estate (WeLive), banking (WeBank), and be-
yond (WeNeighborhoods and WeCities). Son,
meanwhile, helped Neumann and his team
envision themselves as the next Amazon,
which started out peddling books and then
expanded to selling everything else. By posi-
tioning We Work as akin to the trillion-dollar
juggernaut, Neumann and Son were creat-
ing a narrative that could, in theory, justify
We Work’s skyrocketing valuation. “Masa is a
Jedi,” Neumann told me in January, “and as a
Jedi, he has a lot of superpowers.”
With Son spurring him on, Neumann
went on a buying spree, acquiring five com-
panies in six months, including tech startups
to manage construction projects and improve sales and marketing.
Neumann decided to position the company as a technology platform.
He understood that this would help increase its valuation, as tech
companies are more highly coveted than real estate ones. Neumann
hired a respected product manager from Apple, and he started to discuss how We Work would outfit floors with sensors to turn members’
activity into data that could be analyzed by artificial intelligence, one
of Son’s passions, which could yield insights for companies willing to
pay We Work for them.
But Neumann also seized the opportunity to reengineer We Work to
transcend work, venturing into education, fitness, social gatherings,
sports, and leisure. At one point during 2018, Neumann was in talks
with the Saudis about incorporating We Work services into Project
Neom, bin Salman’s proposed 10,000-square-mile metropolis along
the shores of the Red Sea. He told one executive that the deal could be
worth billions. By now, he was already conceiving of the We Company:
We Work, WeLive, WeLove, WeCongregate, WePlay, and WeGrow.
For all the pressure on Neumann, Son was
seemingly under even more. By the fall of
2018, the Vision Fund had invested tens of
billions in dozens of startups around the
world. (SoftBank’s startup investments
would make up 10% of all venture investing in 2019.) Its speed and size awed Silicon
Valley and the rest of the venture community. But this also set expectations for it to
deliver outsize returns.
To keep his plans in motion, Son needed
A few weeks after the news of Khashoggi’s murder broke, in October 2018, Son
traveled to Saudi Arabia to meet privately
with Mohammad bin Salman. Son, who
has never publicly disclosed the nature of
his conversation with the prince, was in
a precarious position. Son left Saudi Arabia without a firm commitment for more
money, and the Saudi government never officially withdrew its $45
billion offer. Many of Son’s portfolio-company CEOs stated that they
were troubled by the Khashoggi news; Uber CEO Dara Khosrowhahi, for
example, pulled out of Davos in the Desert. According to a We insider,
Neumann told employees that he could fix the prince’s problems. “He
said, ‘If only MBS would listen to me, I could counsel him on how to
be a better leader,’ ” says this person.
Neumann hungered for the $20 billion Son had dangled, but also
demanded that he, not Son, have ultimate voting power over the company. Neumann had 100% control over We Work and he intended to
keep it. This was an issue that became heated between the two men.
Neumann felt secure enough in his ability to sway his mentor that he
began mapping out new opportunities—including rebranding as the
We Company. He planned to announce the news at the company’s annual confab, the We Work Global Summit, in January, where the Red
Hot Chili Peppers had been hired to perform.
Then another disaster struck, one neither man foresaw. On December 19, 2018, SoftBank’s Japanese mobile-phone unit went public
on the Tokyo Stock Exchange, seeking to raise $18 billion. It was ill-timed. The global markets buckled that week, falling by a percentage
not seen since the 2008 financial crisis. The mobile spinout’s shares
dropped 15% on the first day of trading—the worst performance for a
new issue in Japanese history.
After this disastrous IPO, Son told Neumann that the deal they’d
originally planned to be $20 billion would now be $2 billion. Outwardly, Neumann took the news in stride. “We want to be known
for being a company that does more with less,” he told me at the time.
But Neumann was rattled. Insiders say that his behavior at the
office became increasingly erratic. He left for California. He made decisions that confused and frustrated those around him. For example,
after surfing with big-wave legend Laird Hamilton in Hawaii, he decided to use company funds to invest $32 million in Laird Superfood.
The newly christened We Company started 2019 with more than
$6 billion on its balance sheet, but it was burning through cash much
faster than it was coming in. The company had doubled in size in the 15
months since SoftBank’s first investment, without taking on any new
backers. Neumann had always been reluctant about taking his company
public; he didn’t want the financial scrutiny. But, increasingly, the public
markets appeared to be the only available option to raise fresh funds.
DO WHAT YOU LOVE
One glorious day in April, Neumann was
floating on a surfboard in the middle of the
Indian Ocean. It was the week of his 40th
birthday, and he’d come to the Maldives to
enjoy it with his family and closest friends.
It was a lavish trip. As part of his celebration, he hosted his guests at a resort on an
atoll that has exclusive access to a world-famous surf break called Pasta Point.
Neumann has often talked about the
role that surfing plays in his life, and he’s
claimed to have ridden waves as high as
18 feet, perhaps higher. Those who have
watched him surf say that he has an unusual number of instructors and guides
who surround him in the water. He often
doesn’t paddle into the surf himself. Instead, he hires jet-ski professionals to tow
him out. Some large offshore surf breaks
require this, but for smaller ones, getting
towed out is seen by surfers as bizarre and unnecessary. It’s the
equivalent of, say, helicopter skiing on a bunny hill.
The We CEO, though, couldn’t focus exclusively on the waves. Back
in New York, Artie Minson, his CFO, and other execs were telling him
that he had to decide whether to take the company public. Minson
was preparing to meet with bankers and required Neumann’s sign-off. He was worried that the news of their
The Indian ride-hail
startup has reportedly
spurned an additional
$1 billion investment
from SoftBank, out of
concern that the investor wanted to merge
it with Uber, one
of SoftBank’s larger
Vision Fund bets.
(Continued on page 126)