Billion Dollar Loser

Jun 15

How Adam Neumann Thinks

Neumann has spent his life as a relentless dreamer, while WeWork cofounder Miguel McKelvey isn’t afraid to design new frameworks. Together, they established one of the most overvalued startups since the dot-com bubble.

Adam Neumann grew up in Israel with troubled parents, moving between Indianapolis and the city of Kibbutz during his youth. Nomadic circumstances forced him to constantly adjust to new surroundings. Eventually, Neumann moved to New York with his mother and supermodel sister. Despite Neumann’s inherent charm, he struggled to follow through with things in his 20s. Adam joined Israel’s premier navy officer training program but dropped out, failed to complete his degree at Baruch College, and couldn’t turn Big Tent, his baby clothes company, into a success.

McKelvey, on the other hand, was raised in Eugene, Oregon, by a single mother. To get by, his mom joined a co-op with five other working mothers who shared resources and helped raise one another’s kids. Miguel learned how to be scrappy in his youth. In 1999, McKelvey attended the University of Oregon on a college basketball scholarship, playing for the Ducks while earning his architecture degree. After graduating, he ventured to Japan with his friend John Hayden. Over sushi one evening, they devised the business idea of helping people learn English. The result was the founding of English, Baby! Upon returning to the U.S., the company earned stable profits selling course materials to international students. Despite the business’s success, McKelvey left after realizing English Baby wasn’t going to evolve into a mainstream social media platform like he had once envisioned.

In 2008, McKelvey moved to New York City and took a job at Jordan Parness Digital Architecture (JDPA) as a junior draftsman. His role quickly evolved into managing the rollout of retail stores for the firm’s founder.

One afternoon, Miguel visited his JPDA colleague Gil Haklay and met Adam Neumann on the elevator of all places. Adam, Gil’s roommate, hit it off immediately with Miguel. Both men worked in the same office park at 68 Jay Street in Brooklyn and had entrepreneurial ambitions. Adam was struggling to sell onesies, and Miguel was eager to move on from managing retail projects.

Origin of Green Desk

Neumann convinced 68 Jay Street’s landlord, Joshua Guttman, to invest in converting one floor into collaborative workspaces. These spaces could be rented to freelancers, small business owners, creatives, or anyone needing a personal workspace. They called the venture Green Desk, which eventually expanded to occupy the entire building. After several years, Neumann, McKelvey, and Haklay sold Green Desk back to Guttman, each walking away with around $500,000. Haklay returned to Israel, content with her earnings, while Neumann and McKelvey stayed in New York, eager to launch a new real estate venture in Manhattan.

Their timing was ideal. In the aftermath of the 2008 financial crisis, commercial property prices were low. After designing more open cube farms, the partners were ready to move forward. Adam’s friend threw out the name WeWork in a brainstorming session, and the project launched into the unicorn sphere.

Check out Billion Dollar Loser by Reeves Wiedeman. Reeves’ recount of WeWork offers spicy details, including how Nathaniel Rothschild helped fund Adam Neumann’s first company. Support us by clicking the button below to order your copy or sign up for Audible. Subscribers receive one free credit each month, which can be used to access any title in the app’s vast library.

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