Adam Neumann’s Flow: Stupid, Evil or Both?

I am a 100% free market capitalist. In fact, I’m an AnCap (anarcho-capitalist) with strong Austrian economics leanings. So it is rare that I run across a business model that I detest. Yet, Adam Neumann’s new company, Flow, might have achieved that feat.

From The Real Deal’s article Neumann reveals his vision for Flow renters to “feel ownership”:

“If we are able to take this value-creating mechanisms and share with the residents a portion of the value, it’s going to make them feel ownership,” Neumann said. “And it’s not just ownership [like], ‘I feel like I am part of something.’ It’s, ‘I actually own part of something.’”

Only renters will not actually accrue equity in the units, according to sources familiar with the venture, nor will they have the opportunity to buy them — they will remain tenants.

I can’t quite decide whether this is merely stupid, actively evil, or both. GaaS (Gaslighting as a Service) is honestly something new in the annals of business, and yet, here we are.

21st Century Feudalism

Maybe I am so incensed because of a video I saw recently from Breaking Points titled “Wall Street is DESTROYING The American Dream“. Here it is:

Now, I happen to dislike the strong streak of left populism in James Li’s video… and he does try so very hard to villainize institutional landlords as if he’s Elizabeth Warren… but it’s hard to deny a lot of the facts.

Banks are withdrawing from the mortgage business in order to get into the landlord business, whether through purchasing entry level homes or through Build To Rent communities. The corporate press is dutifully spouting off a narrative that renting is better than owning. Yet, their actions belie their words.

It’s hard to escape the feeling that we have a group of people who think that the lower and middle income people don’t know any better, and should just be happy tenants being taken care of by their “betters” who have both the money and the smarts to actually own real property.

Li calls them “the Ruling Class.” Well, if the shoe fits….

Flow and the Gaslighting of the Elites

Whatever else you might think of Adam Neumann, it isn’t crazy to call him part of the Ruling Class. He’s a very wealthy man who managed to get a16z, a premier venture capital fund, to give him $350 million for his “housing” startup, Flow. He did this in what is arguably the worst fundraising environment for proptech startups in history. Part of the reason, it turns out, is that a16z essentially bought Neumann’s rental holdings: over 3,000 apartment units in Miami, Fort Lauderdale, Atlanta and Nashville.

All of us in the actual residential real estate industry wondered what Flow could be/do to warrant such an investment, especially given Neumann’s er… spotty past track record with WeWork. From the TechCrunch article above:

WeWork’s attempt at an IPO under Neumann (remember community-adjusted EBITDA?) was so calamitous that its Silicon Valley and Wall Street investors ended up paying Neumann an enormous exit package, worth ~$1 billion, just to leave the company.

Neumann managed to get that handsome payout despite that under his reign, the company tanked in value from ~$47 billion to ~$8 billion and gained a reputation for mismanagement and poor treatment of employees.

Throughout Neumann’s tenure, missteps abounded. He famously trademarked the “We” brand and sold it back to his own company for nearly $6 million, though he ended up returning the money to the company after this arrangement was revealed during the company’s IPO attempt and subsequently lambasted by investors and the public.

After Neumann burned investors’ cash on copious amounts of booze for the office, a school for his wife’s vanity project and a wave pool, it’s somewhat surprising to see Silicon Valley coming back for seconds. a16z’s deal with Flowcarbon may well have been negotiated before the rout in the equity markets but its deal with Flow announced today likely was not, meaning today’s deal is an even bigger sign of the investor’s confidence in Neumann’s leadership amid broadly difficult market conditions.

Well, now we know more thanks to Neumann speaking at an a16z conference from which The Real Deal article is reporting. The full video is online:

Start around the 41:00 mark. I would not have believed that anyone could make such statements, never mind a supposed genius who raised $350 million from one of the sharpest VC investment firms around.

Boil it down and it seems like Flow is one giant gaslighting operation. Tenants will be (somehow) made to “feel” like an owner. Flow wants to “elevate the rental experience” and then “find a way to share a portion of the value” with the tenants. Neumann says it’s the majority of young people.

He talks about how 70% of young people are going to be renters, and they’ll be there for 10 years, 20 years. But they can’t build any equity like the way that 60% of Americans who are (older) homeowners have.

So the four pillars of Flow are:

  1. Branded technology-first management company
  2. Real estate fund that owns the buildings
  3. Financial services company
  4. “Mechanism” that will take some of this value and share the value

Except as The Real Deal makes clear, whatever this “value” is, it isn’t actual equity. It isn’t even partial ownership. Neumann in the video above starts stammering about how “ownership” is a “complicated word” but says something to the effect of how his tenants will feel like they own something.

“If there’s perceived value, and that value appreciates over time, then I feel like I’m part of a community,” says Neumann. The example is that his tenants will plunger their own clogged toilets, instead of calling the building super, because they feel like they own the apartment. So these tenants will actually work for free for Flow.

Not clarified is why Pillar #2 exists, then. If it’s about perceived value, about feeling like you own something, then why isn’t Flow itself not actually an owner, but sharing in the value of the community, and feel like it owns the building even as it doesn’t? I would bet everything I own that the ownership documentation of Flow’s real estate fund that actually owns the buildings is ironclad and watertight. Neither a16z nor Adam Neumann would have any interest in feeling like they own a building while not actually owning it. a16z which made the investment presumably received real ownership in actual stock in Flow, rather than feeling like they own stock in Flow and are part of the Flow community.

Not clarified is that this “share the value” does not include actual equity in the apartments that these tenants are supposed to feel like they own so will save Neumann and his management company a ton of money by plunging their own toilets and fixing their own broken AC units.

This is pure gaslighting. It’s literally counting on the spiritual hunger that young people have in today’s America to belong to become serfs in Flow’s building. Yes, I think serf is the correct term since serfdom often carried with it an obligation to do free work for the manor lord, while feeling like they belong to some community under Baron Neumann’s benevolent rule.

I can’t decide if this is merely stupid or actually evil.


It’s stupid because no matter how dumb young people are, they’re not that dumb. Neumann would literally have to brainwash his tenants into thinking that they are part of some “community” and should perform corvee labor for the landlord because of… belonging?

The comments to the YouTube video are illuminating, and suggest that the number of fools who will end up believing this bullshit is very, very low. Here’s one example:

So… it’s essentially a housing co-op where a corporation owns the lion’s share of the equity but tenants are responsible for maintenance/repairs etc in order to give them the feeling of being homeowners – the burden thereof without any of the benefit. Genius. Oh, and the kicker is the tenants also have to use his banking services.

That seems right. You get to do corvee labor, while paying 35% of your income to Flow, using Flow’s financial services to do so, and your reward is the warm fuzzies of belonging to some community of young hipsters like yourself.

Even young hipsters are not that stupid, and not for that long. Ten or twenty years living like that just to find out after ten years that your feeling of ownership is just that: feelings. And the hard truth is that you owned and own nothing. But like the WEF says, you’re supposed to be happy, because the benevolent landlord is taking care of you and has “elevated your experience” and you felt like you were part of some community.

It doesn’t matter one bit how much National Car Rental wants me to feel like I’m part of a community, and am a “member” of the Emerald Club, or whatever. I know that the car I picked up is not mine and I am certainly not going to wash it before returning it. I doubt the 23 year old idealist is any different.


The evil part might be more of what the corporate press is pushing on their audience at the behest of their masters on Wall Street and elsewhere than what Neumann and Flow are laying out. But it’s close.

It’s one thing to acknowledge that young people and working people can’t afford to buy a house anymore; and that because you have money, you will buy investment properties and offer housing-as-a-rental-service to people who need a place to live. That’s just acknowledging the unfortunate reality of the situation we’re in.

That’s telling people that they should aspire to own a home one day, but until then, there’s nothing wrong with renting. And if you’re going to rent, then well, rent from us! That’s just business.

It’s a whole other thing when you are actually winding down your mortgage programs in order to divert capital into buying up properties to turn into rentals, or financing new construction that is meant to be rentals. Then to direct your controlled corporate press to start pushing a narrative telling people — especially the younger generations — that they should want to rent, that renting is great, and that homeownership is for the birds.

Neumann and Flow are actively trying to deceive their tenants. Instead of making it clear that they’re offering a top quality luxury rental experience, with added “community features” that justifies the rent, Flow is actually telling them they own something. Sure, they’re technically talking about owning the feeling of belonging, the feeling of ownership, and “ownership is a complicated word” but the real key is the gap between what Flow is telling others and what it is doing for itself.

Flow is telling people that they should aspire to longterm rentership in a community with a feeling of ownership, while Flow itself is busy buying up properties, and its business plan specifically contemplates a “flywheel effect” where more renters ==> more money ==> more properties purchased ==> more renters. And as mentioned above, there is zero doubt that when Flow buys a building, they own it. For real. They don’t just get a feeling of ownership; they get fee simple title.

Makes me wonder if Neumann meant to call his company Flow for a reason… which spelled backwards is Wolf.

Converting a Flow in Sheep’s Clothing to a Sheep in Flow’s Clothing

There is a way to actually do good while doing well here. Simply flip Flow on its head. Introducing Wolf.

Here are Wolf’s four pillars:

  1. Branded technology-first management company
  2. Seller-financed mortgage fund that feels like it owns the buildings
  3. “Tenants” become actual owners, who pay down their mortgage
  4. Community mechanism to ensure that Wolf and its investors share a portion of the value created

Instead of the tenants feeling like they own something, let’s have Wolf feel like it owns something. It doesn’t, but the feels are going to be amazing.

Wolf will buy a building, then sell each unit to a “tenant” while providing seller-financed mortgages at above-market rates (ensuring profitability) but no down payment required and no credit checks. The “rent” isn’t rent at all, but mortgage repayment with a property management component built-in.

These new condo owners don’t need to plunger their own toilets; the Wolf property management will do that for them. But they own their own toilets, their own bathrooms, and their own units. They will feel like the own something because they in fact own something, subject to a mortgage. If they want to plunge their own toilets, they can — just like an actual owner would.

With each monthly payment, they build up actual equity in the unit that they own.

The community features are unchanged; the extra payment in the monthly payment (it’s literally no different from HOA dues) goes to having community gatherings, parties, poetry readings, whatever. Except that each owner actually owns his or her unit.

Wolf’s executives, staff, and investors are always invited to such community events, can participate in the online forums, and even join in the community Discord anytime. They should share in the value of that community created by these owners. Common spaces can be named after them — the Adam Neumann Garden, or a16z Community Pub. They should really feel like they own the building, while in reality, they do not.

The flywheel effect still remains. More units sold ==> more money from mortgage repayment ==> more money to purchase new buildings ==> more units sold to actual owners. Turnover will be minimal, because these residents own their units. After twenty years, they’ll have built up sufficient equity to sell and move out to the detached single family in the suburbs. And Wolf management and investors can share in their joy and get all the feelz.

Somebody want to give me $350 million to do Wolf? The sheep in Flow’s clothing?

Do As They Do, Not As They Say

Let me wrap up here.

The bad news is that Flow is part of the current efforts by the Elites to make WEF’s “You will own nothing, and you will be happy” vision a reality. Capital is flowing out of mortgage lending and into #renternation in its various forms. The corporate media is only too happy to go along with it and has already started preaching the message that renting is the better lifestyle. They’re pushing neo-feudalism pretty hard, and one has to ask why that is.

Meanwhile, over 96% of those in the top 10% of Net Worth owns their homes; I can only assume the other 4% are actors, athletes, or others whose jet set lifestyles make renting luxury mansions more attractive a proposition. #RenterNation is no accident.

The good news, I think, is that Flow will not succeed because people are just not as stupid as Neumann seems to think they are. Quite a few of the younger generations got badly burned in 2022 when “perceived value that appreciates over time” turned out to be ponzi schemes and outright scams. The Crypto Crash disproportionately affected younger people who took on far more risk than they ought to have precisely because of the “feeling of ownership” (not your keys, not your crypto) and feeling of belonging to a community where perceived value appreciated over time. Celsius? BlockFi? FTX?

They might rent from Flow. They might enjoy being tenants in one of Flow’s high-end luxury buildings with strong community features. They might choose to stay for years and years because of that feeling of belonging to something greater. But I do not think even the most socialist of them would think that “feelings of ownership” is the same as ownership; not when there is an actual owner, an actual landlord, who charges actual money rent and will actually evict you if you fail to pay it.

The takeaway for the average non-Elite person is simple: Do as the Elites do, not as they say. Watch how they spend their own money, and copy that. Learn what they do and ignore what they preach. When the CEO of Goldman Sachs or the Editor of the Wall Street Journal sells his home(s) and moves into a Flow apartment, you do the same. If they keep buying houses, then save your pennies and do everything you can to buy a house too.


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Rob Hahn

Managing Partner of 7DS Associates, and the grand poobah of this here blog. Once called "a revolutionary in a really nice suit", people often wonder what I do for a living because I have the temerity to not talk about my clients and my work for clients. Suffice to say that I do strategy work for some of the largest organizations and companies in real estate, as well as some of the smallest startups and agent teams, but usually only on projects that interest me with big implications for reforming this wonderful, crazy, lovable yet frustrating real estate industry of ours.

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1 thought on “Adam Neumann’s Flow: Stupid, Evil or Both?”

  1. Solid analysis, Rob. He is the epitome of a ‘huckster’ and continues to sell his level of bullshit to investors and consumers. It’s unfortunate and sad.

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