How Marc Andreessen Going to Cause the next housing crisis

His new $350 millions investment and Adam Neumann's Flow

Let’s say, my startup was valued at $47 billion. But it was basically a scam and a money losing business. Then the company crashed and got bankrupt within a year. I had other scandals as well. A drama series was created based on my story. After all that, a few years later I came up with a new brilliant scam to save the world — well at least a certain part of the world. Would you invest in my idea? Let’s say $350 millions to be precise!

The answer is yes for Marc Andereessen — the billionaire venture capitalist (former alumnus of the same alma mater as me — good old University of Illinois. He got his start at NCSA where Mosaic was created and it become Netscape. I also worked at NCSA for a few years).

ben grosser @bengrosser

venture capital bets on social media gave us megacorps that exploit human attention for hyperprofit, damaging human psych & democracy in the process. a16z's latest bet on neumann/flow expands their extractivist portfolio into housing. expect collateral damage at a similar scale.

So the company is called Flow. And the guy I was pretending to be is Adam Neumann.

safi @s_afiaziz

Got into FLOW and started to unpack Flow, Adam’s Neu Co. Let's dive in ⏬

This is the deal. He is buying a bunch of property and putting a brand on it and selling it to remote workers.

Eliot Brown @eliotwb

Adam Neumann raises $350 M from Andreessen Horowitz for his apartment company now named Flow. Of note: "Flow will operate the properties Neumann has bought" & try to sell services to third parties. Via Dealbook

Yes, we heard this “ripe for discussion” business before. Uber was supposed to fix all the taxi and traffic problems. AirBnB supposed to fix the vacation rental problems, right? All of these are solutions that create problems. But investors love these types of disruptions:

Paris Marx @parismarx

After being revealed as an anti-development hypocrite, Marc Andreessen handed Adam Neumann a $350 million check to “disrupt” residential real estate. But Flow’s “branded living” won’t solve any of our real housing challenges. My latest for @thisisinsider:

businessinsider.comMarc Andreessen’s plan to solve the housing crisis could actually make it worseThe legendary venture capitalist thinks giving WeWork cofounder Adam Neumann $350 million is the perfect way to tackle America’s housing crisis.

And of course, you add crypto to the mix to make this more appealing. According to Forbes:

Forbes has learned that the company, Flow, intends to launch a digital wallet that can store crypto – among other currencies, including U.S. dollars – in addition to the real estate management software it announced previously.

Davidson Goldin, a spokesperson for Flow, said the planned digital wallet cannot be used to make rental payments for Flow-managed apartments using cryptocurrency it may store, but can be used for outside purchases like any other wallet.

So here’s my prediction:

1. Investors drool over Flow and it becomes another hype like WeWork and eventually crashes and maybe we can another drama series out of this.

2. In the meantime, the targeted cities where the rental units have been purchased will cause a local housing crisis. And this will have reverberated effect on other cities. Neumann is riding the “bezzle”:"the magic interval when a confidence trickster knows he has the money he has appropriated but the victim does not yet understand that he has lost it". This is from a VICE report, Aug 15, 2022:

   Neumann has personally made millions as a landlord, chiefly by leasing properties he had an ownership stake in back to WeWork, The Wall Street Journal reported in 2019. In January, the outlet reported that Neumann had bought majority stakes in more than 4,000 apartments worth over $1 billion in Miami, Atlanta, Nashville, Fort Lauderdale, and other cities across the South.

3. It might be a success? Ah…maybe?

4. There will be some more scandals. Andreessen will get out of it with the profit and then he moves on to his next target.

5. Or, it will just crash sooner.

6. Or it will become another Uber type company that will keep the investors happy and create more problems for the mere mortals.

In conclusion, I do not see anything good coming out of this. But time will tell. I leave you with this:

litquidity @litcapital

When you see Adam Neumann raising an outrageous amount of capital at an outrageous valuation yet again