memory of how Son first entered his life. It was January 2016, at an
event called Startup India. At the time, We Work had a $12 billion valuation, but fewer than 75 locations, and none in India. As a condition of
his speaking at the conference, Neumann insisted that while there he
get time with Prime Minister Nahendra Modi. Neumann brought along
his father, and in one photo from the day, Neumann appears dressed
in traditional Indian garb, smiling brightly as he and his dad, wearing khakis and a tie, bookend Modi. (Neumann got the idea to wear
the outfit after attending Donald Trump’s son-in-law Jared Kushner’s
birthday party the night before Neumann’s trip to India, inspired by
what Kushner’s Harvard roommate wore to the event.)
Son had come looking for investment opportunities. A month
earlier, he’d announced plans to put $10 billion into Indian startups.
He had already backed one young entrepreneur: Ritesh Agarwal, a
then 22-year-old Thiel Fellowship winner who was starting a version
of Airbnb in India.
But it was Neumann who caught his eye.
At 6-foot- 5, with long jet-black hair and chiseled cheekbones,
Neumann stood out. So did his words. “For such a spiritual country,”
Neumann began, looking across the crowd of business and government leaders gathered at the Vigyan Bhavan conference center in
New Delhi, “I’m surprised [by] the amount of talk I heard about valuation and raising money and bubbles and building big companies.
That is not the goal. The goal is finding something that you truly love.
Make sure it has intention behind it. Make sure it’s going to make
the world a better place.”
That evening, Neumann joined Son at dinner.
Unbeknownst to Neumann, the then 58-year-old Japanese tycoon was about to start a new venture. Dubbed the Vision Fund, the
$100 billion investment vehicle would let Son build a massive global
conglomerate of digital-era startups. It
would help him shape and dominate the next
technology revolution, powered by artificial
intelligence, which he believed would re-
make markets and industries worldwide. He
called his investing strategy gun-senryaku,
which translates from Japanese to a flock
of birds flying in formation. To fulfill this
dream, he needed an army of wild-eyed en-
trepreneurs like Neumann who would take
big sums and big risks.
In courting Neumann, Son played coy
at first. He passed on participating in a WeWork funding round in March 2016, which was ultimately led by
Hony Capital, a Chinese venture firm. For months, he didn’t show
Then in December of that year, Son asked for a tour of We Work’s
Manhattan headquarters during a visit to New York. He did not say
he was planning to invest, just that he had never been inside one
before and was curious.
We Work employees recall Neumann being nervous that day. Son
was nearly two hours late. When he finally arrived, he told Neumann
that he had only 12 minutes. Neumann raced to show him as much
as he could. He hadn’t gotten far before Son had to go, but he asked
Neumann to ride with him in his car so they could talk.
There, in the back seat, Son took out an iPad and wrote out the
terms for a $4.4 billion investment in the company. He drew two
horizontal lines at the bottom, signed his name across one, and then
handed the iPad to the then 37-year-old Neumann to scribble his
name on the other. Neumann would keep a photo of the agreement
“Startup = growth” “Blitzscaling” “Monopoly is the condition of
every successful business”
The real estate brokerage’s CFO, CMO, COO,
and CTO have departed
in the past year and
a half. Real estate
analysts question the
extent and depth of its
Public-market investors ultimately care about
profits, too, and every sacrifice made for
growth at the expense of profitability—from
taking on debt to entering new markets for the
sake of a story for private investors—creates
a lack of discipline within a company.
“A startup is a company designed to grow fast.
. . . The only essential thing is growth.”
This monopoly-seeking ethos has been
misapplied to global sectors impossible to
dominate, from transportation to food
to real estate. It’s also anti-democratic and
increasingly the focus of regulators.
Founders need to seek out markets they
can monopolize, because it’s harder to capture
value created in competitive industries.
Ultimately, companies with no competition
are more competitive.
Even Hoffman has admitted that this
approach wastes money and produces
a win-big, lose-big mentality, which
is great for venture capitalists and founders—
but no one else.
To become the first major player in
a large global market, one needs to build
out a company very rapidly.