, and what ended up happening was all the people that started digging in doing due diligence on their financials, how the company's run and everything. What ended up happening was people started uncovering all these things like the CEO had us the sixty million dollar private jet. You know, they're just crazy things happening around the company where the wee parties all the time, and then there's like this weird stuff going on where you know, he was planning to have his wife was like number two at the company or something like that. Just a lot of stuff going on that people just were like, whoa, whoa, we got to pump the brakes here. And you know, long story short, their IPO basically had to be canceled and they alse did the CEO. And what happened was, as of this recording. Basically a couple of weeks ago, Softbaing, their largest investor basically had to bail them out. And I think they bailed them out to the tuitive about ten billion bucks or something like that. And the craziest part about this is that the CEO, former founder, Adam Newman, he got to pay out. I think it totaled about a billion dollars with two hundred million dollars seven billion crazy, right, It's like all this stuff happens and he still gets a fat payout, becomes a billionaire. So, Neil, I mean, what's your take on this? Unlucky him, good for him? Can talk him from being successful? You know, I loved We Work, dude, So yeah, yeah, I wish I got the one point seven billion dollars. The biggest thing that I ended up learning for this whole debacle is you can't and markers we tend to do this. You can't put lipstick on a pick. A pig is a pig. You need to create a great product, great service. You need to have good economics. A good example of this is We Work. You know, they're pitching themselves as this new tech company. They're just a real estate company. And I'm not trying to talk crap, but they straight up just are a real estate company. And when you look at we work, everything that they're doing is it's fine, but their valuations aren't. Like a real estate company, They're too expensive. As you grow within them, it becomes way too costly and it's just going to create more and more problems. And when you look at that is it's like, that's something that the markets, their investors all need to keep in mind. And when you're doing your company, you know, don't try to be like one of these companies that be like, oh, we're actually not an e commerce company. Our value should be better and we should operate like where a software company and have higher valuations or whatever. It is like, just be realistic with yourself. Know what you are, know what you're good at, and just focus on that and double down. And it's okay not being the biggest company out there or the sexiest company. Just keep your head downe and keep pushing forward. This is so crazy. I'm reading this right now. The software's latest investment will enrich him further. He will be able to sell nine hundred and seventy million dollars if his stock in exchange for control of the company and receive a nearly two hundred million dollars quote unquote consulting payment in exchange for a non compete agreement and he's super voting rights. That is so crazy. So the one thing I'll say too is Adam worked out a really good deal for himself. So I think one takeaway here is learn how to negotiate. Even when things aren't really working well in your favor, you still have some upside. Learn what the other party wants, and learn how to negotiate well. The book I'd recommend The Secrets of Power Negotiation, great book. Right. Second thing I would say is this, you have to take care of your people because he's getting this fat payout, and while he's getting this fat payout, we're talking thousands of employees are getting laid off. We work bought all these random companies too, So they bought like Conductor, which is an SEO company, and they bought all these other random companies that they tried to get there they basically got rid of tried to sell and so so take care of people, but also have some governance too. It's not just buy whatever company. It's not just you know, smoke weed party, you know, when you're doing meetings, which is basically what I read. I'm not sure if that really happened. But also take care of your cash too. To Deal's point, you know, we work birds so much cash. It was just a cash birding machine. Considering how much money they raised it. You know, they're really good at kind of branding, really good at marketing themselves. But at the end of the day, what ended up happening. So I think it's still very salvageable. I think it's just you know, a couple of points that Deal I talked about. If you're not being realistic, you're not taking care of these items, maybe the company well maybe the company is just something that's going to go on fire. Yeah, and time will tell. But I think there's also going to be less companies like this. I bet you the vcs and stuff in the future are going to be pushing more for profitability than just grow, grow, grow, and trying to get people to like a seventy or eighty or one hundred billion dollar valuation when they should have never had that valuation in the first place. Yep, agreed. And by the way, the employee stock options are not worth nothing. So we work added about ten thousand between the end of twenty seventeen up to kind of twenty nineteen. And so when they're issued stock options, they're exercisable about twenty six bucks, around twenty six and twenty seven bucks. But the key thing is to not confuse you guys. The shares now based on the new kind of SoftBank save with their money. The shares are worth about like eleven bucks per share now, which basically means their shares are now worthless. Right, So these employees not only they are losing their jobs, but you know the risk that they took it just sucks. Right, So again, you know, I come back to it again. You got to take care of your people because it's the people that end up making the business at the end of the day. Even if you have a marketing campaign, it's the people that are running the marketing campaign. So that is it for today, and don't forget to check out the Growth Accelerator. This is the live event that Neil and I do three times a year. Amazing spots, amazing people, amazing speakers, and you can apply at marketing school the ioslash Live. That's live and before we go, don't forget to rate, review and subscribe helps us grow, and we'll see you tomorrow. We appreciate you joining us for this session of Marketing School. Be sure to rate, review and subscribe to the show and visit marketingschool dot io for more resources based on today's topic as well as access to more episodes that will help you find true marketing success. That's marketingschool dot io until next time. Class dismissed