WeWork co-founder Adam Neumann steps down as CEO today.
When WeWork first introduced its decision to move to Las Vegas, it instantly forecasted what would be the beginning of trouble for the startup.
As of late they have been accumulating a track record of failed attempts at expansions in markets that do not make sense, Las Vegas being one, amongst failed revised business plans to expand.
Take for example, WeWork’s IPO delay announced last week after reducing its estimated market valuation to $10 billion from a staggering $47 billion.
“Spending too much too soon on unproven business models only heightens the risk that a company’s race for global domination can become a race to oblivion,” said Len Sherman to the NY Times, an adjunct professor at Columbia Business School and an expert in entrepreneurship.
Their pause will continue well into 2020 and 2021 as predictions goes and they will ultimately find themselves downsizing its staff.
Consumers are not in a place where they can afford $1,000+ private working spaces even as start-up teams or $300+ a month for single remote workers, especially as the next two-years roll in.
Economist are predicting a recession will strike at the end of the 2021 year and they would be correct.
Moreover, there is an unspoken trend that’s been happening in the tech industry and that’s that everyone wants to be next Travis Kalanick and they’re doing everything they can to get there, even if it costs them their objectivity.
This continuous approach for power and control has crumbled plenty of companies before they can ever see their first seasons of glory. That is why the FYRE app failed.
Analysts criticized deals in which Mr. Neumann took stakes in buildings and later leased to WeWork that may or may not have allowed him to personally profit at the company’s expense. A WeWork entity would later took over the management of the properties to eliminate conflicts of interest.
WeWork and Mr. Neumann are under scrutiny by investors for their oversight, leadership, and governance. Neumann is staying on as non-executive chairman of the board.
