A company that rented desks was worth forty-seven billion dollars. Then it published its own accounts, and six weeks later it was worth eight.
Harder version: read this lesson at C1 level →
Look at each word. Say what you think it means. Then tap the card.
Tap a card to see the meaning.
Write one word from the cards in each gap.
1. We a small flat near the centre of the city.
2. Our wants to increase the rent again this year.
3. The business made a of thirty thousand euros last year.
4. That painting is more than my house.
5. He from the board after the newspapers published the story.
6. The of the company started it in her garage in 2011.
1. rent · 2. landlord · 3. loss · 4. worth · 5. resigned · 6. founder
Read each part. Then answer the questions before you read the next part.
Take away the excitement and the business is boring. From 2010, WeWork signed long contracts to rent office buildings. It decorated them beautifully. Then it rented out the space, desk by desk, month by month.
This industry already existed. It was decades old, everybody understood it, and the profits were famously thin.
What WeWork added was not a new business. It was a new description.
We are not a landlord, the company said. We are a technology platform. A global network. A community. The founder's favourite sentence was that the company's mission was to "elevate the world's consciousness".
That founder, Adam Neumann, was the real product. He was very tall, extremely charming, and gifted at making the person in front of him feel part of something historic.
And the description mattered enormously, because of one number. Technology companies were valued at ten times their income or more. Property companies were valued at a small fraction of it.
So every time the company raised money, it had one job: keep the story on the technology side of the line, whatever the buildings said.
In 2017 the biggest believer arrived. Masayoshi Son of SoftBank ran the largest technology fund ever created, and was famous for telling founders to be crazier. He invested billions, then billions more. The first investment was reportedly agreed in a car, after a tour of the building was cut short because there was no time.
By January 2019 the company was valued at forty-seven billion dollars — more than any American startup had ever been worth on paper.
It was the biggest private office tenant in Manhattan. It was opening two locations a day. And it was losing about one dollar for every dollar it earned.
True or false? Click your answer.
1. WeWork's basic business was renting buildings and renting out desks.
2. The company described itself as a property company.
3. In 2019 the company was making a good profit.
In August 2019 the company decided to go public. To do that, the law says you must publish a long document about yourself.
So WeWork did the rarest thing in the whole story. It published its own accounts.
The document began like a poem: "We dedicate this to the energy of We." Then, because the law requires it, it explained the machinery.
Losses of about 1.9 billion dollars, on income of 1.8 billion. Contracts to pay rent for decades into the future, against customers who could leave in a month. And a home-made measure of profit, called "community-adjusted EBITDA", which left out most of the real costs. People were laughing at it within hours.
Then came the section about how the company was run, and it read like a list of warnings.
The founder had taken personal loans from his own company. He personally owned parts of buildings that WeWork then rented — so he was on both sides of his own rent negotiations. He had sold the company the trademark for the word "We", for 5.9 million dollars. (He gave the money back after the public reaction, but it was printed for ever.)
His shares carried twenty votes each. An earlier version of the document had even discussed a role for his wife in choosing a future chief executive.
Every single item had been known inside the company for years, and tolerated. But printed together, in the quiet grey type of a legal document, they stopped being personality and became evidence.
True or false? Click your answer.
1. The company's losses were about as big as its income.
2. The information in the document was completely new and secret.
3. The founder had business interests on both sides of WeWork's rent deals.
What followed was a slow landslide.
Public investors were asked to buy at forty-seven billion. Their answers fell week by week: twenty, then fifteen, then under ten.
In September the listing was cancelled. Days later, Neumann was persuaded to resign. He left with a package reported at around 1.7 billion dollars, because SoftBank needed his votes. SoftBank took control at a value of about eight billion.
That is a fall of roughly eighty per cent in six weeks.
Now here is the strange part. The sceptics did not win because they found a secret. There was no secret. The numbers were never hidden. The rent contracts were public. Property analysts had been saying "this is a landlord with an app" for years — correctly — and had been ignored, round after round.
The story did not die because it was unmasked. It died because the audience changed.
Private investors buy the next chapter of a story. Public markets price the chapter you are in now. The document was the door between those two worlds.
Forty-seven billion was real in one room and impossible in the other.
And there is one last uncomfortable detail that spoils the simple moral. The believers were not wrong about the world. Flexible working, offices rented by the month, people leaving the traditional office — all of it happened, and the pandemic made it happen faster.
The vision was broadly right. The company was priced as if a vision were a business.
Which leaves the question for anyone selling a big idea. You hear the words community, platform and mission. Who in the room is being paid to translate them back into rent?
True or false? Click your answer.
1. Public investors offered much less than forty-seven billion.
2. The value fell about eighty per cent in six weeks.
3. The ideas about flexible working turned out to be wrong.
You cannot tell this story without numbers. Forty-seven billion became eight billion in six weeks. English has a small set of words for exactly this, and they are worth learning properly because they appear in every business meeting.
Going up: rise · increase · grow · double. Going down: fall · drop · decrease · halve.
How much: use by. → "The value fell by eighty per cent."
From where to where: use from … to …. → "It fell from forty-seven billion to eight billion."
How fast: put an adjective before the noun, or an adverb after the verb. → "a sharp fall" / "it fell sharply". Also: slightly, slowly, steadily, dramatically.
| You want to say… | Use | Example |
|---|---|---|
| the amount of change | by | It fell by 80%. |
| the start and end points | from … to … | It fell from 47bn to 8bn. |
| a big change | sharp / sharply, dramatic / dramatically | a sharp fall · it fell sharply |
| a small change | slight / slightly | a slight rise · it rose slightly |
| twice as much / half | double · halve | The losses doubled. |
Write by, from, to, sharply or slightly.
1. The value of the company fell about eighty per cent.
2. It fell forty-seven billion eight billion.
3. After the document was published, confidence dropped very .
4. The company was opening two locations every day.
5. Losses rose 1.6 billion 1.9 billion in one year.
1. by · 2. from / to · 3. sharply · 4. about · 5. from / to
Each sentence has one mistake. Say the correct sentence out loud, then check.
1. The value fell of eighty per cent.
2. Sales increased from 10% last year.
3. The share price dropped sharp after the news.
4. Profits rose from two million until three million.
5. The losses were doubled between 2017 and 2018.
1. The value fell by eighty per cent. (the amount of change takes by)
2. Sales increased by 10% last year. (from needs a starting point)
3. The share price dropped sharply after the news. (after a verb, use an adverb)
4. Profits rose from two million to three million. (from … to …)
5. The losses doubled between 2017 and 2018. (double is not passive here)
Take your time. Short sentences are fine.
Tell me the story of WeWork in your own words. Six or seven sentences is enough.
Tell me about a product, a company or an idea you believed in.
Was the story true? How did you find out?
Think of something in your life or your work that has gone up or down in the last five years — prices, hours, customers, your rent.
Describe the change using rise, fall, by and from … to ….
The idea about flexible working was right. The company still failed.
So was the founder a liar, a dreamer, or just too early? Defend your answer.