Adam Neumann, the former CEO of WeWork, is making headlines once again with a new billion-dollar startup--this time, a residential real estate venture. Venture Capital firm Andreessen Horowitz has pledged roughly $350 million to Neumann, and seems confident that he's the right man for the job.
Yet this is all happening just three years after his less-than-graceful exit from WeWork, a downfall so catastrophic that it has been chronicled in podcasts, books, an Apple TV series, and a full-length documentary.
The question on everyone's mind is... Will this be WeWork 2.0?
Neumann's greatest strength
Clearly, Adam Neumann is very good at securing funding for his companies. In 2019, he was able to lead WeWork to a $47 billion valuation and convince Softbank, the largest venture capital fund in the world, to invest $9 billion into the company. I think we all know what happened next.
So, how did he do it? In the words of Seth Godin, "People do not buy goods and services. They buy relations, stories and magic"--and boy, did Neumann have stories and magic. He made ridiculous claims and people just believed him. He convinced investors that WeWork could double the tenancy of their coworking spaces through AI, something that no sane person would believe. But it worked.
Unfortunately for his investors, the reality of the situation was quite different. Neumann didn't have the numbers to back up his claims, instead relying on his ultra-charismatic personality to convince investors into believing he and his company were going to revolutionize the commercial real estate space. In the end, his greatest strength proved to be his downfall.
Interestingly enough, these situations happen all the time--just on a much smaller scale. They may even be happening in your business.
The one thing that matters
In remote work pioneers Liam Martin and Rob Rawson's recent book, Running Remote, they pose the idea that in-person work environments are prone to a number of biases that remote environments are able to largely avoid. And coincidentally, they use the rise and fall of WeWork to show what can happen in extreme cases.
Here's the premise. When you work in an office, there are hundreds of subconscious biases like personality, office politics, looks, and more that affect the way you think about your coworkers and, by extension, alter your decision-making.
These factors aren't always significant, but they can cause problems. They might allow people to slide by on performance reviews or dupe their managers into thinking they're performing well when the reality is quite different.
Even something as simple as staying late at the office can make it appear as if someone's doing a good job. But really, there's no way of knowing without numbers to back up their performance.
In a remote environment, these biases are not eliminated entirely, but they're much less of a factor. That's because in a remote environment, you're practically forced to rely on metrics to determine whether people are (or aren't) performing at the level required of them. In a remote environment, there are results or there aren't--it's that simple.
In most in-person workplaces, these personal biases might result in favoritism, underperformance, and interpersonal disputes. WeWork is an example of what can happen in an extreme case.
Neumann relied on his charismatic personality--and not much else--to portray himself as the ultimate business visionary, duping investors into wasting billions of dollars on an underperforming company and ultimately affecting thousands of lives. In the words of Martin and Rawson, "The sorry truth was that Neumann wasn't a visionary, as much as he was an incredibly charismatic cult leader."
So, has he learned his lesson?
I think there's a key lesson here for entrepreneurs, investors, and I suppose Adam Neumann, if this gets on his radar.
Whether you're remote or not, business and individual performance should always be backed up with metrics. Martin and Rawson suggest choosing one metric for each person at your company. It's a good strategy, and if you choose to implement it, start by having a candid conversation with each individual.
Ask your employees how they'd like their progress to be measured. Not only do they know the intricacies of their role, but giving them the option to choose how they'll be measured gives them ownership over their performance. When people own their metrics and feel confident they can improve them, they'll be motivated to perform well and seek out new ways to achieve greater results.
This helps leaders gauge progress, but it also provides a clear opportunity for employees to show their strengths and climb the ranks based on merit. Whether you're asking for a raise or millions of dollars in funding for your next startup, it's a whole lot easier when you have metrics to back you up.