Adam Neumann, the frenetic cofounder and CEO of WeWork, was pacing back and forth in his office in New York City’s Chelsea neighborhood, ignoring the heavy bag, the Peloton spin bike and the generously stocked bar in favor of something more urgent: the clock. Softbank boss Masayoshi Son, Japan’s wealthiest man and one of the world’s great investors, had promised the 38-year-old former Israeli naval officer two hours of his time for a full-blown tour of the co-working innovator’s headquarters. And he was an hour and a half late.

“Masa arrives, looks at his watch and tells me, ‘I’m so sorry, but I only have 12 minutes,’ ” Neumann says in a raspy voice. And after precisely 12 minutes of walk-around, Son said he had to go.

But he offered Neumann a chance to join him in his car. Neumann grabbed his pitch deck and climbed into what would become a $20 billion ride.

Son told Neumann to put away his presentation, pulled out his iPad and started sketching the outlines of an investment. “I thought the valuation had been too high for a company its size and that someone could easily copy it,” Son tells Forbes. “But no one could. The idea was easy to talk about but hard to execute–Adam proved he can do what he says.”

As the ride ended, Son signed his name on the iPad sketch, drew a line beside it and handed Neumann the pen. “Even today, I still get goose bumps thinking about it,” Neumann says, holding up his lanky forearm to show that the hairs are standing straight up. “Half an hour later, he emails me this.” Neumann retrieves on his iPhone a photo of the digital cocktail-napkin contract–a tangle of lines laying out a global partnership, with Neumann’s scrawled signature in blue ink beside Masa’s in red uppercase.

The backseat term sheet emerged from the lawyers as a two-part deal: Softbank would invest $3 billion directly into WeWork ($1.3 billion via a tender offer of existing employee stock and $1.7 billion in new equity). A separate $1.4 billion was to be spread across three new entities to expand WeWork across Asia: WeWork Japan, WeWork Pacific, WeWork China. Neumann’s team would build and manage the offices, and Softbank would handle the local relationships. Valuation: $20 billion. WeWork, which straddles real estate, hospitality and technology, was now worth about the same as hotel operator Hilton Worldwide and more than commercial real estate giant Boston Properties and social media sensation Snap.

At the deal closing in Tokyo in March 2017, Neumann was joined by his cofounder and fellow billionaire, Miguel McKelvey, a sinewy 43-year-old former University of Oregon basketball player. “Masa turns to me and asks, ‘In a fight, who wins–the smart guy or the crazy guy?’ ” Neumann says. “I say, ‘Crazy guy,’ and he looks at me and says, ‘You are correct, but you and Miguel are not crazy enough.'”

“I told Adam not to be proud that WeWork was growing organically without a large sales force or spending big marketing dollars,” Son says. “Make it ten times bigger than your original plan. If you think in that manner, the valuation is cheap.” How cheap? “It can be worth a few hundred billion dollars.”

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The craziest one of all would seem to be Son, once you try to figure out exactly what he’s valuing at $20 billion–a figure exceeded only by Uber and Airbnb among U.S. startups (digital intelligence outfit Palantir has a similar valuation to WeWork). It’s an office company … that doesn’t own any offices. Like Uber and Airbnb, WeWork is essentially a middleman, renting space from others at whole-sale and then upcharging for cool design, flexible leases and built-in services like internet, reception, mailroom and cleaning. (Free coffee and beer, too.) WeWork’s value-added is office culture–at massive scale. Starting with one New York City space in 2010, the company now has 163 locations–a figure that has tripled since the end of 2015–spread across 52 cities worldwide. Its 2,900-plus employees manage 10 million square feet for 150,000 members who pay anywhere from $220 a month for the use of a common area to $22,000 for a 50-person office.

“No one is investing in a co-working company worth $20 billion. That doesn’t exist,” Neumann says. “Our valuation and size today are much more based on our energy and spirituality than it is on a multiple of revenue.”

That’s most certainly true–the company is on track to do an estimated $1.3 billion in revenue in 2017 (with operating margins around 30%), giving it a price-to-sales ratio higher than what a more conventional growth company might garner as a multiple of cash flow. But this “energy and spirituality” premium seems high no matter how you measure it. Son’s $20 billion valuation translates to $133,333 per member (even though the ability to walk away at any time is part of the model), each of whom generates $8,000 a year on average. It values each foot of space it rents at $2,000, compared with, say, $325 to buy Class A real estate in a tech hub like Austin.

Even before Son came along, the likes of Benchmark, Fidelity, Goldman Sachs and JPMorgan had put $1.55 billion into WeWork based on the idea that traditional metrics don’t reflect its disruptive model. “They create a vibrant and fun environment and fill it with excited people to energize the work experience,” says Benchmark’s Bruce Dunlevie. Jamie Dimon, JPMorgan’s CEO, calls WeWork a way of life: “They’ve built a hybrid hospitality-and-tech company that’s entirely different from anything in real estate.”

But servicing startups will get you only so far. Their bet–and especially Son’s–is that WeWork can change how pretty much everyone experiences an office. Over the past couple years, WeWork has signed up companies like GM, GE, Samsung, Salesforce, Bank of America and Bacardi. Earlier this year, WeWork allotted an entire building in Greenwich Village to IBM, and now big companies generate 30% of monthly sales.

“It’s now a core real estate solution for our people,” says Matt Donovan, who runs marketing for Microsoft’s Office 365 brand and has put more than 300 employees into WeWork locales. “They get access to different locations, plus insight and feedback from other WeWork members who use our products.”

For growing companies WeWork offers a way to enter new cities without the hassle of scouting locations, negotiating contracts, designing the space and hiring vendors. “There is no reason to rent office space,” says Josh Kushner, the founder of the VC firm Thrive Capital and cofounder of Oscar Health, which launched its Los Angeles market from a WeWork site. “It’s a one-stop shop. Business is hard enough, and these guys take out all the friction.”

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With its sprawling mansion, ancient stone walls, fish ponds and acres of tightly mowed fields, Eridge Estate, a one-hour train ride south of London, is straight out of Downton Abbey. But in mid-August, the tidy, aristocratic park–where Henry VIII led royal deer hunts–looks as if the freewheeling Burning Man tribe has invaded from across the Atlantic.

More than 1,200 tents, trailers and tepees have sprouted in the meadow. There are food trucks and beer trucks and dozens of bars. On one edge of the field (near the roller disco, rock-climbing wall and a building façade that reads “Mac ‘n’ Cheese”) amateur acrobats dangle from a full-size trapeze. On the other side is a strobing Coachella-worthy stage, where indie band Florence and the Machine will later play to a crowd of 5,000-plus.

Packs of twentysomethings tour the scene in jeans, galoshes and tight T-shirts printed in half a dozen languages: English block letters, Japanese characters, Hebrew script. Branded on the back of each shirt is the word “We” enclosed in a white circle. Welcome to “WeWork Summer Camp.”

Summer Camp started in 2012 as a gathering of 300 customers and employees in upstate New York. For this year’s gathering, WeWork flew in 2,000 employees from 15 countries to the English countryside for three days of dancing, crafts, company presentations and plenty of booze (some 3,000 WeWork members will join the party halfway through).

Neumann, who has never met a microphone he doesn’t like, takes the stage a half-dozen times. Channeling Tony Robbins, he talks about finding your superpower, explains that if you have a higher purpose the money will follow and encourages everyone to carry the love and vibrations of camp back to the WeWork offices.

For a cynic, it’s easy to dismiss Summer Camp as the cash-burning boondoggle of an overheated startup. To Neumann it’s a distillation of what WeWork does. “Culture is our intellectual property,” he says. “Summer Camp is a way of telling our employees they are extremely important, even though sometimes it doesn’t feel that way. And there’s a team around you here that believes in the mission.”

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Mixed in with executive presentations and workshops are paddleboarding and poetry, basketball and basket weaving, a class on wild foraging and another on how to infuse vodka with almost anything. There is finance team flip cup, real estate versus legal department kickball, an international soccer tournament (which the U.K. squad wins), a talent show, and a music set by TenaciousWe, an employee band.

“Both Adam and Miguel come from community upbringings and understand the power of it,” says Michael Gross, the former Morgan’s Hotel CEO and current WeWork vice chairman. “It helped them survive.”

WeWork cofounder Adam Neumann (Photo by Jamel Toppin For Forbes)

Neumann and McKelvey grew up on opposite ends of the world, but their childhoods, critically, were transient and communal. Neumann was born in Israel to a pair of doctors who divorced when he was young. He lived in 13 places during his first 22 years, including two years in Indianapolis and a stint on a kibbutz where his mother was the doctor. Severely dyslexic, Neumann couldn’t read or write until third grade but still won entrance into the Israeli Navy’s elite officer program. After serving, he moved to New York to live with his sister Adi, then a professional model and a former Miss Teen Israel.

McKelvey, meanwhile, was raised in Eugene, Oregon, in a collective of activist single mothers who valued causes over cash. It was a childhood in which homes changed often and boxes of federally funded food arrived at the front door. In the family Volvo, McKelvey would drop rubber balls through the rusted-out holes in the floor so he could watch them bounce behind the car. He loved the annual trip to the King’s Table buffet. “It was a privilege to eat as much as you wanted rather than scrap for what you could get,” McKelvey says, surveying a headquarters overflowing with free coffee, beer and snacks. “I’d eat bowls of soft-serve ice cream until I felt sick.” A gifted student, the 6-foot-8 McKelvey played basketball at Colorado College before transferring to the University of Oregon, where he juggled big-time college sports and demanding architecture studies.

The two met in New York through a mutual friend and bonded quickly over their backgrounds and competitive streaks. Neumann had started a baby-clothes company, Egg Baby (a big seller: pants with built-in kneepads called Krawlers), subletting part of his space to make rent. McKelvey was an architect (grinding out store designs for clients like American Apparel), and Neumann talked up a plan to rent cheap space that they could divide and upsell as offices.

Neumann persuaded his landlord, Joshua Guttman, to rent him a floor in Brooklyn, and they launched Green Desk–an earth-friendly co-working space. It was a hit. Neumann and McKelvey looked to expand to Manhattan. Guttman instead wanted to fill vacant space in his Brooklyn buildings. They sold him their stake for $3 million and bet their winnings on a Manhattan co-working play based on the lessons learned from the kibbutz and the collective. Real estate meets culture. That was 2010; seven years later, their combined stake in WeWork is worth $4.3 billion.

In the heart of WeWork headquarters sits a 60-inch touchscreen monitor with the company’s 163 locations pinned on a Google Map. WeWork’s proprietary software turns the hippie-sounding special sauce into data. Finger taps reveal updates on construction, deliveries and maintenance. A swipe gives you data on potential new neighborhoods, listing public transportation, coffee shops, gyms and nearby retail brands that signal a ripe location (Equinox and Urban Outfitters are strong indicators). “They have to buy aluminum and glass, build desks and make sure the plumbing and the air-conditioning and the Wi-Fi all work,” Benchmark’s Dunlevie says. “It’s a grubby, execution-sensitive business.”

WeWork has built a complex technology and logistics system to handle all that grubbiness, and in September, it opened ten new locations, more than it launched in a typical year until 2014. In some ways WeWork looks less like a property manager than like an airline–squeeze in the maximum number of seats while providing enough amenities and perks so that no one hates flying coach. A single extra desk, over the span of a decade, can translate into about $80,000 in sales. But unlike, say, a Boeing 777, with its standardized space, each project has unique dimensions and demons. WeWork has opened in former customs houses, breweries, warehouses and, in Shanghai, an old opium factory.

To make the most of every millimeter, WeWork uses 3-D scanners to measure space and builds virtual-reality models to help design each floor before turning a single screw. Heat-mapping technology tracks traffic and usage to find the right balance of shared space, desks and conference rooms. “Landlords just sell aluminum. We make iPhones,” says Dave Fano, the growth officer and resident mad scientist.

Scale has created price advantages and provided WeWork with unique expertise. Since 2010, Neumann’s team has installed 9.6 million pounds of aluminum framing, hung 12 million square feet of glass walls, laid 8.8 million square feet of oak flooring and built 12,000 phone booths. WeWork does everything itself: location scouting, contracting, interior design. It even makes the thousands of braces that secure the miles of glass walls that WeWork installs. This year, increased tech efficiency and massive buying power have pushed the cost of adding a new desk down 45%, to $8,550.

Solving the construction side looks easy compared with the human problems that arise when a company grows from 2 people to more than 2,000 in seven years. Neumann has recruited seasoned executives from real estate, hospitality, media and tech to manage the once scrappy startup, including CFO Artie Minson (Time Warner), president Rich Gomel (Starwood), COO Jennifer Berrent (WilmerHale), vice chairman Michael Gross (Morgan Hotels) and chief product officer Shiva Rajaraman (Spotify, YouTube).

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There have been growing pains: a public scuffle with a cleaners union in 2015; leaked documents showing lowered forecasts in 2016; layoffs that hit 7% of the staff that same year. Former employees have sued the company, claiming they were overworked and underpaid. Partly in response to these problems, McKelvey has recently taken the role of “culture officer”–a soft-sounding, ironic title at a company that claims culture as its core product. He oversees HR, training, compensation and benefits for thousands of employees deployed across countries, languages and customs.

Neumann, for his part, has swapped a macho, military style for a more professional stance. “He’s realized that motivating with fear is not effective. He used to think fear was a positive thing,” McKelvey says. “Adam now understands that treating people with dignity and respect, and fueling them with positive energy, is a much better way, and he has an incredible ability to do it.”

Asked about this shift, Neumann spends a moment contemplating the surface of his desk. “How many organizations are going to be comfortable with a cofounder saying that to a reporter? I’m good with it–it’s kind of the culture we talk about.”

Neumann says he owes the change to his wife, Rebekah, who served as WeWork’s first brand officer and pointed out the flaw after a month watching her husband in the office. Neumann took the criticism to heart. “I met with my spiritual teacher and went to a therapist. I realized that if I came from a positive place, not only will everyone feel better and I will feel happier, but the company will work better.”

During the 12-minute tour that confirmed enough for Son to eventually write a $4 billion check, Neumann had time to show off just one space: WeWork’s R&D center, which is part Apple Store, part Home Depot. Laptops, touchscreens and iPhones are wired to doors, lamps, fixtures and deadbolts. There’s a test desk that, like a driver’s seat, adjusts to saved height settings with the swipe of an ID. Next to it, a prototype phone booth matches lighting and temperature to the user’s preference. A keyless entry system, which costs about $3,000 off the rack, has been replaced by a $400 WeWork version powered by a cheap Raspberry Pi computer.

WeWork plans to turn each office into one giant connected device that adapts to each user and sends constant feedback to WeWork’s mission control. For Softbank vice chairman Ron Fisher, who sits on WeWork’s board, this tech leap drove the investment, since it will allow WeWork to efficiently scale to hundreds of spaces and serve millions of members. “We did an enormous amount of financial modeling–how they can grow, the margins they can generate, the cash flows they can create,” he says.

To Neumann this technology-driven efficiency will become a product all its own, something like a WeOS, which will make WeWork indispensable even to companies that don’t have an interest in co-working. Instead, WeWork will be able to design, build out and run their offices. Additional revenue can come via renting WeWork’s tech stack and staffing WeWork managers to foster community and keep the space running smoothly. For companies, it’s a way to inject the WeWork vibe into staid offices. For WeWork, the program takes the asset-light model a step further by deemphasizing its biggest cost and risk–long-term office leases.

To pull off both WeOS and its continued global expansion, WeWork must solve what Neumann calls “the trillion-dollar question”–how to keep each WeWork feeling authentic and artisanal as it reaches McDonald’s-size scale. “We need to pay attention to the whole space–every room, chair and table–so it feels uplifting and inspiring,” McKelvey says. “We have to train our team members to run the space and promote community. If we do all that, we create this positive energy that inspires people.”

For Neumann it all goes back to the kibbutz of his youth. He remembers that it was hard to make friends at first. However, his family had the only VCR, and Neumann finally got some kids to come to the house to watch movies. But the VCR was gone. His mom had taken it to the hospital for a 24-year-old cancer patient with little time left. “The other kids were extremely understanding, and we still ended up hanging out together,” Neumann says, tugging at his T-shirt, his face reddening and his eyes tearing up. “The funny thing is that everyone soon completely forgot about the VCR. And then one day, two months later, we came into my house and the VCR had returned. Nobody had to ask why.” – Written by