86: If WeWork was wEOwork: How EO Changes Business


In this episode, Bret Keisling looks at how WeWork’s IPO got cancelled, why its founder and CEO resigned, and how EO might have made the company completely different.


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Episode 86 Transcript


Bitsy McCann: 00:00 Are you a passionate employee, owner or advocate? Would you like to share your passion on The EO Podcast and ESOP Mini-cast? We're looking for correspondents to help us tell the great stories of employee owners and their companies. We're looking for one to four minute long segments that can be recorded remotely over the internet or telephone. If you're interested, drop us a line. You'll hear contact information at the end of the episode.


Bitsy McCann: 00:28 Welcome to The EO Podcast where we amplify and celebrate all forms of employee ownership.



Bret Keisling: 00:37 Hello, my friends. Thanks for listening. My name is Bret Keisling and as it says on my business cards, I'm a passionate advocate for employee ownership. Today we're going to take a look at the WeWork company. You may be familiar with their story. They're a major corporation in the office shared space and they announced in August that they were going to have an IPO and the expectation that the company was valued close to $50 billion and it turns out the IPO has been shelved. The CEO/founder has resigned and we're going to take a look at WeWork to see if employee ownership would've made a difference or how a company with a commitment to employee ownership could operate differently in the future. And a little later on we'll have shoutouts for an organization and three individual advocates in the broader employee ownership space that I have a lot of respect for.


Bret Keisling: 01:36 But first let's talk about WeWork. There's a lot of information that I'll share. Most of it gleaned, candidly, from Wikipedia, its page on WeWork. The Wikipedia article was heavily sourced and as we're not journalists here and don't really have a robust research staff, we're not trying to break news, we're going to share information that's in the media and apply my perspective of employee ownership to that.


Bret Keisling: 02:02 So with that, WeWork, which is officially called the We Company, is a commercial real estate company that designs and builds physical and virtual shared spaces and office services for entrepreneurs, companies including technology startups and assorted enterprises. For example, The KEISOP Group that produces this podcast recently rented office space in the Denver Tech Center. We are part of Office Evolution, which is a much, much smaller competitor to WeWork. Office Evolution has a 72 locations. WeWork has hundreds and hundreds and is international. So the concept, though, of shared office spaces where an entrepreneur or small business can get in relatively cheap and share the resources and have a community is a very good one. And as I said, The KEISOP Group participates in a shared space itself.


Bret Keisling: 02:55 So WeWork was founded in 2010 in New York City and manages approximately 47 million square feet. It currently has more than 5,000 employees and over 280 locations and that's spread across 86 cities in 32 countries. In January, 2019 the company announced its valuation was approximately $47 billion. In the summer of 2019, August, it filed a prospectus for an IPO, an initial public offering. And as a result of the media firestorm, the founder/CEO Adam Neumann has resigned his position. There have been significant changes to WeWork's governance structure and I'm sure all the financiers and Wall Street power people are going to analyze the valuation and do whatever they do, but in looking at the media coverage, there's a lot about the company, as in any case, that I consider to be the good, the bad, the ugly.


Bret Keisling: 04:01 So we'll take a look at all three starting with the good. As I said, in 2010 the company was founded by Adam Neumann and several others in New York City. They received partial funding from a real estate developer who purchased one third interest in the company for $15 million. By 2014, WeWork was considered the fastest growing lessee of new office space in New York City and was on track as well to become the fastest growing lessee of new space in America. Neumann once explained his inspiration in New York Daily News as such, he said, quote, "During the economic crises there were these empty buildings and these people freelancing or starting companies. I knew there was a way to match the two. What separates us [he means WeWork] though is community." And if you're in employee ownership, when you talk about community, you're talking about culture.


Bret Keisling: 04:54 In 2015, WeWork was named among the most innovative companies by Fast Company magazine. And here's some of the innovations besides their idea of community, the shared space and taking what Regus had done before them in shared space and really fostering a sense of community among entrepreneurs. There were several innovations specifically worth noting. In 2017, the firm launched an online store for services and software for its members. Therefore, you weren't just renting a desk or an office space. The company was able to provide you with actual services and software. The company started offering fitness classes at a number of its locations and had plans to open a gym at one New York location. I love this innovation. I've spoken heavily about the importance of health and wellness for employee owned companies, companies broadly. And the fact that WeWork would offer fitness classes among its locations to its tenants is a sign of WeWork's commitment to health and wellness, not just among its own employees, but in this case among the tenants as well.


Bret Keisling: 05:58 In January, 2018, students taking online university courses from an organization called 2U gained access to WeWork common spaces and meeting rooms. I love this as an innovation. Just as Starbucks and Panera have become gathering places for entrepreneurs, WeWork is finding other ways to bring folks into their spaces by signing agreements with online college courses for access to the spaces, just a really smart move. And here's an interesting one that raised a few trustee type questions in my mind. In July, 2018, the company restricted employees from expensing meals that contain red meat, pork, or poultry. The firm also announced that it would not provide meat for events at its locations or allow meat self-serve food kiosks in its locations. Now this policy, whether in a privately held company or in an employee owned company is going to be a company prerogative.


Bret Keisling: 06:54 So were I the trustee in an employee owned company and they rolled out this policy, it's not necessarily going to be a trustee issue, but this may speak to the culture that WeWork. I am curious and would have asked what brought the policy about. If there was certain indications of research that a majority of their tenants thought it was important to, if they were losing business because of the presence of meat, somehow I would get that. If it were connected to a healthy initiative, maybe there are a variety of reasons where one could argue that they wanted the policy. If a company wanted to simply kind of be the antidote to Chick-fil-A, if you will and say, "Hey, we're not going to have any meat products." It's within their purview. But the trustee related question would be if the majority shareholder simply had a preference or a whim and said, "Hey, I'm going to institute this policy across a multibillion dollar company because I feel like it," that's not a sign of the ownership culture we're looking for. That's what we say the guy's acting like an owner. So not necessarily criticizing the non-meat policy. I would just look to get some information about it. So those are the innovations that may, in my mind, part of what make WeWork at good and innovative and positive.


Bret Keisling: 08:20 Now let's take a look at the bad. How did WeWork get from an initial valuation of 45 million in 2010 two evaluation worth billions nine years later? It raised money. Lots and lots of money. As of 2014, WeWork investors included J.P. Morgan Chase & Co, T. Rowe Price Associates, Wellington Management, Goldman Sachs Group, the Harvard Corp., Benchmark, and Mortimer Zuckerman. Here's where the reality is, at this point, there probably isn't any space for WeWork and employee ownership. The reality is with some of those big time investors, perhaps if they were truly a minority investor, truly passive and truly willing to, to get out of the way of employee ownership and change its values to that of employee ownership, which is not wringing out the last possible penny out of a company, then perhaps one of those investors might work in employee ownership. But all of these folks together, their priorities, their return on investments, I assume their investment agreements all are going to set up a culture that frankly I think is at odds and incompatible with employee ownership. Although if you have different views, I'd love to hear them.


Bret Keisling: 09:35 At any rate, in January, 2015 the firm had 51 coworking locations in the US, Europe, and Israel twice as many as it had at the end of 2014. In March, 2016 WeWork raised 430 million in a new round of financing which valued the company at 16 billion. As of October, 2016 the company had raised a total of 1.7 billion in private capital. In July, 2017 after another investment round, the valuation of the company reached 20 billion. In March, 2018 SCC filings indicated that WeWork had raised an additional 400 million alongside a private equity fund to start a fund to purchase properties directly. Now, one of the challenges with WeWork and something that's caused me to be uncomfortable is that a lot of the WeWork properties are actually owned by a company named ARK, which my understanding is, is what we call a related party in ESOP world, a related party company and that means that Adam Neumann as the majority shareholder of WeWork had a financial interest in this company that was set up to buy the real estate that WeWork would then lease back from this related party. In Episode 54 of The ESOP Mini-cast, I examined leases and ESOP valuations specifically with an eye towards how an employee owner could know where the landlord was a related party that the valuation was fair.


Bret Keisling: 11:06 In April, 2018 WeWork announced plan to raise an additional 500 million through high yield bonds and docs related to that announcement showed the company's revenues rose in 2017 but costs rose faster and the company now owed $18 billion in rent obligations. In addition to raising revenue for a China subsidiary, which could be a whole podcast on its own, in November, 2018 the firm secured an additional $3 billion of funding from SoftBank in exchange for a warrant enabling it to buy new. WeWork shares at the end of September, 2019. Now I don't have the details or the documents to go in, but generally with a warrant, SoftBank paid 3 billion just for the option to be able to make a share purchase to have the right to purchase additional shares a year later. I assume it was with the knowledge that an IPO would be planned and the warrant was tied to that.


Bret Keisling: 12:04 If the rise of WeWork was good, and the valuation history from 2010 to 2019 I've characterized as bad simply because it seems a lot of the significant major, major increase in valuation had more to do with the fact that investors believed in an idea than having created actual value. So in my mind there was, we've seen it a lot, this exuberance at the possibility and that was reflected in the valuation, which didn't necessarily take into account what we like to call reality. I suspect sooner or later the valuations would've caught up in some form with WeWork, even if it had remained a private company. But the release of the prospectus in August of 2019 just unleashed a torrent of media scrutiny and analysts focusing on some very troubling financial pictures. And so it's the release of this prospectus that really uncovered a lot of the ugly.


Bret Keisling: 13:11 So, for example, according to the prospective, the company faces substantial risk in the event of an economic downturn. Most companies do. Here, and it's good that they noted this, "we have yet to experience a global economic downturn since founding our business and an economic downturn or subsequent declines and market rents may result in increased member terminations that could adversely affect our results of operations." In the prospectus, you can't just paint everything rosy. So what they're saying is we haven't been through an economic downturn. We don't have the historical financial data to judge how the company might fare, and we understand a weakness that if the economy goes south enough that a lot of the members with leases would default on their leases. WeWork would not be able to default on its own obligations, so they've never gone through a downturn and they would still be on the hook for significant obligations.


Bret Keisling: 14:10 As a result of this, it came out that the company has $47 billion as of the prospectus, $47 billion of future lease obligations, and only 4 billion of future lease commitments, which means even without an economic downturn, if everything just stayed the status quo, WeWork owes $47 billion. They only have $4 billion coming in from their tenants. The reported public valuation of the company is currently post-prospectus around $10 billion, which is less than the $12.8 billion that had raised since 2010. So ignore that the company announced a $47 billion valuation in January of 2019 if the truer valuation were 10 to 12 billion, that's less than the 12.8 billion they raised. So that's very troubling. Media coverage also highlighted analyst concerns about WeWork's future profitability for example, analysts that publish their research on Smartkarma said we cannot even fathom the conditions that would be necessary to articulate a plan to profitability here and noted that they didn't expect the company's valuation to reach far beyond $20 billion. Presumably that's after they've clean things up.


Bret Keisling: 15:27 Here's what I find interesting about. WeWork's prospectus. The emperor who had no clothes, did not issue a prospectus. He relied on everybody simply pretending or going along with his farce that he had clothes. The Wizard of Oz did not issue a prospectus, which would invite media scrutiny as to how the Wizard operated Oz because the prospectus and scrutiny would have shown the Wizard to just be a delightful little bit daffy older gentleman as opposed to the true wizard. And yet WeWork put out a prospectus that allowed the analysts to reach their conclusions and it seemed hard to argue with.


Bret Keisling: 16:13 Media also reported that Adam Neumann enjoys flying on private jets and that in 2018 the company purchased one for $60 million as a result of the fallout of Neumann's resignation and the postponement of the IPO WeWork put a Gulfstream G650 up for sale. Critics said the plane had become a red flag in the lead up to the company's IPO and it created perceptual problems with employees who didn't receive promised bonuses or raises. With my trustee hat, former trustee hat on and knee deep in employee ownership, the employees didn't receive promised bonuses or raises and the CEOs private plane worth $60 million caused a perceptual problem? No kidding! That to me is emblematic of the disconnect between Neumann and the team at WeWork.


Bret Keisling: 17:16 In January 19 -- this another very troubling, very ugly matter from my perspective in employee ownership -- the company decided to change the legal name of WeWork to We Company. The firm paid 5.9 million to license the name We Company from an entity called WE Holdings that was owned by Adam Neumann and additional WeWork founders.


Bret Keisling: 17:39 So, Adam Neumann and co founders, formed an entity called WE Holdings. WE Holdings obtains the license to the name We Company and then WeWork, which Adam Neumann is the majority shareholder and CEO, then pays five point $9 million to his related party for licensing to a name. I don't believe, frankly, this should happen in private business. There are a lot of variations of this where a company owner will funnel work. It's not illegal necessarily, but to an entity it owns. So there was a bank in Pennsylvania that CEO's spouse was a interior designer and she got significant contracts for interior design work at the banks, stuff like that is akin to the naming rights. But this is particularly egregious. It wouldn't have happened in employee ownership, the trustee would have stopped it because Adam Neumann, respectfully, shouldn't as CEO of an employee owned company, set up an entity and then sell the rights. It just is not appropriate and it is very troubling.


Bret Keisling: 18:53 Now as a result of the fallout of Neumann's resignation and the postponement of the IPO, Neumann did return $5.8 million and WeWork will hold all the trademark rights for all of the WE family trademarks. So here's an example where the very bad publicity made a positive change.


Bret Keisling: 19:16 The company in September, 2019 also announce changes to the company's governance, including the ability for board of directors to pick any new CEO, I assume, as opposed to the majority shareholder picking the CEO and not having CEO Adam Neumann's family members on the board. First of all, the board in employee ownership will maintain the right to pick the CEO, et cetera, et cetera. We've done lots of podcasts how it's a bit circular, the relationship between management, the board and the trustee, but the board of directors should have that right, certainly in employee ownership. Not having Neumann's family members on the board. I do want to say a caveat. If the family members are there just for nepotism reasons and board seats paid a lot and I don't know what WeWork situation is and they're just there to say yes, then I'm in favor of the family members being excluded but as someone who is one of seven children and I have siblings with a variety of skill, I don't want to paint with a broad brush. If family members of a founding shareholder have value to add to the board of directors, then they shouldn't be disqualified. But in this case, as far as cleaning up a mess, I don't know the particular status, but the rule to disqualify Neumann's family members is probably prudent.


Bret Keisling: 20:39 One of thing in media reports post prospectus is that WeWork apparently plans to terminate approximately 20 long time friends and family members who worked for WeWork. Again, if somebody uses a connection or knows somebody and gets hired, even if it's family of the company happens all the time. It's not necessarily bad. I've had clients and employee ownership where family members, first of all, if they're part of the founding family, of course they may well have positions with the company and even if management takes over, I know some companies where they brought in family members, but they're imminently qualified family members. And there's something to be said if your sister-in-law is a qualified, competent CPA and she's brought in as the CFO of the company and she's got the skills and the chops, the fact that there's a family relationship there may add to trust and communication. So again, I'm okay with WeWork cleaning out what would appear at least superficially to be some nepotism where they didn't, speaking candidly, may not have earned their keep. This is not an indictment of families of a founders working at an employee owned company by any means.


Bret Keisling: 21:57 Two other points: Post prospectus, Neumann agreed to transfer to the We Company any profits from his real estate deals with the company. I think this is huge. Particularly in employee ownership and ESOPs never would have happened that in the related parties, I think I said earlier, that you'd pay more than fair market value. And from a corporate governance watchdog perspective, the fact that Neumann has apparently agreed to transfer any profits from these real estate deals is a sign that he or members of his team know that they overreached.


Bret Keisling: 22:32 The final change I want to talk about is one that although it's a positive change post prospectus, it's absolutely absurd to me that this is a thing. And that is on September 4th, 2019 WeWork added its first female member to the board of directors. Folks, I've spoken a lot of podcasts about the importance of diversity on boards whether it's board of directors or advisory boards. I've spoken at length about bringing in expertise that you don't have. Sometimes it's banking, sometimes it's marketing, sometimes it's just the perspective. And I don't mean to say "just," it's the perspective of either woman or person of color and WeWork's case. I find it especially egregious that they didn't add a female member of the board of directors untill September, 2019 for a couple of reasons. First of all, regardless of whether it turns out to be a $50 billion company or a $10 billion company, it is a huge company and how it could willfully ignore the perspective of women at the board level just blows my mind. But even if that weren't enough, it's a very strong indictment because a lot of the potential tenants that WeWork is reaching out to entrepreneurs, folks starting up businesses, folks who need a workplace to perhaps get out of the chaos of at home as they work on their startup, are women.


Bret Keisling: 24:08 There are so many different things that that WeWork has done to foster community and it blows my mind that at the board level there wasn't a female perspective of what a certain client might be looking for. Not to mention and I don't want to just limit it to that, the perspective it just goes without saying as it relates to banking relationships and marketing relationships. So kudos, I guess for WeWork adding its first female board member, but in employee ownership that would have happened long before and I look forward to, WeWork as part of its path, bringing more voices onto it's board.


Bret Keisling: 24:46 Okay. I want to talk about how WeWork would have been different if it were wEO, Employee Ownership, Work and if "Eve" had founded it. But first, let me make a suggestion to the multimillion billionaire investors and companies who could afford to invest and presumably lose their investment in WeWork. Let me offer an employee ownership solution out of this mess. If WeWork announced a valuation of 47 some billion dollars in January, and apparently in August or September, it's 10 to 12 billion, I'm going to make an assumption that these major investors have recognized that their investments only worth about 20 cents on the dollar, and of course there is so much, I don't know, I could be completely wrong, but let's for purposes say they've lost a lot of money. Normally what would happen is that everybody would lawyer up, there would be investigations into the valuation. There's already investigations into the governance of the company and they're going to be multiple lawsuits and if the company is considering filing bankruptcy, then the investors presumably who are secured are going to be fighting over the scraps and all of the employees will lose their jobs and the company will implode.


Bret Keisling: 26:06 How about if all of these major Wall Street investors and institutions wrote off their loss completely just acknowledged it was a bad idea, but they're going to make a historic amount of lemonade out of a bad situation, and what if all of the investors renounced their investments, turned it somehow over into a trust as an ESOP or some other form of collective ownership and empower the 5,000 employees not to worry about their jobs, but to rather fight to grow their own pie? I think that would be magical solution. Since that's not likely to happen, certainly on the space of this podcast. Let's now look at wEO works, w-E-O works and see how it might've changed if Eve had started the firm in 2010 the way Adam started his firm.


Bret Keisling: 26:59 Right off the bat, it probably would not have been possible to have it be an ESOP. So she should look at other forms of employee ownership. Very generally speaking startups are too speculative for an ESOP trustee to be able to approve them. True startups where there's not funding. This is an important point. I'd love to be able to discuss other forms of collectives or co ops, that sort of thing that wEOworks could consider. But to be honest with you, I haven't developed the knowledge yet. What I would do is look to something on video called EO Convos. It's a video on YouTube. It's produced by Matt Cropp and EO Convos Number Three [Correction Ep. 002] features a conversation with Matt of the Vermont EOC with Dr. Nathan Schneider, who's an author and professor and really bright guy talking about how they would apply employee ownership to various models, including Facebook, including the gig economies like Uber, ride sharing, et cetera, et cetera. So I would defer Eve as she started an employee owned version of WeWorks to look to EO Convos and reach out to those folks.


Bret Keisling: 28:11 Now as someone who's currently recognized in the ESOP community, but just really learning employee ownership. Let me stress why it's important for employee ownership broadly to work together, whether it's ESOP's or other forms. We have discussed in the past that employee ownership seems among professional advisors and advocates to be a zero sum game. Although that's changing just a little bit, but generally speaking, ESOP folks will look at a prospective ESOP company and if it's not right for an ESOP, they'll ask the company to hold back in a few years. Employee ownership folks, broader employee ownership advocates, probably do a little better job of turning prospects over to the ESOP community. But if your love is collectives or co ops, that sort of thing, ESOPs are different. So there's not a whole lot of great connectivity. I happen to have the view with The KEISOP Group and our podcasts that employee ownership is good regardless of the type of employee ownership. And so I'd like to see Eve and wEOworks meet with the co op and collective community because I'm looking at the big picture and if this major shared space company is employee owned in any form, they're going to have hundreds and thousands of tenants, et cetera, et cetera, who would then be open to either co ops, collectives or ESOPs.


Bret Keisling: 29:36 So we get a company, a major company like this into the employee ownership sandbox and then the various specific forums, ESOPs et cetera, et cetera. will have the opportunity to attract all of the new business that would come of it. So my background is ESOPs, but I would see it starting off as a co op. There is one way, and I don't mean this to be as complete fantasy as it will sound, but there is one way that this could be an ESOP from the get go and that's if they did have funding and here, ironically, although seriously I'm, I'm thinking back to Adam Neumann, the founder of WeWorks and wonder with enough time if he had some perspective, if he could do things differently.


Bret Keisling: 30:18 A person who keeps coming to mind is Michael Milken. Older folks will remember in the 80s I believe he went to jail as part of the Wall Street junk bond scandals, et cetera, et cetera, and was kind of a disgraced wall street executive. And then post-prison, he still had an awful lot of money. He became a champion of cancer research and really the latter couple of decades of his life truly championed cancer research. So if Mr. Neumann wanted to perhaps change his karma or business prospects, let's say he took half a half a billion dollars and put it in trust or financed wEOworks with Eve as the CEO, then perhaps it could be an ESOP right from the get go.

Bret Keisling: 31:09 But let's assume for purposes of this discussion that Eve starts with an intent to form an ESOP and in 2012 she's built up enough of the company that she can put a plan in place. A couple of years, her employees are beginning to vest. So whereas WeWorks had in 2014 all of those high powered financiers, wEOworks in 2014 would have employee owners who are well on their way to becoming fully vested in the company. For all the reasons we've talked in other podcasts about why culture would make a huge difference that would add to the value and help to the growth.


Bret Keisling: 31:51 Eve and wEOworks would not be putting on its first female board of director member nine years after founding. She would have started with a board that recognized all of the opportunities and potential and viewpoints. So I would expect the employee owned, WeWorks and Eve to have a very diverse, talented board that supported the goals of the company in the context of employee ownership. I would expect Eve with wEOworks to not set up a related party to handle the real estate transactions. If there were good reasons from their legal advisors or accountants or whoever that real estate should be owned by a separate entity, I'd expect the real estate company to be a fully owned subsidiary of the employee owned company, so there wouldn't be any of the related parties or enrichment on the other side. It goes without saying that Eve would never have considered coming up with branding and owning it separately and then selling it to the company. In fact, Eve as the head of an employee owned WeWork would fire whoever tried to come up with such a scheme.


Bret Keisling: 33:04 Eve would understand that she could earn a very substantial living if she had an idea that came to market and it really was a multibillion dollar idea, she could earn a substantial living as the Chief Executive Officer. I do want to pay respect to those who would argue that chief executive officer salaries should be no more than a certain percentage of the lowest paid worker and I'll save that for another podcast. I'm not disrespecting that at all, but very broadly in the ESOP context, you can have highly compensated folks and there's means testing that is done to make sure that it doesn't disqualify the plan. But as we've said many times on podcasts from the trustee perspective, high compensation is okay, really high compensation can be okay, excessive compensation is not okay. So finding that line if there is one between really high compensation and excessive compensation may be a challenge in the ESOP space or in some spaces, and I'm acknowledging, while sidestepping the issue, of pegging compensation to the lower paid workers.


Bret Keisling: 34:14 Another difference between the employee owned version of WeWork run by Eve and WeWorks is, I'll return to the prospectus, WeWorks got into a lot of trouble because their property locations are many of them in environmentally troubled areas or areas prone to disasters such as flooding and that sort of thing. So that added to the pressure on WeWork saying, "Hey, you've got all of these buildings that are subpar." As an employee owned company, as part of their mission, Eve and wEOworks would actually be able to say, "Hey, we are taking these buildings that are potentially troubled. We are going to add to our communities by either addressing environmental issues or making the buildings as safe from natural disaster as possible." So rather than looking at these buildings as a bargain way to just make money, the employee owned company is going to recognize the importance of its place in the community and perhaps would do great economic good and social good by cleaning up the sites.


Bret Keisling: 35:30 Ultimately, what Eve would do in growth would be slower. You wouldn't, under an employee owned company, see any of this, somebody giving you $500 million so the company is now worth 12 billion, et cetera, et cetera. You'd have to separate the cash reserves and the exuberance from the actual creating of the value. So Eve would not obtain such heady numbers as quickly, but there is something that's very important in the employee ownership context and that's this. Of the 5,000 current employees of WeWorks as we're recording this two to three thousand are concerned that they are losing their jobs. It is not through their acts. It is not that they did not do a good job. They have done everything that they were supposed to do. It is because the governance of the corporation was such that priorities were often focused on shareholders, et cetera, and not on the employees.


Bret Keisling: 36:29 So even though Eve would not reach the heady value that Adam, at least claimed, was reached, Eve would also be very mindful that her obligation is not to a couple of Wall Street investors, but rather to everybody on the team. All of the employee owners who help make Eve's version of WeWorks successful. So folks, we can't change the past. Although I would truly love to see the investors and WeWorks divest into a trust and make it employee owned. They're already writing off a lot of stuff. What's a little more? And obviously the fantasy of how you would grow office space as an employee owned company is just that, I'm speculating, but every time I see issues these days, I look through it through the employee ownership prism and I just think that employee ownership really is a very solid way to address so many different issues as long as more people open their minds.


Bret Keisling: 37:26 If you have an opinion on this or anything else discussed on any episode of The ESOP Podcast, I'd love to hear your opinion and share your views. With that, we have...


Bitsy McCann: 37:37 Shoutouts, thanks, and congratulations.



Bret Keisling: 37:40 Our first shoutout is for the organization called Fifty by Fifty. They're dedicated to increasing the amount of employee owners to 50 million by the year 2050. Here's what their website says about employee ownership: "It works for workers who deserve a share and a stake in the economy. It works for companies who need a workforce invested in the company's success. It works for communities who need good jobs that are anchored locally, not stripped away in a destructive race to the bottom. It works for business owners who need to ensure the legacy of companies they build. And it works for America, which needs an economy grounded in shared ownership, not growing inequality."


Bret Keisling: 38:18 So here's what I really like about Fifty by Fifty. As everybody who's heard me the last four months knows this spring I got very energized. Cap Trustees spun off the media properties and I've spent the last four or five months pursuing a general growth of employee ownership. What drove me was hearing at one of the association conferences in Washington DC, a target of 40 million employee owners in 10 years. And I kind of adopted that as my mantra and a lot of the early stuff that I did pursued that goal. And the reality is, I'm not knocking anybody, I'm grateful for the inspiration. I haven't heard anybody but me mention 40 million owners in 10 years since the Washington conference. So I'm a cheerleader. I want to celebrate what everybody's doing and amplify what's everybody's doing and I need something to lock on. So I'm adopting Fifty by Fifty's goal of 50 million employee owners by 2050 I think that, as they say on their website, it is an audacious but attainable goal and I'm looking forward to amplifying and celebrating their work and hopefully being a small part in the success that everybody enjoys.


Bret Keisling: 39:36 My next shout out is to Matt Cropp, who's the deputy director of the Vermont EOC, amongst many other titles. Matt is actually who I consider to be in employee ownership kind of the Kevin Bacon of Hollywood, the Kevin Bacon game of who's connected to Kevin Bacon. Everywhere. I look in employee ownership nationally and internationally on social media. Matt Cropp is just there. I've met Matt several times in person when I've been in Vermont for conferences. He's a really nice guy. He's got just a quiet passion for employee ownership whereas I tend to get a little bit excited. Matt is just rock solid. He's very, very smart and he's not just working in the trenches so to speak, building employee ownership. He's a thought leader as well and just someone that I respect quite a bit.


Bret Keisling: 40:28 The second shoutout goes to a man that appeared with Matt in EO Convos Three [Correction Ep .002] which is available on YouTube. It's a video conversation that Matt's been doing. His guest of number three [two] was Dr. Nathan Schneider. I have a lot of respect for Dr. Schneider and I'm a touch intimidated by him and I mean that very sincerely. He's written a number of pieces you probably saw over the summer, "Fighting Capitalism with Capitalism." He takes what is the best of capitalism and that which can be modified for a broader good and his approach really is that employee ownership and the correct use of capitalism can overcome a lot of wrongs that capitalism has created. Earlier this summer when I started my focus on employee ownership broadly, I made a joke that I wasn't even sure whether co op was hyphened. Dr. Schneider was kind enough on Twitter to tell me it was not hyphened unless you're in England. And I suddenly realized that if my mission of amplifying and celebrating employee ownership is successful, there's a chance someday in the future I may be on a panel with Dr. Schneider somewhere and may be able to remind him that he taught me not to hyphenate co op! I'm also aware that if it turns out that I don't have a future in employee ownership, that it's quite possible. Dr. Schneider will be on a panel himself in 5 or 10 years saying there was once this knucklehead who wanted to do a podcast, didn't even know how to spell co op! And I'm probably enough of a narcissist that if that were the reality, and I ended up hearing Dr. Schneider talk about the knucklehead that nobody ever heard of, I'd be like, "Oh, he means me!" Inspired by Dr. Schneider's writing. I've actually spending time reading the works of Louis Kelso. It allows me to say, at least for now that I am a Kelsoist. And so I'm thinking about things in ways that I wouldn't have, but for Dr. Schneider. And again on that EO Convos Three [Correction Ep. 002], as someone who's coming from the ESOP space, they laid out so many great ideas and frankly, some of the things that I have coming up are going to be based on their work. So Dr. Schneider also gets a shoutout and a thanks from us.


Bret Keisling: 42:53 My final shout out and thanks is to someone who fits in the category that I call impactful, which for me is a very high compliment. It's somebody, oftentimes they don't even realize it, but whose work or viewpoint I find so impactful that it kind of seeps in a little bit to the work that I'm doing. I'm speaking about Jennifer Briggs of Boulder, Colorado. Jennifer has been the subject of I believe several articles that Dr. Schneider has written. Jen is a former executive at New Belgium Brewing where she certainly mastered her corporate chops. But as an employee owned company, she developed, I believe, her passion for employee ownership. Here's a couple of ways that Jen has impacted me. When I first started The KEISOP Group this summer and frankly saw Dr. Schneider's article fighting capitalism with capitalism, I got a little bit, I don't want to say defensive, but was, "Hey, capitalism has been used badly, doesn't have to be used badly."


Bret Keisling: 43:57 Jen Briggs on her Twitter, and I guess her website, identifies herself as an inclusive capitalist and I readily came to understand that Jen has it right. That rather than getting bogged down in a fight whether capitalism is good or bad or can be good, that by carving out a space called inclusive capitalism, she's not turning her back on capitalism generally, but rather focusing on the positive aspects of it, that as long as more included that more are helped and it's constituencies, I imagine, not just the employee owners, but the communities, et cetera, et cetera. So I think Jen was wise on inclusive capitalism. And if she doesn't mind, I'd be happy to call myself an inclusive capitalist as well.


Bret Keisling: 44:43 In August or so, right after I decided to open offices in Denver, I had the opportunity to meet with Jen in person in Boulder, Colorado, and I appreciate her time and we're going to get together before too long. And I was trying to explain what I was doing with the podcasts and some of the websites that will be coming out. And I was describing the Drudge Report or the Huffington Post and I said, you know, I'm kind of like an aggregator. I'm just taking the stories and I'm just putting other people's stories out there. And Jen said, so you're amplifying. And I think the following week, the opening to the podcast began, "we amplify and celebrate." It was directly related to Jen's influence. I hope I thanked her. It certainly, it was a sign of respect of that I was able to articulate what it is I was planning to do. And in a moment, Jen provided the word that summed up perfectly what I was doing. And I think you'll see if you go to her website, alifeinmosaic.com, you're going to find an awful lot of employee ownership materials there. You're going to find a lot that makes Jen who she is. But what I really respect about Jen is she brings out everything together from her, her life backstory, if you will, to her business experience, to her passion, to making the world a better place through employee ownership. And you really get a sense of her humanity through her website. She's a really talented writer and I enjoy following her on social media. So I'll stop gushing about Jen, but it was natural for me to bring in Matt Cropp and Dr. Schneider as part of EO Convos and to be honest with you, Jen Briggs fits right into that category of people in employee ownership that I hold in great regard.


Bret Keisling: 46:30 With that, folks, we've had a full episode today. We've talked about WeWorks, we've talked about what if WeWorks were wEOworks and we gave some shoutouts to some folks that we have great respect for. With that, we're going to bring in the disclaimers. Bitsy's going to tell you how to contact us, and then we're going to share our gratitude to the team members who help bring the podcast to you. I hope you'll stick around for those announcements and join us again Friday for the Mini-cast and every Tuesday for the podcast.


Bret Keisling: 47:02 The views expressed herein are my own and don't represent those of my own firms or the organizations to which I belong. Nothing in the podcast should be construed as guidance or advice of any kind in any field, and the fact that I mention an organizational website or an advocate or a company on a podcast does not reflect an endorsement. But if you've heard your name or your group's name mentioned on this podcast, I'd love to have you come on and talk about it yourself.


Bitsy McCann: 47:30 We'd love to hear from you! To contact us, find us on Facebook at KEISOP, LLC and on Twitter @ESOPPodcast. To reach Bret, with one "T", email Bret@KEISOP.com, on LinkedIn at Bret Keisling, and most actively on Twitter at @EO_Bret. Again, that's one "T". This podcast has been produced by The KEISOP Group, technical assistance provided by Third Circle, Inc. and BitsyPlus Design. Original music composed by Max Keisling, archival podcast material edited and produced by Brian Keisling.


Bret Keisling: 48:01 My name's Bret Keisling. Thanks for listening.

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