[News Inside] From the "Minus Hand" to the "Midas Hand" in One Year

Son Jeong-ui, Chairman of SoftBank Group

▲Masayoshi Son, Chairman of SoftBank Group [Image source=Reuters Yonhap News]

[Asia Economy Reporter Kwon Jaehee] The man once called the Midas hand, whose investment judgment was questioned due to a series of investment failures.

SoftBank Group (SBG) Chairman Masayoshi Son avenged himself after a year.

In the fiscal year 2020 earnings announcement (April 2020 to March 2021) released on the 12th, SBG posted a net profit exceeding 4.9879 trillion yen (about 51.5 trillion KRW), the largest ever for a Japanese company. This ranks third after Apple (about 6.1905 trillion yen) in the U.S. and Saudi Aramco (about 5.2618 trillion yen). It is twice the net profit earned by Samsung Electronics last year (about 26.4078 trillion KRW). It is the largest scale ever for a Japanese company. The previous record was 2.5 trillion yen set by Toyota in 2017.

In terms of net profit, it surpassed Microsoft (4.7882 trillion yen), Industrial and Commercial Bank of China (4.7499 trillion yen), Warren Buffett's Berkshire Hathaway (4.5399 trillion yen), and Google (4.2994 trillion yen).

The performance of SoftBank was driven by investment returns managed by the Vision Fund. Masayoshi Son, SBG Chairman, stated, "SBG is an 'investment company'" and expressed his intention to "expand investments through the Vision Fund." He plans to increase the number of startups invested in by the Vision Fund from the current 224 to 400-500 companies by focusing available funds on the Vision Fund.

In the fiscal year 2019, due to Son's consecutive investment failures, the company recorded a historic loss of 961.5 billion yen. The Vision Fund, which had been a burden for SoftBank, became a golden goose in just one year.

▲Masayoshi Son, Chairman of SoftBank Group [Image source=Reuters Yonhap News]

Although he seems to have always been on a path of success, he actually comes from an unauthorized shantytown. His parents, originally from Daegu, decided to move to Japan for a better life and settled in Kyushu. Born in Kyushu in 1957, he grew up experiencing poverty every moment. His parents worked various jobs from illicit liquor production to fish sales to raise four siblings. One day, when Son was in middle school, his parents started a pachinko business and finally hit the jackpot, becoming wealthy overnight.

With improved family circumstances, Son, supported wholeheartedly by his parents, dropped out of high school and decided to study abroad in the U.S. at the age of 16.

The reason behind his decision to study in the U.S. was the president of Fujita Denden. Fujita was the person who introduced McDonald's to Japan and is considered one of the top business leaders in Japan. Son was inspired after reading a book written by him and firmly decided to meet him and go to America. However, it was unlikely that the legendary business leader would make time for a mere high school student.

Son started calling Fujita's secretary every day. Despite multiple rejections, he did not give up and boarded a plane to Tokyo. After arriving in Tokyo, he called the secretary again, pleading to sit in the president's office for just three minutes. Moved by his passion and persistence, Fujita finally met Son and gave him as much as 15 minutes.

Fujita advised the high school student Son that the era of computers was coming and urged him to prepare accordingly.

Son took this advice to heart and embarked on his study abroad journey. It was 1974, a time when most people did not even know about computers. He enrolled at UC Berkeley near San Francisco, California, majoring in economics and computer science.

Then a crisis struck. His father fell ill, and the family’s financial situation began to decline. With family support cut off, Son had to earn his tuition and living expenses himself. At that time, he came up with the idea to create and sell an electronic dictionary. At 19, he approached a professor in the engineering department with his idea and worked together on the project. This technology was sold to Sharp Corporation, earning him about 1.1 billion yen at the age of 21.

▲Masayoshi Son, Chairman of SoftBank Group [Image source=Reuters Yonhap News]

After safely completing his studies abroad, Son returned to Japan and spent one year and six months planning his business before founding SoftBank at the age of 24.

His business acumen and foresight began to show their true value. When Microsoft (MS) was still a small company, he secured exclusive sales rights in Japan, generating sales exceeding 1 trillion yen. He also invested in Yahoo, which was running at a loss, and turned it into Japan's top portal.

What placed him among the world's wealthiest was the exclusive contract with Apple. He personally met Steve Jobs and signed an exclusive iPhone contract in Japan. With the iPhone boasting over 60% market share in Japan, it brought Son enormous wealth.

A famous anecdote is when he decided to invest 20 billion yen in Alibaba after listening to CEO Jack Ma's presentation for just six minutes. This investment yielded nearly 3,000 times the return.

Masayoshi Son reportedly set a life plan at age 19: "In your 20s, make a name for yourself; in your 30s, gather at least 100 billion yen; in your 40s, take risks; in your 50s, complete your business; and in your 60s, hand over the business to your successor."

Currently 63 years old, Son has stated that he is narrowing down candidates to hand over the business to his successor, following the life plan he set at 19.

Son expressed his ambition, saying, "If my enthusiasm does not wane, I want to be involved in management in some form even in my 70s and 80s."

This shows that his success was not achieved overnight.