Adam Neumann Gets a New Backer
August 15, 2022 11:18 PM   Subscribe

WeWork’s founder is back with a billion-dollar venture. Neumann’s new company Flow wants to transform the residential rental real estate market. Notably, it has the financial support of Andreessen Horowitz, the prominent Silicon Valley venture capital firm that was an early investor in everything from Facebook to Airbnb. The backing of Andreessen Horowitz, considered royalty among early-stage investors, is a powerful sign of support, and perhaps a rebuke to Neumann’s critics, who have described his leadership of WeWork as a cautionary tale of corporate hubris.
posted by geoff. (57 comments total) 10 users marked this as a favorite
 
Neumann has purchased more than 3,000 apartment units in Miami, Fort Lauderdale, Atlanta and Nashville. His aim is to rethink the housing rental market by creating a branded product with consistent service and community features. Flow will operate the properties Neumann has bought and also offer its services to new developments and other third parties.

My biggest problem with this, besides the lololol WeWork aspect of this, is that the centralization of services really creates a lot of problems for people on the edges of society. In some ways having it centralized means there's more accountability and ways that the government, in theory, can help ensure equity in housing among disenfranchised and traditionally marginalized communities.

However! As someone who was in the hospital sick for an extended period of time and frankly didn't pay bills or take care of life things, I found out the hard way how easy it is to get locked out of the system. Ignoring how being several ill shouldn't ruin your life in other ways, I was lucky enough to find sympathetic landlords (who also accepted large cash deposits) and explain my situation. Large multinationals and banks didn't really care. Even getting work requires a credit check, background check, etc. and the world is already not sympathetic if life throws you a curveball and you're outside the statistically defined risk curve.

Oh and it appears to vaguely be somewhat associated to Flowcarbon, Neumann's new cryptosomething. So there's that too.
posted by geoff. at 11:32 PM on August 15 [21 favorites]


Andreessen Horowitz (now a16z) used to be a credible tech venture capital firm. They did great out of Skype, Twitter, Facebook, etc...

Now they have lost the plot and their crediblity. They're doing a whole bunch of predatory crypto bullshit that's nothing more than unregulated securities to dump on retail investors to cash out without waiting for an IPO.

And also investing in the disaster zone that is Neumann.
posted by happyinmotion at 11:56 PM on August 15 [22 favorites]


Wait, is he doing the same scam all over again?

This sounds like exactly the same scam, but residential instead of offices.
posted by ryanrs at 12:07 AM on August 16 [17 favorites]


Wait, is he doing the same scam all over again?

No this one involves crypto!
posted by geoff. at 12:18 AM on August 16 [37 favorites]


Oh I should have linked, Flow: Live Life in Flow.
posted by geoff. at 12:26 AM on August 16


Flow is wolf backwards.

Just saying.
posted by chavenet at 1:16 AM on August 16 [52 favorites]


Considering the track record of Neumann, I don’t see how you would want to cut him a huge check - unless you were ideologically sympathetic with him.
posted by The River Ivel at 1:27 AM on August 16 [1 favorite]


Andreessen Horowitz (now a16z) used to be a credible tech venture capital firm. They did great out of Skype, Twitter, Facebook, etc...
Andreessen Horowitz does the same shitty thing that most tech VC firms of its size do: it invests absurd amounts of money into pipe-dream companies to maximize its chances of a single huge payoff.

Invest $5,000,000 into 50 different companies. If one of those companies makes you $1,000,000,000, you've just quadrupled your profit. It's the same infuriating "unicorn theory" that drives Peter Thiel and his Nazi-adjacent ilk. And it's what enabled WeWork in the first place, which opened one rent-an-office in Manhattan and was abruptly given $15,000,000 to burn through.

Side effect 1:
Because tech journalists report breathlessly about which companies have been given how much money, a tech company is considered successful the moment it's been given money. This creates a vicious cycle wherein investors can generate good press for their investments by investing—and it further entrenches the idea that success is defined by those investments, rather than by actually making a profit.

Side effect 2:
Because this strategy only works if billions are hypothetically on the table, virtually every tech start-up—regardless of its market or its product—is encouraged to think purely in terms of world domination. If When it doesn't seem likely to make a billion dollars in profit, it's pushed to do all the scrappy underhanded invasive society-destroying shit that defines, well, the tech industry today.

This is not some industry secret. Thiel's book Zero to One literally says it on its book jacket: "Progress comes from monopoly, not competition." And Andreessen Horowitz is literally the progenitor of the phrase "software is eating the world"—arguing in 2011 that not only will the tech industry destroy the known world, but that the world deserves to be destroyed.

Adam Neumann is not a bug—he's a feature. He is precisely the kind of person that Andreessen Horowitz exists to create. Look at his tactics, which literally boil down to: "You give me infinity money, and I'll spend it establishing unfair monopolies." His companies' selling point is glitziness, which he can afford because, again, infinity money.

Read Forbes' glowing 2014 review of WeWork if you want to see this shit in motion. A fawning look at just how "meteoric" its "rise" is, exactly two paragraphs precisely articulating the reason imploded five years later, and then that's brushed aside so Neumann can talk about how he'll be building tech co-ops on Mars. You even get a bonus Jared Kushner, because what we're talking about here is literally the cancer that is eating the world alive.
posted by Tom Hanks Cannot Be Trusted at 2:03 AM on August 16 [78 favorites]


tl;dr: all of the reasons people are criticizing Adam Neumann in this thread are exactly why he was just given $350,000,000. And look! The New York Times did exactly what I just described and gave him a glowing review, product as-yet unseen. It even made sure to include a prominent link to his new product in the second paragraph!

Nobody involved in this process is an idiot. They just really fucking suck.
posted by Tom Hanks Cannot Be Trusted at 2:07 AM on August 16 [48 favorites]


He doesn't even really have a website! Some startups I understood how they get valuations. Exactly the same as the good old boy network. Zuckerberg is a classic example. But where did Neumann come from? He went to some no name school in Israel and had far flung ideas. He didn't even come from a well known company or school. His rent an office idea wasn't even new, not that matters, but how did he spring up out of nowhere?

The only thing I can think of is that a lot of tech startups I've worked with out of Israel had some sort of connection to the defense industry. But Neumann doesn't come off like that at all.
posted by geoff. at 2:20 AM on August 16 [2 favorites]


Imagine a world where the very worst people have extracted so much money through looting, oppression and crimes against humanity that the classical mechanisms for high end money laundering - property, art etc - can no longer keep up with the volumes.

So you create a series of "investment funds" fronted by useful idiots. These pump your money into mainly ludicrous "start ups". As part of this a mainly captive press hypes these investments and sheep follow the hype. You then cash out your now laundered money, often at an excellent $1:$1 rate which is far better than the usual laundered rate and the cycle continues.

Thankfully such a hellworld is entirely imaginary and we are lucky to live in a well regulated business investment society like this one.
posted by fallingbadgers at 2:39 AM on August 16 [24 favorites]


In Germany this is a not uncommon business model in the general sense. There is a small handful of very large, very wealthy property owning corporations with billions of euro in revenue every year. These companies are so disliked that there was a referendum to expropriate property from them. They own enough property to jack up rental rates where possible. They offer little in services. But you do get a logo on the front door, so it's a branded experience. Investors love it — these companies are some of the most valuable in the world.

Rental apartments are the original subscription model, especially at this scale. And they're hard to cancel, unlike Netflix. I'm not surprised silicon valley wants in on it. Of course they'll make some noise about bitcoins or NFTs or metaverse or whatever to make it sound vaguely innovative.
posted by UN at 3:08 AM on August 16 [5 favorites]


You mean Flow isn't his entry into the Minnesota State High School All Hockey Hair Team?
posted by clawsoon at 4:49 AM on August 16 [13 favorites]


This guy again?

Really?
posted by freakazoid at 5:15 AM on August 16 [8 favorites]


arguing in 2011 that not only will the tech industry destroy the known world, but that the world deserves to be destroyed.

I wonder how much the sum total of money that investors have lost while propping up Uber, et all compares with the amount of money it would have taken to "buy" the relaxation of labor laws in the traditional way (supporting candidates, financing campaigns, changing public opinion, etc). I bet they're getting a bargain.

How can Flow not be a similar attempt at doing the same for housing/rental regulations? Invest a bunch of money in a company that can become the 800lb gorilla overnight, adopt a disruptive business model which blatantly ignores existing law, then wait for lawmakers fearful of stifling the tech industry to create all the carve-outs you need.
posted by RonButNotStupid at 5:22 AM on August 16 [4 favorites]


I wouldn't be surprised if all of Flow's "rental agreements" were completely at-will, had a ToS that required binding arbitration which supersedes all local enforcement mechanisms, and required non-refundable deposits.

I also wouldn't be surprised if each unit came with locks that could be opened by waving a cell phone in front of them because innovation.
posted by RonButNotStupid at 5:28 AM on August 16 [10 favorites]


I’ll be keeping one eye on Flow to watch for the exploitative stuff and the lose lots of money part. At least this time he will own the space.

I didn’t read TFA bc paywall, but I would be shocked if the housing was not all dorms. When I saw the wework docs I was like, “hey throw some beds in there and this is what big money wanted Dubliners to live in.”. (There was a huge debate about what constituted legal housing in new development in Dublin last year.) I can see him offering wee warrens with communal kitchens, etc. If he offers decent SRO on the other hand I’ll have to hand it to him.

I wonder what Rebekah Neumann’s role is this time - sounds hella capitalist-ashram from the name. Was that part of what sold a16z?

Anyway, this does smell like a hype machine from people who should know better. I mean, look at any college town in the US, and a huge number of buildings will have a management company logo on them. The buildings are owned by one or two people who consolidated but have a single LLC per address. That housing is not just for students either, but also for the people who work food service, etc. That setup has not yielded anything but the minimum tolerable living conditions - often it is much worse than that.

Again, big blowout money spent on inventing nothing, just hoping for regulatory arbitrage. Many of these journalists must have spent time in these towns and maybe lived in their buildings. So WTF?

Also, didn’t the paper publish stories just months ago about people renting for boocoo dollares with the promise of doormen, security, and rooftop parties to end up with, you know, nothing of the sort?
posted by drowsy at 5:52 AM on August 16 [2 favorites]


This past year I read "The Cult of We" and there wasn't enough popcorn in the world. It was such an amazing trainwreck overflowing with hubris. Just insane. Pair it with "Bad Blood" about Theranos if you are in the mood for business disaster stories you can't look away from.

I should be surprised that anyone would give him Neumann more money after the amount that was lost with WeWork, but sadly I'm not. Between this, cryptocurrency and Trumpism it seems we've become a planet full of idiots. Though who am I to talk, I thought Musk was going to do good things after SpaceX was successful.
posted by beowulf573 at 6:04 AM on August 16 [4 favorites]


you might think tanking the ipo and being forced out by the board would make you a failure, but Neumann got a billion dollar parachute just about the time that the equities markets started going gangbusters again. he’s probably worth more than that now. once you have a billion dollars even other rich people can’t see through your bullshit i guess. anyway at the wework i visited they had kombucha on tap in every floor. i look forward to the other culture of yeast and bacteria that will start growing in the communal showers or whatever the fuck neumann has planned for flow
posted by dis_integration at 6:07 AM on August 16 [2 favorites]


In Canada, the rental market has been taken over by real estate investment trusts (REITs) which are in it for the investment, and managing their properties is a secondary concern if that. They tend to have a target market section and so have been buying up almost all of the affordable housing, doing cosmetic upgrades that don’t usually actually meet the local legal requirements for evicting current tenants due to renovations (aka renovictions), and putting them back on the market at twice the previous rent. Because they are national (mostly, some international) faceless corporations, and not actually all that interested in the management aspect, they have a tendency to ignore differences between provinces in residential tenancies law and just have a standard rental agreement and practices across the country. Which means that while they don’t do some of the same directly discriminatory shit that some of the smaller, more local property management companies had specialized in, they end up doing all sort of illegal shit around application fees and security deposits, illegal rent increases, and such, as basically their regular policy. On top of the often not above-board renovictions that seem to be central to the business model for anyone looking to “invest” and make money in the rental market these days, anywhere in North America.

In other words, this new VC-funded debacle in the US isn’t even “disruptive” or original, on top of all of the other issues with it.
posted by eviemath at 6:16 AM on August 16 [7 favorites]


I didn't know that he tried to enter the residential market before, with WeLive. Funny that the NYT article about Flow doesn't reference their own previous reporting.
posted by nicodine at 6:38 AM on August 16 [11 favorites]


In other words, this new VC-funded debacle in the US isn’t even “disruptive” or original, on top of all of the other issues with it. A student housing complex near one of the majority universities in southern california is owned by... The Wisconsin state teachers pension fund. CALPERS owns a lot of real estate around the country too, but notably the have reduced their investment in hedge funds due to high fees and risky investments

Institutional investors have always been in real estate for steady reliable returns. The WeWork scam (as well as this new company) is in believe real estate run by a tech company could some end up with 100X returns like you'd see with a software product. Knowledge real estate investors wouldn't touch WeWork, but they had plenty of tech money

When it doesn't seem likely to make a billion dollars in profit, it's pushed to do all the scrappy underhanded invasive society-destroying shit that defines, well, the tech industry today.

When uber fares go up, and can sometimes go to Lyft of back to real taxis. My old company had some staff in WeWorks. when the pandemic came we were able to close up shop pretty fast and let people work from home. But switching apartments can be a lot harder and a do worry that makes folks more ripe for exploration.
posted by CostcoCultist at 6:41 AM on August 16 [2 favorites]


I wish more of the reporting on this story focussed on FlowCarbon, Neumann's gig from a few months ago. Apparently it is "on pause". No harm in trying a startup and failing, at least this one seems to have failed early. Or maybe morphed into this real estate thing? But hoo boy was FlowCarbon breathtaking in its dumb.

Carbon credits on a blockchain. Literally no one asked for this. Carbon credit markets are unpleasant but possibly a useful market for . Blockchain is a very slow distributed database mostly associated with financial fraud. The mixture of the two is basically parody.
posted by Nelson at 6:52 AM on August 16 [6 favorites]


How does this guy still have more credibility than, say, Brock Pierce?
posted by snuffleupagus at 6:55 AM on August 16


"meritocracy" in action, people!
posted by lalochezia at 7:02 AM on August 16 [1 favorite]


you might think tanking the ipo and being forced out by the board would make you a failure, but Neumann got a billion dollar parachute just about the time that the equities markets started going gangbusters again. he’s probably worth more than that now. once you have a billion dollars even other rich people can’t see through your bullshit i guess.

The crazy thing (well, one crazy thing) about WeWork is that basically every investor but Masayoshi Son got at least their initial money back, if not, in fact, a profit. It was totally the Greater Fool theory in action. It's a story that keeps repeating in The Cult of We, mentioned above. A fund manager would hear about WeWork, look at the fundamentals, and question why it was valued over comparable real estate portfolios. Then they'd almost invariably invest anyway, despite their own better judgment, assuming that all the other institutional investors before them must have seen something they themselves missed, and not wanting to miss out on the payday everybody else was going to get.

And you're right that at a certain point the investors' club recognizes One Of Their Own, and at that point any sort of bullshit detector they might otherwise have gets turned into a bullshit amplifier. Once they buy into the grift, they have to get everybody else to buy into it so they can cover their own money. What they don't want is for anybody to get the idea that there are imposters in the club, so they'll close ranks around somebody that they themselves previously tried to avoid.

And yes, if you read The Cult of We, stock up on popcorn. None of it seems like it could possibly be real, but we all lived through it, and the end notes with citations take up almost a third of the book.
posted by fedward at 7:04 AM on August 16 [5 favorites]


In the words of Tom Waits, "there's a sucker born every minute...you just happened to come along at the right time."
posted by Kitteh at 7:04 AM on August 16 [4 favorites]


"meritocracy" in action, people!

Russia has oligarchs; America has meritocrats.
posted by acb at 7:19 AM on August 16 [4 favorites]


@luke_metro: BREAKING: a16z fires Adam Neumann from his new real estate startup after he tries to build apartments in Atherton
posted by JoeZydeco at 7:26 AM on August 16 [10 favorites]


I’m extremely skeptical of any possibility of VC-like returns from this venture but if the company owns 3000 housing units a $1b valuation doesn’t seem wholly unreasonable.
posted by ghharr at 7:41 AM on August 16


I just... fuck.
posted by alex_skazat at 8:22 AM on August 16


Someone should do a good investigation of a16z and why they Are making such dumb investments.
posted by Going To Maine at 8:27 AM on August 16


Andreessen said in the blog post that he was interested in Flow because the rental real estate market is ripe for disruption.

mfw billionaires are talking about disruption
posted by shenkerism at 8:35 AM on August 16


if the company owns 3000 housing units

I think Flow itself is just a glorified property management company. Neumann is reported to own the real estate now under its management; this launch is about opening up the platform to others.

I don't know whether that's more or less attractive to investors; less risky but the profits have to come from the services. But either way, Neumann gets the investors to defray the cost of his existing operations.
posted by snuffleupagus at 9:13 AM on August 16


As a dog returneth to its vomit...
posted by Halloween Jack at 9:16 AM on August 16 [1 favorite]


That letter from the Andreessens in JoeZydeco‘s link… can you imagine writing such an imperious decree to your town council and expecting that to go positively for you? That’s some major entitlement and seriously over-inflated egos on display.
posted by eviemath at 9:22 AM on August 16 [5 favorites]


That letter from the Andreessens in JoeZydeco‘s link… can you imagine writing such an imperious decree to your town council and expecting that to go positively for you? That’s some major entitlement and seriously over-inflated egos on display.

Welcome to Atherton, CA!
posted by Maecenas at 9:25 AM on August 16 [8 favorites]


tl;dr: all of the reasons people are criticizing Adam Neumann in this thread are exactly why he was just given $350,000,000. And look! The New York Times did exactly what I just described and gave him a glowing review, product as-yet unseen. It even made sure to include a prominent link to his new product in the second paragraph!
I don’t think we give enough credit to how many bad things in society stem back to a 1940s case allowing railroads to cheat their workers out of some pay, laying the groundwork for unpaid internships. American prestige media is dominated by the kind of people who could afford at key career points to live in places like NYC or DC on family money or, in a few cases, successfully get grants or other support. That’s not a crime but it means the viewpoint skews towards rich or rich-adjacent people who aren’t jumping to be critical of rich people with whom they likely share social connections. Given how journalism has generally been shrinking since the arrival of the web, there aren’t as many opportunities for more representative voices to get attention.
posted by adamsc at 9:27 AM on August 16 [5 favorites]


"Exact details of the business plan could not be learned. "

That's some fine reporting, NY Times. How is this not just an ordinary property management company?
posted by qxntpqbbbqxl at 9:47 AM on August 16


That's some fine reporting, NY Times. How is this not just an ordinary property management company?

Web3, NFT, kombucha, smart contracts. Duh.
posted by geoff. at 10:17 AM on August 16 [8 favorites]


I think Flow itself is just a glorified property management company. Neumann is reported to own the real estate now under its management; this launch is about opening up the platform to others.

If that's accurate (I have no reason to believe it isn't, but it feels accurate and I'm too lazy to check for sources) it repeats two mistakes of WeWork: (1) valuing a real estate company well outside of the range implied by its fundamentals, and (2) allowing Adam Neumann to be on both sides of a transaction. He kept trying to buy office space and then lease it to WeWork, and the bankers only occasionally managed to prevent it.
posted by fedward at 10:20 AM on August 16 [2 favorites]


This guy again?

Really?

Are you talking about Neuman or Marc ("anti-anti-colonialism") Andreessen?
posted by splitpeasoup at 10:28 AM on August 16


WeWork was honestly a great idea because most cities in the US have huge amounts of office vacancy, and someone purchasing and microleasing that property was a good idea. Even LA and NYC have like 20%+ office vacancy. They just outran the top end of the number of people looking for premium office space.
posted by The_Vegetables at 10:37 AM on August 16 [1 favorite]


Man. That guy. He must be just fucking amazing. The best. Tops! Wow. How can I give him my money?
posted by amanda at 11:07 AM on August 16 [1 favorite]


Even LA and NYC have like 20%+ office vacancy.

"The office-vacancy rate in Manhattan is 12.3%, up from 7.8% two years ago [in 2019]" [Bloomberg]

"Overall vacancy in buildings reached 17.6% in the second quarter [of 2021], up substantially from 13.9% in the same period last year but little changed from the first quarter" [LA Times]
posted by RonButNotStupid at 11:17 AM on August 16 [1 favorite]


It seems like what needs to be disrupted is venture capital itself. Ugh.
posted by nat at 11:44 AM on August 16 [2 favorites]


> The_Vegetables: "WeWork was honestly a great idea because most cities in the US have huge amounts of office vacancy, and someone purchasing and microleasing that property was a good idea."

I first heard the term "lifestyle business" around 10 years ago when I was reading up more about Silicon Valley and VCs and startup culture and all of that. In that context, the term "lifestyle business" was often thrown around as a bit of a pejorative (e.g.: "that company is probably not going to amount to anything more than a lifestyle business") and I was curious as to what exactly people meant by that. As far as I could tell, what they meant by a lifestyle business was basically just a normal business that, y'know, made enough money to pay off expenses and provide the owners with a living. Somehow this kind of business was considered vaguely pitiful and/or cringe. Everyone who was playing the SV game seriously wasn't looking to just make a profitable business; they wanted to be the next Amazon/Google/Facebook/Uber/whatever. And to do that, you needed to shoot for massive exponential growth to get huge VC fundings at billion-dollar valuations in order to engineer a liquidity/exit event, either IPO or acquisition. Profitable or sustainable businesses were not really the point of that game.

Anyways, this is just to say that if WeWork were run like "just" a lifestyle business, it probably would be totally fine. The actual service they provided seems like a fairly sound business by itself. Of course, if they had stayed at that level instead of trying to become the next world-eating, VC-funded behemoth, it would also be likely that none of us would have heard of Neumann and he would probably only be a mere multi-millionaire rather than a billionaire.
posted by mhum at 11:54 AM on August 16 [6 favorites]


Meanwhile, Marc Andreesen (co-founder and general partner at Andreesen Horowitz) is in very very pro-housing except when it’s in his backyard. Very excited to have these people meddling in housing markets around the country.
posted by mbrubeck at 12:06 PM on August 16 [1 favorite]


The actual service they provided seems like a fairly sound business by itself. Of course, if they had stayed at that level instead of trying to become the next world-eating, VC-funded behemoth, it would also be likely that none of us would have heard of Neumann and he would probably only be a mere multi-millionaire rather than a billionaire.

Before WeWork there was another company that already did coworking profitably, called Regus. Regus reorganized itself into a holding company called IWG plc, which trades like the real estate business it is (currently down due to decreased demand for office space post-pandemic, but not out). Its founder is Mark Dixon (heard of him?). He apparently was a great source of quotes about WeWork's crazy valuation and management problems, because his name and his company appear throughout The Cult of We.
posted by fedward at 12:58 PM on August 16 [1 favorite]


It's like they haven't even watched the delightful biopic series WeCrashed.
Wonder if Leto and Hathaway will be available for the sequel?
posted by signal at 1:14 PM on August 16


the term "lifestyle business" was often thrown around as a bit of a pejorative

In the sense that capitalists aren’t Interested in funding the entrepreneur’s lifestyle, as opposed to the entrepreneur being motivated to grow the company to a huge exit.
posted by snuffleupagus at 1:37 PM on August 16


"The office-vacancy rate in Manhattan is 12.3%, up from 7.8% two years ago [in 2019]"

That 12.3% = 58 million square feet for Manhattan and 40 million sq ft for LA. For comparison, the Willis Tower (is it still the tallest building in the US?) is 4.5 million sq feet.
posted by The_Vegetables at 1:53 PM on August 16


Also the WTC, the Financial District, Grammercy Park, Hudson Square, and Eastside all have greater than 20% vacancy.

In LA, Downtown LA, Hollywood, and South Bay subdistricts all have greater than 20% vacancy.
posted by The_Vegetables at 2:00 PM on August 16


Imagine a world where the very worst people have extracted so much money through looting, oppression and crimes against humanity that the classical mechanisms for high end money laundering - property, art etc - can no longer keep up with the volumes.

Then you just make however you made your money legal, and you no longer have to launder it. At a certain point, buying a government (or enough of it to legitimize your business model) is cheaper than laundering money.

I don't think these people are laundering money as much as they're chasing crazy returns that the market just isn't producing anymore, or isn't producing in the quantity it used to. They've got access to a shitload of capital whose owners want big returns... but we're entering a part of the economic cycle where those returns aren't realistic. Rather than just accept that, they're coming up with increasingly baroque ways of trying to make them. See also: crypto.

It's why you see these so-called "unicorn" companies burning through cash and not turning a profit: the financial backers aren't satisfied with normal rich-people ROI, they want insane ROI. And they're willing to keep forking over money—beyond the point of rationality—in the hopes of getting it. But the easy-money days are over. The only way you make those sorts of insane profits anymore is by taking on crazy amounts of risk.

It'll all end poorly, sooner or later. But I'm not going to go out and short them, even if I could figure out a good way to do so: there's an old adage about the market staying irrational longer than you can stay solvent.
posted by Kadin2048 at 8:58 PM on August 16 [2 favorites]


capitalists aren’t Interested in funding the entrepreneur’s lifestyle

I don’t know where the conflation started, but I have definitely heard "lifestyle business" used condescendingly of a business which supported the entrepreneur and employees by doing work for customers and getting paid.

"Organic growth" is maybe the non condescending way to say the same thing?
posted by clew at 10:56 AM on August 17 [1 favorite]


"Lifestyle business" is absolutely used condescendingly or dismissively, whether referring to the scale of the enterprise or the operator's goals or both. Didn't mean to suggest otherwise.

When a VC (or someone in the VC orbit / fan club) wants to be nicer about it they'll say something like "there's nothing wrong with your own lifestyle and a self-supporting business being your goal; but then you want a loan, not VC investment."

"Organic growth" is its own buzzword, and is highly desirable in the eyes of most VCs. It suggests there's actually something new at hand, rather than just trying to squeeze efficiencies out of some existing market by automating operations, shifting labor to gig contractors and remaining business processes to outside vendors, which usually requires a lot of marketing and time operating at a loss to get people to notice and adopt.
posted by snuffleupagus at 11:46 AM on August 17


(I have heard it used in the sense of 'growing at its own pace' as well, though less lately relative to the 'natural growth vs synthetic marketing' usage)
posted by snuffleupagus at 12:37 PM on August 17


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