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Vishu Bheda
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Medial • 2d
After spending just 12 minutes in their office... SoftBank's CEO wrote them a $4.4B check. Less than 30 minutes later, he invested another $2B. Here's the sales pitch WeWork's founder used to convince the world's smartest investors to ignore basic math : In 2017, WeWork was booming, but they were burning cash fast. Then came Masayoshi Son, SoftBank's legendary founder, who turned $20M into $100B with Alibaba. Known for gut-driven investments, Son decided to back WeWork after just 12 minutes of meeting its charismatic CEO, Adam Neumann. No pitch deck, no due diligence—just vibes. In a car ride, Son committed $4.4B, later adding another $2B. Why? He thought WeWork was a tech company, not a real estate one. But here’s the problem: WeWork's model was flawed. They leased offices on 15-year contracts but rented them out month-to-month. Fixed costs, variable revenue—one downturn could destroy them. Despite this, by 2019, WeWork hit a $47B valuation—worth more than Airbnb or SpaceX. But the hype masked reality: WeWork was just subletting offices, not revolutionizing workspaces. The turning point? Their IPO filing in 2019 revealed: $1.9B loss in 2018 Questionable deals benefiting Neumann A messy corporate structure Investors panicked. The IPO was canceled, valuation dropped to $8B, and SoftBank had to bail them out. Neumann was ousted. By 2023, WeWork filed for bankruptcy, drowning in $19B debt. The WeWork saga taught a hard lesson: flashy pitches don’t replace solid business fundamentals. Today, investors demand clear profitability and sound economics—no more billion-dollar bets on vibes. And that’s probably for the best. Follow me for more such amazing business case studies!
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