- SoftBank’s $100 billion Vision Fund has made huge investments in startups like WeWork,, Zume, and Fair.
- For all the differences in industry and business models, several of these Silicon Valley startups share the common thread of eccentric founders with outsized personalities and unorthodox management styles.
- Like WeWork’s Adam Neumann, some of these founders are great “storytellers,” capable of inspiring employees to go all in on noble missions.
- The founder similarities raise questions about whether they are part of an investing pattern by SoftBank and its CEO Masayoshi Son, who often talks of 300 year business plans and visions.
- Click here for more BI Prime stories.
Does Masayoshi Son have a “type?”
SoftBank’s billionaire CEO and head of the Vision Fund has emerged as Silicon Valley’s kingmaker over the past several years, writing nine-figure checks to back tech startups at dizzying valuations.
As the recent implosion of office-sharing company WeWork shows, these investments don’t always work out.
But WeWork, which was led by brash, voluble founder Adam Neumann, also suggests something else about SoftBank’s investment strategy: Many of the traits that Neumann is now known for are also present in the entrepreneurs leading other startups funded by SoftBank.
Whether by design or by the power of the subconscious, Masayoshi Son, or “Masa,” seems to have repeatedly put his money and his faith in a particular type of person.
“If you went through Masa’s portfolio, he has invested in people just like him,” one Silicon Valley investor told Business Insider. “It’s people with a grandiose vision, an outsized personality, and a huge ego. That’s why the portfolio looks like it does.”
What does Masa’s type look like?
They’re almost always male, often middle-aged, and share many of Masa’s own qualities, reflecting his idea of success. Perhaps more than anything else, they are gifted storytellers, capable of inspiring employees to go all in on world-changing “missions” that, in other circumstances, might seem like ordinary business endeavors.
And yet as reports emerge of dysfunctional corporate cultures inside various Vision Fund startups, the Masa leader archetype may also share many of the same flaws.
“VC’s, like people in general, tend to feel most comfortable with people who look like them and have similar backgrounds,” Cameron Yarbrough, a former executive coach, told Business Insider in an email.
That predisposition can be a blind spot for some investors causing them to miss big opportunities, while for others it’s a phenomenon they willingly accept because they believe the payoff from the successes will be worth the trade off, said Yarbrough, who is now the CEO of management training startup TorchLabs.
Master Yoda and his startup knights
Son, who famously bought the most expensive house in California history back in 2012, sees himself as a storyteller, sources told Business Insider. He talks of a 300-year vision for companies pioneering cutting-edge tech like artificial intelligence and robotics.
Now the second richest man in Japan, Son has demonstrated an entrepreneurial bent since his younger days, selling his first tech product — a multilingual translator — to Sharp for $1 million before the age of 21.
Son’s level of involvement and influence in funding startups can vary — the Vision Fund has a team of investors who scour the globe hunting for promising startups and overseeing the deals.
When he is involved, Son can be quick to act and decisive. Known to quote Star Wars’ Yoda, Son says he likes to “feel the force” and use intuition to guide his investing decisions, according to a Financial Times profile.
He initially invested in WeWork after a 12-minute meeting with Adam Neumann, according to Wired. And Neumann has described Son as the living incarnation of the little green sage.
“He is Yoda. He has ‘the Force’ with him,” Neumann told Business Insider in an October interview.
The common thread between Vision Fund founders
Like the Jedi knights under Yoda’s training, several entrepreneurs in Son’s orbit seem to be made from the same mold. WeWork’s Neumann and Zume cofounder and CEO Alex Garden, for instance, were repeat founders with an intense passion for building globally dominant businesses.
Neumann and Garden are “the exact same person,” the Silicon Valley investor said.
Garden liked to tell employees that “Masa invested in me,” implying that he personally was the driving force in securing the investment, a former Zume employee told Business Insider.
A messianic zeal for the startup’s business is another common trait. WeWork famously sought to “elevate the world’s consciousness” under Neumann’s stewardship, while Scott Painter, the cofounder and CEO of car-leasing startup Fair told employees he was seeking “crusaders,” and spoke of a mission to “liberate.”
Garden’s Zume, which initially went to market with automated pizza-making robots, sold investors on his vision to “engineer a more sustainable food system” around the world, a claim that is still the company’s mission, a company spokesperson told Business Insider. But the business division overseeing the robots recently lost its president and will fold into the broader Zume, Inc., parent company in January, Business Insider previously reported.
Several sources told Business Insider that Son is particularly excited about founders who have similar personalities to his. He values “aggressive” types that aren’t afraid to push themselves, and their employees, to bring their vision to reality. These founders know they are expected to grow their companies at all costs, and are excited about doing so. That’s Son’s sweet spot.
At startups like WeWork and Zume, that growth-at-all-costs mentality can result in problems like high employee turnover, low morale, and constantly changing business objectives.
The growth was also the impetus for disfunction at car-leasing startup Fair. According to previous Business Insider reporting, employees at the SoftBank-backed startup rapidly increased headcount following the Series B funding, sometimes hiring employees it didn’t have jobs for. Painter told Business Insider in November that his business was still viable, but he was struggling to finance the costly model after burning funding on lavish company retreats and perks like on-demand massages – a situation reminiscent of the Neumann-led culture at WeWork.
“We’ve built the hardest part; we have to figure out how to finance all of it,” Painter told Business Insider from a conference in Portugal. “We’re at a point now where we have to get it right, given our scale.”
SoFi, an online lending startup that raised $1 billion from SoftBank and others in 2015, was founded by Mike Cagney, a boisterous, former Wells Fargo trader and entrepreneur with a reputation for shouting obscenities at underlings. Under Cagney’s reign, SoFi tasked customer service representatives with approving loans and of misrepresenting the amount of debt financing the company had secured, according to a New York Times profile. Cagney resigned in 2018 amid allegations of sexual harassment within the company.
The original founder prototype that paid off big time
Of course, with more than 80 companies in SoftBank’s Vision Fund portfolio, there are plenty of startups led by executives who don’t fit the profile.
Kabbage, another online lender that SoftBank invested in, is led by founder Rob Frohwein and has been rated one of Inc magazine’s best workplaces for two years in a row. And when the Vision Fund invested in dog-walking app Wag in 2018, it brought on Hilary Schneider, an experienced internet business operator to replace the company’s two cofounders.
If these startups emerge as big winners, they may shine the light on other common threads among the startups that prove the wisdom of SoftBank and Son’s investing strategy.
And it’s worth remembering that the original model for a startup founder that Masa invested in has worked out pretty well. Jack Ma, a former English teacher with a penchant for grand statements and a surplus of confidence, convinced Masayoshi Son to invest $20 million in a fledgling commerce company called Alibaba in 2000. Today Alibaba is one of the world’s most powerful tech companies, worth more than $500 billion, and the early bet on Jack Ma has made Son one of the richest people in the world.
SEE ALSO: SoftBank-backed robotic pizza startup Zume is losing 4 more executives, including its CMO and the head of a major business division, amid a big restructuring
Join the conversation about this story »
NOW WATCH: Inside the US government’s top-secret bioweapons lab