The vitality of the samurai: how Masayoshi Sleep lost $70 billion and remained afloat


In a report published in early March, the Forbes list of billionaires, the founder of Japanese Telecom company SoftBank 58-year-old Masayoshi Dream is located on the 82nd spot with $11.7 billion (by 17 March, according to “counter” Forbes, it has already reached $15.2 billion). Among the wealthiest men in Japan Sleep is second only to the network owner Fast Retailing, to his friend Tadashi Yanai.

Capitalization of SoftBank on the Tokyo stock exchange is almost $60.7 billion Dream looks at the company’s future with confidence. In October 2015, speaking to students corporate Academy SoftBank, it announced plans to transform its conservative and focused mainly on the Japanese market company a global player. Perhaps it is the ambition of Sonu helped to successfully continue to do business even after the year 2000 because of the bursting of the dotcom bubble, he lost about $70 billion, which was the largest loss of equity in history.

Startups the son of a fisherman

Masayoshi Dream was born in 1957 on the Japanese island of Kyushu, in the city of Tosu, in the family of Korean immigrants. Koreans who came to Japan during the years of Japanese rule in Korea, was granted the status of “temporarily residing” in Japan until the 1960s, faced different types of discrimination that affect the ability to obtain well-paid jobs. Sona’s parents belonged to this category of immigrants. The family of the future businessman was very poor, his father made a living fishing. Later, the Dream remembered that at school because of his Korean origin to him sometimes stones flew.

On the formation of the future businessman was affected by several important meetings. The first such meeting was held on the eve of the release of Sona school with the founder of the Japanese division of McDonald’s Dan Fujitas. He advised Sonu to learn English and to study in the U.S. and, according to The Wall Street Journal, even outlined his business computers.

In 1973, the Dream moved to California, graduated from school, and in 1977 enrolled at the University of Berkeley. There he meets a Professor of physics, inventor of the electronic speech synthesizer and speech Recognizer. The dream gives him the idea of creating an electronic voice translator. As a result, the device in 1979 was sold to Sharp for $423 million (about $1 million in today’s prices).

In 1980, after graduation, the Dream came back to Japan. A year and a half he speculates about in what area he wants to work, and from 40 options selects the distribution of the software is for PC. In 1981 he creates SoftBank (starting capital became the money received from Sharp for a electronic translator). But from the beginning the business went customers the company did not have. All of a sudden and changed a good deal with the third largest seller of electronics in Japan — the company Joshin Denki. Sonu managed to negotiate an exclusive contract for delivery of the software. In an interview Harward Business Review, he confessed that at that time he had no money even for a trip to Osaka for a meeting with representatives of Joshin Denki.

The deal contributed to the rapid growth of the company. During the year, the monthly income of the company grew from $10 thousand to $2.3 million in 1984, SoftBank held approximately 50% of Japanese market software sales.

Business Masayoshi Sona in numbers

$60,7 billion — capitalization of SoftBank on March 17, 2016 on the Tokyo stock exchange

20,9% — owned SoftBank Sonu

$59,9 billion — helped SoftBank in the third quarter of 2015/16 fiscal year (31 December 2015), 7.9% more than in the same period a year earlier

$3.8 billion — SoftBank net profit to 31 December 2015

$1600 — is first recognizing the emotions robot Pepper, which SoftBank is developing

$70 billion is lost Sleep on the bursting of the dotcom bubble

44.1 million — the number of subscribers of SoftBank Mobile in Japan

The rise and collapse of

The emergence of SoftBank (late 1980s — 1990s) coincided with the rapid development of the Telecom and IT companies and a surge of interest from investors and consumers to computer technology. Sleep diversifies activities SoftBank: company acquires the publishing business (produces magazines about computers). In the late 1980s the telephone system in Japan demonopolized, and creates a Sleep system that helps users to choose the most advantageous tariff. In 1994, SoftBank will become public: in the course of placement on the Tokyo stock exchange raised $140 million Since that time and begins to show the nature of Sona as a venture investor. For $1.5 billion he buys a memory card manufacturer Kingston, for $3.1 billion — the publishing house Ziff-Davis. But the main achievement of the saône in 1990-ies was that he became one of the pioneers of the Internet among investors.

By the mid-1990s, Internet Commerce was in its infancy. At that time the volume of this market amounted to about $300 million, according to estimates from International Data Corp. “All who in 1995 was put on the Internet startups found themselves on the crest of a wave. And given the fact that Sleep has invested more than anyone in the maximum number of venture capital, success was inevitable,” wrote Forbes magazine in 1999, at the peak of the dotcom bubble. In 1996 the Dream became acquainted with Jerry Yang and David Filo, owners of small Yahoo! who sought $5 million for the development of search engines. According to the description of The Wall Street Journal, which cites an eyewitness of the meeting, the Dream has offered $5 million and $100 million To the objection of young is that in a lot of money they don’t need, Sleep allegedly replied: “Jerry, everyone needs $100 million”. The dream showed his acumen as an investor and, when Yahoo! became public, the share in the company SoftBank accounted for more than 30%.

According to Forbes in 1999, a Dream invested about $900 million in eight Internet companies that subsequently became public, and the cost of packages bought SoftBank, increased to $14 billion Then the son said to the magazine that his success is in no way associated with luck and is the result of a long-term strategy. “I don’t like accidental success. Bill gates uses the word “accident” as opposed to the word “respect”. However, in 2000 the strategy of Sona gave a historic failure.

At the peak of the dotcom bubble in 2000, the cost SoftBank $180 billion, the value of the share Sona — $78 billion on 10 March 2000 the dot com bubble that grew during the previous five years, busted: the NASDAQ at the close of trading fell by half. This led to the sharp decline in shares of Japanese Internet companies. Price SoftBank shares fell almost 20 times — from $590 to $34, capitalization of the company decreased to $21 billion Personally Sleep lost on the bursting of the bubble $70 billion As it was written in 2003 Forbes, it became the largest single loss in the history of the business.

However, Son believes that the speculative growth of stock prices of Internet companies was a bubble. “In 2000… there was a price correction. But look, did the majority of companies, which collapsed in 2000, again increase in value? Could they be even more expensive than at the peak in 2000? The answer is Yes, and this means that no dot-com bubble in 2000, actually,” said the Dream, speaking to investors in February 2015.

Recovery

The loss of record amounts did not put an end to the ambitions Sona — he has continued to develop and SoftBank to diversify the activities of the company. Sleep decided to invest in broadband Internet. The prices for the connection from SoftBank were cheaper and the speed is higher than its main competitor (Nippon Telegraph & Telephone). In addition, the company Sona provide customers with free modems. For several years, SoftBank raised enough funds to exit for another new market.

In 2006, the Dream decides to turn SoftBank, which has invested in the online venture capital, a major telephone operator. Sleep spending $15.4 billion on the acquisition of the Japanese unit of Vodafone. Two years later, the Dream takes another standard solution is to become in Japan, where almost all of the market traditionally held by local phone manufacturers, the first distributor of Apple’s iPhone (then SoftBank will be the first to bring iPads into the country). As noted by Bloomberg, rate on Apple products helped SoftBank for four years (from 2008 to 2012) to increase the annual net profit seven-fold to $2.8 billion.

In 2012, SoftBank entered the U.S. mobile market, having acquired third the number of subscribers of mobile carriers in the United States Sprint Nextel for $21.6 billion is One of the latest investments Sona, which, according to The Economist, “made in surprise to raise eyebrows even in Silicon valley,” the investment of $1 billion in financial-technology startup Social Finance (SoFi), in the Internet lending.

Business plan for 300 years

As wrote The Wall Street Journal in 2012, Sleeping in all my years in business have invested in about 600 companies. Investments have often been unsuccessful. For example, on the purchase and subsequent sale Kingston SoftBank lost $1 billion, But the impression that Sleep is chaotic invests in steam-based technology startups, is deceptive. “He is a very shrewd strategist, who is able to see, than the future. Every time he makes a major investment in any project, the market price of SoftBank falls, and everyone is saying that the Dream went crazy. But six months later, there are voices: “Oh, he’s got a plan!” — told the publication Ars Technica Professor, University of California at San Diego Ulrike Sheda.

The founder of the largest Chinese IT company Alibaba Jack MA recalled how in 1999 he represented Sonu your business plan shortly after the first round of attracting investments into the project has received $5 million Through six minutes after the start of the presentation of the Dream interrupted him and said that SoftBank is also interested in large investments in the project. “You have to spend money,” recalls MA’s words Sona. In the end, the Dream has invested in Alibaba with $20 million and then buy more shares of the company several times. Now the share of SoftBank in Chinese companies is 32%, while the capitalization of Alibaba’s $182 billion investment Sona was one of the most successful in the history of the IT business.

Billions in India

In the recent Sohn investment in India, namely in the solar energy sector. In the summer of 2015, the Dream has announced that a total investment of SoftBank in renewable energy projects in India will reach $20 billion. Partners SoftBank will perform Indian Bharti Enterprices and Taiwan’s Foxconn. According to Sona, India could become the “biggest producer” of solar energy in the world. “In India two times more of the sun than in Japan. The cost of building infrastructure for generation of solar energy in half. This means that investing in solar energy in India and not in Japan four times more efficiently”, — said a Sleep. The Indian government supports investment in solar energy: the Indian authorities want to increase its production from 3 GW today to 100 GW in 2022. In addition in India, Sona interested Internet: $200 million was invested in mobile ad network InMobi, $210 million — in the service taxi Ola Cabs, $627 million — a platform for online retailers Snapdeal.

In 2010, the Dream, presenting to investors its vision of development of the company, stressed that plans the business development of SoftBank’s 300 years. The entrepreneur believes that by 2040 99,98% working now companies will cease to exist in their present form, and SoftBank would survive. In the next 30 years, the Dream plans to invest 5 thousand companies to “create a Foundation” for future generations of leaders SoftBank. One of the main tasks billionaire believes “the creation of a computer brain”. To 2300 years, according to the company, will reach a “symbiosis of computer technology and the human brain, which will lead to telepathic communication.”

One of the most ambitious projects in Sona — SoftBank Robotics Holdings (60% owned by SoftBank, a 20% of Alibaba and the manufacturer of Apple devices, the company Foxсonn). The first step of the holding was the creation of the Pepper robot that can understand emotions. The first batch of Pepper (1000 robots for $1600 each) was sold on 22 June 2015 for one minute. Pepper is able to perceive the mood of the interlocutor in his words and facial expression, and can also synthesize their own emotions. The first batch of Pepper was sold in Japan from 2016 it is planned to supply abroad. According to Sona, he wants to make the sale an emotional robot in the world business.

Judging by the statements of Sona, he really believes in the future of humanity with robots. The businessman in October 2015, said that in the future robots will allow their owners to lead a life of unprecedented luxury in life, which can be compared with the life of a slave in Ancient Rome.