Channeling WeWork Ideals, Neumann Talks About Flow With Few Specifics

Months after receiving a $350M investment for his new business idea from Andreesen Horowitz, or a16z, Adam Neumann gave a bit more insight into his vision for the company called Flow.

In a video released by a16z Monday, which includes footage from the investor's American Dynamism Summit in Washington, D.C., last year, Neumann discussed Flow, eventually returning to the subject of creating community — a theme that dominated much of the former WeWork CEO's rhetoric at the helm of the coworking giant, though in an office context rather than multifamily.

Neumann hinted at how Flow might create a sense of community and outlined the four pillars of the new company but didn't offer much more in the way of specifics than he did previously, stressing that it is still early in the game.

Last year, when venture capitalist a16z put $350M into Flow, Neumann's foray into residential real estate — thus valuing it at about $1B — neither party offered much detail about what the company would do or how it might impact the industry.

A16z reportedly took an interest in the 4,000 apartment units in Florida, Georgia and Tennessee that Neumann acquired in his immediate post-WeWork period, giving it something of value regardless of how Flow turns out.

In his video remarks, Neumann said homeownership isn't going to be as common in the future as it has been and that the prospect of renting an apartment for 20 years is “soul-crushing.”

The first of the four pillars is a “branded technology company” that runs the buildings, Neumann said. Another is an asset management company that owns the buildings, and a third is a financial services aspect. Neumann didn't mention any specific technology, such as blockchain, but many believe that his model incorporates the centralized platform.

The fourth pillar, he said, is going to “take some of this value and share it with the value creators.”

“If we can actually create a better experience in the building, then the building performs better and makes a better NOI,” Neumann said.

That would enable Flow to buy more buildings, and more users, or tenants, would start using the company's financial services, presumably creating a growth spiral for Flow.

The financial services component of Flow would offer “meaningful” services to users, Neumann said.

“Then, if we can take this value-creating mechanism and share with the residents a portion of the value, it's going to make them feel ownership,” he said, adding that the word “ownership” is a very “complicated word” but that residents would “feel they are a part of a community.”

Making residents feel like they are part of a community will make them stay longer, reducing turnover and thus kicking net operating income upward, Neumann said.

“In a very simple way, we want to create an elevated experience for the resident, and we want to find a way to share with the resident a portion of the value that they create,” Neumann said, although he didn't offer any dollars-and-cents specifics.

“You leverage technology to actually make things work,” he said. “The more complicated part is you find a way to share a portion of the value with the resident itself, and that's the vision.”