Neumann Owns

Flow has nothing to do with the housing crisis.

This morning, Andreessen Horowitz announced that it had invested $350M into Adam “WeWork” Neumann’s new startup, Flow. Whereas WeWork revolutionized the commercial real estate business and made ad-hoc office space easier for startups, Flow attempts to do the same for residential real estate.

A lot of ink has been spilled on whether it’s okay for A16Z to have invested this money given Neumann’s well-documented, disastrous track record with WeWork, in an environment where lots of other people find it hard to raise even a tiny fraction of this amount. I agree with these comments in the sense that it’s obviously unfair: a sign of an unequal system. It just is.

But for a moment, look at it from a mercenary venture capitalist’s perspective. WeWork is everywhere, which happened under Neumann’s watch — and although Neumann is not the one doing it, it’s finally approaching profitability.

And then there’s housing, which is in need of major reform. I’m not going to shed any tears at the loss of today’s batch of rental agencies and real estate management firms, which have helped hike rents up to astronomical levels, and have often lobbied for preferential legislation that hurts ordinary renters. At the same time, investment properties leave many homes completely vacant in the…