WeWork co-founder and former CEO Adam Neumann took the stage in Miami to explain his multifamily startup, Flow. Did he succeed?
Judge for yourself: Here is the transcript of his interview with The Real Deal publisher Amir Korangy at TRD’s South Florida Real Estate Forum, at which the charismatic and controversial Neumann also discussed WeWork and other topics.
Amir Korangy: For this next talk that we have, I’ve been very excited about it. The next speaker we have coming on stage, he was one of the largest figures in the world of real estate across the country. And really, hey guys, we got to get on with this program. We’re on a really tight schedule, so if everybody can sit down, we’ll get started. Then, our speaker, our next speaker, really changed the way real estate operated, especially commercial real estate. He really came from no legacy. He didn’t have an inheritance of any kind. He started by himself, with a co-founder. But he changed the way real estate operated. Adam Neumann, the co-founder of, former co-founder of WeWork, who changed the vernacular of real estate with WeWork. Now you Uber somewhere and you Google something, you also WeWork office space. He really changed that. And he’s planning to do the same with residential real estate. Please put your hands together for our next speaker, Adam Neumann of Flow real estate. Come on out, Adam.
Adam, I know you have the board meeting today, and I’m glad that you’re able to do this for us. So I really appreciate you being here. And you know, the first thing I want to ask you is that, we only have a short amount of time, so I want to get a lot of questions in there. And the first thing I want to know, you know, you started, you built something that became so huge. The term WeWork still is something that people say and use. And you started that. And the thing that I’m really curious about, there’s this great saying from Fitzgerald that that there’s no second act for Americans. You’re not American, so maybe you don’t have to worry about that. But is it something that you think about, that the next thing that you do, your next act, which is Flow, is it only a success if it grows to be the size of WeWork?
Adam Neumann: Wow, those are a lot of questions in one question. First of all, thank you, Amir, for having me here. I really appreciate it. And congratulations for building what I think is the most important news outlet and media company in real estate. So congratulations. A big hand for Amir.
Also, before we start, I just always love knowing who I’m speaking to. If you’re a broker or an agent, can you raise your hand, just so I know. Wow. Wow. So before we even talk about anything else, I think, over the past week I’m sure we’re going to get to it, we’re going to talk about Flow House, our new condo project, and I had the privilege of meeting a lot of agents right here in Miami. And I have to tell you something I learned from the people I met. A lot of the people are immigrants just like me. They came to this country with a dream. They started by working in a car wash or as a receptionist or some job, and they climbed their way up the ranks until they didn’t just become brokers, but I’ve been meeting brokers here who do unbelievable things and move hundreds of millions of dollars a year. And I just wanted to say that, to be an agent, to be a broker, to be an entrepreneur, it’s exactly the same. And I just wanted all of you guys to know, what a big deal it is, the journey that we’re all doing. And you spoke about being an American or not being an American. I think what this country is all about is about a person being able to come here, have a first chance, have a second chance, and talking about second chances, I saw a second chance yesterday night. Have a second chance. Without making any political statements. This country is all about the fact that if you have a dream and you’re willing to work very, very hard, and what I saw in the agents I met, everybody is a really hard worker. You have a dream. You’re willing to work hard. Anything is possible. So that, I think, is the first thing I’d say to it.
Amir Korangy: Thank you for that. But I do want to know, like, look, when you, when WeWork, I remember we were covering you guys regularly. All of a sudden it was worth $200 million. And then it was worth a half billion dollars. And then it became a billion, $4 billion, next thing you know, it’s a $47 billion company. The company, the product that really existed before, but the way you pitched it and the way you branded it, it became, all of your competitors were maybe, maybe worth a couple of hundred million dollars. And then when your stock started to rise, their value started to rise, too. And I don’t want to spend too much time talking about WeWork. But I guess my question, which is the first question that I have is that, if your new company Flow, which we’ll get into, if it’s not as successful or as big as what you built before is, does that feel like you didn’t accomplish what you wanted to accomplish?
Adam Neumann: So first of all, one word to say about WeWork, I couldn’t be more proud with what we built. We’re right here in Wynwood. There’s a beautiful WeWork here. There are WeWorks all over the world. We built a global brand, but it wasn’t our ability to tell the story that built it. It was the people who were working there every day and delivering in community. Delivering on experience. It’s because that was so unique that it really grew to where it went, and because landlords all over the world put these WeWorks inside their buildings and suddenly their whole building changed. This world was able to propel us.
But even when we built WeWork and there’s a few people here in the crowd, actually some of our first employees are sitting here, right here in the crowd right now. I got a text message from one of them a few days ago saying that she’s going to be here. When we started, it was never about, oh, this is going to be so big. It was about the fact that community was important. Bringing people together is important. When we came up with Flow, it wasn’t something that we set up and said, let’s come up with the next big thing. Not at all. Actually, what actually happened, it was Corona, our family office, we stepped down from WeWork, we were sitting thinking, what are we going to do next? Our family office said, wow, look at multifamily, what an interesting category. Cap rates were still wide. Interest rates were very, very low. Looked like a very good trade. We went and bought a portfolio and I started walking these buildings. And the entrepreneur in me couldn’t help it but observe that that same idea of community and bringing people together is probably even more relevant in residential buildings than even it was in office. And then we got started.
So it’s not something, so when we sit, we’re not thinking, oh, how big is this going to be? We’re really thinking about, is there a real need in the market, which there is. Are people today who, look at people, look right now we’re talking to all the people, all the people have their phones up, and I love that you’re recording it. But you know, the moment you have your phone up, you get to lose this presence of really being in the moment that second. We’re in a world where people are so connected digitally, we’ve never been more disconnected. And because we’ve never been more disconnected, this is a great time right now to build businesses that bring people together. And where else but to start it in residential real estate and in multifamily? And then from multifamily, what an obvious place to go into condos, because if you like community in your apartment building, then of course you’re going to like it in the place you own and live.
Amir Korangy: It’s just, we were getting into that, and I think it’s important that you just explain very simple terms. No jargon, just straight, simple terms for the audience exactly what Flow House is and how it’s different from other developments that are going on.
Adam Neumann: Okay, so we’re going to say, so the question was exactly what Flow House is. We’re going to say a word about Flow and go into Flow House. Flow, as I said, it was a simple idea. Can we take buildings and by delivering community and a better experience, increase the value of the building.
And the way we measure the value of the building is with NOI. Can our net operating income in the building grow based on these two things? And we started by buying, actually two buildings, one in Miami and one in Fort Lauderdale, and the reason we had to buy to start Flow is because we had to be vertically integrated. Because to deliver on the on the vision of Flow, you had to be the property manager, which we started one, you had to be the brand, which we launched one, and you had to be the technology, not just on the front end, the app that all the residents are using, but also the architecture on the back end that allows all these ideas to become a reality.
In April, we actually launched officially our brand, and the amount of inbound that we got was unbelievable. And part of that inbound was, in a lot of the buildings, a lot of residential buildings, over 50 percent of inquiries come from brokers. In Flow today, in Miami, and Flow Fort Lauderdale, 92 percent of all the residents are coming directly to our website, if you didn’t see it, it’s at flow.life, directly to our website, booking a tour or even booking the whole, booking the apartment online.
Once we did that and we got such good feedback on it, there was a natural next step to say, well, could this work for condos? We were, at the time, also developing a building we built right here in Miami World, where they had one building that we bought that was 44 stories, 440 apartments. We’re developing a building with 460 apartments. And the discussion was, could we take this building, and instead of opening it as a rental, open it as a condo? And then we decided, not too long ago, of course we can. And what are the important things for that condo, and it’s all the things we spoke about, including wellness. Including a way of being. Because again, we live in a world where people are so disconnected. And it’s not jargon. They want to feel it. And if you’re one of the people who say, well, what’s the difference about it? You have to go there and feel it. And that’s what Flow House became.
The other thing that’s really different about Flow House, we don’t just build communities with our residents, we’re building communities with the agents. So we started to say, what does it take to sell a condo in Miami? And we’re going to talk a little bit about Miami also, because I think Miami is in the center of the world right now. But we said, what does it take to build a condo in Miami? And what it takes to sell a condo, the brokers, usually, they had their Dropbox, they had their story, they had their movie. And we said, why don’t we build a tool, a broker tool, that will make it very easy for brokers to transact and make them feel like all the marketing materials, all the videos, all the websites, everything we built is for them.
So if you now, this is an open invitation for everybody. We have over 500 people right now using our broker portal and our agent tool, and we only started it three weeks ago. If you go, and I recommend to do it after, but you can do it now if you need to. If you go to flowhouse.life and go to Agent Portal and sign up, we’re going to make sure at the end of the day, because these are all your guests, we’re going to make sure to approve every single person that submits today as a broker here. And by the way, Miami pays really well to brokers who bring apartments, I think it’s as high as 6 percent per apartment, in the broker fee. If you go in, our entire website and our entire content will become your content. And when it becomes your content, it will have your name, your website, your email, your phone. And if anybody looks at that website, they’re only talking to you. They press the text message. It’s only texting to you. So we’re not just building communities for the residents, we’re building a community for the brokers. And by doing all of that together, you’re delivering something very unique in Flow House.
Amir Korangy: I visit a lot of new developments, I go to a lot of buildings. And, you know, you have the yoga studios, you have the gyms, you have the public spaces people can use. I really need to understand how is Flow exactly different from that? Because you’re saying that there’s going to be a sense of community and, you know, we looked at a few websites from new developments, and the term wellness and community came up pretty much in all of those websites. And you’re saying that this is actually a unique thing. So what is that unique thing that separates it from all these individuals?
Adam Neumann: So first of all, we can talk about it as much as we want, it’s a feeling. So I encourage everybody to go and see it and feel it. This is not something we’re going to do. This is something we have been doing for the past two years. So if you go in Fort Lauderdale, you go in Flow Miami, you go to Riyadh, Saudi Arabia, you will feel the exact same thing that we’re talking about. That’s number one.
Number two, it’s from the first moment we started designing it. We designed our own furniture. We bring everything together. The wellness classes are hosted by residents. So over 80 percent of all the wellness classes that happen every week in our building, and there are at least six classes a week, sometimes as much as 10, are done by the residents. So it’s on the app, the resident puts their name, we host the class, the residents themselves invite everybody to go and everybody is doing the classes. On the weekends we have as many as 60 to 100 people all going to the pool, doing wellness classes together as a group. When they’re done, they will go and have their juices. They go to all the different activities together. It’s already happening. By leveraging our community managers, technology and the design in the building, we’re able to take this feeling. But as you said before, we have a lot of experience. There’s a lot of things that, about the past that we can still talk about, but the fact that we built community globally is unquestionable. We’re doing the exact same thing, but in a much, in an elevated way, and we’re allowing the residents to be the ones doing the events, to be the ones throwing the classes, and we’re just empowering them.
Amir Korangy: And, you know, one of the things I loved about WeWork was that you go into these offices and you have like, all this food and drinks and beer and everything was available for everybody. Is that the same concept?
Adam Neumann: So, I think maybe in the television show it looked like that. I think the only thing we gave was tea, kombucha and there was beer. I don’t think food was part of it. But the answer is, everything in Flow is a lesson and a next level of what we did in the past. And the point is to do things for people that really mean something. So if it is, so let’s say you throw an event, if you invited enough people, yes, we’ll give you a budget to order some food. And we’ll have vendors that are approved in advance that you can do it with. And if we’re doing a wellness class, like with ice baths and cold plunges and all different things we’re doing, then there’s going to be someone selling the kombucha or giving it as a test. But it’s about the fact that when you go into that building, you actually make friends. It’s a real community. And how do we know that it’s working? People are staying longer in our buildings, as far as we can tell, in other buildings. The NOI is growing in the building substantially compared to the neighbors. The rents in Miami, that have actually been flat or going down for a lot, our rents keep going up. So all the different signs are showing that it’s working really well.
Amir Korangy: Do you have this sort of a “rent to own” thing going on?
Adam Neumann: No.
Amir Korangy: You don’t have anything?
Adam Neumann: No, no. Don’t have anything like that.
Amir Korangy: I thought there was something where like $50 of people’s rents goes towards –
Adam Neumann: So early on, we’ve been experimenting a lot of different ways to create a loyalty program, to do something that allows, if you’re doing all these different things, how can we show that we appreciate it? So we tested a lot of different things. But as of right now, we do a, there’s a little bit of points that you can get, like loyalty program, just like American Express has, but except for that, no.
Amir Korangy: And obviously you started Flow here in Miami. You moved to Miami, you know, right around 2019 or so.
Adam Neumann: Which you’ve reported on a lot.
Amir Korangy: Yes we did. And that’s how we became, that’s how we came to know each other. But so, you moved to Miami, you decided to start Flow here. You’re doing two buildings here, and now you’re doing 900 or something units in Riyadh in Saudi Arabia. Why skip from Miami and go all the way to Riyadh?
Adam Neumann: I think that’s an excellent question. You wouldn’t think that the next place after Miami. So imagine the board meeting, say, hey, guys, I found our next location. They’re like, oh, New York, L.A.? Try Riyadh. So first of all, a question. Have you ever been there?
Amir Korangy: I’ve never been there. But are you going there because that’s where the money is?
Adam Neumann: So, well, thank you for that question, but just question again for the crowd. If you’ve been to Riyadh, can you raise your hand? I just want to know what I’m, okay. We’re just starting. So I’m going to tell you guys a little bit about Riyadh, Saudi Arabia. The average, so 70 percent of the country is 35 years old or younger. It’s a very young country. And it has a leader and a vision that’s very, very clear. It’s called Vision 2030. And that vision has a lot to do with urbanization and with community and with the environment and a lot of different things that people maybe didn’t know about Saudi when they think about Saudi the first time.
Our investors, and we didn’t speak about, I’m very lucky to have a16z, which is a very big venture capital firm as my investors, they’re unbelievable partners. Today, the board meeting, I get to see both of them. And the reason they’re such great partners is because they don’t say at the board meeting what I want to hear, they say what I need to hear. And whenever they hear something that might not make sense, they fight, they put their foot down, they’re really good discussions.
And when we started talking about Riyadh they said, Adam, tell me, tell us about Riyadh. What can we do there? And really what’s happened is we actually started traveling the Middle East because we were talking to a lot of their investors who come from that region. And we were telling them what Flow is going to do in Miami. And every single person we met in MENA, which is the Middle East and North Africa, every single investor we met there was like, oh, forget about doing this in the U.S., you got to come do this in the Middle East. Specifically, you should start in Riyadh. And after so many people said it, we flew to the country. And we started exploring it. And the more people we met, the more excitement, we realized that this concept, as good as it is in the U.S., does not exist there at all. The product-market fit we thought was going to be phenomenal. And I don’t know if you know this, but over 180 HQs, global HQs, have moved to Riyadh in 2024.
Amir Korangy: I totally understand that part of it. It’s a very hot city. But speaking of your board meetings, I remember reading that, you know, at WeWork, when you look at the minutes of the board meetings, when you showed up there with an idea and unanimously they always agreed with you. And now you have a different setup. Now, Andreessen Horowitz is your partner. Ben –
Adam Neumann: Ben Horowitz and Marc Andreessen.
Amir Korangy: Yes. So these guys, as you said, that they challenge you constantly.
Adam Neumann: Constantly.
Amir Korangy: And they invested $350 million.
Adam Neumann: They did.
Amir Korangy: And you put in $300 million of your own money.
Adam Neumann: $350.
Amir Korangy: Well, you put, matched –
Adam Neumann: $350. $350.
Amir Korangy: Got it. And so now they challenge you constantly or –
Adam Neumann: So, as opposed to challenge, they are real partners. And what a real partner does is they tell you the truth. And that’s the key, has to be one of the big lessons, is you have to surround yourself with people who tell you the truth when you don’t want to hear it. The other nice thing about them, they’ve built many businesses. But just to finish up on Riyadh, because I think it is, it is worth saying. The country was so exciting, but when all these expats, these American companies, these European companies are coming to Saudi, they don’t know where to live. The moment they hear that Flow is there, it makes it very easy for them. So a great product-market fit. And we launched our first building in August and it’s been very exciting.
Amir Korangy: And when you were referring to the partners who tell you how they honestly feel, were you, are you referring to Masa?
Adam Neumann: We’re really, we’re really, you’re really –
Amir Korangy: I mean, I don’t know, I don’t know which partners I thought you were –
Adam Neumann: What I was saying, I was saying it to everybody because again, when I speak, I want to make sure that I’m speaking to the audience. I think we all in life get to have partnerships. Let’s start with my most important partnership, my wife. If you, most important, most simple. And for all the men in the room, in case you got confused about it, or no one told you, make her the queen and you will be the king. And the secret? It’s a fact. I just said it was a fact. And the secret of making her the queen? She’s royalty. Even when she’s wrong, she’s right. And that’s very, and by the way, they’re usually right. It just takes you a second to listen. It takes us a second to get it.
So when I talk about partnership, I talk about partnership in your personal life, I talk about partnership in business. It could be with your partners or investors. It could be with your partners who are working with you in the business. It could be with your partners who are on your PR team. Whatever it is, if you surround yourself by people who really want your best, they’re going to tell you the truth. And by the way, if you’re walking into a room and you can tell that you’re the smartest person there, leave and walk to a different room. Because that room is no good for you. So that’s what I meant.
Amir Korangy: I appreciate that. And, you know, building a national real estate brand is an incredibly difficult thing to do, right? So you see the biggest guys in the game. Related, Hines. You know, a lot of other guys, they really stick to their niche even when they do a national real estate brand. It’s not an easy thing to do. And out the gate, this is what you’re going with. Because even those guys started in their local markets because, you know, real estate is really about understanding your local market and then slowly expanding to other markets. But, you know, the whole concept here is that you’re going to be, I mean, not only are you going national, but you’re going international. I mean, is that something that, you know, is a concern? Because it’s not that, you’re not the first person to think about, you know, the idea of going, having a national brand.
Adam Neumann: So first of all, everything is a concern. And every moment when things don’t work, things do work, it’s all, it’s all a bigger picture. But let’s use the word brand. You said the word brand for a second. For me, a brand, you have to stop seven people on the street and if five of them know the name, it’s a brand. If something is a big financial institution, that doesn’t make them a brand. A brand means that you’re landing in Miami and you’re starting to search, I want to live in the Flow apartment. You’re buying a condo and you’re like, I heard about Flow House. I want to go see what Flow House is doing. So a brand is something that speaks to a consumer and brings it to them.
Of course, going international is very difficult. But, when you’re an entrepreneur, you sometimes need to follow the signs. You need to follow where things are really happening. The product-market fit, that’s very high, it’s very hard to find. And when you find one, then you really have to go after it. Saudi was just clearly, and the real estate, for those of you who know real estate in Saudi, the real estate is very interesting. Because the rents are actually high and the cost of construction is still quite low compared to the U.S. Doing business in anywhere international is difficult. Doing business in a different language is difficult. So there are a lot of difficulties that come with it. But real success, mostly in life, is not found in the places that are easy. It’s actually found where it’s hard. And because it’s hard, and because there was the opportunity to go after something real, then we felt that there was the right thing for us to do.
And since we launched Flow House, for example. So if we didn’t have a brand, would have launched Flow House, I don’t know if you know, right now Miami condo sales are not going that well. Meaning people are not selling that many. One of the ways we measure condo sales is velocity. Right now the average Miami is somewhere between five to, I think if you’re really lucky, 10 apartments a month. But if you’re launching something with a real story, and if people can really connect, and also value, it’s very important. Something else about Flow House, think of it as the Four Seasons for the young generation. Affordable luxury. It gives all these services, but it’s not that expensive. I’m not saying it’s cheap, but it’s not that expensive. And you can see on the website, you can see the price points. When you can bring real value and a great experience and a brand and bring it all together, then you can really go to the next level. And one of the reasons we’ve actually been taking our time, because yes, we moved to Saudi, but we’re still growing one building at a time. We want to make sure that we’re delivering the promise and that the experience is really there. And once we feel it’s in the right place, we’re ready to go to the next level.
Amir Korangy: And what is the next market that you’re going into?
Adam Neumann: So that is a great question. Right now we’re very focused on South Florida and very focused on Riyadh. In Saudi, there are other cities that are interesting. We get offers all the time from a lot of different places. But for now, until the end of the year, we’re just focused on keeping our head down and delivering our product. And next year we’re going to look up again. We’re going to see what opportunity we think is right.
Amir Korangy: If you had to pick a market today, that you’ve sold out all of the Flow and everything’s rented, if you had to pick another market today, where would that be?
Adam Neumann: So I’m sorry to not answer perfectly what you’re asking, but I will double down right now on Miami. I didn’t say anything about Miami, but 10 years ago, if you spoke about Miami, people didn’t understand it as much, you’re choosing to do your revenge right here. When I go globally today, anywhere, and I say I live in Miami, everybody wants to talk about it. So Miami right now has really become the center here. It’s attracting a lot of energy. There’s a lot of exciting things happening. I know you guys are going to talk a lot about it in panels that are going to come. You’re going to talk about absorption, you’re going to talk about development. I think they’re all very, very interesting topics.
Right now for us, doubling down here is very interesting. But other markets, just think South Florida for a second. South Florida has West Palm Beach. And then if you think Saudi there’s a city called Jeddah in Saudi next to that’s, not next to Riyadh, but another city that’s beautiful. And again, this is again, I think true for everyone. If you know what you’re looking for, you’re open for feedback. You keep practicing every single time you learn, sometimes you make mistakes, sometimes you go right, you surround yourself by the right people. You keep your head down and you go one foot after the other, the whole world is of value.
Amir Korangy: And you know, there was one more question. There was a showing –
Adam Neumann: Amir that he’s clocking out.
Amir Korangy: He has a board meeting to go to. But I’ll have one more question. There’s a–
Adam Neumann: I would love one more question.
Amir Korangy: There was a, you know, the people who worked for you, they were sort of, people said that they were really high on the Kool-Aid. Because they were super loyal to you, and they followed you everywhere and they were, they really believed in, you know, in the idea of WeWork and now Flow. So, you mentioned, there’s a lot of people that were in WeWork also came to work for you now at Flow. Is there like an evolution for you as a CEO? Like how have you evolved since that time and what have you learned, you know?
Adam Neumann: So, I hope that for all of us there’s always an evolution. I think if you stop going, then you’re going the other direction. You know, we talk a lot about spiritual growth and in spiritual growth either you’re going up or are you going down. There’s no way, there’s no middle.
Amir Korangy: And can you be more specific about like –
Adam Neumann: I will, I will. About anything in life, either you’re going up or you’re going down. And, I hope that I am working on going up. And I hope that I’m a different CEO today than I was before. I think one of the things we said is, yes, some of the amazing people that were with us in the past are with us this time again. But we’re also very lucky we get to invite new people to be with us. People that we’ve never met before. And every time we meet those people, we tell them that the environment you’re going to work in is going to be a very difficult environment. And we’re going to expect a lot. And we’re always going to be punching above our weight. But, we’re also going to be listening.
And we’re also, we love, the best ideas come from bottom up, not necessarily from top down. We love when an idea is not, is not our idea and didn’t come from some executive meeting, but actually someone had an idea. We like to do our off site hackathons. And the reason we like to do these hackathons, we let all the team members come up with new ideas. This broker tool that we just created, our agent tool, we created because of a hackathon. Because someone said, wouldn’t it be amazing if we created a tool dedicated for the brokers that makes them feel like we’re supporting them. Not like we’re trying to get into their business. Like we’re doing everything we can to make them more money. Because if we do that, and we deliver for them, and then they’re going to come back again and again.
So yes, I think I’ve learned many different things, but I think the proof is going to be in the action. Words are cheap. I say this a lot to people all the time. If someone did something and they came and apologized to you, it’s nice that they apologized. But did they change? Did they grow? And I think for myself, and I hope for everybody in this room, if we’re able to look at ourselves honestly and say, you know what, that was me from yesterday. And this thing I like about myself and this thing I don’t. And me from today gets to do a choice and gets to be the next version of myself. If you do that every day, I promise you that in a month from now, you’re going to be a new person. In a year from now, you’re going to be sitting right here with Amir talking about your new next development. I wish for everybody in this crowd and for everybody here to have an amazing conference. Thank you so much for having me.
Amir Korangy: Thank you, Adam.