The Maverick King of the Internet
WHY YOU SHOULD CARE
Entrepreneurs don’t just make money, they change our world.
By Steven Butler
The longest-running star of Japanese TV commercials is a white Hokkaido dog known as Otosan (Father), also referred to as Mr. White, who plugs cell phone plans for SoftBank as the gruff-speaking, vainglorious, and gently disrespected canine patriarch of what might be Japan’s most unusual family: His human wife and daughter are Japanese, and his human son is black. Otosan is everywhere, from outer space to shootouts in the Old West, not to mention occasional zany encounters with Tommy Lee Jones as an alien with supernatural powers. Mechakucha is a good Japanese word for it: all jumbled up.
Yet the real star of this popular series — more than 130 episodes over seven years — is Masayoshi Son, founder and CEO of the Japanese company SoftBank, the almost equally mechakucha organization that’s made him Japan’s second-wealthiest man, worth $13.9 billion, according to Forbes magazine. (Number one is Tadashi Yanai, the retailer behind Uniqlo, with $21.1 billion.) “He has disrupted industry after industry,” says Ulrike Schaede, a UC San Diego Japan specialist, essentially forcing the government to deregulate Japan’s vast telecommunications industry.
The jumbling is everywhere: Son is Japanese Korean, from a shunned minority; his education and first business breakthrough were in the U.S., and his heir apparent is an India-born former Google executive. With an eclectic empire stretching from India and China and across the Pacific to the U.S., he may be the premier Pan-Pacific entrepreneur, a high-stakes gambler who started with nothing and has made it big — and sometimes lost big — by breaking taboos. “He’s pretty in-your-face, willing to challenge the establishment,” says Steven Vogel, a UC Berkeley political scientist and Japan specialist.
Great success in business takes only a few good calls, and Son’s record is loaded with plenty of bad ones.
Son — who declined a request for an interview — is a rebel, perhaps as a result of his outsider status. In elementary and junior high school, he recently told the Nikkei Asian Review, “I was in agony over my identity so much that I seriously contemplated taking my own life.” He dropped out of an elite Japanese high school, in the southern city of Fukuoka, not far from the impoverished Japanese-Korean hamlet where he grew up. He headed to California, to school in Oakland and on to UC Berkeley for an economics degree. It was in the U.S. that Son shed his Japanese name, Yasumoto, for his ancestral Korean name, much to the dismay of his family, who feared disapproving Japanese eyes.
Meanwhile, he began importing Space Invader video machines from his father, who, back home in Japan, had entered one of the few businesses easily open to Koreans: running pachinko parlors, pinball gambling venues. And with the help of a Berkeley physicist, he invented a translation machine that he sold to Sharp for a million dollars, enough to fund the launch of SoftBank in 1981.
In the business world, the rebellion took other forms. In button-down Japan, he was an early convert to office-casual culture, and he gives long speeches without notes, strutting about often in a light-colored jacket, his balding pate accentuating his round face.
Great success in business takes only a few good calls, and Son’s record is loaded with plenty of bad ones. SoftBank, an early Internet pioneer, later branched out into banking and even launched a Japanese version of the U.S. Nasdaq stock exchange. By 2000, the company, valued at around $17 billion, was worth more than Sony or Toyota, until its stock price tumbled by 99 percent as the dot-com bubble burst, with both banking and the stock exchange souring.
And then there’s dreary Sprint, which SoftBank bought into in 2013 for about $20 billion, when it was the third-largest wireless carrier in the U.S. Son failed to win government approval for a merger with the then-fourth-largest carrier T-Mobile, and he admitted recently that he had for some time “lost confidence” in Sprint as it shed customers. Now, Son is pushing a new plan to revamp the company, investing an additional $87 million. Sprint shares had fallen by two-thirds since the end of 2013, but that changed when Son made his commitment clear in early August. Sprint’s stock price went up but then fell in November, when Sprint borrowed money to fund sales.
Still, good investments have previously saved the day, like an early stake in Yahoo and majority ownership of Yahoo Japan, which commands more than half the Japanese search market, compared with about a third for Google. A $20 million dollar investment in China’s Alibaba turned into a $70 billion bonanza when the giant Internet retailing company went public in 2014. SoftBank’s price-slashing policy has kept it thriving too. And in 2006, it turned around Japan’s struggling cell phone carrier after buying it from the British company Vodafone. Vogel credits Son with driving down prices throughout the Japanese telecom market. “He knows how to take risks,” says Schaede.
You might imagine Son to be cutthroat, but it’s the word romantic that first comes to mind. A few years ago, he touted the company’s 30- and 300-year plans, based on the simple (and contestable) notion that the information age would relieve death, loneliness and despair — thanks to self-teaching computers that vastly outpace the human brain. These days, he struts about onstage alongside Pepper, a humanoid robot on wheels trained to read human emotions, as he spins out his ideas. (The first 1,000 of the robots, at $1,600 each, sold out in one minute in Japan, when they went on sale in 2014.)
Now, it’s turnaround time once again for Sprint. Perhaps Son takes comfort that Nikesh Arora, number two at SoftBank and heir apparent, said he would plow $483 million of his own money into Softbank shares. Big bets seem to run in the company bloodline.
*Correction: An earlier version of the story was changed to reflect the standard use of the word mechakucha.
- Steven Butler, Steve landed at OZY after years of reporting all over the world and living for long stretches in Asia and Europe for the Financial Times and U.S. News & World Report. He has managed correspondents everywhere as foreign editor at Knight Ridder but is delighted to be free of the printing press. Follow Steven Butler on Twitter Follow Steven Butler on FacebookContact Steven Butler