The Secret Reason Andreessen Horowitz Invested in Adam Neumann’s Latest Venture, Flow

David Friedlander
4 min readAug 22, 2022

For the past eleven-plus years, I have written, researched, built, and promoted novel types of real estate that work within the world’s current and likely economic, social, and environmental realities. With this background in mind, it is unsurprising a few folks solicited my thoughts on WeWork co-founder Adam Neumann’s latest venture, Flow, which last week secured a $350M investment from Andreesson Horowitz (a16z) — their single largest investment to date. I thought I’d write a quick post to share my thoughts.

As if planned, the news was delivered a day after I published a piece about the death of real estate innovation, killed by rampant lies and corruption, writ large in the broken promises and wasted funds from Softbank and Y-Cominator backed startups. Neumann was a principal player in this story, baldly pilfering Softbank’s limitless flow of ill-gotten cash based on absurd growth projections.

In my post, I explained how money keeps being channeled to projects that, to lay and experts alike, appear to lack innovation, coherent business modes, or durable markets. I used Y-Cominator’s recent $9.5M investment in glamp-tent startup Jupe as a prime example, writing:

YC Secret Sauce + Absurd Product Startup + Inexperienced Team + Big Venture Round = Inevitable Market Disruption

I was reminded of this formula reading a16z’s blog post about Flow and their vague reasons for investing — one made in spite of (or perhaps because of) — Neumann’s scamming and failures with WeWork. The post revealed nothing, other than stating a bunch of multifamily residential market problems and that Flow was doing something about them. Similar to the above formula, Flow’s something was never revealed. The investment, not the business, was all the validation Flow needed to get its $1B valuation. I wrote this to one colleague:

It reminds me a lot of [Softbank-backed construction startup] Katerra, who for months had only a holding page for their website, saying they were a ‘technology company’ from SV. The fewer details they give, the more it’s supposed to allow other investors’ imaginations to fire, and since Andreesson is investing, they think he must know something, even when he’s not a housing or real estate guy [VC].

In other words, Neumann and Andreesson are so much smarter than you and me, and their ideas are so groundbreaking, investors and the public don’t need specifics —we probably wouldn’t understand it, anyway.

Paraphrasing comments from a former colleague about a failed startup we worked at, “if you’re offered a ticket on a rocketship, don’t ask about which seat you’re getting.” This axiom may have worked in the halcyon days of tech investing, but far less so today, when so many investor and employee seats are in the fuel tank —seats that are jettisoned when founders and first investors get to the economic orbit they set out for. Neumann made billions while thousands of WeWork employees were fired and late stage investors lost billions.

What differentiates Flow from WeWork…or is it We Cos? The name, year, investor, and asset class. Everything else is the same.

I emailed the same colleague:

Markets are swimming in inventory so he’ll [Neumann] probably gobble them up (I read somewhere he’s already bought 3K units) at a ‘discount’, giving them a theoretical use case — sorta like what WeWork did for excess office inventory…There’s some chatter about people being able to “flow” within an inventory. Process and capital efficiencies aren’t what’s wrong with residential — quite the contrary. The efficiency of process has empowered investors to make real estate into ATMs.

In other words, the problems affecting multifamily rentals — affordability, the inability to build equity like homeowners — won’t be fixed by a startup because the problem is regulation and market based.

If this is the type of success VCs like a16z are after, I would hate to see a failure.

One commenter nailed a16z’s investment motivation, writing:

Despite the public criticism, early WeWork investors still benefited from backing the company, Rare Breed Ventures founder McKeever Conwell, whose firm backs seed and pre-seed companies, told TechCrunch…‘At the end of the day, Adam is a white guy who started a company and got a multibillion-dollar valuation. Now, was there some trickery in there? Sure. Some things he did wrong? Sure. But I think what people forget is, if you were an early investor, which we weren’t, you still got paid,’ Conwell said.

In other words, VCs are not so interested in building an enduring business as they are creating sufficient hype to draw in secondary investors who can provide them lucrative exits. The multibillion dollar valuation Conwell mentions was BS, and WeWork’s stock is trading at half the value of their hail Mary SPAC’d IPO price. There is no “We” in WeWork’s success, since it was limited to such a small pool. Flow will be no different. Mark my words. I’m usually right about this stuff.



David Friedlander

Pondering the future, today. Housing, health, and lots of other stuff.