Adam Neumann is back, and this time it wants to revolutionize the residential sector. His new project is called Flowwill presumably be launched in 2023 and aims to rethink the home rental market by creating a brand capable of offering services and housing units for those who work remotely.
The project has the financial support of Andreessen Horowitzone of the leading venture capitalists in Silicon Valley, who has decided to invest in Flow 350 million dollars. Andreesen Horowitz’s support, considered royalty among early stage investors, is a powerful sign of support and possibly an attack on Neumann’s critics, who have described his previous leadership at WeWork as an extremely bad experience.
READ ALSO: “Anne Hathaway tells the new miniseries on the history of WeWork”
“Neumann is a visionary leader”
“Adam Neumann”, explains the venture capitalist in a statement, “is a visionary leader which revolutionized the world of commercial real estate, bringing the concepts of community and brands to an industry where they weren’t. Adam and the WeWork story have been told, analyzed and fictionalized. Despite all the energy put into telling the story, it was underestimated that Neumann alone redesigned the office experience. We understand how difficult it is to build something like this and we love to see business founders grow from lessons learned. For Adam, the successes and lessons are many and we are excited to embark on this journey with him and his colleagues to build the future ”.
Neumann’s project intends to carry the experience behind WeWork in another project. “We think it’s natural”, explains the investor, “that Adam returns to the theme of connecting people by transforming their physical spaces and building communities where people spend most of their time: their homes. Residential properties are ready for this change ”.
“Many people”, continues Andreessen Horowitz, “will live in places far from where they work and many more will move to a hybrid environment. As a result, they will experience far less of the social bonds enjoyed by local workers. For many of these people, the increase in screen time and the reduction in human interaction they will cause alienation and loneliness. This issue must be addressed immediately “.
A revolution for those who work remotely
Neumann bought more than 3,000 apartments scattered across Miami, Fort Lauderdale, Atlanta and Nashville. His goal is to rethink the home rental market by creating a brand that brings a sense of community and cooperation to real estate. Flow will manage the properties that Neumann has purchased and will also offer its services to third parties who wish to use them. It was not possible to know the exact details of the business plan. (Flow appears to be financially separated from cryptocurrency firm Flowcarbon, which was co-founded by Neumann and raised $ 70 million in May in a round led by Andreesen Horowitz.)
The investment, the largest Andreessen Horowitz has ever written in a single round of funding to a company, brings Flow’s valuation to over $ 1 billion before it even officially opens its doors. As reported by the NYT, Flow is expected to launch in 2023 and Marc Andreessen will join his board.
The story of Adam Neumann
Adam Neumann was born in 1979 in Tel Aviv, Israel. Despite his dyslexia, which prevented him from learning to read until the third grade, he became an officer in the Israeli Navy, where he served between 1996 and 2001. At 22 he had already lived in 13 different houses. Included a kibbutz – a typical Israeli voluntary workers’ association, founded on the concept of collective ownership -, which was the inspiration for WeWork.
At the height of WeWork’s success, Neumann’s assets had grown to $ 4.1 billion. As the company headed for a giant IPO, however, the newspapers began to report its excesses. From the passion for tequila to proclaim that the Washington Post he judged “disconnected from reality”. Neumann defined WeWork as a company capable of “raising the consciousness of the world”. In 2018 he said that “there are 150 million orphans in the world. We want to solve this problem and give them a new family: the WeWork family ”. And he is determined to become the first person in history to amass a fortune of trillion dollars. For comparison, the richest man in the world, Elon Musk, is just over 220 billion. And it has been calculated that, if inflation is taken into account, the richest ever was John D. Rockefeller, with a fortune between 300 and 400 billion today.
Even more than Neumann’s excesses, investors were worried about the doubts about WeWork’s business model: renting coworking spaces to those who do not want or cannot afford to rent an office. The founders assured that the potential market involved 255 million customers, for a turnover of 3 trillion dollars. They had convinced, among others, the CEO of JPMorgan ChaseJamie Dimon, and that of SoftBank, Masayoshi Son. Still in 2019, when the papers for the IPO were filed (in which the word “Adam” appears 169 times), the company was losing billions. At the end of the previous year, he had almost 500 properties in his portfolio worldwide, but recorded a deficit of 1.9 billion.
“The formula is destined not to work in times of crisis,” he wrote Forbes Italy two years ago. “In fact, WeWork’s customers occupy the premises for an average of 15 months: much less than the duration of the parent company’s contracts (15 years). So the business works in times of boom but is bound to suffer when the economy slows down. And in those moments WeWork can’t cut costs ”. The IPO was aborted within days of its Wall Street debut and Adam Neumann was forced to leave his baby.
The WeCrashed mini series
In recent months, the story of Neumann and WeWork has been told by mini tv series WeCrashedbroadcast on Apple TV +, with Jared Leto and Anne Hathaway (also executive producer of the series). “Of course,” he told Forbes Anne Hathaway, “Adam’s failure can serve as an example for trying to understand what went wrong. And also to evaluate one’s desire for power which, if not managed in the right direction, can lead any company to destruction ”. So you wonder if the lesson will have been useful or if Neumann will fall into the same mistakes.
For other contents subscribe to the Forbes.it newsletter HERE.