Billion Dollar Loser by Reeves Wiedeman

Curious about the world of unicorn startups? Even if you're not, you may have wondered how some companies seem to appear overnight and bring in millions of dollars. Social media is full of inspiring stories about passion and innovation, but what about old-fashioned salesmanship and the art of closing a deal?

A striking example of this is WeWork. Its founder, Adam Neumann, had a solid idea, but more importantly, he excelled at selling his vision. I discovered Neumann’s story through Billion Dollar Loser by Reeves Wiedeman, which I picked up at a local bookstore.

The book chronicles We Work’s explosive rise to a $47 billion valuation and its dramatic fall into filing for Chapter 11. Here are the Cliff Notes.

Origins of Green Desk

WeWork started as a lesser-known real estate venture called Green Desk. The first deal closed after Neumann convinced Joshua Gutman, landlord of 68 Jay Street in Brooklyn, to rent out one floor to tenants in need of flexible workspaces.

Guests were greeted with fresh coffee, friendly baristas, inviting seating areas, and lively conversations. Within 18 months, Green Desk had leased out the entire building. Neumann, McKelvey, Gutman, and McKelvey’s architect friend Gil Haklay ran Green Desk for several years before selling their stakes back to Gutman for $500,000 each.

Within a year, Neumann and McKelvey reinvested in commercial properties in lower Manhattan. At Neumann’s wife’s suggestion, they renamed the new venture WeWork. The timing was ideal, as real estate prices were still low in the wake of the financial crisis. Between 2008 and 2020, WeWork expanded aggressively, opening roughly 800 locations worldwide.

Warning Signs of We Work’s Impending Doom

Trouble began when rapid growth outpaced operational stability. McKelvey focused on building out offices with minimal overhead, while Neumann hired aggressively and persuaded investors to inject more cash flow.

Despite the company’s sky-high valuation, it was built on shaky ground. By 2019, WeWork planned to go public, but poor due diligence, high expenses, and low occupancy rates were impossible to ignore. When the company filed its S-1, its troubling financials became public, effectively killing the IPO.

Neumann's story serves as a cautionary tale for entrepreneurs: flashy sales tactics can only get you so far. A business without strong fundamentals will eventually unravel. Sales matter, but should be backed with sustainable strategies and solid margins. Before launching any venture, think carefully about how it will scale, retain customers, and manage cash flow.

Meditative Mantras for Anxiety

To close, here’s today’s hypnotherapy-inspired mantra: Breathe in, breathe out. Repeating this phrase during meditation encourages focused attention and deep relaxation. Research suggests that mantras can tap into the subconscious mind, helping to shift thought patterns. Brain imaging studies have shown that hypnosis and similar techniques alter neural activity in areas linked to attention, perception, and pain control.

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other reflective texts:

• Bezonomics

• The Bond King

• The Bhagavad Gita

• Atomic Habits