Back in late January, Bolt founder Ryan Breslow called Stripe and Y Combinator the “Mob Bosses of Silicon Valley.” We covered it here (The SiliCON Game). True or a media stunt, we might argue that his list might have been a bit too narrow.

 

A16z recently poured a small fortune into Adam Neumann’s new startup, Flow, a co-living space not unlike WeLive, which fell under the founder’s WeWork rubric, and never mind that “Neumann (has) tried residential real estate before and failed. Under his leadership, the We brand launched WeLive, co-living spaces in New York and Virginia. The plans to expand to India and Israel quickly shuttered, and in 2019, WeLive became the subject of an investigation by New York City,” Fast Company reported.

 

As a note to self: don’t expect to find Flow spaces in Atherton, CA any time soon:  just two weeks ago, it was clear that Atherton resident Marc Andreesen was firmly against multifamily housing developments in his community (Star tech investor Marc Andreessen wants America to build again—just not housing in his backyard). But if he can make a buck or two if some such dwellings are in someone else’s backyard – all good.

 

Tech – re, getting that Silicon Valley investor cash – has long been all about the founder and the cult of personality and given that he is a consummate showman, Adam Neumann seems to check all the right boxes. Look, he managed to convince investors that WeWork was a tech company rather than what it really was: a Ponzi scheme disguised as a real estate play disguised as a tech company.

 

Then again, as we said last week, tech has long been driven by the cult of personality – and Mob bosses – and while WeWork was once valued at $47B and did have a $4B exit after raising $10B in funding, could it fairly still be considered a unicorn, considering the math and wasn’t it Neumann who drove it to ruinicorn status?

 

Is this yet another one of Neumann’s real estate plays disguised as a tech play?

 

Said Pitchbook, “One actual detail that emerged this week was that Flow plans to launch a crypto wallet, according to a report from Forbes. Perhaps ownership in Flow-operated apartments will be tokenized—a FlowDAO in lieu of a homeowners association. Like other crypto startup investors, early backers could receive handsome handouts of tokens that offer a pathway to early liquidity.

“Flow’s crypto trimmings make it defensible as a tech investment, and therefore a more plausible place for VCs to park their cash. For years, WeWork promoted overblown claims that its tech would give it some advantage over the old business models that it aped. Will Flow be any different?”

Good question, and Neumann does have competitors in the space, including one that’s on course to achieve unicorn status this year – and that already has actual…traction! And sales! “Serial entrepreneur Bill Smith launched Landing in 2019. The furnished apartment rental firm expects $200 million in revenue this year by catering to the work-from-anywhere generation,” Forbes reported.

 

But investors prefer serial entrepreneurs and Neumann is that.

But wait! High school dropout Smith is also a serial entrepreneur. He sold his previous company, online grocery delivery service Shipt, to Target for $550 million in 2018, with absolutely no controversy, so meh. Considering that Shipt raised only $65.2M in funding, it did have a profitable exit – still, a relative pittance for a founder if you also take into account that “Neumann received a juiced-up stock award worth $245 million, on top of $200 million in cash, as part of a sweetheart exit package from the office rental company he led to disaster, regulatory filings show,” the New York Post reported.

 

“Landing has raised $237 million in VC funding, including $75 million (previously undisclosed) at a recent valuation of $475 million. Not bad for a company whose revenue hit $83 million in 2021, up sixfold from a year earlier,” said Forbes, while Flow, about which we have only sketchy details, raised $350 million from a16z, which, according to Fast Company, “is reportedly a16z’s largest check ever. According to the New York Times, this is Andreessen Horowitz’s biggest investment in a single round, with the startup already valued at $1 billion.

Again, Silicon Valley Investor math. But you also have to factor in all that free press that Flow/Neumann is getting.

And let’s not forget the Bro Network.

 

All told, Bill Smith is no Adam Neumann, despite the fact that Shipt wasn’t even Smith’s first successful startup. That was Insight Card Services (2009), Forbes reported, “offering reloadable prepaid Visa cards. Five years later, at 28, he sold that business for tens of millions.” All well and good but think about it: are Landing and Smith going to inspire the warm and fuzzies – and press attention – that Flow is getting and will no doubt continue to receive?

 

Said Pitch Deck, “Andreessen described the company as an effort to build “community-driven, experience-centric service with the latest technology.” To refresh your memory, WeWork promised to “elevate the world’s consciousness” –  and did manage to make the world very much aware of Neumann himself, even as the A16z investment did manage to raise quite a few eyebrows.

 

Turnkey flexible living may well be the future of residential real estate – especially for digital nomads – but as Forbes noted, “The big question, of course, is how many people will want to live month to month in temporary housing, and whether the mobility of the pandemic for white-collar workers will not only continue but remain popular enough to make the financials work. “The world of work right now [is in] a massive period of experimentation,” says Steve Cadigan, a future-of-work consultant and author of Workquake. “The digital nomad has a shelf life until you want to settle down and have kids. The older we get, the more we like continuity.”

 

But damn the naysays! This is Adam Neumann we’re talking about! – and it seems that Andreessen Horowitz has decided to go with the Flow. Given Neumann’s lavish lifestyle, which he, to date, seems to feel should be at his company’s expense given that he is indisputably the key man, we can only wait and see whether, given that he’s never one to mince words and did name the company Flow, if that investor cash will once again flow mostly into own Neumann’s pocket. Onward and forward.