YouSaid · the spoken record

Jeff Housenbold

lines on the record: 75
first: 2021-03-29
most recent: 2021-03-29
sittings or episodes: 1
sources: podcast

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“So, the biggest mistake I made in my professional career is Early on not having the subtleties and understanding the politics of different organizations. I'm an incredibly direct person and sometimes people don't know how to interpret that directness, but it comes from a place of love because I want us to all get better. I want us to succeed. And so the biggest thing that I learned that I still, again, can improve upon this, but is how do you tell her that message so it's received by different people? Because some people have to sandwich, some people you have to come from the side, others can take it straight on. But making sure that you get Your point across in a way that is receivable so that you can achieve your objectives.”
2021-03-29 · Capital Allocators · Jeff Housenbold – Inside Softbank Vision Fund (Capital Allocators, EP.186) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I learned a lot of lessons growing up on the streets of Brooklyn and then raising myself And I'm still struggling to be a great steward of this lesson, but enjoy the journey. Don't just look forward to the destination. I'm always raising the bar for myself and those around me. And you have to celebrate success a little bit more along the way.”
2021-03-29 · Capital Allocators · Jeff Housenbold – Inside Softbank Vision Fund (Capital Allocators, EP.186) · IDENTIFIED FROM THE TRANSCRIPT · source
“able to help people be on the right curve otherwise they fall through the cracks and it's part of why we have such division i think in our country today and i wish our politicians and our society was spending more time talking about how we're going to fix education and provide access to everyone to a great education. And I think national security is vital, but we're spending $835 billion in our defense spending if we spent $700 and put that $135 a year into education, we could dramatically change our society. And the benefit will be immense GDP growth as well.”
2021-03-29 · Capital Allocators · Jeff Housenbold – Inside Softbank Vision Fund (Capital Allocators, EP.186) · IDENTIFIED FROM THE TRANSCRIPT · source
“Think it's getting education, really. And that was a little bit from my mom certainly, but I also have been fortunate. I happen to date the Val Victorian and her family went to college and grad school and I saw the power of the education. And that's my courage. I used to go around the country talking to kids that came from humble beginnings about there was money and you could get scholarships. And even if you have to do it online or get a GED, get an education, all the data shows that it tremendously changes your life, not just economically and financially, but from a health and longevity standpoint, from a happiness standpoint. So it's really all about education. And my wife and I spend all of our charitable time and giving and helping young kids have access to food because if you're hungry, you can't learn. And then reading, if you can't read, you can't learn. And it's kind of between three and seven is where we need to intercept to be.”
2021-03-29 · Capital Allocators · Jeff Housenbold – Inside Softbank Vision Fund (Capital Allocators, EP.186) · IDENTIFIED FROM THE TRANSCRIPT · source
“There's a couple right now, and there are a lot of entrepreneurs that are struggling to raise capital, but I've never seen more access to capital ever before through multiple avenues, be it tech stars or YC or governments or traditional venture capital or Angel List or bands of angels. People think raising capital is their focus. That's not what it's about. It's not about the next up round. It's not about raising capital. For me, it's about how are you building an enduring franchise? How are you building a company that will last? How are you creating a culture that will survive the founder? And so for me, I'll phrase it as there's a little bit of short terminism in people's mentality and thinking. And I get much more excited when an entrepreneur comes in and tells me, 50 years from now, this is what I believe the company will be doing versus in five months from now, I think I could spack the company.”
2021-03-29 · Capital Allocators · Jeff Housenbold – Inside Softbank Vision Fund (Capital Allocators, EP.186) · IDENTIFIED FROM THE TRANSCRIPT · source
“Like every other. So I had to raise myself since I'm 15 and hard work is just part of the ethos. And so I never mind when someone's ignorant about things because I don't know a lot of things. But one of my pet peeves is when people don't have a growth mindset, when they don't take it upon themselves to continuously learn and that laziness kind of sets in. So I'm attracted to people who are always trying to make themselves better and by being associated around them, you are better for it. And so laziness is a big pet peeve.”
2021-03-29 · Capital Allocators · Jeff Housenbold – Inside Softbank Vision Fund (Capital Allocators, EP.186) · IDENTIFIED FROM THE TRANSCRIPT · source
“Give you three again. So one, I grew up in Pittsburgh and came of age from Calvin and Hobbs. I don't know if you've ever read the comic strip, but the complete collections of Calvin and Hobbs is one of them. Second is I love spy novels. I was getting recruited by the CIA coming out of college and it's just something that I always fantasize about being a covert operative. And so I read a lot of spy books, but anything by DeSilva is fantastic about the Israeli Masad. And then the third book that for me that I've always loved and read over and over and over again is the Fountain Head.”
2021-03-29 · Capital Allocators · Jeff Housenbold – Inside Softbank Vision Fund (Capital Allocators, EP.186) · IDENTIFIED FROM THE TRANSCRIPT · source
“I'll give you a couple. One is I try to give a hug and get a hug a couple of times a day. And I know that might sound trite or corny, but connecting with the people that matter most in your life and showing them that love is, we can always do more of that, but I try to do that. Second is that most amazing chocolate lab in the world and getting out on taking a walk, which helps me meditate, clear my mind, think about the important things, get a little exercise. And then the third thing I do not every day, but three or four times I collect old cars and my middle kid and I love to just go out for a drive. And as a parent, that's the time when he talks to me and opens up and we really connect. And so I am going to miss the days when combustion engines don't exist because the roare the engine and the conversation are pretty exciting.”
2021-03-29 · Capital Allocators · Jeff Housenbold – Inside Softbank Vision Fund (Capital Allocators, EP.186) · IDENTIFIED FROM THE TRANSCRIPT · source
“Is there anything beyond work and family? I'll say two. One is I've been a poker player since I'm 13 and enjoy playing poker and had the pleasure and the privilege to serve on Caesar's board, which owns the World Series of Poker. And it's something that my friends and I get to do and experience, though, COVID has put a little bit of a clamp on that online poker with them is not the same as in person and swapping stories and having shared experiences. And the second is I have three teenage boys and we all enjoy video games. So it's either playing Call of Duty or Madden or League of Legends with them. So those are two fun hobbies.”
2021-03-29 · Capital Allocators · Jeff Housenbold – Inside Softbank Vision Fund (Capital Allocators, EP.186) · IDENTIFIED FROM THE TRANSCRIPT · source
“So we're still in the process of doing that, but I'll tell you my framework in doing that. We have a lot of talented people in the firm, very seasoned people. They've been successful in their careers. And I believe we're going to be able to do that in a really smooth and successful way where my team gets to continue to flourish and SoftBank gets to continue to flourish. So I don't have any concerns about that. It's partly why I gave the firm six months just like I did when I left after 11 and a half years at Shutterfly. I believe in open honest direct transparent communication. I believe in smooth transitions and I believe that the relationships you create are invaluable. And so I think more in a relationship view than a transaction view. And so I'm excited for me personally about the next chapter. And I know my team and SoftBank will continue to do amazing things.”
2021-03-29 · Capital Allocators · Jeff Housenbold – Inside Softbank Vision Fund (Capital Allocators, EP.186) · IDENTIFIED FROM THE TRANSCRIPT · source
“That sounds good. So you mentioned transition, and even in investment businesses, there's always a succession issue. And even though this is a shorter period of time, I'm curious, how are you approaching handing off the team you've led to whoever will then run at least that component of the Vision Fund next?”
2021-03-29 · Capital Allocators · Jeff Housenbold – Inside Softbank Vision Fund (Capital Allocators, EP.186) · IDENTIFIED FROM THE TRANSCRIPT · source
“Not alone, my wife's wondering the same thing, so you might recall that I said SoftBank's the 17th company that I've worked for. And I'm coming up on four years and I'm reflecting on what I want to do next. And it's been an amazing journey. I learned a lot, made a lot of good friends, hopefully added some impact and value to my portfolio companies. And I've had great success financially for the firm and the LPs. And so now I'm going to take a couple months and reflect on do I want to go back and be a CEO and an operator or do I want to start my own fund focused on a little bit earlier stage than where the vision fund is? Both are great opportunities. As I said, I'm an and, not an or person, and I'm blessed to have the option to choose which one. And I'm going to take the next few months to do a smooth transition for my portfolio companies, my team, and the firm. And once I make a decision, I'm going to tell my wife, then Ted,”
2021-03-29 · Capital Allocators · Jeff Housenbold – Inside Softbank Vision Fund (Capital Allocators, EP.186) · IDENTIFIED FROM THE TRANSCRIPT · source
“Jeff, you mentioned at the onset of your entry into Softbank Vision Fund that MASA had said, well, you could just do this for a couple of years and we're going to have all these companies and you go run a company, you can do whatever you want to do. And in between, when we first met and now, you had announced that you will be stepping away. And I'm curious, both the thought process in that and if you have any thoughts of what you'll be doing.”
2021-03-29 · Capital Allocators · Jeff Housenbold – Inside Softbank Vision Fund (Capital Allocators, EP.186) · IDENTIFIED FROM THE TRANSCRIPT · source
“Censure. These are companies that have been around for a long, long period of time, and they have adapted to the changing environment where some companies, large incumbent companies have not been able to adapt as quickly and some of them have gone out of business. And you see that reflective if you look at the number of, say, Dow 30 companies today that didn't even exist 20 years ago, you see a lot of that in companies. And so in the investment side, you could build a company that can stand a long period of time and ultimately that comes down to do you do your job well, which is you make an outsized return for your investors.”
2021-03-29 · Capital Allocators · Jeff Housenbold – Inside Softbank Vision Fund (Capital Allocators, EP.186) · IDENTIFIED FROM THE TRANSCRIPT · source
“Teams. The third is our employees, both our investment staff as well as the functional and specialists that support and enable us to do what we do every day in the firm. And then it's the communities in which our companies operate in. We have a set of stakeholders that go beyond just returning capital. We have to be thoughtful about our impact to climate and to the earth and to diversity and to shrinking the gap between the haves and the haves-nots. And so I just think if you're high integrity, you have a true north, you build an amazing team and you work smart and hard, and luck shines upon you, you can continue to build a company that will outlast any individual, but that becomes a franchise and a legacy in of itself. And I admire companies and industries that have been able to do that over a long period of time. Berkshire Hathaway, Blackstone, McKinsey, Goldman Sachs,”
2021-03-29 · Capital Allocators · Jeff Housenbold – Inside Softbank Vision Fund (Capital Allocators, EP.186) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's incredibly similar and consistent over time in industry between investment and operating companies. And what do I mean by that? Doesn't matter if you're in a service industry and you're Goldman Sachs or McKinsey, if you're an investment industry and your fidelity or Blackstone or Softbank or you're creating a company. What you want to do is have a set of true norts, a strong set of values and behaviors. You want to make sure that you recruit well and train well and retain your best and brightest. You want to have KPIs or OKRs or nested objectives in place so that you're measuring progress. You want to be able to fail fast and you want to run a lot of experiments. You want to be able to reward the people who are performing and weed out the people who are in the wrong job at the wrong time. And you want to make sure that you're servicing your customer and you know who that is. As it relates to an investment firm, who are our customers? Well, one, they're our limited partners. They entrust us with their precious capital. The second is it's our portfolio CEOs and the management.”
2021-03-29 · Capital Allocators · Jeff Housenbold – Inside Softbank Vision Fund (Capital Allocators, EP.186) · IDENTIFIED FROM THE TRANSCRIPT · source
“In fact, dysflation is probably a bigger risk than inflation over the last few years. I don't think the Fed's worried about interest rates, and that will continue to allow multiples to expand. It'll allow equities to continue to rise and allow startups to have access to capital because we're in this destructive phase of new companies taking over the leadership position from incumbents. And you look at that in every industry, it is happening, every industry. Netflix versus Hollywood, Tesla against Detroit, Uber against the Taxi and Limousine Companies, Airbnb against the hotel industry. And so we're seeing it everywhere. And as long as that destructive creation continues to happen, I think there's going to be capital to fund the next generation of great startups.”
2021-03-29 · Capital Allocators · Jeff Housenbold – Inside Softbank Vision Fund (Capital Allocators, EP.186) · IDENTIFIED FROM THE TRANSCRIPT · source
“None of us have a crystal ball, but I'll give you some hypotheses. I think Janet Yellen and the head of the Fed have indicated strongly to the capital markets that the Fed put is going to be in place, i.e. that they're going to backstop liquidity and continue to increase largely the size of our assets on the balance sheet and provide liquidity to the capital markets, particularly during the economic slowdown that the pandemic has created. And that's not just an American-centric view. You look at central banks around the world, and they're all pledging to do roughly the same thing. That will continue to buoy assets and assets in the form of gold, in the form of Bitcoin, in real estate, and in equities. And because we have been in a fairly unusual time where inflation has not really a problem.”
2021-03-29 · Capital Allocators · Jeff Housenbold – Inside Softbank Vision Fund (Capital Allocators, EP.186) · IDENTIFIED FROM THE TRANSCRIPT · source
“Some way, a form of substitution of capital. And that is part and parcel why we have started a SPAC at Softbank. By the way, every other venture capital firm is in the process if they haven't already done one as well. It's just another arrow in the quiver that gives us the flexibility as we meet companies what they want to do. Stay private and take private capital or go public sooner via SPAC instead of going to someone else because of our strength, of our ecosystem, our global perspective, the balance sheet, and then being part of the SoftBank family, they get perhaps greater benefits than just going with a sole spec. And so now we have one too in a competitive response to the SPAC market and its potential to be a substitute.”
2021-03-29 · Capital Allocators · Jeff Housenbold – Inside Softbank Vision Fund (Capital Allocators, EP.186) · IDENTIFIED FROM THE TRANSCRIPT · source
“To date, not much, but my anticipation is a little bit more. So let me decompose that. We have been beneficiaries largely of the SPAC process, which allows companies to go public perhaps sooner than they might have in a traditional IPO. And so a number of our portfolio companies are in the process of going public via SPAC. The most notable one that has been completed was the Open Door, which Amath Paula Pate's SPAC, and that has gone swimmingly well, thankfully. And so that's good for us because, again, we have 120 portfolio companies. And if they have access to more capital and the public markets, then that's a good thing. Over the intermediate term, my anticipation is that companies will now have greater choice if they want to raise a late stage growth round, which someone like a soft bank or they want to tap the public markets. So it is in”
2021-03-29 · Capital Allocators · Jeff Housenbold – Inside Softbank Vision Fund (Capital Allocators, EP.186) · IDENTIFIED FROM THE TRANSCRIPT · source
“In a market that is fairly jubilant. And so I think maintaining the discipline is the harder part, not the access to capital.”
2021-03-29 · Capital Allocators · Jeff Housenbold – Inside Softbank Vision Fund (Capital Allocators, EP.186) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's largely again, it's stock and flow, and SoftBank's balance sheet is in the strongest position it's been ever with the sale of sprint to T-Mobile, with the spinout of SBK, the cell phone company with the Yahoo Japan spinout with this impending sale of ARM to NVIDIA, with some monetization in Alibaba stake. The parent company is sitting on plenty of capital. Capital is not an issue. And in fact, that led MASA to decide that Fund 2 is a sole LP fund. It's just Softbank's money. And $10 billion, as you said, is a large amount of money. And so we'll invest in that. And then we'll have another $10 billion and another $10 billion and another $10 billion. And so access to capital in today's world with the strength of the parent company is not a challenge. The challenge is finding great places to deploy that capital at entry valuations that make sense.”
2021-03-29 · Capital Allocators · Jeff Housenbold – Inside Softbank Vision Fund (Capital Allocators, EP.186) · IDENTIFIED FROM THE TRANSCRIPT · source
“You've rolled from fund one into fund two, and you mentioned you go 100 billion, 10 billion, which is still huge in that ecosystem. That's a huge step change function lower in size. What was the thinking?”
2021-03-29 · Capital Allocators · Jeff Housenbold – Inside Softbank Vision Fund (Capital Allocators, EP.186) · IDENTIFIED FROM THE TRANSCRIPT · source
“That's the average. No one wants to be average in life. Often some of us are, right? But you try to be in the top 10% or top 20% in that investment thing. And so if you're looking for funds above a billion and you want to be in the top quartile, then you're looking at something like a 2.3 gross MOIC. And we're doing really well on that relative basis on $100 billion because the law of large numbers would indicate that it's harder to do that. And so when I go into an investment, I generally won't make an investment if I don't think we could get at least a 3x MOIC. And if I target that and we get a 2-2, we're fine. And if we happen to hit a home run like DoorDash and we get a 17 or 18X, that's going to make up for the few that were 0.3 or 1 or 2. And so again, it goes back to portfolio theory.”
2021-03-29 · Capital Allocators · Jeff Housenbold – Inside Softbank Vision Fund (Capital Allocators, EP.186) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, if you look at historic, and again, the data is a little wonky because no one's done 100 billion when we started the largest fund, I think, was NEA at the time and about a billion nine. I think they're investing out of their next fund of 3.8 or something now. And then Sequoia has gone on to raise the growth fund and stuff. But if you look at all of the Kaufman Foundation or the NVCSA or the Cornerstone Research, The average fund of a billion or greater returned a 171 gross and a 144 net MOIC.”
2021-03-29 · Capital Allocators · Jeff Housenbold – Inside Softbank Vision Fund (Capital Allocators, EP.186) · IDENTIFIED FROM THE TRANSCRIPT · source
“Exciting outcomes like a WeWork, we have many to shine a positive light on our life sciences investments have done incredibly well. Relay therapeutics, VR, 10X, Garden, those have done really well, DoorDash is doing really well, Open Door's doing really well, Compass is about to go public, coupon is doing really well, DD in China, RAPI in Latin America, which I led, GoPuff, Uber's now doing really well. So if you go through our portfolio, we're doing pretty well. And when you think about that on the magnitude of the scale we have on 100 billion, it's even that much more impressive in that short amount of time.”
2021-03-29 · Capital Allocators · Jeff Housenbold – Inside Softbank Vision Fund (Capital Allocators, EP.186) · IDENTIFIED FROM THE TRANSCRIPT · source
“People to step back is every single venture firm will have losers that go to zero. They'll have some that return 30 cents on the dollar, 50 cents, 80 cents, some that they'll get a one, two, three X, and a couple they're going to get 10, 20 or 30x. For us as late stage investors, we're in Fund 1, our average investment was $900 million, we're going to have only a handful of 10 or 20x versus someone putting $2 million in. So for example, I put roughly $600 million into DoorDash and got a 17 or 18x. My dear friend Pagemont Pair put $2 million in and got like a 300x, but the quantum of dollars we made about $12 billion in profit today on that investment. And so that's the game of venture capital. As you know, it's a portfolio management and a couple of big winners will return the entire fund. And that's no different for us. And so for all of the high profile”
2021-03-29 · Capital Allocators · Jeff Housenbold – Inside Softbank Vision Fund (Capital Allocators, EP.186) · IDENTIFIED FROM THE TRANSCRIPT · source
“So we don't talk a lot about this, but the fund's doing really well. And we recognize that we were the new kids on the block. We showed up with the fanciest car and the biggest bank account and that created fear, uncertainty, and doubt within the ecosystem. I personally tried to leverage my long-term personal relationships with other venture capitalists and entrepreneurs to help them understand that we're additive to the ecosystem, not just competitive. That's not a zero-sum game. It's not a winner take-all. We're going to sit on boards together and co-invest, and other times we're going to compete for termsheets. That's just the co-opetition of what Sandhill Road and Silicon Valley is about. And we work was not a great outcome for us. It's not over, by the way. There's a talented team that's working on a turnaround in trying to fix that company, and they're making some good strides. But what I encourage...”
2021-03-29 · Capital Allocators · Jeff Housenbold – Inside Softbank Vision Fund (Capital Allocators, EP.186) · IDENTIFIED FROM THE TRANSCRIPT · source
“people who might have deference to hierarchy not care if they disagree with me or anyone else because it's about the idea and I don't care if the idea again comes from the janitor or the chairwoman it's about the best ideas”
2021-03-29 · Capital Allocators · Jeff Housenbold – Inside Softbank Vision Fund (Capital Allocators, EP.186) · IDENTIFIED FROM THE TRANSCRIPT · source
“Until everyone else talks, and then you have to tell us why we shouldn't do the deal. And it forces them to go from, because we get what's called deal momentum in the business, you fall in love with that because you've gotten to know the entrepreneur, you've researched the business, you really want to do the deal. And so you have to step out of that. It's kind of like if you're the surgeon, you have to be the camera above the surgeon and watch what's going on. So there are different tools and techniques we do in our team to do that. And then I had the pleasure a couple of years ago to sit in on the Supreme Court deliberations. And one of the things that Justice Breyer told me, and I didn't know this, but the court, the youngest member sitting on the bench, they speak first. So every justice has to speak. And the most junior first and no justice could speak twice until every justice has spoken once. And so trying to make sure you're hearing all the different points of view and then helping the younger.”
2021-03-29 · Capital Allocators · Jeff Housenbold – Inside Softbank Vision Fund (Capital Allocators, EP.186) · IDENTIFIED FROM THE TRANSCRIPT · source
“And I did this when I was running MA as well you always assign a group or an individual to be the devil's advocate on a deal. And often what I'll do is I'll take the person who's championing the deal and say, okay, you don't get to talk.”
2021-03-29 · Capital Allocators · Jeff Housenbold – Inside Softbank Vision Fund (Capital Allocators, EP.186) · IDENTIFIED FROM THE TRANSCRIPT · source
“really quickly and so we build up that basis of seeing each other beyond whatever box our job description is or what our LinkedIn profile says and then we appreciate the differences in my career at Shutterfly I built an incredibly diverse organization and was blessed to be recognized as one of the 20 best companies to work for three different times and at SoftBank when I came here I said I want us to build an investment firm that is reflective of that diversity because the diversity will lead to our success as investors and it will lead to society's success so I want diversity not just in gender and race and ethnic background and sexual orientation those are absolutes too but I also want to end differences in job experience in majors in your childhood your perspective on things so I try to build a interpersonal relationship and then to answer your question more specifically”
2021-03-29 · Capital Allocators · Jeff Housenbold – Inside Softbank Vision Fund (Capital Allocators, EP.186) · IDENTIFIED FROM THE TRANSCRIPT · source
“So in my career, I've done this with every one of my teams. I usually start and we do it every year because new people join or leave the team. But I usually take a couple days off for us to really go deep as individuals. And I'll do some techniques like we'll do Myers-Briggs or we'll do Enneagram. We'll do a timeline where people literally talk about, hi, I was born in Brooklyn, New York. I had two older sisters. My first job was this. The moment I was most proud. And you really go deep on your personal side. I'll do things like amulet bags, like bring the three most important things that are reflective of who you are and what you're proud of. And we go really deep on part of YPO, the young president's organization. We do this as forums, but it's a way to kind of strip away the veneer. I don't care you went to Brown or you went to Harvard or you went to Princeton or you went to McGill. Who are you? How do you think? What are you here for? What are your fears and your hopes and your dreams? And we get raw.”
2021-03-29 · Capital Allocators · Jeff Housenbold – Inside Softbank Vision Fund (Capital Allocators, EP.186) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think it is inventure. You have to have an optimistic lens on the world where private equity is often more of a pessimistic. How do I take cost out? And so making sure people get in the right frame of mind, they have the space to make mistakes, ask questions, learn on the job, and increase their pattern recognition so that they could continue to move up in their investment career.”
2021-03-29 · Capital Allocators · Jeff Housenbold – Inside Softbank Vision Fund (Capital Allocators, EP.186) · IDENTIFIED FROM THE TRANSCRIPT · source
“Merits of an investment because smart people could look at the same data set and make different investment decisions. And if you look at, I think, Starbucks when Howard was raising money 120 different venture capitalists passed on Starbucks. And I think 88 passed when market Facebook was looking to raise capital, right? So it is part science, but it's largely art as well. And so creating that culture where people can go and have autonomy, but know that there's a team to come back. And creating, because I think venture is an apprenticeship business, making sure your younger people are sitting in as board observers. You're explaining to them how you're giving coaching to a CEO, why you're for or against that merger or acquisition, and how do you use your interpretive skills and your operating experience beyond just what the spreadsheet tells you? Because sometimes in venture, you just have to believe. And the difference between private equity and venture.”
2021-03-29 · Capital Allocators · Jeff Housenbold – Inside Softbank Vision Fund (Capital Allocators, EP.186) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I blessed I have an amazing team. The demarcated by the characteristics of all the teams I built in my 30 plus year career. And largely my success has been because of my team success. And that demarcation of qualities is high integrity, intellectually curious, high output, low ego, team-oriented, and a growth mindset. And so I have an amazing group of people well-educated, well-executed, demonstrable success, and any one of them I strongly believe will go on to do great things in their career, but the collective of us, and then to create a culture and environment where, well, I'm the boss, how do you create an environment where we can all discuss with radical candor?”
2021-03-29 · Capital Allocators · Jeff Housenbold – Inside Softbank Vision Fund (Capital Allocators, EP.186) · IDENTIFIED FROM THE TRANSCRIPT · source
“Opportunity for serendipity to come in or for me not to have thought about in industry. And it's like, oh, I really never thought about that. Now let's go look at how people are using DNA to customize their food. And then we go get smart on that. But for me, it's a, because I spent five and a half years as a strategy consultant, it's more about determining what your strategy and vision is first and then executing against it.”
2021-03-29 · Capital Allocators · Jeff Housenbold – Inside Softbank Vision Fund (Capital Allocators, EP.186) · IDENTIFIED FROM THE TRANSCRIPT · source
“delivery and prepared meals how consumers consume what their diet and health needs are and then where the economic rents are in that value chain who the incumbents are who are the startups what are the strengths and weaknesses and who do I believe will win and then I went on a journey of learning and so I met with over 150 food companies and I would tell them all I'm getting smart about this space I will deploy capital I don't know when I don't know if it's going to be in you tell me only what you're comfortable telling me and that way it informed my worldview and of the 18 investments I did I think 13 of them were not fundraising when I put the money in it was because of that relationship so each of us magic partners have a different set of experiences a different span of responsibilities and different way to go to market for me it's about being thoughtful about the industry first and then deploying capital that doesn't mean I don't leave the opportunity”
2021-03-29 · Capital Allocators · Jeff Housenbold – Inside Softbank Vision Fund (Capital Allocators, EP.186) · IDENTIFIED FROM THE TRANSCRIPT · source
“There's six or seven of us managing partners around the world. We each have our teams, we have the sectors that we cover. So I oversee consumer and prop tech. And we're a firm and a global firm in Moss is the head of that, but we all kind of run our own sectors on a daily basis. So my approach to investing is not to be reactive so that someone's raising money and therefore I look at it. I try to take three to four sectors a year and go very deep. So for example, take food. I spent seven months mapping out the entire value chain in food from seed development to planting to growing to harvesting to processing to how it gets on the shelves in the cold chain to do that to how retailers called groceries and convenience stores and e-commerce companies, pick, pack, and ship to how it food.”
2021-03-29 · Capital Allocators · Jeff Housenbold – Inside Softbank Vision Fund (Capital Allocators, EP.186) · IDENTIFIED FROM THE TRANSCRIPT · source
“Come in, have clarity as to how to get unit economic positive. You don't necessarily have to be there, but you know exactly the levers you're going to pull as the leader to be able to get there and you can articulate that to your investors so that they continue to deliver more capital for your expansion.”
2021-03-29 · Capital Allocators · Jeff Housenbold – Inside Softbank Vision Fund (Capital Allocators, EP.186) · IDENTIFIED FROM THE TRANSCRIPT · source
“Constantly do that. And so it's always a balance when I'm talking to entrepreneurs about go faster, expand into 300 cities or nail it and then scale it in five cities, right? Show profitability, show your gross margin curves, your retention curves, your CACTA LTV curves in a couple cities and then replicate it. My personal ethos is to do that, nail it, then scale it. Because if you've proven it to me in Albuquerque and in Indianapolis and Cleveland and San Francisco and Boston, now I have permission ability to believe you have the playbook. And then you can go rapidly and expand. And many companies kind of got in trouble by not really nailing it and then expanding really quick. Some of them got bailed out because there was tremendous amount of capital on their balance sheet or accessible and others got crushed under the weight of those losses. So there's no right answer and there's no one size fits all. But my preference is.”
2021-03-29 · Capital Allocators · Jeff Housenbold – Inside Softbank Vision Fund (Capital Allocators, EP.186) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, it's a really interesting dichotomy because one, as venture capitalists, the greatest thing we have is pattern recognition, right? It's being able where you're an entrepreneur, you typically only see one asset, you see one industry, you see one set of levers to pull. As venture capitalists with 120 different companies, we get to have pattern recognition over a broader set of data as well as my own personal experience having worked for 17 different companies in my career, many of which were hyper growth technology-enabled companies. And so I want to be informed by my experience at Shutterfly, but I don't want it to just be the only thing I think about because I think smart businessmen and women are changing their perceptual map on the world based upon new information. And that could be technology adoption, that could be macroeconomics. It could be competitive landscape. It could be consumer sentiment. And so you have to.”
2021-03-29 · Capital Allocators · Jeff Housenbold – Inside Softbank Vision Fund (Capital Allocators, EP.186) · IDENTIFIED FROM THE TRANSCRIPT · source
“Curious how you reconcile this just maybe for you, this notion you mentioned earlier of being a free cash flow guy as soon as you could atfly with clearly some of these unicorns are not even yet cash flowing businesses.”
2021-03-29 · Capital Allocators · Jeff Housenbold – Inside Softbank Vision Fund (Capital Allocators, EP.186) · IDENTIFIED FROM THE TRANSCRIPT · source
“The greatest determinant of your returns with the highest r square is your entry valuation. Some people call that vintage, but it is your entry valuation that has the highest r squared. So you want to be disciplined. But in today's world, multiples are expanding quicker than free cash flow or even revenue growth. And so you get greater permissibility to be wrong in your entry valuation in a bull market. The question will be, what happens when the market rolls over and ultimately it will. We just don't know when that uplift in your valuation is. Is it high enough to absorb any of the decrease or compression in multiples? So I think to your question, you have to always be thoughtful of that as you're managing risk and managing your LP's money.”
2021-03-29 · Capital Allocators · Jeff Housenbold – Inside Softbank Vision Fund (Capital Allocators, EP.186) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's a great question, and there are times where I've heard people say, oh, SoftBank is valuation insensitive. I think there's examples of that, but there are plenty of examples. I could tell you how I passed on Zoom at $6 billion because I thought that was too expensive, or I passed on Procore. I could keep going on and on at companies that at different points in time seemed expensive. So like any venture capital firm, you're trying to price risk on a daily basis. And when you're in markets that If you look back to just March of last year, the Nasdaq was at 6,600 and now it's at 13,800. So when you're in an up market, asset prices tend to continue to rise when you have liquidity and low interest rates. They continue to rise. And so you got to price that risk every day. And so valuation discipline, I think, is really important. Because if you look at all the academic research and it doesn't matter if it's at private equity or venture capital.”
2021-03-29 · Capital Allocators · Jeff Housenbold – Inside Softbank Vision Fund (Capital Allocators, EP.186) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, it just happens to be silicon. And so it's that whole ecosystem feeding on itself. And there's more and more startups. And so there's going to be more and more demand for capital. And as one of the leading technology investors in the world, softbank's in a great position.”
2021-03-29 · Capital Allocators · Jeff Housenbold – Inside Softbank Vision Fund (Capital Allocators, EP.186) · IDENTIFIED FROM THE TRANSCRIPT · source
“Back to where you think about Gen Z's and millennials, they're not following the footsteps of, say, our parents where my father-in-law spent 51 years at the same company. They think about going to a startup, getting experience, and then perhaps starting their own company. And then with low interest rates and coordinated liquidity by central banks around the world, money has to chase yield. And so it's chasing growth because you can't put it in negative to 62 basis points in government debt. And so there's access to capital. And then the success of Silicon Valley and the success of the first wave of companies from Cisco and eBay to the second wave of Facebook and Twitter to now the third wave of the DoorDashes and the SoFis and the Airbnbs are leading people to realize that there's money if you go out west, if you will. Remember the old gold rush and money, there's money in plastics.”
2021-03-29 · Capital Allocators · Jeff Housenbold – Inside Softbank Vision Fund (Capital Allocators, EP.186) · IDENTIFIED FROM THE TRANSCRIPT · source
“Come down. When I was in that first wave of internet companies, you had to pay $350,000 to Sun to get a Sun Solaris 360 as a server. Today I unlock an AWS key with a credit card. To be able to find tech talent was harder back then. Now there are a lot of engineering programs and we don't just have a narrow focus of it has to be in the US. We all have remote teams across the world, be it in Canada or the Ukraine or China or other places. And so the access to talent is greater. There are more programming languages that are more flexible to what you need. There are more software platforms. So if you're a small business, you could get on Spotify. You don't have to use IBM WebSphere. You don't need an Oracle or an SAP implementation. You could use NetSuite. So there's enterprise software that helps you support the back office and functional stuff. So it's just cheaper to get started. And I think we're.”
2021-03-29 · Capital Allocators · Jeff Housenbold – Inside Softbank Vision Fund (Capital Allocators, EP.186) · IDENTIFIED FROM THE TRANSCRIPT · source
“So I thought about it in stock and flow. So when we got started, there was a stock of what I'll call pre-unicorn and unicorn companies, i.e. companies that are going through hyper growth that can use $100 million to $3 billion of growth capital. And there were 600 of those around the world. And over the course of the last three and a half years, we met with all of them and we ended up making about 90 investments. And now the flow is smaller than that stock because we've been in that Malu for three and a half years. And so fun two is roughly $10 billion. And we've made a number of investments. It's $20 or $25 investments now in net fund. And so one of the things that has been happening, as you know, over the last 10 years, the number of startups has been growing exponentially. Why? For a couple of reasons. One, the cost to start a company is”
2021-03-29 · Capital Allocators · Jeff Housenbold – Inside Softbank Vision Fund (Capital Allocators, EP.186) · IDENTIFIED FROM THE TRANSCRIPT · source
“Sharp Fox gun, same company, and Apple. And part of that is historical relationships. MASA had an exclusive to sell the iPhone in Japan, was very close to Steve Jobs. Apple was an investor. Qualcomm's chips are in all of these phones. Foxconn assembles it. MASA owns SoftBank KK, which was our mobile unit and bought Vodafone. So those long-term relationships and the belief in Masa's ability to create returns led to those investments. And so we raised $100 billion and we deployed about 88 billion of that in Fund One, held back some for follow-ons, and we've been investing out of fund two since November of 19. So about a year and a quarter now in the second fund. And across the two, we have roughly 120 investments.”
2021-03-29 · Capital Allocators · Jeff Housenbold – Inside Softbank Vision Fund (Capital Allocators, EP.186) · IDENTIFIED FROM THE TRANSCRIPT · source