Why Did WeWork Fail? Motivation With No Finish Line

The Short Answer

Why Did WeWork Fail?

WeWork made growth the goal instead of a way to reach a goal. It chased size with no defined destination, leased long and rented short, and leaned on a flattering number to hide the losses. Bigger was the plan. Bigger is only a direction.

This is the cautionary tale in Chapter 1 of Become Your Version of Rich by Dr. Paul Borosky, DBA, MBA. It shows what motivation looks like when it has no finish line. You can fix that on paper in twenty minutes with the driver statement method. If you run a team, the planning side lives in what planning means in management. The whole cluster sits inside the Become Your Version of Rich guide.

What Happened

From a Sound Idea to Chapter 11

The business was real. The numbers got out of hand.

• 2010WeWork launches. It leases office buildings on long contracts, renovates them, and rents the space back in small, flexible pieces to freelancers and small companies.
• 2017Revenue of about $886 million, and a net loss of roughly $900 million, according to its bond offering documents.
• January 2019SoftBank invests another $2 billion at a $47 billion valuation.
• August 2019The IPO filing shows losses above $900 million in six months. Public investors do not buy the story.
• Fall 2019The IPO is shelved, Adam Neumann leaves, and a SoftBank rescue values the company at about $8 billion.
• November 2023WeWork files for Chapter 11 with about $15 billion in assets and more than $18 billion in debt.

Sources: Associated Press, WeWork files for bankruptcy in stunning downfall from its $47 billion heyday (Nov. 2023). CNBC, WeWork offers a romantic vision in its IPO filing, alongside staggering losses (Aug. 2019). Axios, Digging into WeWork’s new financial metric. Rescue valuation per Reuters via TechXplore.

Figures vary slightly by source and by what is counted. The direction does not.

The Decision Underneath

Growth Became the Destination

WeWork’s core idea was fair. Plenty of freelancers and small companies did not want a long lease of their own. Co-founder and CEO Adam Neumann was a magnetic leader who could raise money like almost no one alive. Dr. Paul gives both their due. Then the company made one fateful decision, and it is the same one Napoleon made, in a modern suit.

It bet on growth for its own sake. Get enormous, fast, and treat the size as the goal. Outside money paid for the sprint. The model made it riskier, because the company leased long and rented short. Its costs were locked in for years while its revenue could leave on short notice. Size did not fix that. It raised the stakes.

Notice what is missing. Nobody ever wrote down the sentence that finishes the thought: we will know we are done when. With no finish line, every quarter has the same answer, which is more. That is motion, not a plan. Dr. Paul calls it a missing stop line, and he returns to it throughout the book.

The Tell

When You Invent a Better Way to Measure Profit

This is the part managers can use tomorrow.

As losses mounted, WeWork leaned on a measure it invented, called Community Adjusted EBITDA. In plain terms, it counted what it earned from a building against that building’s own running costs, and left out company-wide expenses such as marketing, general and administrative costs, and development. The result looked far healthier than the net loss beneath it.

There is nothing wrong with a company tracking unit economics. The trouble comes when the friendly number replaces the standard one. When someone has to create a new way to measure profit so the losses look smaller, there was never a real finish line. There was only motion. Once the public could read the standard numbers, the story came apart in weeks.

Your Smaller Version

You Will Not Raise Billions. You Can Still Make This Mistake.

The fix is a sentence, not a spreadsheet.

Dr. Paul puts it this way in Become Your Version of Rich.

That sentence works at any size. A five person company chasing more clients with no target, a sales team chasing more calls, a manager chasing a bigger headcount: each can drift the same way. Write the sentence first. Then use the enough line to decide what “more” is supposed to buy.

How This Helps a Manager

Use WeWork as a Checklist for Your Own Team

You do not control the company strategy. You do control your targets, your reports, and the questions you ask. Three places to use the lesson.

One Honest Caution

Growth Is Not the Villain

Do This Tomorrow

Three Steps for This Week

1. Write one sentence for your business or team: we will know this is enough when. Add a number and a date.
2. Pick one metric you report. Check that the standard version is visible next to any custom one.
3. In your next planning meeting, ask what the growth target is for. Write the answer down.

If the sentence is hard to write, you have found the real work. Start with how to find your why, then read why BlackBerry failed to see another company defend the past instead of reaching for a destination.

The Book

The WeWork Story Closes Chapter 1

This page covers one cautionary tale. Become Your Version of Rich places it next to people who aimed their drive well and one who did not.

• The five-step method to build your driver, with a 30-day check
• Madam C.J. Walker and Benjamin Franklin, two people who built motivation on purpose
• Napoleon, and what happens when a driver has no finish line
• The full WeWork cautionary tale and the sentence to write in response
• Daily Actions you can start tomorrow

Get the Book on Amazon →

Keep Going

More From Chapter 1 and the Cautionary Tales

FAQ

Common Questions About WeWork’s Failure