Ten minutes. Softbank founder Masayoshi Son didn’t need more time to convince Jack Ma, founder of the Chinese online store Alibaba, in 2000.
It was the “fighter mentality” that so appealed to him in Ma, Son said almost twenty years later during a speech at the University of Tokyo. And, perhaps more importantly, “Jack had twinkling eyes.”
It is Masayoshi Son (65) in full. The eccentric founder of the Japanese Softbank – the largest tech investor in the world – does everything on intuition. On Friday, he announced that he would step back from his investment fund. Son will focus full-time on guiding British chip designer Arm – one of Softbank’s largest investments and “the source of my energy, my happiness and enthusiasm,” Son said during the presentation of Softbank’s quarterly results on Friday.
Nutcracker
A step aside means that Son – who will continue to own Softbank but will transfer day-to-day management – will no longer be responsible for presenting the quarterly results. Normally such presentations consist of bone dry slides, at Son every quarter is an experience. Think of screen-filling pictures of hordes of unicorns. Or Son die – to Tchaikovsky’s music Nutcracker – for the eyes of investors dances along with moving golden eggs, representing Softbank’s successful investments.
Masayoshi Son – nicknamed ‘Masa’ – started Softbank in 1981 as a website where consumers could order software packages. With the rise of the internet, Son developed Softbank into a successful investment company. Softbank has interests in hundreds of companies, including Yahoo, telecom companies Vodafone and T-Mobile, meal platform Doordash and start-ups (young technology companies) in artificial intelligence and financial services.
When the internet bubble burst around the turn of the millennium, Softbank’s share price collapsed. Son lost $70 billion — 99 percent of his personal wealth at the time. It felt to Son as if he “fell into a ravine,” he would later say. “Somehow I survived.”
It was Jack Ma’s ‘sparkling eyes’ that put Son back on track. After the meeting, Son decided to invest $ 20 million in Alibaba, giving Softbank a third of the shares of the webshop. Son’s gamble turned out to be a golden move: when Alibaba went public in 2014, Son’s 20 million was now worth $ 60 billion.
Alibaba’s money would shape Softbank’s future in the decades to come—and, with it, the course of the tech sector as a whole. Son does not believe in detailed models and economic projections, but focuses on a ‘feeling’ he gets from an entrepreneur. This is followed by blind trust and unlimited amounts of money, with which entrepreneurs are deliberately encouraged by Son to grow as quickly as possible. For Softbank, one very big success then makes up for the losses from a hundred other failed investments.
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Passionate artist
Son was always driven in his choices by the motivation to find the new Jack Ma. Son saw a similar sparkle in the eyes of American Adam Neumann, founder of office rental company WeWork. Son pumped 20 billion into WeWork, until just before the IPO in 2019, it turned out that Neumann had saddled his company with huge losses and enriched itself at Softbank’s expense.
Son had been drawn into the story of Neumann, whom he considered “his son” and described as “a passionate artist.” Later Son would apologize. “I have learned a hard lesson.”
Sometimes Son guessed well, such as his investment in TikTok owner Bytedance and the South Korean web store Coupang, which went public last year and made Softbank billions. But things went wrong much more often, including failed participations in chat program Slack, taxi app Uber and the Indian hotel platform Oyo. Last quarter, Softbank lost nearly $10 billion on its key investments. The shortfalls have been compensated in recent years by selling shares in Alibaba. Softbank currently only owns about 15 percent of Alibaba.
Son meanwhile sticks to his strategy: a big gamble with the entrepreneur who can determine the future. “When the internet started, I got the same criticism. Even more than now,” he told the American business magazine in 2020 Forbes. “Yes, I made tactical mistakes. But my vision is still unchanged.”
A version of this article also appeared in the newspaper of November 15, 2022