Dagogo Altraide, “WeWork – The $47 Billion Disaster” (ColdFusion,2019)
Some workers probably wish their employers would make their working lives fun for them by sending them to fun fairs once a week perhaps to ride on roller-coasters for free. Few of them would probably opt to work for a company that is a virtual roller-coaster all the time. This though has been the role of tech company WeWork in the last few years. Founded in 2010 by Israeli-American entrepreneur Adam Neumann, WeWork provides office space with a funky hipster atmosphere to pop-up and start-up ventures and freelancers, the aim being to foster a collective collaborative culture that will spark creativity and new ideas to pitch and market to target audiences. Over the next several years, the company grew very rapidly and expanded overseas to the point where it owned 840+ properties in over 120 cities around the globe and rented them out to up-and-coming entrepreneurial ventures. In 2017, Neumann met Masayoshi Son, the founder and CEO of SoftBank, who was besotted with Neumann’s vision and plans for WeWork enough to commit billions in investment in WeWork. This enabled Neumann to set up and splash out mega-bucks on subsidiary firms like WeLive, a service that buys furnished residential property (usually following the then current fashion Zeitgeist) and leases it out, and an experimental school for preschoolers and kindergarteners – provided their parents can fork out the yearly equivalent in fees of a lower middle-class income.
Unfortunately this mix of generous investment funding and Neumann / WeWork has led to a very precipitous rise and equally steep fall in WeWork’s fortunes as documented by Cold Fusion TV, an Australian online media company helmed by founder Dagogo Altraide (who made the video under review and also provides voice-over narration), in a very calm and straightforward, rational way that makes following the ups and downs of WeWork’s recent history quite easy for viewers, even if the highs and lows are dizzying. The documentary makes clear that WeWork’s abstract business model is financially unsustainable and resembles an elaborate real estate Ponzi scheme, in that the people who rent space from WeWork essentially become the company’s employees as well as tenants. As long as WeWork provides a place for freelancers and contractors to work in, all is well for them; the moment WeWork decides to sell the property, these people have nowhere to go and become effectively unemployed. They could perhaps go to their local libraries or the Starbucks coffee shop to work as long as those places offer free WiFi but then they could have done that initially and not gone anywhere near WeWork. In addition, WeWork’s business model can only work if property prices are rising and interest rates are low, in a real estate environment where perhaps few people are able to afford their own homes because banks keep lowering interest rates to encourage property speculation and thus pump money into the economy, leading to a situation where people end up borrowing big. As one interviewee in the documentary says, the moment property prices start going down and interest rates start going up, WeWork’s business model starts to rack up huge debts quickly and alarmingly and the company starts sacking people.
What doesn’t help WeWork either is its founder Adam Neumann’s bizarre and narcissistic behaviour, verging on sociopathy, in the way he misuses the billions invested in WeWork by SoftBank, preferring to splash money on private jets and a luxurious and wasteful lifestyle. Meanwhile his employees must tolerate his abusive behaviour and tirades, his lies, his drinking and his frankly unhygienic habits. The documentary makes clear Neumann’s shabby treatment of WeWork employees and SoftBank’s trust and investment in WeWork.
The last part of the documentary is interesting in its demonstration of how WeWork’s failure and collapse without even having come as far as going public on the New York City Stock Exchange exposes the fragility and instability of the US financial system centred around Wall Street. Public confidence and trust in large investment banks doing the right thing by the bulk of their shareholders and by the public generally undergird the banking and finance industry; if confidence and trust are lacking, the banks potentially face failure and closure if companies they invest billions in fail and the banks are exposed. They would then have to call in their loans and other companies start to fail, setting off a contagion of runs and further losses of public confidence and trust in their operations.
The documentary is well made, relying on a mix of static photos and occasional moving picture videos. The pacing is steady and easy-going, and Altraide speaks with a reassuring air and confidence. If Altraide is furious at WeWork for peddling a false New Age / Age of Aquarius vision of people in offices wearing comfy casual clothes, quaffing coffee and sitting in colourful open-space settings while they work, his voice remains remarkably free of bitterness and anger. The story Altraide tells is structured in clearly defined segments, with perhaps the most interesting segment being about Neumann’s self-centred arrogance and sense of entitlement.
What the ColdFusion video ignores is why and how a company selling an abstract feel-good hippie vision and similar tech firms promoting a work culture of fun and supposed high ethical ideals end up being not only wasteful of investment money but also turn out to be deeply corrupt and hypocritical.