Adam Neumann Finally Speaks Up About His New Startup ‘Flow’
Israeli-American businessman, investor, and serial entrepreneur Adam Neumann finally speaks up about his much anticipated real estate startup ‘Flow’ at the 8th Annual Israeli American Summit at the Main Plenary, Austin, Texas. Funding began in mid-August 2022, with a $350 million initial investment fund from Andreesen Horowitz. This staggering amount takes the company’s value to more than $1 billion, making it a unicorn startup even before its operations commenced.
During his sitdown interview with Danny Kushmaro of Israel’s Channel 12 News, Adam shares the idea behind Flow, its mission, and its inception. “In the US today, if you’re 35 years old or younger, 75% of 35-year-olds are renters. They all rent apartments. If you’re 40 years old or younger, about 62% are all renters,” Adam explains. “In America, rent represents 37% of the average American’s annual salary. It used to represent when you bought an apartment or bought a home, approximately 60% of your net worth. So we have the largest asset class in the world, but suddenly something changed – everybody’s a renter.”
“If you’re 22 today, there’s a very high likelihood that in the next 20 years, you’re going to be a renter,” he continues. “When you’re a renter, you’re not going to build equity; you’re not going to create that savings account. Generational wealth in the past would’ve been given to your children or grandchildren. At Flow, we want to do two simple things: we want to elevate the resident experience, and we want to show the value with the value creators. How? We don’t have enough time, but in general, that’s what we’re after.”
Flow’s massive funding round was initially met with controversies. An article by The New York Times criticized the actions of Marc Andreessen as he had opposed a plan to construct a multi-family housing in the town he resides in Silicon Valley, then subsequently announced his biggest deal yet with Flow, led by Adam who infamously lost billions of dollars at WeWork. This was often tagged as the “bro culture” in Silicon Valley, detailing how the industry’s progressiveness remains a problem.
However, Adam debunks these issues by highlighting their great partnership with the firm. “With Flow, we were very lucky to get investment from Andreesen Horowitz, and for those of you who don’t know them, they’re unbelievable venture capitalists,” he says. “The fact that they invested in us, the fact that they got to know us and made an investment based on their research and what they knew was right and what they thought the future is, shows you that they’re much bigger thinkers. They’re also turning out to be unbelievable partners, and I wish for every entrepreneur to have investors like them. But separate from that, we also have a family office and we invested in the past three years in over 49 companies, and actually I think five of them are here today.”
Adam went on detailing his 10-year journey with WeWork, explaining how it all started with an ambition to disrupt the status quo and bring their idea to the US. “Obviously, I get asked a lot about WeWork. I’ll start something that I haven’t shared before,” he says. “WeWork was a 10-year journey. It’s now a 12-year-old company but it was a 10-year journey. A lot of people don’t know this but the original team in WeWork had 8 employees. 5 of them are Israeli, and all of them are my best friends and all of them served with me in the Army, and we came to the US, and we came to New York and we didn’t know a lot but we did know about Israel and we did have the Tel Aviv energy and we just wanted to bring it to New York City and we wanted to bring community, because growing up in Israel, communities were a natural thing.”
Adam continued talking about his team at WeWork: “We started with 8 people and by the end of it, it was over 10,000 people. I wish those people in that team got the credit that they deserved for this unbelievable business that they built which, by the way, redefined office, changed the category, and it’s a better idea today post-corona than it ever was 10 years ago.”
Adam’s journey with WeWork was famously depicted in WeCrashed, an AppleTV+ miniseries which starred Jared Leto and Anne Hathaway. Based on the podcast WeCrashed: The Rise and Fall of WeWork by Wondery, the 8-episode show delved into the rise and fall of the infamous coworking space company where Leto played Adam. “I’ve never watched the show, but thank God things were really working well before, and we had a lot of companies coming, and we had a lot of deal flow,” Adams confirms. “After the show, it was unstoppable. I’m not sure what the intentions of the creators of the show were, but the result of the show was very positive for us, and I think that’s a good lesson in life: sometimes you think something is going to happen that’s going to be bad, and actually ends up being the best thing that ever happened to you.”