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SoftBank’s Masayoshi Son Speaks to an Almost Empty Room at Saudi Summit (bloomberg.com)
126 points by ryan_j_naughton 5 months ago | hide | past | web | favorite | 74 comments

The title's a bit clickbait. He was one member of a panel in one segment of a fairly dull and sparsely attended investment conference. It took me ages to track down when he even appeared but here it is for what it's worth:

Program: https://futureinvestmentinitiative.com/en/programs/solving-t...

Video: https://www.youtube.com/watch?v=2UWx1hbhpOU&feature=youtu.be...


"Watch Softbank chief Masayoshi Son fall asleep during a panel at the Future Investment Initiative in Saudi yesterday..."

Reading some of the program description

>Urgent questions? What frameworks for collaboration between corporations and startups will drive these technologies from ideation to commercialization? How will investors spot keystone technologies with the potential to address large-scale global challenges?

I can kind of understand that

Hard to square with: "And, unlike Tuesday, when people were turned away from the main hall because it was packed, there were mostly empty chairs as attendees headed for lunch or huddled in meetings."

Glancing and the videos it looks like it was quite full for the opening but the audience had largely drifted away by three hours in. Masayoshi only spoke for about four minutes half way through day two.

I imagine a lot of the attendees figured they were better off networking than watching the discussions.


This is nowhere near market moving information.

It's the principle of the thing.

Lots of comments about how people are avoiding SoftBank because of their big losses, but I think the bigger aspect at play is more investors are coming to view these mega funds in general as a bad idea.

That is, when you're sitting on $100 billion dollars, you're going to spend it, even if to grifters like Adam Neumann. I think more folks are coming to the realization that there is just too much money chasing to few deals, and more money isn't the solution.

It's a good time to actually be a founder right now. Too many people just want to sit around and write checks.

I hope the US creates a sovereign wealth fund. Not only would it likely make raising money more meritocratic but it would likely make a bunch of the low to mid tier VC firms go away.

> I hope the US creates a sovereign wealth fund.

Umm, and where would that "wealth" come from?? The US national debt is over 22 trillion dollars.

The NSF regularly gives grants for no equity https://seedfund.nsf.gov/

You could do something like that, but broaden the requirements to include all tech (not just science or high tech), and take equity.

The gov't would also be in a much better position to hire scouts across the country, hence democratizing access to funding.

US households hold $113 trillion dollars in assets, so I wouldn't start passing the cup around.


> US households

> sovereign wealth fund

No one is passing about a cup.

A sovereign wealth fund is owned by the state.

A private wealth fund is owned by people and corporation; e.g. "households".

Same fund that bought GM, Freddy Mac, (etc. etc.) and sold it off for a profit.

Now with that being said, I'm against the idea of a US-based sovereign wealth fund. But it wouldn't be unprecedented at all. EDIT: I think I can see a sovereign "strategic initiative", like something to ensure semiconductor dominance, or other forms of technological innovations. But not necessarily for the purpose of making money like a sovereign wealth fund would try to do.

USA should definitely fund research and providing infrastructure, and maybe even subsidize a company or two. But I'm not sure if the USA wants to be the owners of many companies in the market.

> > I hope the US creates a sovereign wealth fund.

> Umm, and where would that "wealth" come from?? The US national debt is over 22 trillion dollars.

By issuing more debt. Debt isn't always a bad thing, especially when it results in an even larger amount of revenue. That's partially why looking at the 22 trillion debt figure in a vacuum is almost meaningless. Looking at the change over time of the debt/GDP ratio will give you a much fuller picture.

by definition that liability is someone else's asset. it may even be yours: many pension funds seek uber-stable paper among other things to diversify risk.

It is someone else's asset.

That doesn't change the parent's point about the U.S. government not having money for such a fund.

(Nor, do I think should it have such a fund. If the government were to have extra money -- and it doesn't -- the government should lower its taxes.)

> Nor, do I think should it have such a fund. If the government were to have extra money -- and it doesn't -- the government should lower its taxes.

In the case of Norway's sovereign fund (the biggest I think) there's a very good reason for it to exist. The fund inflows are the result of extracting oil from the ground so from the accounting point of view those are not revenues. They're movements in the balance sheet, converting one asset (oil) into another asset (cash). So they then put that in a fund and spend the returns, funding expenses with actual revenues. If they were to spend the capital they would be funding current expenses from assets. The equivalent in the US would be to every year sell a part of the national parks and use that money for tax breaks.

Norway is indeed a semi-socialist country financed by state-owned oil.

Regardless of whether you think that's a good or bad thing, it's certainly very far from the U.S. situation.

> those are not revenues. They're movements in the balance sheet, converting one asset (oil) into another asset (cash)'

Though it doesn't invalidate your point, I do not think it means what you think it means.

Revenue: The income generated from sale of goods or services, or any other use of capital or assets

I'm not saying it's a good or bad thing. I'm just explaining why they've setup a sovereign fund and why reducing taxes instead doesn't always make sense. And the point is that Norway is not funded by the oil directly, they're funded by the investment returns of the oil. They don't touch the principal. I agree the situation is very different from the US. I was just pointing out the parallel wasn't the US starting to raise taxes to setup a fund, the parallel would be selling some other asset the US government already does own.

In usual accounting terms revenue has clear rules. If you sell long-term assets for the same value you had on your balance sheet already you record nothing in your income statement. You only record a gain or loss if the sale value is different from the book value, and even that goes straight to the bottom line and is not top-line revenue. Norway's oil is a long-term asset so converting it to cash is not revenue in the normal accounting sense.

> I was just pointing out the parallel wasn't the US starting to raise taxes to setup a fund, the parallel would be selling some other asset the US government already does own.

Yes that is the closest parallel.

Though in the long-term it's all relative; funding is funding. The U.S. could sell its national assets to lower tax burden. Norway could sell its national assets to lower tax burden.

Or, instead of lowering the amount taxed, they could use those assets to fund a sovereign wealth fund for government benefits.

>Or, instead of lowering the amount taxed, they could use those assets to fund a sovereign wealth fund for government benefits.

Both options are equally easy for the state to do, of course. The point is there's a sound argument for doing the fund when you have such a large asset that's otherwise useless to you, instead of returning the money as lower taxes. If you do the fund you're setting up your economy to be able to depend on the revenues from the fund forever as you are not depleting the capital. If you lower taxes you get an economy using asset sales to fund current expenses. Once those assets run out you get to deal with that somehow to go back to a balanced budget. Since most states tax incomes much more than wealth doing that would basically mean the current generation living large and passing on the problem to their children to solve. Which is effectively what is happening in a lot of the oil rich countries.

The US government DOES have such a fund though. It’s called DARPA/ONR/whatever other military research wing. They all invest heavily in startups.

DARPA invests in startups for military technologies.

VCs invest in startups for commercial viability.

In a sense, we do this already in the form of billions in all kinds of grants.

The interesting thing about the debt is that it costs 8.7% of all Federal outlays now verses 15% of federal outlays in the mid-1990s. Hence probably why Nancy Pelosi a few weeks ago agreed with Donald Trump to get rid of sequestration which was holding the line on Federal spending.



Ha, you ascribe national debt to the wealth status of corporations?

I hope you’re somewhere you don’t do your own taxes.

>It's a good time to actually be a founder right now.

It also means that you need to spend a lot of time obtaining funds because it is not a competitive advantage anymore, it's a requirement.

Between the Bayh-Dole Act, DARPA, NASA, the NSF Seed fund, and Department of Energy loans (I seem to recall the A123 loan was a political football for a while) doesn't the US already put a lot of money into technology startups?

The only difference is, the US government doesn't take equity, and thank goodness for that. Imagine a political appointee on the board of every new technology company.

The three letter agencies do in fact place people on the boards and within the executive ranks of the companies the DoD awards contracts to.

> It's a good time to actually be a founder right now. Too many people just want to sit around and write checks.

I’m uncertain about this. Clearly , not having money is bad but is too much money in the hands of founders really good?

Mostly agree with you, but I would just like to point out that it might be that some of those founders would have done prudent and useful things if they had been given 1/10th the amount of money. Just like Softbank, they may have felt the pressure to spend that money somehow.

I don't know enough about Adam Neumann to say, and the current media environment for him is too negative for me to get an unbiased opinion. Maybe he was always going to be an unwise investment. But it is just possible that he (and Uber, and Lyft, and Peloton, and...) would have built productive, profitable companies if they had not felt they had to somehow justify being given 10x the amount of money they deserved.

No one made him get the trademark for we and then try to sell it back to the company. That's not justifying the amount of money they had. No one made him get control through the super-powered voting shares and control of the board. No made him sell the $700 odd million he did, well before the crash to make sure he got something out of it.

For sure, he's culpable for his own behavior. But, I think a lot of what you mention, would not have happened if he had not been in such a "take all this money please and pretend you're spending it on technology" atmosphere. Because, people like him cannot spend do stuff like that if they're not enabled by someone, but if you're willing to sling money around there will always be somebody willing to take it and spend it.

Opulence leads to complacency and bad decisions and no sense of risk. Give me 10 billion dollars on Vegas, and I will make large, dangerous bets.

Now may be the overdue bite of all that expansionary QE.

>Man who spent $10 billion to bring a company to an $8 billion valuation ignored at financial conference

Softbank spent $18 billion according to Marcelo Claure.[1]

[1] https://techcrunch.com/2019/10/24/softbank-notes-it-has-now-...

Some of that money is Vision money, some of it is Softbank.

If Saudis can chop a journalist at their embassy just imagine what they are going to do to Son.

Give him avocado rolls on sushi platter?

It’s amazing how a reputation for lighting money on fire makes investors avoid you.

Lest not forget that this isn't Masayoshi Son's first ride on ligthing money on fire, he still holds the record of most money lost in history from the dot-com bubble crash of the 2000s.

Well, he was also the richest person in the world for 3 days in 2000.

I'm as skeptical of the vision fund as anyone. But it's pretty impressive to go from nothing to the richest person in the world. Lose the most money in history (still being a multi-billionaire, though), and in the span of 20 years, 10x your fortune AGAIN -- to be again one of the richest people in the world.

If anything, that's an impressive story -- at least to me.

He's an interesting guy. Here he talks about making his first million while a student at Berkley https://youtu.be/--dReMGY_WY?t=459

He's showing signs of making some of the losses back already: https://www.reuters.com/article/us-bytedance-ipo-breakingvie...

I wouldn't write him off just because he got a little conned on WeWork.

>I wouldn't write him off just because he got a little conned on WeWork.

I'm not able to believe a guy with Son's record gets conned by WeWork. I'd say Son was trying to con others, but got caught holding the bag.

I'm reminded a bit of his investment in Alibaba - when he met Jack Ma he says he had no business plan or revenue but he could tell he had charisma and leadership and so invested. I guess he tried to do similar with Adam but it didn't work out quite the same.

The whole WeWork saga stinks to high heaven, did Neuman con Son or was Son just not aware of what's going on till all truth came out in the S1. And, was he stupid to believe that the company could still go IPO based on what was in the S1.

He's always showing signs of making money before losing more of it. Personally I think TikTok is a paper tiger and wouldn't throw a dime of my money near them.

it seems to be the first major Chinese player who makes inroads with global (and in particular American) audiences, something that other Chinese companies are notoriously bad at. And they really seem to be onto something when it comes to young users. I wouldn't brush them off.

All they realized was that people wanted Vine, even if it wasn’t called Vine anymore. I still don’t know why Twitter shuttered them, it seems stupid in hindsight.

I have massive distrust in companies headquartered in China. No company of TikTok's (purported) scale w.r.t revenue/valuation is going to be divorced from the influence if not ownership by the CCP.

I would not invest in the Chinese government, and therefore would not invest in a large Chinese company since they are two sides of the same coin. Not only out of morality, but because I don't want to expose myself to financial risk by betting on a communist government/dictatorship not to fuck me.

TikTok's projecting $17bn revenue and some profits this year. That's got to be worth something.

Is anyone auditing these projections?

Agree he has a stake in something good now that he has control. WeWork in the long tail will be a great cash generator but it’s unlikely to return anything for at least a decade and due to the leases there is some risk that needs mitigating. However the model is sound We just needs better cost controls, many years of investment and a customer obsession.

> little conned


But I agree.

Interesting, I hadn't known that. What's a good link to read about his story?

Not to be a smartass, but... Wikipedia for a start? https://en.m.wikipedia.org/wiki/Masayoshi_Son

Yes, a single sentence on the event is probably what he was asking for, thank you.

There are whole sections about his specific history at each company and stage. If you’re looking for three sentence summary then I can’t help you.

NPR's Planet Money did a decent piece on him earlier this month.


I believe this is a baloney quip. If you want to know how he fared in dotcom you should look at his worth before and after, not compare the peak of the funny money to the bottom of the crash.

Who attends these events anyway? What do they say on stage that you can't read off of their website? I lucked into tickets to some event that was near my office to listen to some panel of business titans talk about sustainability or something and it was just some half-baked sales pitches and posturing.

Isn't Saudi Arabia's sovereign wealth fund a significant client of SoftBank? Interesting development.

The biggest, I think.

The contributed $45B of the $100B in the fund

Cannot blame the Saudis one bit, but...this might be the sound of a tech investment bubble bursting. Which means many of the readers of HN, even the ones like me who never worked at a SB-backed company, will find the employment market in 2020 to be much less favorable than it has been in 2019.

Would love to see a stack rank of SoftBank investments from best to worst.

On the surface Nuro looks cool but now it makes you second guess knowing SB invested $1B in them...

there's a hack to getting around the bloomberg paywall. If you scroll down quickly before the page can bring up the pay us to read dialog you can get a greyed out version of the text. Then use ublock to zap the top modal out of the way. If you need to read the rest of the text reload again and scroll down faster.

Or one could disable Javascript? (WFM on FF with uBlock Origin).

Can’t help but admit that this is a little sad.

Quick Poll:

Does this Softbank/WeWork unraveling make you nervous about the whole Silicon Valley system unzipping too? (Vote Below)

No, I am not worried at all. This is fine.

Yes, it does, I'm upping my meds.

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