Masayoshi Son: Building SoftBank’s Global Empire From Japan

Son, a third-generation Zainichi Korean who naturalized as a Japanese citizen, has shaken up industries with high-profile deals such as Sprint’s and investments such as Alibaba. Now he says he’s ready to make another splash by betting big on artificial intelligence.

Rival venture capitalists fear SoftBank’s huge VC fund could inflate startup valuations and induce companies to take on capital they don’t require or want. Yet Son has proven his mettle at turning losses into opportunities.

History

Softbank founder Masayoshi Son has made headlines for making bold, risky investments to position Softbank at the forefront of emerging trends and technologies he believes will fundamentally alter society. From telecoms and IoT infrastructure investments to big data technologies or autonomous vehicles – Son looks for investments that will ensure his conglomerate will still be relevant centuries down the road.

After graduating from Berkeley in 1981, Son returned to Japan and founded SoftBank (an abbreviation for Software Bank). Starting off as a distributor of packaged software distribution, SoftBank soon expanded into technology trade shows and publishing.

During the dotcom boom, he employed corporate bonds to finance mergers and acquisitions – an approach which earned him comparisons to Bill Gates, cofounder of Microsoft Corporation; Morita Akio, who co-founded Sony Corporation; and Honda Soichiro who ran his namesake car-and-motorcycle business.

SoftBank became one of the world’s biggest technology investors, investing more than $140 billion across hundreds of startups. But its propensity to bid up valuations and give founders more money than they asked for was controversial among Silicon Valley rivals; WeWork was its largest bet; now mired in financial turmoil yet the CEO still plans on fulfilling her 300-year plan.

Technology

SoftBank is one of Japan’s leading technology conglomerates, boasting stakes in such companies as Sprint, Yahoo! and Supercell (maker of Clash Royale mobile game). SoftBank CEO Masayoshi Son is well known for betting big on emerging technologies like self-driving cars and cloud storage despite any fears surrounding coronavirus outbreak. Son believes these technologies will fundamentally change how the world operates despite any threats posed by coronavirus.

Son is adept at disproving critics. His early bet on Alibaba in 2000 would eventually turn into a $58 billion windfall when the company went public in 2014. Son established the Vision Fund in 2017 to try and recreate that magic.

Son has earned himself the reputation as an adept dealmaker who takes risks in search of large rewards. Over the past five years, his investments have returned an average annual return of 44 percent including Alibaba and 42% without it, according to research firm Preqin; that outpaces Sequoia Capital and Silver Lake Partners who generally pursue more conservative investments with lower returns.

Telecoms

At 16 Son relocated to California to complete high school at Holy Names University and Berkeley – two cities then at the forefront of the silicon revolution. He challenged himself daily to come up with computer-related business ideas, setting up his first company leasing Pac-Man game machines before later earning one million dollars designing an electronic translator that Sharp purchased for $1m. Back home, Son was transformed with purpose and founded SoftBank in 1981.

Son has established a global telecoms empire and boasts an incredible track record of investments that have proven lucrative. His investments include those made early on with Yahoo and Alibaba as well as taking over Vodafone Japan’s wireless operations when everyone thought it hopeless, turning them into fierce competitors.

He is known to take bold risks, often ending in failure; yet his savvy and perseverance have earned him widespread admiration from those who know him best. Before meeting with founders, his staff typically conducts extensive due diligence investigations; then when meeting them personally he often poses probing questions to encourage more expansive thinking regarding opportunities available to them.

He had long been expected to step aside in his 60s, but that plan appears likely now that Nikesh Arora has been replaced as his heir apparent and Vision Fund has opened to include investors such as Saudi deputy crown prince Mohammad bin Salman.

Consumer Products

Son has earned himself a reputation for making bold, daring investments to position SoftBank at the center of trends he believes will shape our world for generations to come. These deals include investments in Yahoo and Yahoo Japan early on; taking over Vodafone’s cell phone business when others had given up; and getting Apple to agree to an exclusive distribution deal for iPhone 3Gs in Japan.

But he also has critics. Many question whether his investments in ride-hailing and artificial intelligence will meet their promise, while others wonder how he’ll make sense of all of the money being invested into big data, biotechnology, robotics and agriculture.

Son is often described in interviews as friendly and humorous–chuckling away at his ambitions while candidly admitting his mistakes. While Son may exaggerate in his presentations by employing theatrical flair or lofty rhetorical devices, he does seem to care deeply for both his workers and the global community at large.

His staff conducts meticulous due diligence on startup founders before meeting them, and Son typically asks questions designed to get them thinking more broadly about possibilities. Still, Son has final say in all Vision Fund deals; rival venture capitalists often accuse him of inflating valuations or pressuring startups into taking money they may not need or want.

Healthcare

Masayoshi Son is often thought of as a cartoon figure; an offbeat businessman operating like an unhinged talking toy and ATM machine with unhinged forecasts about the future, dispensing cash at will. Yet such an image fails to do justice to his remarkable career which began with Softbank as Japan’s third-largest telecom and internet provider back in 1981.

Son was an enthusiastic investor during the dot-com boom, investing in more than 800 startups to form what he termed “netbatsus,” or digital equivalents of Japan’s traditional conglomerates known as zaibatsus. Unfortunately, when their bubble burst, almost all failed and Son lost $70 billion.

Since the decline of his earlier era, Son has embarked on an effort to reinvent himself and the company that bears his name. He has invested money in everything from ride-hailing services to satellites; without waiting for market analysis to complete before making deals.

Interviews reveal Son to be an engaging figure, laughing off his ambitions and open about his mistakes. However, some doubt his business acumen and question the use of ride-hailing in financial management or why his Vision Fund invested in Zume Pizza (an old pizza truck boasting robotic oven).

The Future

Son has long been an advocate of making bold, daring deals to place his conglomerate at the forefront of any trend that could fundamentally reshape our world – such as telecoms and Internet firms; but also companies managing cars, offices, software and data. He sees great promise in all businesses which could alter how people live their lives, work or play together – thus becoming part of each one if it can change how we live, work or play together.

Son’s strong convictions, coupled with his aggressive personality, has proven challenging for investors. According to analyst Chris Lane of Sanford Bernstein, eight out of ten tech investors he consults are wary of Son, viewing him as overly cautious operator with limited tech investments experience and lacking any tangible assets under SoftBank (including Alibaba stake) which have yet to realize their market value.

SoftBank’s early moves displayed both audacity and naivete, notes Lane. Son founded SoftBank Corp as a distributor of personal computer software in 1981; purchasing the largest booth available at an electronics show before calling local software makers who needed someone to distribute their products in physical stores selling PCs or other hardware.

Son persuaded them of his abilities, and they gave him their business. His enthusiasm for global deals shows no signs of abating – Oliver Matthews of CLSA believes coronavirus outbreak may speed up change Son has been trying to spur on through Vision Fund investments.