WeWork conflagration per Matt Levine

[ergophobe]

Imaginary conversation between WeWork founder Adam Neuman and SoftBank's Masayoshi Son during Neuman's 2017 pitch to Son for investment, as per Matt Levine
https://www.bloomberg.com/opinion/articles/2019-10-23/how-do-you-like-we-now

Son: What does your company do?

Neumann: We lease office buildings, spruce up the space and sublet it in small chunks.

Son: Hmm I invest in visionary tech stuff, this doesn't really sound like my thing.

Neumann: Did I mention we are a state of consciousness. A generation of interconnected emotionally intelligent entrepreneurs.

Son: Okay yeah that's more like—

Neumann: The world's first physical social network. We encompass all aspects of people's lives, in both physical and digital worlds.

Son: You're crazy! I love it! But could you be, say, ten times crazier?

Neumann: You're going to invest $10 billion in my company, which I will use as kindling to light the whole edifice on fire, and then when we are both standing in the ashes you will pay me another billion dollars to walk away while I laugh at you.

Son: All my life I have dreamed of meeting someone as crazy as you, but I never really believed this day would come.

Neumann: I'm gonna use your money to buy a mansion with a room shaped like a guitar, where I will play the world's tiniest violin after all your money is gone.

Son: YES PUNCH ME IN THE FACE.

I don't mean to speak for Neumann's subjective experience of his WeWork career, but from the outside, in hindsight, objectively, one could describe it like this: He spotted a bubble in venture-subsidized fast-growing money-losing capital-intensive low-margin tech-adjacent companies, noticed in particular that SoftBank seemed to be on the long side of that bubble, and set himself up to profit on the other side—by raising money for his own ultra-unicorn, by setting up the governance of that unicorn in a maximally self-interested way, and by selling and margining a bunch of his personal shares.

This is a lesson specifically of financial capitalism: In most businesses you can notice a competitor doing a dumb thing and create value by doing a better thing, but the financial markets are special because you can notice a competitor doing a dumb thing and get rich by taking the other side, without creating value or doing a better thing. If you notice that people are buying dumb unicorn shares for too much money, you don't have to invent a better way of doing business or of funding companies. You can just sell them as many as possible of the dumbest possible unicorn shares; when the bubble bursts, you collect your winnings.

[rcjordan]

Debbie didn't like WeWork from the gitgo --she said it was The Starbucks of office space.

[ergophobe]

But if that were true, it would be making money and have reasonable corporate governance.

[rcjordan]

> it would be making money

Hhh, yeah.  She was talking about the 'feel' of the spaces they were hyping. All of them looked like the seating area in Starbucks, or maybe a playroom at Google.

I may have mentioned it before, but there is a gasoline/convenience chain popping up around here -Sheetz- that has that same SB-ish vide.  From what I can tell without looking at the books, they got it right. Their places are jammed with customers.

[Travoli]

I think Sheetz is trying to be Wawa, while Buc-ee's is trying to be Walmart.

"The New Braunfels location is the largest convenience store in the world at 68,000 square feet. The store features 120 fueling positions, 83 toilets, 31 cash registers, 4 Icee machines, and 80 fountain dispensers."

[rcjordan]

>Wawa

Agreed. I was going to mention them but decided the eurotrash wouldn't be able to get over their name.  Wawa is going to be tough to beat, particularly in the pick-up food category, but Sheetz is giving them a good run.  Both have given Deb a SB vibe for a long time.

[rcjordan]

update:

> Sheetz is trying to be Wawa

We visited Wawa and Sheetz to see which is better - Business Insider
https://www.businessinsider.com/wawa-or-sheetz-which-is-better