The Cult of Charisma — kerri pollard

I had heard the same story at least 25 times in the last 12 months. He shared it with the same cadence, charisma and hand gestures. It was magic every time. His magnetic, messiah energy loomed large, encouraging all to hang onto every word. How the business came to be and the vision that would change the world. Childhood trauma prompted him to quickly assess the room, identify any threats and diffuse them with a smile. The story recipients laughed at the same moments. Nodded their heads simultaneously. Drinking it all in. Tears filled the eyes of some as he shared his early life of poverty, leading him to this juncture. Consciously or subconsciously, they were falling in love with the man, the idea and the potential.

I fell in love too. Before the epiphany hit me, charisma alone can’t scale a business. The impact of the founding narrative has a shelf life. Unfortunately, employees of WeWork also learned these painful lessons with unfathomable outcomes: job loss, worthless equity and so much more.

At the onset of my retirement in early 2022, I fell down the WeWork rabbit hole, reading several books about the dysfunctional company such as the Billion Dollar Loser and the Cult of We. Obsessed with Jared Leto since the 90’s cult classic My So Called Life, I also watched the Hulu docuseries WeCrashed and listened to the supporting podcast with Professor Scott Galloway.

I was fascinated by the fact that this man with little to no business experience raised $22.2 billion dollars in venture capital resulting in a $47 billion dollar valuation. Yes, $47 BILLION DOLLARS. A unicorn on steroids. Despite claims of being a “serial entrepreneur,” his only attempt prior to WeWork was a failed clothing company called Krawlers, which made knee pads for babies. Slogan being, “just because they don’t tell you, doesn’t mean they don’t hurt.”

Adam, they really don’t hurt. ;)

With a height of 6’5” and shoulder-length, wavy hair, Adam’s unique presence dominates every room he swaggers into. When former employees and investors describe Adam, the number one attribute used is “charismatic.” Childhood stories of living on a kibbutz in Israel combined with moving to 13 different homes in 22 years fueled his compelling - and repetitive - narrative of community. “The power of we: be part of something that is greater than yourself.”

Who knew the business of leasing offices and dividing the space into shared desks could be so compelling?

Sadly, Adam Neumann is not the only one. Venture capitalists seem to be suckers for charismatic and courageous founders - especially men - with little to no business experience, i.e., Sam Bankman-Fried and Travis Kalanick. I know, I know Elizabeth Holmes of Theranos should also be in the Adam camp. Done. I also know most - if not all boards - pressure founders to hire experienced executives to offset their ignorance. But, how do they ensure that these founders actually listen to their savvy C-suite? Adam didn’t.

(Looking at gender alone, all-women executive teams secured a mere 1.9% of the $238.3 billion in venture capital allocated in 2022. This percentage increased to 17.2% when the team was of mixed gender (TechCrunch, January 2023).

I was a sucker too. I worked at three, different start-ups during the course of my career in which several of the male CEOs had no operational, business experience and struggled in listening to those outside their circle of trust. This circle typically included family members, early employees or college buddies. People like people like themselves.

A victim of my own Ivy League envy and perceived emotional intelligence, I jumped onto their executive teams and followed blindly. I quickly found myself managing their ego instead of doing what was best for the business. When the six-month honeymoon period came to a close, I started to dismiss my 20+ years of experience and assumed the tactics outlined in the latest book read by the CEO. Reid Hoffman’s Blitzscale still gives me nightmares.

At one such start-up, I was tasked with accelerating customer acquisition. The company’s growth was starting to slow so I was hired to craft a new global strategy and hire the necessary resources to execute. After weeks of researching the market; assessing the competitive landscape; interviewing employees; understanding our customer base along with the key attributes of top clients, I presented a robust strategy including the necessary marketing infrastructure for success. It gained the unanimous support of the executive team and board. At first...

Challenge was, targeting small to mid-market businesses isn’t sexy. Despite the lack of product-market-fit, the “circle of trust” wanted the big names. It became an uphill battle as every resulting tactic and associated spend was questioned. Think bigger! Go crazy! Ironically, the same words were said to Adam Neumann by Masayoshi Son of SoftBank following his $4.4 billion dollar investment. Ultimately, I surrendered, changed direction and left soon thereafter. The lack of progress in pursuit of prospective whales pushed me out the door.

It took Adam pushing WeWork near the brink of bankruptcy for him to be fired via a golden parachute worth hundreds of millions. At one point, WeWork was burning $100 million dollars PER WEEK and profitability seemed like a pipe dream. For most employees, it was too little too late. Thousands lost their jobs and their equity was worthless.

The good news is, it appears that the “founder-friendly” investment sentiment is starting to change as valuations dramatically decline and the focus on profitability is once again a priority. According to a CEO study featured in the Harvard Business Review “founders add the most value as CEOs in the early years of a firm’s development, by the six-year mark (on average), they become more valuable in non-CEO positions, such as CTO or a board seat.” (December 2021).

If you’re looking for your next gig inside or outside of your company, beware of those that possess a vision and supporting charisma but lack experience. Be sure to talk to current AND former employees to understand the pros and cons of working for such an individual. Oftentimes, we get so excited about a new opportunity that we fail to do our own due diligence. We fear that negative feedback will prompt us to look elsewhere. Isn’t knowing now better than being surprised days, weeks or months after you’ve started? Nothing worse than being forced to reignite your job search because other opportunities have now passed. Finally, ask the recruiter about the turnover rate within the leadership team. Attrition is expected in the C-suite but if the door revolves every year, beware. Strategies never stick in such environments as they are quickly replaced by new blood, creating chaos amongst the ranks.

I’m surprised and disappointed that no candidate has ever reached out to me to learn more about one of my former employers. Afraid of what they may learn? They shouldn’t be. My challenges may spell opportunity. My successes may be replicated. And, at the end of the day, I am just one datapoint.

I wonder what venture capital firm Andreessen Horowitz learned during their due diligence of Adam Neumann’s latest real estate venture, Flow, before writing their largest single check of $350 million last year?