Since WeWork founder Adam Neumann announced that he was launching a real estate company called Flow last year, people have wondered what exactly the new venture was meant to do.
On Tuesday, Andreessen Horowitz, which is one of Neumann's backers, released a video from a November conference panel where the WeWork founder shared a few details about Flow, which he said would create “an elevated experience for the resident.”
Neumann explained that his new startup would make renters “feel ownership” over their apartments, though he admitted that "the word ownership is a very complicated word."
The founder turned to a toilet metaphor to explain one aspect of his idea of ownership. “If you’re in an apartment building, and you’re a renter, and your toilet gets clogged, you call the super,” he said. In contrast, “if you’re in your own apartment, and you bought it and you own it and your toilet gets clogged, you take the plunger.” For Neumann, fixing up your own apartment means shifting from “being transactional to actually being part of a community" and "feeling like you own something."
Neumann said that Flow wanted to create equity for renters, and “find a way to share, with the resident, a portion of the value that they create.” That mechanism, which Neumann didn’t describe in detail, would be one of Flow’s four pillars, alongside a property management company, a real estate fund, and an arm that provides financial services.
Neumann was joined on the panel by Andreessen Horowitz co-founder Marc Andreessen. In a blog post last August, Andreessen wrote that the U.S. was in a housing crisis, between potential owners squeezed by high housing prices and renters hurt by the “soulless experience” of renting.
“Virtually no aspect of the modern housing market is ready for these changes,” Andreessen wrote, describing Flow as a “direct strike on precisely this problem.” The post does not go into detail about Flow’s potential business model.
Neumann echoed Andreessen's comments in November, complaining that many apartment buildings do not foster a sense of community, despite offering many communal amenities.
"Even when people live in the same building, they don't talk to each other in the elevator," he said. "When I used to say hello to people in the elevator, people thought I was weird, and I thought it was weird that you wouldn't say hello," he continued. "Wouldn't you want to know who's living there?"
Andreessen Horowitz reportedly invested $350 million in Flow last year, which valued the startup at $1 billion.
According to the company's website, Flow is planned to launch in 2023.
Neumann’s ventures often use lofty language to describe their goals. WeWork, which leased coworking spaces to businesses, said its mission was to “elevate the world’s consciousness” in its prospectus filing in 2019.
WeWork’s IPO collapsed later that year, after investors balked at the company’s governance structure and high valuation. The company ejected Neumann as CEO soon after.
WeWork's valuation, which stood at $47 billion before its postponed IPO, fell to $9 billion when it went public via a SPAC in 2021. The company's market capitalization is $1.4 billion today.
