Elizabeth Holmes
(Born 1984)
Co-founder of Theranos
Adam Neumann
(Born 1979)
Co-founder of WeWork
Comparing the case of Elizabeth Holmes and Theranos with the case of Adam Neumann and WeWork
It makes sense to compare the case of Elizabeth Holmes and Theranos with the case of Adam Neumann and WeWork.
While there is one major difference between the two cases, there are several similarities.
THE SIMILARITIES
(1) The age of the founder
Elizabeth Holmes was born in 1984. She was very young when she founded the medical company Theranos in 2003.
Adam Neumann was born in 1979. He was still a young man when he founded the real estate company WeWork in 2010.
(2) The co-founders
Elizabeth Holmes founded Theranos with her friend and partner Ramesh “Sunny” Balwani.
Adam Neumann founded WeWork with a guy he knew from the past Miguel McKelvey.
(3) The personalities
Elizabeth Holmes had an idea for a medical product. She was passionate about this idea. She had a vision and she wanted to turn it into reality.
Adam Neumann had an idea for living and working. He was passionate about this idea. He had a vision and he wanted to turn it into reality.
(4) Fast expansion
Theranos began as a small company with almost no money and almost no staff, but after a while it began to expand.
Theranos expanded extremely fast.
Surprisingly fast.
WeWork began as a small company with almost no money and almost no staff, but after a while it began to expand.
WeWork expanded extremely fast.
Surprisingly fast.
(5) Getting investors
Elizabeth Holmes was an amazing salesperson.
She was able to persuade potential investors to invest millions of dollars in Theranos.
Adam Neumann was an amazing salesperson.
He was able to convince potential investors to invest millions of dollars in WeWork.
(6) The timeline
Both companies operated in the beginning of the 21st century:
** Theranos was founded in 2003. The company collapsed in 2018. After the collapse, it was dissolved.
** WeWork was founded in 2010. The company collapsed
in 2019. After the collapse, it continued to operate, but now on a much smaller
scale. In November 2023, WeWork filed for bankruptcy.
(7) From success to failure
While things were going well, both companies were regarded as models for the future.
The estimated value of Theranos and WeWork was counted in billions of dollars (not in millions of dollars).
But when they collapsed, almost nothing was left. It seems the value of both companies had been highly overrated.
The real value of these companies was only a fraction of the estimated value during the golden years.
(8) How was the truth revealed?
Theranos collapsed in 2018. How and why did it come to an end?
Theranos had no real substance, but for several years Elizabeth Holmes and Sunny Balwani had managed to hide this fact from the public.
How and when was the truth about Theranos exposed?
In 2015, the Wall Street Journal published an article about Theranos written by John Carreyrou.
It was the first in a series of articles about Theranos. This was the beginning of the end.
In September 2019, the Wall Street Journal published an article about WeWork written by Eliot Brown.
It was a shock for the company.
The board held a meeting.
When the meeting was over, the members of the board invited Adam Neumann to join them. He did not know what was going to happen.
The board had a brief message:
** He was fired
** He was out
During the following six weeks the company collapsed, but it was not dissolved.
THE DIFFERENCE
When Theranos collapsed in 2018, this was not the end of the story for the co-founders Elizabeth Holmes and Sunny Balwani.
They were both accused of fraud. They were tried in a court of law where they were found guilty.
They were both sentenced to more than ten years in prison.
In 2023, they began serving their sentences.
When WeWork collapsed in 2019, Adam Neumann was fired. He was no longer the CEO of a multi-billion company.
Looking back at the case, we can see that he was actually lucky to be forced out when he was.
Since he was the CEO, the board had to pay him when they fired him. He had a good contract.
When he left the company, he was able to walk away with a large amount of money.
Exactly how much?
Different estimates of this amount have been
published by different sources.
According to many observers, he walked away with assets of 1.7 billion dollars (not 1.7 million dollars).
After the crash, Adam Neumann was investigated, but he was not charged with a crime.
There was no trial for him.
There was no prison time for him.
Today he is a free man and he cannot be described as a poor man.
REFERENCES
# 1. About Theranos
Bad Blood:
Lies and Secrets in a Silicon Valley Startup
By John Carreyrou
(2018)
The Inventor:
Out for Blood in Silicon Valley
A documentary film which premiered in 2019
The Dropout
A historical drama which premiered in 2022
A miniseries with eight episodes
# 2. About WeWork
Billion Dollar Loser:
The Epic Rise and Fall of WeWork
By Reeves Wiedemann
(2020) (2021)
The Cult of We:
WeWork, Adam Neumann,
and the Great Startup Delusion
By Eliot Brown and Maureen Farrell
(2021) (2022)
WeWork:
Or the Making and Breaking of
a $47 Billion Unicorn
A documentary film which premiered in 2021
We Crashed:
A Love Story Worth $47 Billion
A historical drama which premiered in 2022
A miniseries with eight episodes
*****
Bad Blood:
Lies and Secrets in a
Silicon Valley Startup
by John Carreyrou
(2018)
*****
The Cult of We:
WeWork, Adam Neumann,
and the Great Startup Delusion
by Eliot Brown and Maureen Farrell
(Hardcover 2021)
(Paperback 2022)
*****
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