According to TheStreet: Elon Musk calls WeWork founder’s new company bullshit, doesn’t hide what he thinks about Tesla CEO Adam Neumann’s new company Flow. It can be summed up in one word: bull.
The business world is full of other opportunities. Many founders failed but got a second chance from investors. Proponents of second chances say the idea is that founders should be encouraged to fail, restart, fail again, restart, and ultimately succeed.
An example of a second chance that paid off big time is Henry Ford, who went through two bankruptcies before becoming bankrupt. In 1901, the Detroit Automobile Company, a company Ford had founded two years earlier, had to file for bankruptcy due to the poor quality and high prices of its vehicles.
Ford faced a second bankruptcy in 1903 when he founded the Ford Motor Company. Bowing to pressure from his 12 partners and financial backers, who provided him with $28,000 in capital to start the company, Ford introduced his first production model in 1903: the Model A.
But this time, Ford learned that just making it wasn’t enough; It was also necessary to pay suppliers if one wanted to assemble cars to be distributed to potential customers. The cost of developing and manufacturing the Model A was very high. In July 1903, after paying its suppliers and not selling a single car, Ford Motor had only $223.65 left in its coffers.
The company received an order and down payment and also received a loan from a set of investors. It was then able to rebound and became a huge success. The example of Henry Ford is cited by proponents of second chances for startup founders. It’s also a point of pride for American business because Ford has changed the way we live with its practical and accessible cars.
He invented the methods of modern, mass production that became the benchmark for industrial practices during the first half of the 20th century. But investors also say that all other opportunities are not so good. For example, one of the greatest serial entrepreneurs, Elon Musk, believes that a second chance given to the disgraced founder of WeWork, Adam Neumann, is a bad idea.
In a thread on Twitter, a user posted a video that appears to show Newman explaining the idea behind his new company, Flow. The former CEO of WeWork accompanies his explanation with big hand gestures. His reasoning is difficult to understand.
Elon Musk doesn’t buy what Neumann is selling “So number one: management company branded technology first,” Neumann explained in the video. “The number two real estate asset management company, which can buy real estate and manage real estate assets; number three financial services. And the fourth pillar is this mechanism that’s going to take some of the value and share it with value creators.”
He continued: “And those users are going to start using our financial services. They’re going to use financial services now because the payments company that’s collecting your rent already has users.” There is a real connection with the residents. And then, if we’re able to take this value-creation mechanism and share that with the residents, a share of the value, that’s going to give them a sense of ownership.”
“If you’re in your apartment building, and you’re a renter and your toilet clogs up, you call the super. If you’re in your own apartment and you bought it and you own it and your toilet is full, you take the plunger. And there’s a difference between feeling like you’re renting something and feeling like you’re renting. From transacting to actually owning a community Until you become a part.”
Newman’s monologue is incomprehensible. For Musk, it’s all kinds of mental gymnastics that leads nowhere. He doesn’t hesitate to use the brinjal emoji to back up his criticism and warning. The eggplant emoji is often used on social media to represent the penis.
Elon Musk commented, “Imagine it’s your 🍆 … Now I’ll explain with my hands.” Basically Musk has presented Newman’s idea as rubbish, air. Neumann returned last August with a new Flow startup. He had raised $350 million from venture-capital firm Andreessen Horowitz, valuing his new venture at $1 billion. This is a record for the first round of funding.
There was a bit of deja vu in the script. Newman, a charismatic young entrepreneur, had already proposed a revolutionary approach to commercial real estate, which was at the heart of his concept. For this they had the benefit of backing reputed institutional investors like SoftBank (SFBQF). But the thrill turned into a nightmare for investors.
Flow, his new company, is in the midst of renting and buying housing. It is based on sharing like WeWork. Newman has said that Flow seeks to solve the housing crisis.