This article originally ran in Term Sheet, Fortune’s newsletter about deals and dealmakers. Sign up here.
A few months ago, I received an email from a Term Sheet reader that asked a valid question no one in the press was asking: Where has WeWork’s other co-founder Miguel McKelvey been in this mess? “Every story on WeWork is talking about Adam Neumann, but no mention of his co-founder,” the email read. “Why didn’t he speak out more? Or if he did – what is his side of story?”
I decided to try and answer those questions, and it turned
into a full-fledged
story. I listened to old podcasts, dug into interviews, and spoke with
several company executives as well as McKelvey himself.
What I found was that McKelvey was a well-liked and
well-respected figure who enjoyed a quiet, behind-the-scenes presence for
years. He was helping open new WeWork locations, design the look and feel of
the workspaces, and serve as a sounding board for employees inside the company.
That all ended once his company spiraled into chaos when its CEO Adam Neumann
was ousted and its anticipated IPO scrapped.
McKelvey spoke with me in his first public interview since
the company’s period of turbulence last year. “Growth was one of our biggest
focuses in the past, and I don’t think we were as focused as we should’ve been
on making our product as great as it can be,” McKelvey said. “A big benefit to
slowing down a little bit is that we’re going to focus on [the product] more.”
For a company whose IPO prospectus stressed fast growth,
aggressive spending, and spiraling losses, this is a particularly surprising
turn. Even more unusual is that McKelvey is suddenly quite involved in the
company’s financial future.
“Just being honest, I was not deeply involved in the
financial modeling,” McKelvey said. “There are things I didn’t understand in
the past because it wasn’t my role, and I have jumped in a lot more recently.”
In October, WeWork released a
50-page presentation outlining some of the changes it planned to make in
the next 90 days. One of the key principles says the company will focus on “the
core WeWork desk business, prioritize disciplined growth with profitability,
and right-size our operations.” It has since divested several businesses and
dramatically reduced its workforce. It appears that WeWork wants to return to
its roots and areas of focus that were important before 2017, the year that
SoftBank agreed to pump $4.4 billion into the business.
McKelvey added that he’s worked with WeWork’s leadership
team to devise a plan that he’s certain the company can succeed with, adding,
“I’m here, I want to be involved, and I want to be part of our future.”
And then, he was off to his next meeting at WeWork’s
headquarters. The formerly free-spirited, jet-setting cofounder who traveled
the world to help expand WeWork’s reach is now stuck in conference rooms,
crunching the numbers to see what’s feasible, rather than world-changing.
…SPEAKING OF WEWORK: GV (formerly Google Ventures)
has bought out the majority of WeWork’s stake in women’s workspace startup The
Wing as part of its plan to divest from its non-core businesses.
WeWork first led a $32 million funding round for The Wing in
2017 and invested again in its 2018 funding round, which resulted in a 21%
ownership stake in the company.
My colleague Emma Hinchliffe reports
that GV has bought out most of that stake, with the remainder going to
existing investors Sequoia Capital and NEA. GV general partner Jessica Verrilli
will join The Wing’s board of directors, replacing former WeWork chief legal
officer Jennifer Berrent. Read