US housing is in trouble. And charismatic founder Adam Neumann, known for successfully and unsuccessfully rebranding his space as his WeWork shared office, thinks he has a solution. It’s Flow. This residential real estate startup hopes to address a range of issues, including housing availability, lack of social interaction in remote areas, and the inability of renters to acquire shares.
The housing shortage is certainly serious. The US is short of about 4 million homes as of late 2020, and the problem is widespread across the country. The inability to buy a home has a huge impact on everything from Americans’ quality of life to their ability to generate wealth. The problem is big enough that venture capital firm Andreessen Horowitz (a16z) has written the biggest check ever ($350 million, with the company valued at $1 billion), and Flow is helping We invest in Flow in hopes of disrupting residential real estate.
In a blog post, a16z co-founder Marc Andreessen said Neumann returned to “the theme of transforming physical spaces and connecting people by building the communities where they spend most of their time: their homes.” It is written that To solve the housing problem, Andreessen said, “we need to combine community-driven, experience-centric services with the latest technology in unprecedented ways to create a system where renters benefit from owners. ‘ added.
It’s not exactly clear what that means. What we do know is that Flow plans to run his 3,000-plus apartment complex recently acquired by Neumann, and the company could add community features and offer renters the chance to take a stake. is high.
The big open question here is whether this failed founder and tech veneer will actually do anything to help the US housing crisis. there is a shortage of housing. The problem there stems from exclusive zoning, but like the thousands of apartments that Neumann and his friends have devoured, private his equity has gone crazy trying to buy rental homes. but the situation has not improved.
You can build your wealth by being able to acquire a piece of equity in an apartment, but renting a flow is probably for those who are already relatively wealthy. For example, the Nashville property that Neumann purchased includes a saltwater pool, a valet pick-up, and a dog park. On top of that, add all the premium his services and community-building aspects that Neumann properties seem to offer, and it’s even more expensive.
The project also seems to involve blockchain. There are some clues to this, including several trademark filings uncovered by The Wall Street Journal. Flow-related entity applications include real estate development, management of communal living spaces, and cryptocurrency trading services. We also know that both Neumann and Andreessen recently teamed up on the similarly named project Flowcarbon, which aims to apply blockchain technology to the market for carbon credits. What’s more, before a startup can do anything, it likely needs to use some sort of nascent technology to justify its multi-billion dollar valuation.
When WeWork filed to go public, many pointed out that it was trying to convince people that the real estate company was a technology company. This time, you can almost see the wheels spinning in Neumann’s head. What’s more cutting-edge than Web3? The rebranding of cryptocurrencies and blockchain will change the internet as we know it, wresting control of the web from big tech companies like Facebook and Google and giving it away. It is said that it may be returned to the creator.
Sure, it sounds great. But what does that have to do with imparting equity to real estate, communities and tenants?
Arpit Gupta, a real estate expert and professor of finance at NYU’s business school, speculates that Flow may be trying to combine a number of existing ones and sell them into one. increase. They include timeshares (flexibility!), cooperatives (equity!), layaway loans (access and equity!), and luxury buildings in trendy areas (wealthy millennials). Presumably, Flow wants to provide short-term apartments with loans provided by the company.
“It’s kind of a rent-to-equity system combined with WeLive 2.0,” imagines Gupta. Oh, they will probably launch a token for finance and fun that will allow more people to take ownership of the business and generate a lot of buzz.
Flow isn’t the only company looking to apply technology to real estate. Venture capital-funded tech startups are doing everything from investing in real estate to raising money for renters to become owners. Gupta said his Web3 real estate firm in particular tends to put property rights on the blockchain and tokenize building shares.
We also don’t yet know the full extent of Neumann’s latest plans. In addition to Flow and Flowcarbon, a search for related trademark applications reveals Flow Life (investment and cryptocurrency trading services), Workflow (workspace design), Flow Village (online professional networking), and Kibbutz (educational services and social networking platform). ) is found. Of course, filing a trademark application does not mean that you will actually do anything.
But as the fortunes of WeWork’s former umbrella organization, We Company, show, Neumann’s ambitions don’t quite paint the picture of what’s possible. In addition to running his growing portfolio of coworking spaces, Wee’s company has also branched out into seemingly unrelated businesses, including schools and the engineering firm that manufactures Wave his pools. Neumann is a spendthrift and is well known for his poor money management.
Nevertheless, Neumann’s reputation and ambitions have yet to curb his fundraising abilities.
“There’s always money in Silicon Valley for repeat founders,” said Elliot Brown, a Wall Street Journal reporter and WeWork author. our cult, told Recode. “Failure doesn’t seem to stop people.”
Especially so here. Andreessen is partly responsible for the Founder’s Cult, a term that refers to the mythical status given to founders who are thought to have done nothing wrong. Now his VC is funding Neumann’s return to glory.
“One of the ironies is that a big driving force behind WeWork’s rise and fall was its founder fetishism,” said Brown. “Adam became something of a paragon of a mad founder. It was the mysterious creation that Andreessen described of the founder.”
But for Andreessen, Neumann’s experience and failures are virtues.
In a recent blog post, Andreessen said, “We understand how difficult it is to build something like this, and it’s great to see repeat founders build on past successes and grow from lessons learned.” I love you,” he wrote. “There are many successes and lessons for Adam.”
Presumably this means there is no wavepool in the flow.
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