Adam Neumann stood on the 57th floor of the Woolworth Building, the neo-Gothic skyscraper that was once the tallest in the world. It was late on a Friday night in 2013, and the WeWork founder and chief executive had just made a move to add the top 30 floors to his rapidly expanding real estate dealings.

Mr. Neumann and three employees had already enjoyed a few drinks when he decided to bring them to tour his latest coup. In the gutted-out space, they tossed beer bottles into empty elevator shafts, listening to them clink on the way down. Then, Mr. Neumann told them all to follow him out to the ledge. No guardrails. No enclosures. Just four inebriated start-up executives teetering on the edge of death.

''I was up there with him on the top of the world, and he said, 'Everything is going to be amazing,''' recalled Harrison Weber, WeWork's editorial director at the time.

Then, Mr. Neumann picked up an old beer bottle -- a remnant, apparently, from some previous bender. He asked the employees to drink the rank liquid. Everyone took a swig, except Mr. Weber. ''It felt like a loyalty thing,'' he said. ''In that moment, I felt what a deeply persuasive person he is.''

The last 80 days have seen an implosion unlike any other in the history of start-ups. WeWork filed for an initial public offering with a prospectus that was quickly ridiculed for its incoherence; investors learned of several red-flag financial arrangements by Mr. Neumann; the company's valuation plummeted; Mr. Neumann was forced to resign; and the I.P.O. was withdrawn. Once estimated to be worth $47 billion, WeWork was reduced to $7 billion, after a rescue by the Japanese giant SoftBank.

But WeWork's astonishing downfall came with an even more astonishing exit package for Mr. Neumann: The 40-year-old could receive more than $1 billion after selling his shares to SoftBank and collecting a $185 million consulting fee. As the scope of the disaster comes into focus, the question on everyone's mind -- from his co-working customers to Wall Streeters to soon-to-be-laid-off WeWork employees -- is how Mr. Neumann managed to fail up so spectacularly.

The answer has a lot to do with what Mr. Weber glimpsed atop the Woolworth Building -- an inexplicably persuasive charisma and a taste for risk. But Mr. Neumann, who grew up in Israel, also had an uncanny ability to read people, from potential investors to reporters, gain their loyalty and then sell them on his vision of a ''capitalist kibbutz'' on a global scale. He benefited from a frenetic, nonstop energy, and silly as it may sound, there's no question that Mr. Neumann's good hair and looks helped his cause. At 6 feet 5, he had a physical presence that could dominate a room. (Through a spokeswoman, he declined to comment.)

Crucially, Mr. Neumann was selling to an eager audience at the right time: WeWork's rebranding of the office as an expansion of one's personality made sense to...