How Masayoshi Son became a powerful tech investor

Thinking beyond his time: Softbank boss Masayoshi “Masa” Son.

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Whether we like it or not, Softbank and its boss Masayoshi Son are with us all throughout the day. Be it the apps and services funded by the Japanese investor that we use. Or the chips in our phones designed by a Softbank-supported company. And yet the head of the company, Masayoshi Son, is largely unknown in this country. Who is the man who is the world’s largest tech investor today?

Which business should I start? Masayoshi Son had this question in his head when he was still a teenager, says “NZZ” Japan correspondent Martin Kölling, for example. In the 1970s, McDonalds came to Japan under the leadership of Den Fujita, a management legend in the country. At the time, Son was 16 years old, curious and, according to his own account, tried 60 (!) Times to get his management role model on the phone. Vain. But Son remains persistent, only asks for three minutes – and eventually gets the time. In the end it even took 15 minutes, and Son received his answer: He should do something with computers. Definitely not something that already exists. He must look ahead, far ahead. And that’s what Son has been doing ever since.

Studied in the USA

Masayoshi Son thinks big. While studying in the USA, he writes down one invention every day, which he believes is the most efficient use of his time. The first business idea was quickly found: together with a few fellow students and professors, he developed an electronic dictionary. For Japanese, English and even German. Son founds a company and later sold it to a Japanese company.

In 1981, Son went back to Japan and started Softbank there – initially as a software retailer, soon to become a media company. And the basis for today’s Softbank, because Son quickly begins to invest in young tech companies. This duality – own business and investments – characterizes the group to this day. And that makes it unique.

Son wants to build a global corporation right from the start, even if that takes many years. “Masa”, as he likes to be called, builds relationships with leading tech founders or CEOs. He invests in internet companies like Yahoo and makes a lot of money that way. It is the late 1990s and the tech boom is making Softbank a successful company (PDF) – and Son a rich man.

Crash at the turn of the millennium

The crash comes shortly after the turn of the millennium. It won’t be the only one in Son’s life, but it will be the most serious so far. Within a few weeks, the wealth dissolves into almost nothing. He was as good as broke back then, says Son today, but somehow he finally made it through the crisis. Above all, it is the companies in the group that endure. Yahoo Japan, a joint venture with the Californian tech company, is also generating profits.

Son re-invests whatever money is left. And in the mid-2000s it buys, among other things, the Japanese Vodafone mobile network – for 15 billion dollars. He’s in debt for the deal – as he did for many later ones – but he has a plan. As with the McDonalds boss, Son had worked his way up to Apple founder Steve Jobs. And convinced him to get the exclusive marketing rights for the first iPhone generation in Japan.

That brings Son a lot of capital to continue investing. In the US mobile network Sprint or the computer chip designer ARM. This leads to Son’s most significant project to date: building the world’s largest investment fund. The tireless Japanese set himself this goal in 2016.

The largest tech fund in the world

In order to raise money for his Vision Fund, Son hits the wall: When he meets the current Crown Prince of Saudi Arabia in Tokyo, he announces him “a present of a trillion dollars” – and of course alludes to the future success of his investments . The then Vice-Crown Prince agrees with the words “now it’s getting interesting” and at the end of the 45-minute conversation he gives Son 45 billion for his fund. A billion a minute, at least that’s the story Son tells it today.

The vision behind Sons Fund? Singularity. In other words, the moment when computers are just as intelligent as humans. Son bets everything on the tech future. To do this, he and his investment fund don’t just invest in artificial intelligence. But rather in companies that can benefit from AI. A network of tech unicorns is to emerge and, together with Son, drive the information revolution forward. In Germany, the mega fund is involved in the travel startup Getyourguide and in the used car dealer Auto1. Anyone who has Softbank as an investor becomes a unicorn, a billion-dollar company.

But last year the second crash came in Son’s life. Above all, the Japanese gambled away with the investment in office space renter Wework, the company collapsed, and Softbank had to support the company with billions of dollars. The Uber car service doesn’t work out either. Expectations were too high and the company’s IPO was a flop. Softbank also took a stake in the German fintech Wirecard with just under a billion dollars – the investment goes completely wrong with the bankruptcy of the former model company, the same thing had happened before with the British satellite startup Oneweb.

To save the situation, Son must now move billions. Share buybacks are supposed to keep investors happy, company sales are supposed to bring new capital into the coffers. Perhaps the most important role in Son’s portfolio is played by the Chinese tech group Alibaba. The Japanese investor had invested there for $ 20 million at the end of the 1990s; at the IPO in 2014, the stake was worth $ 60 billion. The expected IPO of the fintech subsidiary Alipay should bring in a lot of money, as well as the possible sale of the chip designer ARM. In the end, Softbank and its boss Masayoshi Son will also survive this crisis. But the path to becoming a global tech company has become a little longer.


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