Miguel McKelvey: From UO Architecture to WeWork IPO

 

The WeWork saga—the company’s meteorically epic rise and precipitous downfall—has become the stuff of legend: a cautionary tale about the pursuit of unrealistic financial gains, overly rapid expansion, personal greed, and an indifference for the bottom line. Adam Neumann, WeWork’s charismatic and reckless former CEO, is the individual most associate with the company’s volatile trajectory. He pitched a starry-eyed vision of WeWork as a paradigm-busting, disruptive start-up that would change the culture of office work. That vision attracted tens of billions in investment capital, but ultimately succumbed to Neumann’s excesses and failure to reward WeWork’s investors.

 

What many with only a casual familiarity with the story may not be aware of was the key role played by WeWork cofounder and Chief Culture Officer Miguel McKelvey. Miguel shared his entrepreneurial journey with an in-person and online audience last Wednesday as part of the UO School of Architecture & Environment 2022-23 Lecture Series.

 

Miguel was born and raised in Eugene. His mother, Lucia McKelvey is one of the cofounders of the Eugene Weekly, Eugene’s alternative newspaper.(1) Miguel graduated with a degree in architecture from the University of Oregon (Class of 1999) and was a member of the UO men’s basketball team while at the school.(2) After graduation, he went to Japan and helped create a social networking site for English-learners, but returned to the U.S. to get back into architecture. Upon his return, Miguel worked for a firm in New York designing stores for the clothing retailer American Apparel, where he learned how design can empower a business. It was while he was in New York that he met Adam Neumann at a party in 2008. Being like-minded, he and Adam became friends and business partners. They recognized that property owners did not like leasing buildings for spaces used by small startups but instead preferred large tenants who signed long-term leases. The two soon developed the concept of an eco-friendly, semi-communal, coworking space business. This led to WeWork, which they established in 2010. While Adam was the hustler at WeWork, courting venture capitalists and spending lavishly, Miguel largely worked behind the scenes, using his background in architecture to develop what became the company blueprint for its coworking spaces around the globe.

Miguel McKelvey (all images here are screenshots from Miguel's presentation).

The WeWork model was and is based upon the idea of a community-driven work environment that provides small business owners and entrepreneurs with an affordable alternative to traditional offices. Miguel oversaw the design of all WeWork spaces, building upon the notion that such environments can “foster a network of people who come together to create something greater than themselves.” WeWork locations became well-known for their trendy aesthetic and identity as a lifestyle brand that promoted community, creativity, and connection. That distinct branding would be synonymous with WeWork and attract a cult-like devotion among its members, employees, and investors. WeWork prided itself on its ability to enhance business performance and employee engagement in collaborative work environments—to provide people with something to belong to.

 

Miguel recounted how aggressively and ambitiously he and Adam grew WeWork. From the beginning, they saw it as a global opportunity. After opening sites in New York and San Francisco, the company expanded to Tel Aviv, then Shanghai, and ultimately worldwide, growing to a peak of 850 locations in 23 countries, 14,500 employees, and $47 billion in valuation. At one point, WeWork was the largest single holder of real estate in Manhattan, with over 5.3 million square feet of space to rent out.

 

Much of the company’s early success was due to its ability to attract capital, which it leveraged to great advantage, such as when purchasing bespoke furnishings in large volume. Miguel described how his team built its own BIM software to conduct test fits of WeWork’s “modules,” the term the company used for its combination of individual offices, meeting rooms of assorted sizes, sound-isolated “phonebooths,” and shared communal amenities. They also designed offices using machine learning. Artificial intelligence analyzed data and neural networking to predict how frequently members booked specific meeting room types. The analyses found some rooms were perpetual favorites, always booked and always highly rated by members. This knowledge informed the design of subsequent WeWork spaces.

 

Though the WeWork model primarily relied upon acquiring existing vacant offices in prime locations, the company also developed its own properties from the ground up. Miguel seemed especially proud of the design of WeWork’s entirely new building located at the Brooklyn Navy Yard. Completed in 2017, the $380 million building accommodates 675,000 square feet of workspace.

 

Dock 72, WeWork's outpost at the Brooklyn Navy Yard.

A significant outcome of the WeWork phenomenon was the “multiplier effect” it created in the vicinity of its locations. Miguel said that for every 10,000 members, an additional 12,000 jobs were created through direct and indirect spending. Typically, each WeWork location brought new people, businesses, and economic activity to neighborhoods, and one in ten members moved closer to their WeWork location after joining. This meant more business for neighboring shops, cafes, and restaurants—a boon in tax revenue to local and state governments.

Even as WeWork grew rapidly, Miguel still actively participated in the hiring and onboarding of all new employees. It was important for him that everyone understood the power of “we.” He encouraged new hires to regard being part of the WeWork experience as more than employment. Instead, he told them they should view it as an opportunity to gain experience and grow as a person and be part of a community.

 

Of course, it all proved too good to be true. As WeWork made plans to go public in 2019, financial disclosures and revelations about how the investors’ money was being spent led to the company’s board of directors pushing for Adam’s ouster as CEO and delaying WeWork’s initial public offering. Miguel would stay on longer, eventually leaving WeWork in 2020. The company survives today, but no longer commands the dominant position it once held in the coworking real estate arena.

 

Not surprisingly, the WeWork story, and particularly Adam Neumann’s mercurial role in it (as well as that of his influential wife Rebekah Paltrow Neumann) received the Hollywood treatment. A 2022 Apple TV+ mini-series stars Jared Leto as Adam and Anne Hathaway as Rebekah. Miguel is portrayed by the actor Kyle Marvin, of whom Miguel said the producers did a rather good job of casting (“he looks like me”). Purely by chance, Miguel bumped into Jared Lehto at a London art gallery after the series debuted. He sheepishly approached Lehto but found him to be friendly and engaging. Miguel thanked him for his time, to which the actor responded by saying “thanks for living an interesting life.”

Still from the Apple TV+ mini-series WeCrashed. Jared Lehto (right) portrays Adam Neumann, while Kyle Marvin (left) is Miguel McKelvey. 

Miguel now lives in London. Since leaving WeWork, he has kept a low-profile. I expected him to talk in detail about his current interests, but he did not in any detail (he is involved with NAYAH, a venture capital and private equity firm that “invests in the growth and development of people and companies that align with our vision to build true community power, shared wealth, and holistic well-being for minoritized people”). He instead focused upon his WeWork journey and how it impacted him personally. He loved what he accomplished with the company but quoted the journalist Walter Winchell: “Nothing recedes like success,” meaning how fleeting success can be. Miguel lamented the compromises running a business demanded, and their psychological toll if held too tightly. He talked about now “being in the moment” and “living life at a different tempo.” I sensed he has not entirely moved on yet, and that he misses being part of something big.

WeWork certainly was big. In years to come, historians will look back upon the company as a cultural phenomenon that helped to define the 2010s. The parable is fascinating—WeWork is now synonymous with hubris and overreach—a moral fable that played out in real time before our eyes. Like the mythical character Icarus of Greek legend, WeWork simply flew too high, too quickly, falling victim to excessive ambition.

 

Though Miguel has flown higher than I can ever imagine, as a fellow graduate of the University of Oregon school of architecture and resident of Eugene, I cannot help but feel a kinship. My thanks to him for sharing his story.

 

 

(1)  My wife worked alongside Lucia at Eugene Weekly for several years.

(2)  My firm provided Miguel with an office practicum for one academic quarter while he was in architecture school.