In March, WeWork stunned the tech industry by raising $430 million in funding, valuing the company at a whopping $16 billion.
No one could fathom how investors came up with that sky-high value for the shared-office space startup.
Plus, WeWork hasn’t been without its struggles. Even in June, months after raising all that cash, WeWork laid off about 7% of its staff, Bloomberg reported. It employed about 1,000 people at the time.
Earlier this week, founder Adam Neumann, gave a clue about why investors are so excited.
He said the company would hit $1 billion in revenue in 2017, speaking at the Fortune Brainstorm Tech conference in Aspen, Colorado.
And he indicated that his margins were healthy, too. He said when WeWork hits annual sales of $12 billion, its gross profits would be $4 billion (excluding things like taxes, interest, etc.), or a 30% margin.
When Neumann was asked if WeWork would go public in 2017, he sidestepped the question (as startup CEOs are prone to do), saying only that he has made a commitment to make money for his investors and would not to let them down.
But his cofounder wife, Rebekah Paltrow Neumann, also on stage with him, jumped in with an interesting story about how much they worried about investors.
“Just to say how serious we take it, we did have a failed business or two before this,” she said. (While they didn’t say what that businesses were, Neumann pretty famously had a not-very successful line of baby clothes when they met.)
So, when WeWork grew successful and the two of them “personally made some cash” they paid back their past investors of former failed businesses “out of own money. That’s how much we care that we don’t want to lose anyone money,” she said.
A “big talker with nothing to show”
Neumann then very sweetly credited his wife for all of this current success.
He said that 12 years ago, when he met her, he was chasing the dream of getting rich and failing badly at it.
“When I met Rebekah, I weighed 20 pounds less,” the extremely lanky Neumann said. He was also a chain smoker.
She called him out, he remembers, telling him, “You’re a big talker with nothing to show for it. You can’t even buy me dinner.”
She warned him to “immediately stop chasing the wrong things,” such as making money, and to find some something that he loves to do. Success and fulfillment with follow, she assured him.
“I happen to love buildings and my passion is bringing people together,” Neumann says. His wife also got him to stop smoking.
On stage he credited all that he’s achieved to her, thanked her, and told he loved her.
Whether WeWork thrives and goes public, or implodes like an unwieldy, over-hyped startup, remains to be seen. But Neumann’s unabashed, public appreciation for his business partner and wife shows that his most important relationship is built on a solid foundation.
Here’s a portion of the interview:
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