
The meaning of the Vision Fund - nopinsight
https://www.economist.com/news/leaders/21741973-succeed-or-fail-masayoshi-son-changing-world-technology-investing-meaning
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rdlecler1
There are a lot of green field opportunities out there — technologies and
solutions that will exist but which will need significant capital to get
there. I think in 10 years from now we’ll look back on today and say that we
were vastly underinvesting in technology and being too conservative given the
size of the opportunity to create category defining companies from scratch.

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melling
You could have made the same statement any time in human history.

Everything humans now know could have been learned hundreds of years ago if
we’d had invested more in science and research.

The technology of the early 23rd century, for example, could be obtained in 50
years with more investment in R&D today.

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MadSudaca
> You could have made the same statement any time in human history.

How are you so sure of this? To me it sounds too optimistic. It implies that
we have been in control for the extent of our history, and I think this
couldn't be farther from the truth. In fact, even today I'm feeling a bit
pessimistic regarding our ability to overcome challenges such as changes in
social dynamics and known/unknown threats introduced by technology.

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simonh
The question is does a Softbank investment simply increase the price of such
investments, with underlying long term value staying unchanged, or does the
investment actually increase value by stimulating greater growth in those
investments?

That's a tricky one. The fundamental principle venture capital works on is
that investment stimulates growth. You invest in a company so that it can grow
and make your investment more valuable. But at some point investment becomes
excessive and wasteful, as in a bubble. Softbank is so big, it could quite
conceivably stimulate a tech bubble all by itself, especially if rival
investment firms 'bulk up' to compete.

If that is the case, Softbank's flood of cash into tech will eventually
destroy more value than it creates and the prudent response for an investor
would be to reduce exposure to the tech market. But of course nobody wants to
concede defeat, especially if your withdrawing investment actually makes
Softbank's investments more likely to succeed by having a deflationary effect
on the bubble.

Interesting times.

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Eridrus
I find the case of Slack super interesting here, they were a completely
undifferentiated and uninteresting product with quite a few competitors until
they started bulking up on capital and out marketing and out spending their
competition. In this case, investment is entirely what made the company.

I still basically think Slack's business sucks long term because Microsoft and
Google are basically just throwing Slack into their office suites for free,
but their current successful is entirely built on just having more capital
than competitors.

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kornish
I'm curious why you say Slack was undifferentiated. When you use a product
many, many times per day in small bursts, small increases in ergonomics and
decreases in friction start to add up fast.

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karthikb
But those small increases aren't apparent unless you're using the product many
times a day - chicken and egg. The issue is that for many products in this
class, churn is so quick that you need to be convinced to stick around long
enough for the decreases in friction to actually have time to accumulate.
Hence marketing spend.

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baybal2
My own opinion: this fund has a LOT of debt. At current microscopic interest
rates, that is not much of a deal, but it will very well be once interest
rates will go up.

They need to make returns quickly to not to sink in interest. This should be
mandating their line of action from now.

1\. They will be downsizing, and offloading assets.

2\. It looks very likely that this is just a gigantic LBO vessel for Son and
Saudis

3\. And it will be following a standard LBO play - buy, cut out tasty parts,
sell to pay interests.

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lawrenceyan
Probably shouldn't have put so much in Uber...

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Havoc
Hindsight 20/20

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peapicker
Paywall. Other link?

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madspindel
Works in incognito

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AdamM12
Thank you for this.

