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Her Search For Enlightenment Fueled WeWork's Collapse

Bjorn Iooss / Trunk Archive

When Rebekah Paltrow showed up at Dechen Thurman’s 8 a.m. meditation class for the first time, Thurman saw someone a lot like himself. Her last name advertised shared lineage with an ultrafamous blonde movie star. She’d been born into enormous privilege and the expectations that accompanied that. She was a struggling actor who had taken the better part of three decades to figure out that what she was probably supposed to do with her life was teach yoga.

Thurman had also faced years of rejection as an actor, and when he found a following as an instructor at New York City’s celebrity-beloved Jivamukti Yoga Center, he felt that yoga bloggers wrote him off as Uma’s brother and the less successful child of Robert, the western world’s preeminent Buddhism scholar. “A lot of having privilege is the double-edged sword of expectations,” Thurman says. “There are a lot of people hoping for you to fail, and a lot of the same people ready to dismiss whatever success you do achieve as a byproduct of the privilege.”

Rebi, as she was called then, didn’t seem to let it get to her. “She didn’t have unrealistic expectations,” Thurman says. When her acting career failed to alight, she signed up for a 300-hour apprenticeship with Thurman with the goal of ultimately opening a Jivamukti franchise somewhere. “She was willing to put in the work and trust the process.”

But her new boyfriend Adam slammed the brakes. Rebekah brought him to one of Thurman’s afternoon classes, which averaged around 75 students at his peak. Thurman sensed that Adam was impressed, and later that night, when a group of yogis went back to drink at Thurman’s rent-stabilized walk-up on East 11th Street, Adam asked point-blank what kind of money his soon-to-be-wife could expect to make as a Jivamukti instructor. Thurman explained what he knew about the system — that instructors were independent contractors who got paid a dollar or two for each student who showed up to class. When you were starting out and working the low-volume shifts during the slower months, it was almost like you were paying to work there, “almost like being a stripper.” “Adam didn’t feel like his wife should waste her time that way when she could just create something herself,” Thurman says. “And he was right.”

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It would be a few years before Thurman began to feel that he had been used by the yoga studio, working effectively without a raise while the company expanded to Europe and California. “Adam’s mission rescued Rebi from spinning her wheels inside the yoga teacher bubble,” he says. “And she saved him, too.”

Today, Rebekah and Adam Neumann are living in temporary social exile in Tel Aviv after starring in the most sensational corporate collapse probably ever. Adam founded WeWork with Rebekah’s help in 2010, promising to rescue 21st-century workers from the drabness of 20th-century offices and usher in a new era of collaboration and innovation. WeWork did not invest substantial sums in technology or research, and its development and construction costs were heavily subsidized by its landlord partners. Still, the office space startup burned roughly three times as much cash as it ever grossed, much of it on decadent parties and investments in similarly questionable startups. All the while, its valuation (as calculated by Goldman Sachs) inflated to $90 billion.

When plans to go public last August backfired in a hailstorm of headlines about Adam’s excesses, WeWork’s financial backers kicked the Neumanns out of their ice bath-equipped corner office — only to burn another $1.7 billion bestowing upon the couple the biggest golden parachute in history. It was a relatively victimless grift, graded on the generous curve of modern corporate meltdowns, but it symbolized magnificently the deranged notion that young idealists can solve the world’s problems by wearing vegan shoes and delivering triple-digit returns to a small clique of Silicon Valley billionaires. Even Republican Sen. Tom Cotton seemed ready to sentence its founding couple to the guillotine, if only for embodying “the reason Americans are open to socialism.”

WeWork’s bailout by its largest investor, SoftBank, may permanently obscure the ugliest details behind its demise. But if the epidemic of self-delusion surrounding WeWork’s potential can be traced to anyone, it is Rebekah. Media accounts tended to depict Rebekah as a cartoon Yoko who brainwashed Adam into giving her titles like “strategic thought partner” and a staff she charged with such inane tasks as disassembling her phone, painting all the pieces white, and reassembling it again. But even though Rebekah’s name was absent from WeWork’s original literature — leading to accusations that the company rewrote its history to make her a co-founder — the business bore the hallmarks of her thirst for enlightenment and mystic milieu. It was Rebekah who, according to the couple’s own mythology, transformed Adam from a chain-smoking pretty boy with such profound dyslexia he could barely read his text messages into the shamanic figure who wooed so many overconfident white guys in Silicon Valley. Perhaps more importantly, a close friend says, it was she who at some point during the financial crisis of 2008-2009 — when other heiresses were plowing their money into gold, Caribbean tax shelters, battered too-big-to-fail bank stocks, industrial foreclosure flippers, and this new thing called Bitcoin — bet her own net worth on Adam.

"She was never running around, trying to get attention."

Rebekah Paltrow came into the world ensconced in wealth and bad energy. The baby of the family, her youngest elder sibling, Keith, was 12 years old when she was born in 1978. By the time Rebi was in school, her parents, Bob and Evelyn, were still nominally living together but increasingly estranged. Bob was busy with all manner of revenue streams: Evelyn’s family had made a killing with an accessories business now known as the lingerie company Gelmart; Bob’s family had made a tidy sum manufacturing steel pipes, and there was North American Communications, the junk mail printer-distributor Bob co-founded with a childhood friend. A company plane and a pilot on payroll flew the family to Evelyn’s mother’s summer house in the Vineyard, a winter house in Vail, and an oceanfront mansion in Palm Beach. But all was not well, according to a former friend of the family. Although the family had moved from a secluded estate in Bedford, New York to a beachfront mansion in Great Neck, Long Island, to be closer to her parents, Evelyn spent Rebi’s early years growing increasingly fed up with her semi-absentee husband. The friend remembers her abruptly leaving the house for three weeks at one point, allegedly to help Bob’s business partner re-decorate his house. (Evelyn Paltrow declined to comment.)

At some point in the ’80s, the junk mail company began to underperform, and Bob juiced the earnings a bit, founding a faux charity called American Cancer Research Inc. The organization littered the nation’s mailboxes with questionnaires and pleas for funding but had no intention of ever sending the (about $2 million worth of) checks it collected to any actual disease researchers, according to court documents describing the “old-fashioned swindle.” The authorities began sniffing around and, ultimately, sued the charity, the junk mail company, and Bob Paltrow. Washington got involved a few years into the saga, suing the group on behalf of the U.S. Postal Service in 1990. Then, between courtroom battles, the unthinkable happened: Keith got cancer.

Rebi stopped eating meat around the same time Keith died at 23 years old, after a yearlong struggle with the disease. She was just 11. She had always loved animals, according to her then-brother-in-law Moni Liberman, who remembers first meeting Rebi when she was 7 or 8. “Uncle” Moni was a charming Tel Aviv event promoter who met Rebi’s older sister Marlene on the beach in Malibu and quickly became part of the extended Paltrow family. He worked on the set of St. Elsewhere, which was written by Bob’s brother, Bruce Paltrow, and babysat Bruce’s children, cousins Gwyneth and Jake. He was struck by how well behaved Rebi was, and how independent.

“She was never running around, trying to get attention,” he remembers. “Bob needed to control everyone around him, but he did not control Rebekah.” A hairdresser in the midst of stressed-out mid-tier moguls, Liberman spent a lot of time with Rebi and Gwynnie at the “kid’s table.” “The whole family was constantly under fear, constantly guarding and judging,” he says, behind the mask of “this American phenomenon of talking and talking without saying anything.”

Rebi went to the prestigious Bronx private high school Horace Mann and fell in with the wealthy popular crowd. One self-professed scholarship student remembers Rebi as the nicest of the rich girls. That was in part because she was best friends with Amanda Tisch, future fashion editor of Harper’s Bazaar, in whose radiant presence another student remembers “everyone else just seemed terribly mediocre.” At the same time, cousin Gwyneth was becoming, well, Gwyneth. When Rebi moved up to Ithaca for college in 1996 at her father’s alma mater, Cornell, her cousin was on the cover of both Vogue and New York magazines.

By the time sorority rush came around, according to Business Insider, Rebi had established a generic line for addressing her association with the most envied woman in America: “Yes, she’s my cousin. Yes, we’re close. Yes, I know Brad. Yes, I’m going to the wedding. Next!” Her flippancy offended some of Cornell’s more sensitive social gatekeepers, according to the article, but classmates say she had her own group. Some of her Horace Mann friends had joined her at Cornell, and together they befriended other affluent, ambitious kids, including Brian Hallisay, a handsome econ major from Washington D.C. who dated Rebi for a time and went on to become a successful television actor. (Hallisay did not respond to a request for comment.) A college friend who traveled with Rebi and a group of her Kappa Kappa Gamma sorority sisters to Jamaica for spring break remembers her as sweet and serious, not snobby by the standards of sophisticated New Yorkers marooned in Ithaca.

"There’s this saying in Kabbalah that the woman is the CEO of the relationship, and she was 100% the CEO of the relationship."

Rebi majored in Buddhism and business, and she interviewed for first-year jobs at investment banks during her senior year of college, because, as she would later say on The School of Greatness podcast, it was “the kind of job to get.” She moved into a West Village walk-up and got a job on the trading desk at Smith Barney. And then, very quickly, her world fell apart.

Rebi quit Smith Barney weeks into the program. “It was not my calling,” she later told The School of Greatness. Then her boyfriend “ran off” with her best friend, and she booked a flight to Dharamsala to meditate in the presence of the Dalai Lama. While her older sisters, Marlene and Lisi, landed in The New York TimesSunday Styles section for their party-throwing exploits, and Marlene divorced her second husband after the SEC began probing his role in an insider trading scheme, and Gwyneth eloped and had babies, and Bob and Evelyn made their divorce official, Rebi set about finding herself.

She moved to Los Angeles, took method acting boot camps, and started taking classes at the Kabbalah Centre. “I felt like a loser,” she told The School of Greatness. Friends of Rebekah who spoke with Bustle weren’t exactly sure what she did during the six years after she returned from India. “She was extremely dedicated to art and she was extremely dedicated to meditation, spirituality. You can absolutely spend every moment of the day for six or 20 years in genuine dedication to either one of those things,” says Raphael Sacks, an actor who met her in a master class. But the life of an aspiring actor in LA is “brutal” enough, he says, without the added existential curse of a famous surname. “It’s easy to imagine people in LA trying to use her to get to Gwyneth Paltrow.”

Tatiana Ganopolsky, a former Kabbalah Centre member who knew Rebekah in WeWork’s early days, says the Centre’s combination of spiritual scholarship, life-coaching, meditation, and networking is often all-consuming. “There are dinners, there are classes, there are trips…when you are in the Kabbalah Centre they don’t leave you time for anything else,” she explains. When they met at the New York center in 2008, Ganopolsky says Rebekah sat in the front rows of every class, denoting her as a VIP, a status reserved for celebrities and people with money. (A recent class-action lawsuit filed against the Centre says staffers kept spreadsheets with detailed information about members’ finances, culled from databases like WealthEngine, alongside whatever notes instructors had collected on their insecurities and sex lives.) In those days, Ganopolsky says, Rebekah was solemn and “very serious” about studying the Zohar, the ancient mystical interpretation of the Torah that serves as Kabbalah’s foundational text.

Everyone who knows Rebekah will tell you what she famously didn’t do during her years in the wilderness: date. “I was studying life and wanted to have a deeper understanding of who I was before I opened up to welcoming a partner,” she later told The School of Greatness. In 2007, as Rebekah tells it, she had just come back to New York City after an intense Jivamukti instructor certification program upstate when she agreed to go on a date with a guy one of her college friends had met on the roof of his building.

Adam Neumann had moved to New York from Tel Aviv around the same time Rebekah had taken off for India. He had spent the intervening period crashing on his fashion model sister’s couch and hitting on her fashion model friends, while dreaming up get-rich-quick schemes and squandering a modest trust fund on a business selling baby pants outfitted with kneepads to make crawling more comfortable. Like Rebekah, he had never held down a real job, having spent his 20s in his own kind of tequila-soaked wilderness. Unlike Rebekah, on their first date, he had the nicotine shakes and no money to pay for a cab.

"The yoga business is old-fashioned labor exploitation, and maybe WeWork was a Ponzi scheme."

“Rebekah went on that first date with me,” he would later recall in a Baruch College commencement address on the importance of finding a soulmate, “and within five minutes — now I say five minutes to be nice but it surely took 10 seconds — she looked me straight in the eye and she said, ‘You, my friend, are full of shit. Every single word that comes out of your mouth is fake.’”

And with that, Rebekah marshaled the accumulated revelations of six years in multiple forms of therapy and gave Adam a crash course in what she called “the game of life.” She brought him to Shabbat dinners and the Kabbalah Centre in Turtle Bay and meditation sessions with Thurman at the Jivamukti studio in Union Square. The Kabbalah instructors introduced him to the Landmark Forum, a famously grueling self-help boot camp that teaches adherents how to “enroll” friends and strangers in their ideas and agendas. She got him to quit smoking and, for the most part, meat. Slow down, she said, and if the money is meant to follow, it will follow. In 2008, within months of meeting, they married; over the next six years, they would both become billionaires. Says a close friend, “There’s this saying in Kabbalah that the woman is the CEO of the relationship, and she was 100% the CEO of the relationship.”

“I am nothing without you,” he often told her, including from the stage as he delivered the Baruch commencement address. Financially speaking, it was true: In addition to all those life lessons, she gave him a million dollars, which was a lot of money to have in the bank during a credit freeze. The money was a wedding gift from her parents, for a down payment on an apartment. They moved into a tiny East Village space and saved the money for a “capitalistic kibbutz,” or communal office space, inspired by a business plan Adam had originally dreamed up in a college entrepreneurship contest. A professor had mocked the idea back then on grounds that Adam would never manage to raise the funds to secure the necessary real estate — but that professor had not factored in the possibility that his student would marry into wealth on the precipice of the greatest real estate crash New York had seen in decades.

Countless other companies in Manhattan offered office space to freelancers and startups. But the timing gave Adam an edge with both landlords — who were desperate for reliable tenants — and prospective subtenants, or “members,” thousands of whom were being laid off every month in 2008 and 2009. It also helped that WeWork’s valuation had been inflated by a property developer named Joel Schreiber, who purportedly heard about the company and offered to buy a 33% stake for $15 million before the Neumanns had even settled on a building for their first location. (The money never materialized — Schreiber’s former associates, several of whom have sued him for defrauding them, doubt he had that much cash in 2009, according to a 2017 investigation by The Real Deal — but it made WeWork into a speculative bubble before it was even a brand.) Rebekah’s family continued to help; the C-suite was stacked with her brother-in-law, cousin, and another cousin's husband, who later brought in his mother; her nephew started as an intern and quickly worked his way up the ranks to vice president.

“It felt like a lot of people from Great Neck, Long Island, and people from Great Neck take care of other people from Great Neck,” says a former WeWork staffer. “That was my sense of how they got so much financing when their business, on paper, was a disaster.”

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Rebekah’s spiritual family at the Kabbalah Centre helped, too. At least some members were initially skeptical of Adam — a former member remembers one instructor musing that he would “never amount to anything” — but Rebekah conferred legitimacy upon him. At the group’s headquarters, Adam ended up meeting many of WeWork’s earliest investors: private equity investor Steven Langman, Madonna’s ex Marc Schimmel, and Ashton Kutcher, who parted ways with Kabbalah when he broke up with Demi Moore but stayed friends with Adam.

WeWork’s real differentiating factor, however, was Adam’s limitless capacity for bullshit. Early employees watched in awe as he led prospective members on tours of dusty construction sites; promising zen gardens and “revolution,” he sub-leased the spaces months before they were finished. By the time Adam had lined up a third building, he was pitching himself to the press as a new generation’s answer to Steve Jobs.

“I remember Adam wanting me to buy some supplies for the first location on my own credit card, and Rebekah stepping in and saying, ‘Adam, you can’t just ask him to do that, he’s not rich,” recalls one of WeWork’s first employees. “And Adam said, ‘He will be soon.’”

Rebekah spent WeWork’s early days revisiting her acting aspirations. Out of a studio in the original WeWork, she wrote and produced a short film about a woman experiencing a mental breakdown called Awake. Some Kabbalah Centre friends helped her cast Rosario Dawson and Sean Lennon. “It's one of those things where, instead of waiting for the perfect part, why not produce your own short film?” explains a friend who worked on Awake. “She was going about it the right way; she wasn’t, you know, pining for fame,” adds Thurman.

She also helped orchestrate the parties for which WeWork became legendary, including a three-day bacchanal in the summer of 2012 for all 400 WeWork tenants at a tony upstate summer camp owned by her aunt. If the events didn’t make obvious sense for the underlying business, they were invaluable in wooing the new investors required to subsidize an increasingly insolvent enterprise. (An A-list Silicon Valley venture capitalist told Forbes that visiting WeWork in 2012 gave him eBay-in-1997 vibes; he promptly led an investment round in the company.) As Rebekah would later recall on The School of Greatness, “Our intention was never to find a way to make the most money,” but “just, ‘How do we expand this good vibration to the planet?’”

Rebekah didn’t start appearing in all the news stories about WeWork until 2014, the year the company achieved its first official billion-dollar valuation, on revenue of more than $100 million. The same year, Bob Paltrow, following a few years of legal wrangling with IRS auditors, pleaded guilty to felony tax evasion over his liberal use of the junk mail company to finance his lifestyle. Court documents show the company had purchased four antique race cars, five luxury passenger vehicles, and a membership to Mar-a-Lago for Bob’s personal use, and it had made hundreds of thousands of dollars in rent payments on Bob’s Palm Beach mansion and Park Avenue penthouse. (Calls to a number listed for Bob Paltrow and his former criminal attorney were not returned.)

Bob was sentenced to six months in prison, following the requisite flurry of letters from friends and family about what a great guy he was. Rebekah used her letter to suggest that her dad had been acting out on repressed sadness stemming from Keith’s death. “I do not know why my father would disrespect the government or act in such an irresponsible and stupid way as to not pay taxes, but I have to imagine, in some way, it was related to the tremendous loss he felt and his wanting to rebel against a larger system of life,” she wrote.

Patrick McMullan/Patrick McMullan/Getty Images

In the years that followed, the Neumanns similarly commingled their finances with WeWork’s, calling upon the company’s construction department to assemble furniture and install light fixtures in their homes, directing employees to spend three full days downloading kids' movies to the entertainment center of the company's $60 million Gulfstream, and buying assets WeWork would in turn lease back from them. But as Rebekah explained in an interview with Fast Company, “We don't have a line at all between work and life. It's not even a blurred line. There is no line.”

Adam expected deputies to show up for Kabbalah meditation classes and tequila-addled midnight meetings, and their children opened up lemonade stands in the office. When it was time for Elle, their oldest child, to start preschool in 2017, the Neumanns decided that preschool, too, needed to be a part of the “We”-volution. “In my book, there’s no reason why children in elementary schools can’t be launching their own businesses,” Rebekah told Bloomberg at the time.

So she created the Tribe School, which was soon given a Bjarke Ingels-designed headquarters inside the WeWork base in Chelsea and renamed WeGrow. “I think they were just starting to miss their kids,” says a company veteran. A few months into its first semester, according to several news reports confirmed by a WeGrow parent, Neumann enacted a ban on nannies waiting in the WeGrow waiting room because, well, no one ever forced her to articulate a reason; she was notoriously obsessed with the WeGrow Instagram feed, according to Business Insider.

WeWork’s attention to superficial details and branding made a kind of sense for a company that needed new influxes of cash to sustain itself. “The end of the month always felt like a pyramid scheme,” says a former staffer. “The only financial metric anyone cared about was desks sold.” According to the staffer, the sales staff used increasingly desperate means to reach their quotas. First, they offered 12 free months to all defectors of competing workspaces. Then they tried to convince big corporations to relocate to WeWorks that didn’t exist yet, counting the prospective tenants' declaration of intent to sign a lease toward the desk quota. In more cases than not, the former staffer says, the company was losing money on each new desk it purported to fill.

When SoftBank pulled out of a promise to invest another $16 billion at the beginning of 2019, the company doubled down and decided to go public. In preparation for an initial public offering, Rebekah put her spin on a prospectus that projected the most enlightened, aspirational image possible of a business with the financial reality of a condemned basement. (The document’s aesthetic emulated her cousin’s wellness website Goop, according to the podcast WeCrashed.) “We are a community company dedicated to maximum global impact,” it opened. In committing to words the limitless possibilities of whatever it was she and Adam had created, she had perfectly articulated the emptiness of the business model.

The Kabbalah Centre preaches that you can get what you want by willing or “manifesting” it to be. According to the former WeWork staffer, Adam believed that by the time the music stopped, so much important real estate would be annexed by WeWork that they’d be Too Big to Fail. Lofty marketing and lush amenities nearly got them there. “You can use the language of spirituality to revive a discredited idea,” Thurman says. “And so, the yoga business is old-fashioned labor exploitation, and maybe WeWork was a Ponzi scheme.”

"She just came off like one of those women who has never left the bubble of that Upper East Side existence where all your friends are socialites.”

By the middle of the decade, Rebekah’s spiritual stomping grounds had come under fire for taking advantage of congregants. The Jivamukti yoga studio was sued for sexual harassment in 2016 and later settled; it closed its doors in New York City in December 2019. The Kabbalah Centre has faced multiple lawsuits from former members over misappropriated donations and sexual assault, and is currently being sued by seven former staffers who accuse the group of forcing them to sign “vows of poverty” and work essentially for free.

The junk mail company that had bankrolled Rebekah's lavish childhood began to collapse, too, a few months before WeWork's botched IPO. In March 2019, roughly 700 employees of a company factory in Ciudad Juárez were told to take a three-day weekend, only to return to an empty warehouse; in interviews, employees said the machinery had been driven back across the border. No one bothered leaving their last paychecks, so employees resorted to hanging “Wanted” posters outside the plant with photos of Rebekah's brother-in-law, Nick Robinson, who had been running the company during Bob Paltrow's tax evasion case and is accused in one lawsuit of looting its coffers.

At the same time Rebekah, who had so masterfully domesticated and focused her husband in WeWork’s early days, increasingly turned her critical gaze toward sources of toxic “energy” undermining the WeWork mission of, as she articulated in the IPO prospectus, “elevating the world’s consciousness.” When Adam wanted to make a headcount reduction, Rebekah would walk through the offices looking for signs of bad energy, then call a meeting with the offending employee, ordering him or her fired within minutes; it was reported in Vanity Fair that a mechanic hired to maintain the company Gulfstream was let go after Rebekah determined his energy was poor. In a lot of office environments, “bad energy” might be code for “old” or “overweight” or “knows too much about labor law,” but one veteran WeWork employee said Rebekah’s firings were seemingly random and without obvious prejudice. “She was just a spoiled baby,” the employee said.

If WeWork seemed like an heiress yoga instructor’s idea of a company — “redefining success to include fulfillment and sharing and generosity,” is how Rebekah explained it to The School of Greatness — that’s precisely what it was. But as WeWork’s valuation exploded, Rebekah abandoned the Zen detachment from material possessions of more youthful days. According to The Wall Street Journal, the Neumanns’ real estate spending spree started in 2013 with a $10.5 million Greenwich Village townhouse they spent $6.5 million renovating and a modest weekend beach house in the Hamptons. They moved on to a $50 million-plus Gramercy Park project, converting four condos into a single ultra-penthouse replete with stroller parking lot; a $15 million weekend estate in Bedford; and a 7,000-square foot mansion in Amagansett that backed up to one of Gwyneth’s homes. There was also the $21 million Marin County, California, mansion with a guitar-shaped room they purchased in 2018.

The Neumanns intend to come back to New York, according to their Tel Aviv-based publicist Asher Gold, albeit to a slightly humbled existence; they just listed the Gramercy penthouse for $37.5 million. If and when they begin their second act — this time with a billion dollars in seed capital, not a million — their money will do the talking that, over the past decade, became WeWork’s signature product.

A WeWork staffer remembers seeing Rebekah speak at the launch of WeGrow: “She’s up there talking all this — Scott Galloway calls it ‘yogababble’ — about how the school system isn’t doing enough to nurture conscious entrepreneurialism, and I’m thinking, you’re talking to a bunch of people whose kids pass through metal detectors on the way to school every day. She just came off like one of those women who has never left the bubble of that Upper East Side existence where all your friends are socialites.” In her jet-setting, enlightenment-seeking, Ivy League-credentialed way, Rebekah Neumann seemed almost provincial to him. It wasn’t obscene or evil, says the staffer. It was painful to watch. “I can’t even go to yoga anymore,” he says. “It’s too triggering.”

Editor's note: This post has been updated to clarify the extent of Rebekah's involvement with the prospectus for WeWork's initial public offering.