An African proverb is clear – “no man, no matter how wealthy, can prepare enough food for his kinsmen, but if those kinsmen make food for him, he will be unable to consume the whole food”. That proverb is not saying that Dangote cannot feed his village kinsmen in Kano for an evening. Rather, the proverb is drawing on the strength that comes from unity and the “wisdom of many”.
In the Igbo nation (Southeast Nigeria), parents name their children “Igwebuike” [strength in many] because despite the success of any person, the real strength comes in teamwork. The elders conclude by saying that no matter how big an iroko tree is, it can never be called a forest because a forest requires having many “trees”. They always drop that proverb when they task successful people to help others rise because without others coming up, there will not be a community.
(Sure, I agree that many have turned things upside down by requesting you upgrade pronouns in addressing them. So, you address a man as “Unu abiala” [Have you people come] even when only one man is standing before you. Yet, that one man cannot make a forest even though he is a big man (in body size) and certainly wealthy.)
That brings me to the news that the CEO of WeWork, Adam Neumann, has resigned, though he remains as non-executive chairman of parent company We. WeWork is a real estate company in U.S. but with digital nativity, and has lost billions of dollars since its founding,. Yes, the difference between it and a typical real estate is the same as the one between twelve and a dozen. Sure – it rocks and is extremely exciting.
Major layoffs are all but inevitable at high-flying real estate startup WeWork after Adam Neumann succumbed to pressure today to step down as CEO and take the role instead of non-executive chairman of the company he cofounded nine years ago.
Two well-placed sources tell us that the scope is likely to be massive, and includes some of of its newest business divisions, which these same sources anticipate will be jettisoned to get the company’s focus back on its core business. One of these sources speculates that over time, up to half of WeWork’s 15,000 employees — 9,000 of whom have been brought on in the last two years — could be laid off to shore up the unprofitable company’s expenses. The sentiment echoes a new piece in The Information that reports a “group of executives from WeWork’s parent company and bankers” have discussed laying off as many as 5,000 employees—a third of its workforce.
WeWork’s valuation rose to $47 billion driven by the backing of Japan’s SoftBank. But as WeWork went public, public investors (“the people”) started seeing what they did not like. Within days, the company valuation fell from $47 billion to $19 billion to even $3 billion (if you believe the Financial Times). What happened? WeWork leadership carelessness on corporate governance.
This brings me to We Company, the parent of WeWork, a quasi-technology real estate company that operates mainly in U.S. We Company last raised private capital at a valuation of $47 billion. It wanted to go public and had filed paperwork with road shows planned. But it has many governance issues, triggering scenarios that its public valuation could fall below $20 billion. So the road show is cancelled and the IPO is postponed, the Wall Street Journal notes..
Now, SoftBank is possibly going to lose billions of dollars (at the interim); other investors will also have red eyes. Yet, you cannot claim that these companies and the extremely “brilliant investors” did not see the mess. But they ignored everything, hoping they could package the mess for the public investors to swallow for them.
No man can cook enough food for his whole village. But a village can always cook more than enough for a man. The point is this – never really think that these investors from all those great brands are smarter than “all of us”. Yes, do not be intimidated because the WeWork case has shown one thing: no one can understand any company until the village has tasted its food.
WeWork’s food is not tasting great at the moment; it has taken the meal back home with the IPO temporarily frozen. It plans to go back, update its recipes and return in the near future to the public market. But the damage has been done to the brand: most investors will not taste any meal coming from WeWork in the very near future.
Do the right thing – and always remember the brethren; all of them, as a tribe, will always be smarter than you! The market is smarter than WeWork investors. Simply, for WeWork, there is no winner here as they have just lost a leader and possibly imperiling the company in the process. Uber has not recovered, in many ways, since the founder, Travis Kalanick, left; WeWork may experience the same decline as Adam departs.
For years, he convinced private investors that WeWork, a company that leases space from landlords, renovates it, slices it up into offices, and rents them out at a premium, was worth more than every other office-rental company. It was Neumann’s charisma, conviction, and unfettered ambition—he has spoken about WeWork Mars, running for president of the world, and becoming the first trillionaire—that built WeWork into one of the world’s most valuable startups, with operations spanning 111 cities in 29 countries.
Then, in August, WeWork filed for an initial public offering, and in doing so exposed a raft of curious and troubling details about the inner workings of the company, which rebranded earlier this year as The We Company, or We.
Imagine – someone could have called Adam to order, reminding him that he would meet the village one day!