Andreessen Horowitz has invested in Adam Neumann’s new business plan, which brought WeWork down with its savage management.
In the current economic climate, the world seems to be divided into two. There are those who believe that we are headed for a recession, no, we are already in a recession, and those who believe that we are in a period of adjustment toward an open world, and that the market is only temporarily turbulent in the process. .
On August 15th, something happened that gave the latter optimists a big boost in thinking that it wasn’t a recession. ‘Cause would be so. If we’re in a recession now, 350 million Silicon Valley venture capital (VCs) will hit 350 million in response to the failed and exiled founder’s attempt to recreate the concept with a few tweaks in another market. Because there is no way to hand over dollars (about 47.6 billion yen, 1 dollar = 136 yen).
But Marc Andreessen, co-founder of famed VC firm Andreessen Horowitz (a16z), has done just that. He’s invested heavily in Flow, the new real estate company of Adam Neumann, the man who blew WeWork’s $43 billion valuation. Then he announced.
In my experience, during a recession, funds of this magnitude are not being financed for projects as capricious as Flow’s. So this may (very infuriatingly) bode well for the economy. But for VCs, Silicon Valley, and the tech industry, it’s a bummer.
A founder with ties to startup accelerator Y Combinator said:
“It’s nice to know that even if you fail in the worst possible way, a super-rich white guy can make up for it. But I’m not white, I’m not rich, and I don’t have any connections, which is a shame.”
Andreessen has no intention of solving the housing problem
Neumann’s “new” idea is to rebrand WeLive, which he founded during his WeWork days. Flow, like WeLive, will own and manage Neumann’s unique, cult-inspired mansion.
Andreessen’s pitch for the business is like an infomercial that turns mundane work into torture. He called renting an apartment a “soulless experience,” noting that apartment dwellers were hesitant to “bring friends and family along,” and that even though they lived there, they had no connection to the community because they didn’t have a stake. do.
Andreessen doesn’t seem serious about solving America’s current housing problem.
Based on the letter, Andreessen seems to believe that branding is at the heart of America’s housing problem. The apartments are basically unattractive and lack facilities. But it’s not a big deal. The problem is that the housing supply is inadequate and rents are skyrocketing. So what we really need is to build a building (as Andreessen himself said two years ago).
But for now, Neumann’s plans are to either buy the existing building or partner with a developer to turn it into a giant playground for adults. It’s like saying to someone who has a broken arm, “The problem isn’t the broken arm. The problem is that the cast isn’t pretty, so it needs to look better.”
This isn’t the first time Andreessen has been shown not to care about “a real solution to America’s housing shortage.”
In early 2022, Andreessen and his wife live in Atherton, Calif., which plans to expand its multi-family neighborhood. The couple then wrote a scathing letter to the mayor and town council. According to The Atlantic, “more multifamily housing will dramatically reduce the value of our property and the quality of life we have in our neighborhoods. It will also dramatically increase noise pollution and traffic.” .
“Construction”, the real solution to the problem Andreessen and Neumann pretend to solve, is far more difficult than rebranding. What’s more, the Andreessens are adamantly against “building” in their city.
A failure to solve the housing shortage will also affect the economy’s most pressing problem today: inflation. In a recent comment to clients, a Goldman Sachs analyst said, “Inflation has eased somewhat thanks to the removal of supply chain bottlenecks and lower prices for raw materials such as oil, but higher housing costs are the cause. “Official inflation data will likely remain fairly high for some time.”
Andreessen writes that “flow provides an opportunity for renters to acquire a stake in the condominium they live in,” but didn’t elaborate on how it would work financially, and the coverage is sparse. It seems I’ve asked some financial industry brains about the plan, and they’ve gotten mixed reviews.
“Even if the tenant does get an interest, it’s probably very small. I think it’s just a matter of losing it or selling it when you move out.”
said credit analyst Vicki Bryan, CEO of research firm Bond Angle.
“That means the lessee doesn’t get control. It’s my guess, but it’s like shopping at the company’s kiosk.”
That’s right. The store of the most innovative company ever.
And the money melts without the problem being solved
The Flow deal is the “most efficient” way Silicon Valley is wasting money I’ve seen.
Not only does this not solve America’s real problems, but it’s run by someone who runs a business like a six-year-old jumping into a swimming pool after getting high on sugar (i.e. Newman). )That’s why.
But other Silicon Valley investors also seem thrilled with this surprising investment. After all, this is the single biggest check a16z has written in its funding round. When tech writer Eric Newcomer asked a16z competitor “Have you ever considered investing in Flow?”
“No way. But it’s good to know that there are still companies out there that really do this kind of insanity.”
Over the last decade or so, Silicon Valley has been flooded with money, but innovation delivered to consumers hasn’t progressed. The exuberant energy of the early 2000s with a mandate to “make the world more productive” has been replaced by a ferocious desire.
Instead of looking at the real problems the world has faced over the past two decades, this generation of conscientious people has wondered how we could deliver a bowl of egg soup to your door the fastest. But in today’s economic and geopolitical instability, it all feels like a waste.
In these uncertain times, Neumann best exemplifies the hypocrisy of Silicon Valley’s mission to “save the world.” Andreessen calls what Neumann did at WeWork a “success,” but I disagree.
Sure, Neumann turned WeWork into a gigantic, pop-culture phenomenon, but he didn’t make a single dollar in the business. After everything fell apart, all he had left were “shocked jobless employees” and “confused investors.”
Neumann is really good at playing the typical “planned guy” in the business world. He swindled Wall Street and Silicon Valley and made a huge fortune. I think I can understand his cynical charm. But it’s delusional to think he’s learned “how to be successful in business” from the hundreds of millions of dollars generated by the WeWork debacle.
Andreessen is doing his peers, and perhaps himself, a disservice. When he hears Silicon Valley say, “I want to solve real problems” or “I want to empower really great founders in every field,” he thinks, “Is that just another lip?” Money that should be spent creating something productive for society and good for investors is likely to be wasted on branding.
The Y Combinator-connected founder said:
“Now a16z can no longer pretend to invest in things that matter. I know they invest in people. That’s fine. People are people. We’re going our separate ways.” Until”
[原文：’If you f–k up in the biggest ways, you can be redeemed’: Silicon Valley just handed $350 million to the guy who crashed WeWork ]
(Edited by Ayuko Tokiwa)
Source: BusinessInsider
David Ortiz is an opinionated and well-versed author, known for his thought-provoking and persuasive writing on various matters. He currently works as a writer at 24 news breaker, where he shares his insight and perspective on today’s most pressing issues. David’s unique voice and writing style make his articles a must-read for those seeking a different point of view.