Feb 7, 2023
Adam Neumann Says His Apartments Will Make Tenants Want to Plunge Their Own Toilets
(Bloomberg) -- In Adam Neumann’s residential real estate company Flow, he’s hoping that if his residents “feel” like owners — regardless of their actual equity ownership — they will plunge their own toilets instead of calling the superintendent.
That was one of the takeaways from a talk Neumann gave at a conference organized by Flow’s major venture capital backer, Andreessen Horowitz. The investor released new footage this week from the closed-door event, which took place in November, the first time Neumann spoke at length about his business.
Neumann had remained tight-lipped about what Flow actually does ever since Andreessen Horowitz invested $350 million in August. Flow will own and operate multifamily residential apartment buildings and has plans to debut in cities such as Atlanta; Fort Lauderdale, Florida; Miami; and Nashville, Tennessee. Even in the new video, which runs for more than 50 minutes, Neumann is coy about core aspects of the business, such as how Flow will simulate ownership for tenants while maintaining control of the buildings.
The idea of monetizing “community” was a major selling point of Neumann’s last business, WeWork. Although he was ousted as chief executive officer of WeWork in 2019, he hasn’t given up on the notion. Flow’s goal, he explained, is “to find a way to share with the resident a portion of the value that they create.” That value “is going to make them feel ownership. And it’s not just ownership — ‘I feel like I’m part of something’ — it’s ‘I actually own part of something.’”
Neumann quickly added that “the word ownership is a very complicated word.” But, he continued, “if there’s perceived value and if that value appreciates over time, then I feel like I’m part of a community.”
An important element of the business proposition is that renters who stay longer are more profitable, Neumann said. His theory is that people who feel a sense of ownership will stick around.
The plunger factor would be an added benefit for Flow. “If you’re in an apartment building and you’re a renter and your toilet gets clogged, you call the super,” he said. “If you’re in your own apartment, and you bought it and you own it and your toilet gets clogged, you take the plunger.” That’s the difference, he said, “when feeling like you own something.”
Broadly speaking, Flow will have four pillars, he explained: a branded property management company that runs its buildings, a real estate fund that owns the buildings, a financial services company and a “mechanism that’s going to take some of the value and share it with the value creators.”
The project, and the language that Neumann uses to talk about it, reflects some of his personal interests. Flow, he said, will offer an “elevated experience” to renters; under his watch, WeWork famously made its mission statement “to elevate the world’s consciousness.” When discussing Flow’s financial services arm, he said, “We think of it as financial wellness” — WeWork’s wellness offerings went as far as to include a WeWork gym and wellness center.
Since leaving WeWork, Neumann has gotten into crypto, and Flow’s financial services arm will include a digital wallet for handling cryptocurrencies, Bloomberg reported last year. During the event, he didn’t go into details about crypto or how it might play a role in Flow’s financial-wellness product or its twist on property ownership.
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