I see a lot of confusion over why anyone would want to take a stake in an Adam Neumann biz. Some guesses…<p>VCs are looking for return, and quickly, which is why they have glommed on to crypto projects. In the old model, you invest money, wait 5-10 years, and get a payoff when the company goes public or gets sold. With crypto, there is a much more immediate payoff with unregistered securities, AKA “tokens”. And then maybe a second payoff in 5-10 years.<p>There are no details from a16z or Flow on what this actually is, but I am guessing tokenized rent payments on a blockchain in some fashion, promising some sort of equity to renters, and quick returns to a16z. They came out with a splashy investment and a high valuation, and are hoping to make their money back on the unregistered securities, AKA tokens, and who knows, maybe more in 5-10 years.<p>Never underestimate the cynicism of a16z.
I think not everything needs a venture-backed, take-over-the-world solution.<p>For the issues being raised here (home ownership is inaccessible to many, renters don't have stability, security), aside from greater protections for renters, another class of existing solution is Community Land Trusts. These organizations retain ownership of the land, have a charter that's targeted at keeping housing affordable (or some related mission), lease out land on very long terms (like 99 years) with contracts that place limitations on resale of any improvements on the land. These restrictions can make housing permanently affordable, and removes housing on that land from being an asset for speculation. Residents get security from the very long terms of their loans, the governance of their CLT, and ownership of improvements on the land. The CLT can use revenue to create and maintain community amenities.<p>Sometimes good arrangements already exist, but they're not going to be rapidly scaled up across the country because no investor stands to get a windfall from rapid expansion.
My guess:<p>A network of apartment complexes across the country that you can own equity in the entire enterprise instead of one single home. You can "freely" move between the apartments without having to go through financing etc.<p>This can be interesting with a massive capital and enough time to build out the network but seeing this cocaine addict's name in the mix make me feel this is going to fail fast. Real estate is a slow industry, VC money doesn't have patient for it
I am surprised to see so many negative responses.<p>I bet most of the people here agree 100% with the problems and structural shifts this memo identified, and that technological innovation in the housing space to facilitate both social cohesion and affordability would be a *very good thing*.<p>Sure, Adam had some highly publicized issues at WeWork. Also, a16z is on a lot of people's shit list right now. Still, why do so few people seem to be rooting for their success? If you're prone to cynicism I get it - the only way this can end is grift - but personally I would like to see more companies trying to address these issues and Adam seems like he genuinely cares about it. Maybe a little too much, even.
> In a world where limited access to home ownership continues to be a driving force behind inequality and anxiety, giving renters a sense of security, community, and genuine ownership has transformative power for our society.<p>To paraphrase, "we will continue hurling investment money into residential real estate to create a permanent serfdom of renters."
It's notable that there are no references in this article. We actually have a 9 month supply of new housing now (which is a lot, that's up from a low of just a few months). Population growth in the US continues to go ever lower (but isn't going negative). Here is a nice data-driven video overview of this current economic situation and also about how this likely indicates a worsening recession ahead: <a href="https://www.youtube.com/watch?v=Z6JBX8Y8XQM" rel="nofollow">https://www.youtube.com/watch?v=Z6JBX8Y8XQM</a><p>It would be nice to see this data explored in a more localized way. I know there are excesses of new housing in some places and shortages in other places. I also don't know how much of the current excess housing supply is due to houses being built in less desirable locations.
Anyone know what this magical idea is?<p>Color me skeptical, but the deliberately vague strawman arguments in the post read between the lines to be something like: "If you're a homeowner we want to your equity and if your a renter we want your rent". I don't harbor any illusions that flow wants to help anyone but themselves.<p>I have no idea what flow actually is, but if it's something like "airbnb but permanent on the blockchain" like we work was "Airbnb but for your work desk", then no. Heck no.
> The second model: you rent an apartment, but: it’s a soulless experience; do you even meet your neighbors, much less have any friends in your complex? Does it feel like home, or just a place to sleep? Are you proud to bring friends and family to visit, or hesitant?<p>Excuse me, what? I've absolutely met my neighbors. In past buildings in Brooklyn I've gone out to dinner with some, spent hours on the stoop having conversations with others, taken care of their kids while they ran an errand, and had all sorts of positive (and negative) experiences with them. That's what living in apartments in a dense city community is like. People come hang out in my place all the time.<p>It's hard to even comment on what they're proposing, since there are no details, but the last thing we need is more single family homes and corporate landlords.
That's a lot of words to find out exactly zero about Flow and what it's doing, for which the buried link to the website also does nothing to explain.<p>Also, it's kind of rich to hear a billionaire wax poetic about the woes of the real estate market. According to a quick search, he of no surprise owns several properties, including a $177 million property.
Let me see if I got this right. Instead of a16z using its resources to actively push for YIMBY changes in society and politics that would <i>actually</i> have positive outcomes on the problems stated, it's investing in the next idea from the WeWork dream seller / scammer, and we don't even know what the venture is? Is this what the venture capital world has become in 2022?
> revolutionized the second largest asset class in the world — commercial real estate — by bringing community and brand to an industry in which neither existed before<p>This sounds very disingenuous. Starbucks was arguably the first 'community brand' where people would associate one with an informal meeting place rather than to drink a coffee. Even in Silicon Valley, there are cafe chains renowned for this meeting vibe.<p>And then there are country clubs, which are newer and more bourgeois.<p>Even the neighborhood newspaper kiosk in historical European cities did a better job of bringing community and brand to real estate than WeWork.
This is really gross. Andreessen, who’s used his sway to stop any slight increase in housing density in his own town, talks about the broken housing system and how investing billions into a failed scammer will revolutionize housing in a way that’s completely unstated, but presumably involves attempting to find ways to collect rent from people who need housing while also putting all the capital risk onto those individuals as well. The worst thing we can do for housing is to give any credence to this company’s plans.
This is almost certainly going to be a rent-seeking venture that attempts to sell "freedom of movement" by having something that feels like student accommodation for adults and small families... a kind of shared living space that can be rented month-to-month with some perks like community spaces and services, pre-furnished, etc. To sell a lifestyle.<p>Of course that comes at a cost, one that very few people can afford. At least, it will be unaffordable to most. It is always true that more people than one realises is actually awash with money (thanks to the prior generation benefiting from incredible growth of their assets) and for them this freedom of movement by renting on a rolling short-term basis and upping on a whim will allow them to further access high paying work.<p>I'm really not sure that what housing needs is for large-scale VC money to be poured in (and the corresponding expectations of return on that).<p>Will it be profitable? Yes. Is it ethical? No.
> There’s a reason the federal government started subsidizing home mortgages: someone who is bought in to where he lives cares more about where he lives.<p>Hasn't this thought process proven wrong in europe. Renters were similarly engaged in local communities where there were sufficient protections for long term renters.( I can't find the study now ).<p>I really don't understand why govt need to be in the business of providing home ownership subsidies. Seems like it has contributed to exacerbating current situation in US.
Housing is absolutely not an issue that more consolidation and VC money can fix. Watching the US just nosedive right into becoming a renter society and giving up on the prospect of ownership is pretty wild...
Easy for AH- they charge fees on the capital they deploy. Adam and his BS are ultimately the problem of your poor grandmother’s teaching pension getting invested in a noted charlatan.
I used to have a high opinion of venture capital, seeing them as tech visionaries and folks with access to deep pockets that fund the best technology that is truly changing the world. Maybe something has changed, but now all I see are just financial hustlers, working markets, trying to capture or corner spaces with "unicorns", looking for M&A activity that might have already been pre-negotiated looking for something to fill that spot, and weird market plays that never seemed to make sense financially (Web3? WeWork?). My perception now of VC is much like any other private equity play. They're in it for the financial hustle, and I don't feel that their "ideas" really hold much water. Why we look up to VCs as thought-leaders and visionaires when they are financial creatures beats me.<p>While the top VC players may have earned the respect by themselves being visionary entrepreneurs (once, decades ago in many cases), the rest of the VC market is filled with also-ran investors who have never been practicing entrepreneurs, following markets like lemmings and looking for a relatively quick buck while not even understanding the markets they invest in. When I hear someone is an investor, especially if they're not one of the handful few of well-known investors, I just think to myself "banker". I don't know if it's always been like this, but it certainly feels like it's gotten worse.
> Adam is a visionary leader who revolutionized the second largest asset class in the world<p>I was of the opinion that Adam made a serious and flawed business decision of taking long term leases with borrowed money, but selling short term fluid leases for revenue leading to books that are incredibly risky. At the time of collapse, the sky high valuation was basically a branding exercise, rather than actual business value (adjusted for risk)<p>> it’s often under appreciated that only one person has fundamentally redesigned the office experience and led a paradigm-changing global company in the process<p>How is that A16z is oblivious to the fact that astronomical valuations were tempered after scrutiny of the business of WeWork?<p>>We understand how difficult it is to build something like this<p>Again. They took cheaply available VC money, turned it into long term leases. That is a terrible business to be in, risk wise.<p>Not to mention bullshit about "community" and what not that they tried to build around WeWork.<p>>Adam returns to the theme of connecting people through transforming their physical spaces and building communities where people spend the most time: their homes.<p>What is novel about this? Aren't Cul de Sacs supposed to be this? Or even apartments?
I'll be curious to see what they come up with<p>I guess this is where wework was headed before he got forced out<p>I put together a simple site to try to develop the solution to at least one of the problems of apartment living -- loneliness<p><a href="https://myapartmentfamily.com/" rel="nofollow">https://myapartmentfamily.com/</a>
Finally! A potential solution to the housing crisis. Newly VC-infused and rehabilitated Adam Neumann. Yes yes yes. The world needs more of this.<p>This is also a good hedge against the crypto pyramid starting to slow down. Leveraging peoples' willingness to try to get rich quick to create a pyramid was profitable, but once people lost their money and crypto lost its luster, they wandered off and were no longer easy victims^Wcustomers... but imagine if VCs could also control your housing. Wandering off is so much harder! Built-in market protection.<p>Brilliant.
Maybe the solution to the housing crisis is to build more affordable housing and to eliminate the practice of using housing as an investment / safe place to park money. Also, outlaw or heavily regulate Airbnb.<p>I don't think another VC-funded app with cool branding is going to save us.