Regular readers might recall that, as a lad I dropped out of school to pursue an electrical apprenticeship. While I will forever be known as perhaps the worst electrician to complete an apprenticeship at DBE, I’d like to think I did learn a thing or two.

I cannot help but think to myself, every time I see an American vintage car, of my old workmate Grant, himself a Yank tank afficionado who taught me that cars must display “chrome, fins and tonnage.” Similarly I will forever be inspired by John C, whose seeming intention was to keep working until his grandkids had retired.

One thing that was etched into my psyche in those times was a fairly binary perspective on those who have desk jobs versus those who perform, what we described at the time as “real work.” As a teenage apprentice I, naturally enough, considered myself superior to those who wore a suit and tie, who might risk a paper cut at work, or who had to take it easy lest the lifting of their briefcase strain their back. Indeed, at the time I saw little to indicate that these “office Wally’s” did work of any validity.

Fortunately for myself and the many professional folks who I today call colleagues, my perspective has changed somewhat and I understand that there is merit in many different types of work. Wielding a power tool, while certainly satisfying, isn’t a prerequisite for an individual’s day to be considered real work.

I’ve been thinking of work, and my somewhat pejorative definition of it, recently while I’ve been watching the drama series telling the sorry tales of WeWork. Most people will have some awareness of WeWork, the desk-renting startup that somehow managed to convince investors it was in fact a technology startup and which, in the process, managed to raise many billions of dollars.

Suffice it to say, WeWork was led by a very charismatic, Israeli of dubious morals, Adam Neumann. That leader was himself led by a wife with her own peculiarities, including a massive appreciation of her own worth, a self-appointed position as the deliverer of elevated human consciousness, and an oft-mentioned familial tie to Hollywood actress Gwyneth Paltrow.

Anyway, WeWork had a famous reckoning a few years ago, after which Neumann was forced to fall on his sword (albeit after being paid a golden parachute of over a billion dollars). The company carried on and has since returned from zero and in fact became a listed company. Its reinvention, however, doesn’t change the underlying facts of the case – that WeWork was built upon a house of cards designed by a very charismatic, but flawed founder, and without the fundamentals required to build a sustainable operation.

I was thinking of WeWork, and thousands of other overinflated and venture-backed companies recently when I read about an email that Y Combinator, the famed Silicon Valley accelerator and investment house, sent to its portfolio companies. The email, which had the tone of a “man the lifeboats” command included the following:

No one can predict how bad the economy will get, but things don’t look good. The safe move is to plan for the worst.  If the current situation is as bad as the last two economic downturns, the best way to prepare is to cut costs and extend your runway within the next 30 days.  Your goal should be to get to Default Alive.

To paraphrase, be aware all these companies that have raised millions of dollars based negligible fundamentals but with the simple view that their valuations will rise because well, things always go up. Inexorable growth is not, in fact, inexorable and anyone who lived through either the ’87 stockmarket crash or the 2008 GFC will know that markets also trend downwards. And when they do, those with the money suddenly start to make more conservative decisions.

It’s a situation that parallels the property market. Every day I receive messages from twenty-something year old property investment advisors who sell me on the notion that they’ve “cracked the code” of property investment. These charlatans, who themselves have only experienced a market with an upward trajectory, don’t understand that making money in a bull market is easy. But even easier is to lose money in a bear market. When prices go down, these used (and sometimes new) house salespeople will suddenly be left high and dry. As will the gullible people they convinced to invest in a “sure thing.”

I absolutely feel sympathy for those who will suffer the reality of this upcoming economic reset. There will be many people who see their net worth head south and no one should feel glee about that. But despite the collateral damage, this current economic downturn might mean that snake oil propositions such as WeWork (not to mention Theranos or a couple of close to home examples that I won’t name), don’t get the oxygen they need to continue. No one wants companies to fail, but if their success is simply a by-product of an overinflated and utterly warped time in economics, perhaps it is for the better.

My old workmate Grant used to say, the man’s a fool, Boss. Those who invest in companies, properties or any other assets simply because their prices have risen over the past few years is being similarly foolish.

Ben Kepes is a Canterbury-based entrepreneur and professional board member. He’s invested in a bunch of things but doesn’t believe anything is a sure bet.

Ben Kepes

Ben Kepes is a technology evangelist, an investor, a commentator and a business adviser. Ben covers the convergence of technology, mobile, ubiquity and agility, all enabled by the Cloud. His areas of interest extend to enterprise software, software integration, financial/accounting software, platforms and infrastructure as well as articulating technology simply for everyday users.

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