Has the time come for founders to be held more accountable?
Has the time come for founders to be held more accountable for the billions of dollars that are being poured into their companies?
Are billionaire businessmen busier chasing investments rather than sustaining their firms’ actual purpose, product, processes, and people – in terms of both employees and customers?
Or is there another side to this coin?
In the second quarter of 2022, Uber turned cash flow positive for the first time ever, while still losing a lot of money.
The firm reported an adjusted EBITDA of $364 million, up $873 million year-on-year, but still witnessed a heavy net loss of $2.6 billion in the quarter, mainly because it is still spending a lot of money to invest in other firms such as Aurora, Grab, and Zomato.
For a long time, Uber has been criticized by experts because of the way it calculates its adjusted profits, which comprises an unusually large number of exclusions and exceptions. This adds to the questions being raised around the legal disputes that the firm has been mired in following concerns raised by drivers and consumers.
Then there’s the news that’s shaking up the investment, entrepreneur, and startup world.
Adam Neumann, the ousted co-founder of WeWork, has raised a $350 million in investment from US venture capital firm Andreessen Horowitz, aka A16Z. The investment for Neumann’s latest real estate venture ‘Flow’ pegs the yet-to-launch company at more than a $1 billion.
This is the same person whose blockchain-enabled carbon credit trading platform Flowcarbon raised $70 million from A16Z in May 2022, only for the project to be ‘placed on hold indefinitely’ in July 2022.
Neumann is most infamous for being ousted from WeWork in 2019, after raising the company’s valuation to approximately $47 billion, only for the firm to later crash to $8 billion after a failed IPO and alleged corporate mismanagement.
This firm that Softbank poured $13 billion into is now worth $4.3 billion, of which only a subset is owned by Softbank. That’s after Neumann exited the company for a reported package of approximately $1.7 billion.
While there are a few who point to the fact that Neumann put WeWork on the map and created billions of dollars in value; created thousands of jobs; created exponential returns for its investors; and created multiple growth opportunities …
… there are also those who point to the Apple TV+ ‘WeCrashed’ story of thousands of layoffs and lost jobs, $40 billion in lost valuation, corporate mismanagement, and a track record of raising audacious amounts of money without any track record of building profitable businesses or raising money for investors at exit events.
There’s a lot to digest and dissect … and all said and done, Neumann’s unit economics may still be sound enough for A16Z …
Yet, what’s the impact on products, processes, and people?
