The Case for Being a Fraudulent Visionary

The hype of startups like WeWork shows it pays to be a delusional visionary founder, sometimes. Softbank literally had to acquire control over WeWork to save it, but let's figure out how much Adam Neuman has profited from it.

Let's see, he had already sold $700 million in stocks. This week we learned that former WeWork CEO Adam Neumann will get about $1.7 billion in stock, cash and credit to walk away from the company and give up his voting rights. So that already amounts to $2.4 billion then, even as the actual market value of WeWork has plummeted from around $47 billion to $8 billion today.

When VCs peg a valuation for a startup, it basically amounts to a vanity metric. When your company isn't profitable, shouldn't it have a negative monetary valuation? That is, even if it can survive the cash burn. I see companies like Uber and Netflix literally in the same light.

So how do the visionary founders dupe us? It's not that they are so very charismatic. I don't see Travis, Mark or Adam in that light, Elon maybe. If you can dupe a bunch of billionaires (which is what Softbank's Vision Fund is), you likely have more than perverse charm - you pretend that you are leading a movement.

Here is a man who built a company that is literally too poor to fire 30% of its workforce. His personal wealth is fine, but the company he founded would not have survived had Softbank not taken control and essentially bought him out.

Softbank Vision Fund is supposed to be building the future, like artificial intelligence. But everyone in 2019 knows WeWork is a legacy real-estate company that masqueraded as something else. What happens when startup hype is fraudulent? Who pays? Clearly not the "visionary". Do investors pay? Who bails you out for the dishonesty of your vision? No, capitalism rewards you for being good at deceiving others, in a somewhat sociopathic game for founders.

Silicon Valley created an aspirational market for fraudulent visionaries and founders who could dupe as many people as possible. It takes a special kind of person to be a startup CEO, it turns out.

The ethical problems with founders isn't even being addressed, there's no consequences to hurt people with dishonesty in business, if you can make $ billion by being a twisted visionary. If you can be a bully platform (not just robotic Mark) or pretend your startup is something it is not.

Silicon Valley has no soul. This isn't a cult of founders, this is a failed mechanism in capitalism. Adam or Mark are not unique people, but so long as you have to be unethical in business to win big, others will keep doing it, and so the market doesn't actually learn anything from WeWork, only that the fraudulent visionaries don't go to prison, they can become part of the Billionaire class.

Sure the 40-year-old Israeli-born Neumann has come a long way from the shoe-box-sized New York city apartment he first lived in in the early 2000s. But is this the kind of capitalism we want? Where CEOs can break all the rules and get richer for it? That's not controversy, that's criminal-like behavior and it seems like Silicon Valley and Washington doesn't know the difference.

WeWork, it seems, is in a bit of a Catch-22. There is no "moment of truth" in scams like WeWork, only bankruptcy and the escape of cons. We knew Masayoshi Son was a gambler in how he does business, but this is an epic failure for the Japanese tycoon, and the world will never be the same in how it judges hyped cult of the visionary founders.

You are still recommended to be deceptive as a founding CEO, because this allows you the biggest possible payout if your ruse works long enough and scales big enough. Adam Neumann is a hero of capitalism, a flawed and disgusting market that has no semblance of social justice or fair regulation.