Japan’s favorite TV ad series features a family who sit around bickering and occasionally mentioning the merits of the tariffs offered by mobile network Softbank.
So far, so ordinary. Mobile operators love to feature regular people and trumpet the joy of communication with bland phrases about being ‘better connected’ and having a ‘world that revolves around you’.
But in the Softbank commercials, the grown up Japanese daughter has a brother who is apparently an American black man. And their father is, well, a white dog.
No one in the ads ever remarks on the weirdness of this.
It’s all very droll, slightly weird and joyfully eccentric.
And wildly popular. Indeed, Japan’s CM Research Center, which conducts TV ad recall surveys says SoftBank’s ‘Otosan’ ads (Otosan is Japanese for father) have topped most of its polls for the last five years — and earned the firm’s ‘Brand of the Year’ prize every year from 2007 to 2011.
Otosan could not have happened without the direct involvement of Softbank’s irrepressible and eccentric CEO Masayoshi Son. He was central to the creation of the idea and signs off all the ads, which means there’s no watering down by committee.
This is not typical of Japanese business. But then Masayoshi Son has made his reputation by going against the flow. In an extraordinary career, Son has lost and won a series of huge bets on the way to becoming the first or second richest man in Japan (depending on which poll you read).
In the dotcom crash, he lost $70bn before re-building to the point that he was able to buy Softbank from Vodafone and later acquire one of the US’s big three networks, Sprint.
Masayoshi Son makes brash statements. He’s a celebrity with the most Twitter followers in his home country.
To repeat, his behaviour is not typically Japanese.
But then Masayoshi Son himself is, strictly speaking, not actually Japanese either. He’s Korean.
Son was born in Tosu, on the Japanese island of Kyushu, to a very poor Korean family. His father scraped a living as a fisherman. In the 1960s, discrimination against Korean immigrants was rife, and the young Son recalls being pelted with stones by Japanese classmates at school.
Maybe this gave him some inner steel and the resolve to prove himself. Either way, the Masayoshi Son soon displayed the restless curiosity and energy that marks out all entrepreneurs. As a young man he agitated for a meeting with his hero, McDonald’s Japan founder Den Fujita, who advised him to learn English and study in the US.
So Son moved to San Francisco and enrolled in high school. He graduated in weeks, then enrolled at the University of California at Berkeley to study computer science and economics.
The student was already enamoured of computers and legend has it that Son so carried with him a cut-out newspaper pic of a microchip at all times.
When not studying, Son was thinking of business ideas. He decided to come up with one idea a day, and even ‘hired’ a fellow student to be his stand-in at lectures when some business matter called him away.
Inevitably, Masayoshi Son was going to make a fortune. And it came when he hired a scientist to help him build a voice-operated multilingual translator, which he later sold to Sharp for $450,000.
With the money, he set up another business importing Space Invaders game machines from Japan and leasing them across the Berkeley campus.
When he returned to Japan in 1980, one would assume the stage was set for immediate glory. Instead, Masayoshi Son mooched around for 18 months, thinking and reading. He drove his family mad, but he was adamant the next venture would be the big one.
Softbank is born
Masayoshi Son began thinking about computer software. He noticed how easy it was to buy hardware and how much software seemed to be available. And yet hardly anyone seemed to be selling it. At least not professionally and at retail.
So Son used $80,000 in savings to create SoftBank.
His first project was an utter disaster.
Aware of the lack of distribution, Son hired a huge stand at a consumer electronics expo. He then gave Japan’s top software makers free space on it, and drew crowds with a huge sign that said: “Now the revolution has come for software distribution for PCs.” The stand was permanently packed with delegates. It was the hit of the show.
Problem was: no one wanted to do business with Softbank. Instead, visiting retailers swapped cards with the publishers and signed their own direct deals.
Masayoshi Son reckons he made back one-twentieth of the cost of the booth. He resolved to keep going, but the odds were against Softbank.
Then fate intervened.
He was phoned by someone from a shop called Joshin Denki. They needed software. Could he come to Tokyo for a meeting? Well, no he couldn’t. He told them he was too busy. In fact, he didn’t have the money.
Son didn’t realise that Joshin Denki was in fact the third largest home electronics dealer in Japan. Mercifully, they called again to say the company president would be going to Tokyo (where Softbank was based) anyway.
In reality, the trip was arranged solely to see Masayoshi Son. Joshin Denki had just set up a computer shop and desperately needed more software.
Exclusive or nothing
The conversation that followed reveals everything about Son’s audacity. Rather than leap gratefully at such an opportunity, Masayoshi Son advised his visitor that Joshin Denki would have to let go its existing suppliers and trade exclusively with Softbank. Why? Because his dedication to software would take Joshin Denki to the top.
“If you want to be the number one PC dealer in Japan, you have to find the number one guy in software distribution. That’s me,” he said.
Amazingly, his impertinence worked. Other deals swiftly followed for both retail and publishers. In a year, Softbank’s monthly revenues went from about $10,000 to $2.3 million.
Masayoshi Son was off and away.
By 1984, Softbank owned 50 per cent of Japan’s retail market for computer software. Meanwhile, its relentless CEO was exploring other business lines. The firm moved into telephone-routing devices, magazine publishing, and broadband internet service.
Son loved to buy and sell, throwing money into 600 technology companies, including GeoCities, Ziff-Davis Publishing and the Comdex computer show. Some of these bets went disastrously wrong, such as Kingston Technologies, which lost Softbank $1 billion.
Others did better.
Ziff-Davis’s chief executive, Eric Hippeau, introduced Son to a struggling small company called Yahoo, which wanted $5 million to develop its search engine tech. Famously, Masayoshi Son offered $100 million. Yahoo founder Jerry Yang replied that they didn’t need that much. To which Son countered: “Everyone needs $100 million.”
Thus, Softbank owned more than one-third of Yahoo when it went public in April 1996.
And Masayoshi Son was similarly prescient about Alibaba, offering a big sum to its CEO Jack Ma when he hadn’t even asked for it. As a result, Softbank got a third of Alibaba – a stake worth $75bn on the day the Chinese giant IPOd last month.
SoftBank’s $20 million investment in Alibaba back in 2000 probably ranks as one of the greatest ever.
How Masayoshi Son got friends in high places
An astute eye for potential wasn’t the only thing propelling Son to the top. He was also extraordinarily good at networking. Son made good friends of Bill Gates and Larry Ellison – relationships that would help Softbank enormously.
But perhaps the best bit of friend-making was with Steve Jobs.
In another story that has turned into legend, Masayoshi Son claims he visited Jobs to present the Apple boss with a drawing of a mobile-enabled iPod. Jobs threw it back, laughing that he didn’t need a ‘shitty’ little drawing; Apple was working on its own.
So Son said: “Well, I don’t need to give you my dirty paper – but once you have your product, give it to me for Japan.”
Job agreed. He had nothing to lose. The iPhone didn’t exist. And Son didn’t own a mobile network at that time.
But he soon would. SoftBank would buy out and rename Vodafone Japan’s network in late 2006. Months later, he had the iPhone exclusive.
That sounds great now. But in 2007, the device wasn’t such a sure thing.
Traditionally, the Japanese chose handsets by local OEMs like Fuji, Panasonic and Sony. Also, the iPhone lacked crucial features. There was no QR code reader, the Safari browser didn’t work with dedicated Japanese mobile sites, there was no support for SMS emoji.
SoftBank’s solution was to steamroller the phone into users’ hands, offering it free with cheap unlimited data packages.
It worked. The iPhone became Japan’s most popular handset, and Softbank raised its subscriber base from 16 million to 35 million.
However, the Softbank story hasn’t been plain sailing. In his bid to challenge the previously omnipotent telco incumbent NTT DoCoMo, Masayoshi Son has had to make more huge bets.
Softbank has spent close to $2 billion building out a gigabit Ethernet network to provide Internet access to Japanese homes at 12 megabits per second. Naturally, users love this. Especially at $21 a month. On average, 7,000 new subscribers sign up every 30 days.
Yet Softbank is spending $250 to acquire these new customers. Which explains the firm’s vast $3.9 billion debt. So should Son ease off a bit? Maybe. But he won’t. It’s not his style.
After all, this is the man who threatened to set himself on fire in a government meeting over a regulatory dispute with NTT.
“Yes, the story is true, I did threaten to set myself on fire inside the Telecommunications Ministry, but I did not take any petrol along,” he says.
Masayoshi Son believes ultra-fast internet can deliver future benefits that cannot be foreseen until they happen – and that Softbank will be the ultimate beneficiary.
The same thinking underpinned another of Son’s big bets, arguably his biggest of all. In 2013, he became chairman of US mobile carrier Sprint after spending $21.6 billion to buy control. As so often before, Masayoshi Son was advised against buying what was an ailing business in a sector with an uncertain future.
Observers described the coming together of Japan’s number three mobile company with America’s number three mobile company as ‘a merger of losers’.
And indeed, he lost $1.3 billion from his own net worth when Softbank shares plummeted on reports of the acquisition.
Son’s response? “I’m a man, so I want to be number one.”