Who is SoftBank's Masayoshi Son?

The Japanese billionaire bidding for ARM Holdings is more Warren Buffett than Bill Gates - and once lost $70bn.

by Adam Gale
Last Updated: 18 Jul 2016
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Just to be clear, Japanese tech firm SoftBank’s £24bn offer for British chip maker ARM has very little to do with Brexit.

Tempting though it may be to hail a sudden jolt of FDI either as a sign that ‘Britain is open for business’ or that the M&A sharks are now circling, it actually has far more to do with the unique personality of the man making the offer than the prevailing economic conditions.

Masayoshi Son is Japan's second richest person (he would be the richest, were it not for a little investment hiccup, of which more later), hailed since the early 90s as his country's answer to Bill Gates.

Both, it’s true, founded technology companies, but there the similarity ends. Gates is a tech geek who’s also a brilliant entrepreneur; Son is a brilliant entrepreneur who happened to pick tech to make his fortune (currently standing at $16.8bn).

A better comparison would be with super-investor Warren Buffett, or perhaps Alibaba’s Jack Ma. Son shares with both a penchant for the dramatic bet on the Next Big Thing.

Starting SoftBank

Son, now 58, went to the US when he was 16, graduated from high school after two weeks and then majored in economics at Berkeley.

Apparently, he spent more time working on his businesses than in the classroom, making millions remodelling Japanese computer arcade machines for restaurants, selling a patent for a calculator to Sharp and developing a next generation voice synthesizer.

Son then returned to Japan to start a business, but took 18 months deciding what it would actually do. He settled - wisely in hindsight - on software, in 1981. ‘I wanted to choose [a sector] that I would feel more and more excited about as the years passed,’ he told HBR in 1992.

From its origins in software distribution, SoftBank rapidly diversified (very rapidly – it began publishing magazines within six months of launch). Its main business is now as a telecoms provider, with sidelines in solar power and humanoid robots.  

You win some...

Son’s biggest contribution to the global tech scene is not what SoftBank makes or does, but rather in the investments his company has made.

The two biggest successes are local search engine market leader Yahoo Japan, which he founded as a joint venture with the American firm in 1996, and Alibaba.

Son invested $20m in the one-year old Chinese firm in 2000; even after Softbank sold it down for a ten-figure sum, the stake is now worth $55bn.

It hasn’t all be rosy on the investment front though. Son reportedly lost upwards of $70bn – the most anyone’s lost in history – when the dot com crash wrote off 87% of SoftBank’s value in eight weeks. Ouch.

Still, Son hasn’t let a little thing like that deter him from making big bets, becoming a major investor in Uber’s Chinese rival Didi Chuxing and buying a majority stake in American telco Sprint among hundreds of other investments over the last decade.

What this means for ARM

SoftBank is not buying ARM to asset-strip it or fold it into its existing operations, as might have happened if it had been bought by the likes of Intel, Samsung or Apple (some think that a counterbid by one of those three is still a possibility).

Rather, Son views it like these other investments, as sources of future income rather than as components or compliments to SoftBank’s core business. Phew.

In his own words

‘I think I became an entrepreneur because I have my way of doing business... to do that, you have to have your own company. But if you have your own company, you’re an outsider in the Japanese business world. It’s difficult. But that’s life’ - HBR, 1992

‘I believe the continually advancing Information Revolution will lend us the wisdom and strength to address humanity's previously unsolvable problems and help us make a positive impact on all of society’ – from SoftBank’s ‘corporate message’

‘I know I should not be a hindrance to SoftBank’s future growth and that I need to pass on the baton to the younger generation. But I’ve become greedy again and I want to continue as chief executive for a bit longer. I’ve come to a realisation once again that I’m young. Please let me lead a bit longer.’ – at SoftBank’s annual meeting 2016, after Son replaced successor-in-waiting Nikesh Arora  - with himself.

Photo credit: Danny Choo/Wikipedia (Son is on the left...)


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