The Resilience of Reputation: Lessons from WeWork’s Adam Neumann

Breaking a unicorn startup.

When WeWork was launched everyone believed it was the future of working. Every founder, small agency owner, and freelancer in 2010 was signing up. Falling in love with the flexibility, ascetic design, and ability to network with other entrepreneurs it drew everyone in.

WeWork didn't only attract members, it became the hottest startup and every VC wanted to be apart of it. Raising a total of $22.2B over their 23 rounds of funding from funds like Benchmark, a16z, and SoftBank.

Adam Neumann, the founder, wasn't just building a business. He was building a cultural movement that some people believed would take over the world.

At the height of WeWorks success, Adam was praised for his innovative approach to business and his ability to transform the way people worked. He was a charismatic leader who inspired his employees to work hard and believe in the WeWork mission. There was no other founder that could even come close to his ability to attract attention, employees, or investors at this time.

As I'm sure many people know (from the different documentaries that have been published about WeWorks), this success didn't last. Adam eventually destroyed the company he build taking its valuation from $47 billion to $8 billion before being removed from the business.

Adam became involved in many scandals, had a vision that made him appear delusional to some, and at one point was losing $219,000 every hour for a year straight...

Despite all this, Adam was still able to raise $350 million for the new venture, Flow.

Adam understood one thing that allowed him to raise money after publicly destroying his last startup...

Reputation will open doors you otherwise couldn't.

Reputation is not just a byproduct of the work that's been done. It's the result of what others think of us

Someone might believe you're good at coding even if you've never written a line of code. If you speak about software with ample knowledge and you seem well-connected with other people in tech, it would be natural for someone to make the assumption — even without direct proof.

"It takes 20 years to build a reputation and five minutes to ruin it.”

- Warren Buffett

There's a common perception around reputation that when it is tarnished, that's the end. To some extent this is true, reputation is the earned consequences of the actions we take.

Your actions + what others say about you = your reputation

With Adam Neumann's less-than-stellar track record and a slew of negative press about him as a CEO, a16z still wrote him the largest check they have ever given to date. How could this be?

A carefully cultivated reputation is a ripple effect that never fluctuates.

Most of the time, people leave their reputation to be assigned by others. They fail to cultivate a reputation for one outstanding quality -- a professional point of differentiation. Adam didn't leave the interpretation up to others.

During the height of WeWork's success he became known for being an innovator in real estate, making it known to as many people as possible. Once he had a solid base of respect in the industry, drawing any attention to himself enhanced his reputation.

It's important to be associated with people who have strong reputations. When reputation is put into question, the people associated with it bolster the reputation back up (in Adam's case he was talked about with the largest names in VC).

Today, there's a big emphasis on building a positive online brand. The reality is that the offline world matters more.

First impressions are truly overlooked and undervalued. They set all judgments for the reputation that's carried into the future. It's the start of the ripple that takes place.

When talking about the investment they made in Adam, a General Partner at a16z, Chris Dixon said, "I know there’s a lot of stuff written about [Neumann] and things we did, but we do our own research. We just don’t rely on books and movies for our diligence. We do our own research, and we just came to a different conclusion on a lot of what happened".

The social currency never fluctuates with others if the right actions are taken offline like:

  • Being consistent
  • Act with integrity
  • Make other people look good
  • Going a step beyond what is expected
  • Going out of your way to help others reach their goals

Goodwill will always be remembered and compounded to increase your presence and exaggerate your strengths.

Building a reputation only happens with intention.

Start with a strong foundation.

Understand what your core competencies and interest are, even if there's not much experience or notoriety to speak of.

Pick the one quality you want to be known for.

Make that known. Give people a place to learn about you where you have incorporated that quality and persuaded their perspective.

This could be:

  • Business cards
  • Email signatures
  • A personal website
  • Social media profiles

Set an anchoring point for the reputation they will attach to you by giving them the exact words to describe ho you are at your core.

Invest in your knowledge heavily.

The more you invest in your knowledge the greater authority you establish over time. Knowledge compounds just like everything else eventually turning into wisdom.

People don't really need direct proof of your competencies when you can speak with expertise and provide new insights.

Get accolades.

The only way to earn a reputation in any industry is to get recognition from other people in that industry (or people loosely connected to it).

You can do this through:

  • Network
  • Guest post
  • Certifications
  • Collaborate with others
  • Join communities specific to your niche

Your reputation will always proceed you so have it be designed the way you want it to be.

FOOTNOTES

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