Should Zero Profit Equate to Wealth?

Jul 10, 2024
Should Zero Profit Equate to Wealth?

Adam Neumann, Founder of WeWork is worth an estimated $2.2 Billion.

The company was never profitable. 

Yet was valued around $47 Billion. 

Then filed for bankruptcy last year. 

But somehow the founder became a billionaire. 

This is everything that's wrong with the venture model. 

Delusional optimism makes for a great startup founder. 

The problem is investors are supposed to ground them in reality. 

But they've also become delusional optimists. 

When incentives aren't aligned, outcomes won't be either. 

Founders and investors should not get wealthy without generating profit.

It's wrong, but it's become their livelihood at everyone else's expense. 

That said, it's hard to blame them for playing the game. 

It's really the rules of the game that are beyond logical at this point.

It's easy for us to want to blame the founders and even the investors, but the further I dive into this subject the more I realize everyone is simply following the incentive model put before them.

For things to really change for the better it's the rules of the game that have to change.

We simply can't keep pumping up financial bubbles only for a few people to actually win, leaving customers and employees behind in the dust. 

Shout-out to the founders who see past rogue incentives and insist on doing things the right way.

There's plenty of them out there and they work extra hard to do it right, kudos to them.

Happy Selling,

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