The
WeWork saga—the company’s meteorically epic rise and precipitous downfall—has become
the stuff of legend: a cautionary tale about the pursuit of unrealistic financial
gains, overly rapid expansion, personal greed, and an indifference for the bottom
line. Adam Neumann, WeWork’s charismatic and reckless former CEO, is the
individual most associate with the company’s volatile trajectory. He pitched a starry-eyed
vision of WeWork as a paradigm-busting, disruptive start-up that would change
the culture of office work. That vision attracted tens of billions in
investment capital, but ultimately succumbed to Neumann’s excesses and failure to
reward WeWork’s investors.
What many with only a casual familiarity
with the story may not be aware of was the key role played by WeWork cofounder
and Chief Culture Officer Miguel McKelvey. Miguel shared his
entrepreneurial journey with an in-person and online audience last Wednesday as
part of the UO School of Architecture & Environment 2022-23 Lecture Series.
Miguel was born and raised in Eugene.
His mother, Lucia McKelvey is one of the cofounders of the Eugene Weekly, Eugene’s alternative newspaper.(1) Miguel graduated with a degree in architecture from
the University of Oregon (Class of 1999) and was a member of the UO men’s
basketball team while at the school.(2) After graduation, he went to Japan and helped create
a social networking site for English-learners, but returned to the U.S. to get
back into architecture. Upon his return, Miguel worked for a firm in New York designing
stores for the clothing retailer American Apparel, where he learned how design
can empower a business. It was while he was in New York that he met Adam Neumann
at a party in 2008. Being like-minded, he and Adam became friends and business
partners. They recognized that property owners did not like leasing buildings
for spaces used by small startups but instead preferred large tenants who signed
long-term leases. The two soon developed the concept of an eco-friendly,
semi-communal, coworking space business. This led to WeWork, which they
established in 2010. While Adam was the hustler at WeWork, courting venture
capitalists and spending lavishly, Miguel largely worked behind the scenes, using
his background in architecture to develop what became the company blueprint for
its coworking spaces around the globe.
The WeWork model was and is based upon the idea of a community-driven work environment that provides small business owners and entrepreneurs with an affordable alternative to traditional offices. Miguel oversaw the design of all WeWork spaces, building upon the notion that such environments can “foster a network of people who come together to create something greater than themselves.” WeWork locations became well-known for their trendy aesthetic and identity as a lifestyle brand that promoted community, creativity, and connection. That distinct branding would be synonymous with WeWork and attract a cult-like devotion among its members, employees, and investors. WeWork prided itself on its ability to enhance business performance and employee engagement in collaborative work environments—to provide people with something to belong to.
Miguel recounted how aggressively
and ambitiously he and Adam grew WeWork. From the beginning, they saw it as a
global opportunity. After opening sites in New York and San Francisco, the company
expanded to Tel Aviv, then Shanghai, and ultimately worldwide, growing to a
peak of 850 locations in 23 countries, 14,500 employees, and $47 billion in
valuation. At one point, WeWork was the largest single holder of real estate in
Manhattan, with over 5.3 million square feet of space to rent out.
Much of the company’s early success
was due to its ability to attract capital, which it leveraged to great advantage,
such as when purchasing bespoke furnishings in large volume. Miguel described
how his team built its own BIM software to conduct test fits of WeWork’s “modules,”
the term the company used for its combination of individual offices, meeting
rooms of assorted sizes, sound-isolated “phonebooths,” and shared communal amenities.
They also designed offices using machine learning. Artificial intelligence analyzed
data and neural networking to predict how frequently members booked specific
meeting room types. The analyses found some rooms were perpetual favorites, always
booked and always highly rated by members. This knowledge informed the design
of subsequent WeWork spaces.
Though the WeWork model primarily
relied upon acquiring existing vacant offices in prime locations, the company also
developed its own properties from the ground up. Miguel seemed especially proud
of the design of WeWork’s entirely new building located at the Brooklyn Navy
Yard. Completed in 2017, the $380 million building accommodates 675,000 square
feet of workspace.
Even as WeWork grew rapidly, Miguel still actively participated in the hiring and onboarding of all new employees. It was important for him that everyone understood the power of “we.” He encouraged new hires to regard being part of the WeWork experience as more than employment. Instead, he told them they should view it as an opportunity to gain experience and grow as a person and be part of a community.
Of course, it all proved too good to
be true. As WeWork made plans to go public in 2019, financial disclosures and revelations
about how the investors’ money was being spent led to the company’s board of
directors pushing for Adam’s ouster as CEO and delaying WeWork’s initial public
offering. Miguel would stay on longer, eventually leaving WeWork in 2020. The
company survives today, but no longer commands the dominant position it once
held in the coworking real estate arena.
Not surprisingly, the WeWork story,
and particularly Adam Neumann’s mercurial role in it (as well as that of his
influential wife Rebekah Paltrow Neumann) received the Hollywood treatment. A 2022 Apple TV+ mini-series stars Jared Leto as Adam and Anne
Hathaway as Rebekah. Miguel is portrayed by the actor Kyle Marvin, of
whom Miguel said the producers did a rather good job of casting (“he looks like
me”). Purely by chance, Miguel bumped into Jared Lehto at a London art gallery
after the series debuted. He sheepishly approached Lehto but found him to be friendly
and engaging. Miguel thanked him for his time, to which the actor responded by
saying “thanks for living an interesting life.”
WeWork certainly was big. In years to come, historians will look back upon the company as a cultural phenomenon that helped to define the 2010s. The parable is fascinating—WeWork is now synonymous with hubris and overreach—a moral fable that played out in real time before our eyes. Like the mythical character Icarus of Greek legend, WeWork simply flew too high, too quickly, falling victim to excessive ambition.
Though Miguel has flown higher than
I can ever imagine, as a fellow graduate of the University of Oregon school of
architecture and resident of Eugene, I cannot help but feel a kinship. My
thanks to him for sharing his story.
(1) My
wife worked alongside Lucia at Eugene Weekly for several years.
(2) My
firm provided Miguel with an office practicum for one academic quarter while he was in architecture school.
No comments:
Post a Comment