20VC Marcelo Claure, CEO of Softbank Group International on Lessons From Investing $1BN Per Week with Masa Son, How Softbank Could Have Up To 8 Companies Go Public in LATAM Alone Next Year & How Softbank Analyse Both Deal Pricing and Competition Today

In this episode, Harry Stebbings interviews Marcelo Claure, CEO of SoftBank Group International and a pivotal figure in Latin America's tech ecosystem. Claure discusses his journey, from founding Brightstar and becoming CEO of Sprint to his current role overseeing SoftBank's strategic direction and vast portfolio, including WeWork and T-Mobile US. He highlights the success of the SoftBank Latin America Fund, which invests in technology growth opportunities and has created numerous unicorns in the region. Claure also touches on the challenges of managing conflicts of interest in investments and the importance of providing entrepreneurs with sufficient capital to focus on their businesses. Additionally, Claure shares insights on working with Masayoshi Son, his approach to investing, and the future of the Latin American market, including his goal to invest $5 billion annually in the region.

• Harry discusses the success of a special feature week on Latin America.
• Over a hundred new subscribers were added to 20vc in Latin America.
• Marcelo Claure was not featured during the special week but is highlighted for his significant contributions to Latin America's tech ecosystem.

So the other week we did a special feature week on Latin America, and bluntly, it was a storming success. We added over a hundred zero new subscribers to 20vc in Latin America alone.

The quote highlights the success of the special feature week dedicated to Latin America, indicating a strong interest and growth in the region's tech sector.

• Marcelo Claure is introduced as the CEO of SoftBank Group International and CEO of SoftBank Group Corp.
• Claure's responsibilities include overseeing SoftBank's strategic direction and its portfolio, which includes major companies.
• He leads the SoftBank Latin America Fund, a $5 billion investment initiative.
• Claure holds multiple leadership roles across various organizations, including WeWork, Club Bolivar, and Girona FC.

So I'm thrilled to welcome Marcello Claw, CEO of SoftBank Group International and CEO of SoftBank Group Corp.

The quote introduces Marcelo Claure and summarizes his extensive responsibilities and leadership roles, reflecting his influence in the global tech investment landscape.

• Harry thanks Mateo from eight sleep for contributing questions for the interview.
• Mercury, Ripling, and Angelist are mentioned as services that provide foundational infrastructure and investment management for startups.

And then finally, a huge thanks to Mateo at eight sleep for some fantastic questions suggestions today.

This quote shows appreciation for contributions from individuals and companies that support the startup ecosystem, emphasizing the collaborative nature of the tech industry.

• Marcelo Claure founded Brightstar, which became a leading mobile phone distribution and supply chain service.
• Masa (Masayoshi Son) acquired Brightstar on the condition that Claure would become CEO of Sprint.
• After turning around Sprint and merging with T-Mobile, Masa invited Claure to learn investing in Tokyo, leading to the creation of the SoftBank Latin America Fund.

So there's a story behind it, right? And first thing that I did is I created a company.

The quote introduces the narrative of how Marcelo Claure became involved in venture capital, starting with his entrepreneurial journey with Brightstar.

• Claure describes the dire financial situation at Sprint upon his arrival.
• He focused on empowering the workforce and launched a customer listening tour to address customer dissatisfaction.
• Sprint introduced an unlimited plan to simplify customer bills and underwent a significant cost reduction, saving $11 billion.
• The brand was transformed with a new marketing strategy, leading to profitability and the eventual merger with T-Mobile.

So I would say the first thing that we had to do was to empower the workforce.

This quote emphasizes the importance of employee empowerment in the turnaround process of Sprint, highlighting Claure's strategic approach to corporate restructuring.

• Claure learned from Masa's founder-focused and long-term investment approach.
• Masa's disregard for short-term results allows for a vision beyond immediate market fluctuations.
• Claure identifies with Masa's 360-degree view, combining experiences as founders, operators, and investors.

What is amazing about Masa is he's truly founder focused.

The quote reflects Masa's investment philosophy, which Marcelo Claure admires and adopts, focusing on the significance of founders in the success of investments.

• Claure describes the daily routine of investing alongside Masa in Tokyo.
• They worked closely, with meetings held in a conference room where they met with entrepreneurs.
• The process was collaborative and intense, with a high volume of investment decisions made weekly.

Sure. In normal days, we basically, if you imagine the setup on the office in Tokyo, there's MASA's office, there's my office next to MaSa, and there's a conference room.

This quote provides insight into the daily operations and physical setup of the investment process at SoftBank in Tokyo, illustrating the close working relationship between Claure and Masa.

• SoftBank's investment process involves numerous meetings with entrepreneurs, evaluating their passion, business plan, and desire to win.
• Decisions can range from $50 million to $8 billion checks, sometimes on the same day.
• Investment partners conduct pre-due diligence and financial analysis before companies are presented to Tokyo for final decisions.

We had 8910 meetings a day, pretty much with the access to data that was prepared for us and how we felt about that entrepreneur, we're able to make decisions right there.

This quote from Marcelo Claure explains that investment decisions were often made quickly during meetings, based on the data prepared by investment teams and the impression of the entrepreneur.

• Investment partners worldwide conduct pre-due diligence, ensuring the industry has growth potential and the company can become a leader.
• They assess the entrepreneur's capability to overcome obstacles and perform all necessary financial analyses.
• The final investment decision can involve various interactions, from short meetings to dinners, depending on the investment size.

So, for example, today we have 26 investment teams all over the world that are meeting hundreds of entrepreneurs every single week.

Marcelo Claure describes the extensive network of investment teams at SoftBank that meet with entrepreneurs, indicating the global scale and thoroughness of their investment process.

• SoftBank invests its own capital without external limited partners (LPs) and isn't confined to specific deployment cycles or sizes.
• The focus is on companies that can leverage AI, data, and machine learning to disrupt traditional business models.
• SoftBank operates without a preconceived deployment schedule, investing as opportunities arise.

We only invest our own capital. We don't have our own lps. We don't have specific cycles. We don't have specific sizes.

Marcelo Claure emphasizes SoftBank's unique position of using only its own capital, which allows for flexibility in their investment strategy, not bound by traditional fund cycles or external pressures.

• SoftBank identifies itself as 'vision capitalists,' focusing on companies that are part of the AI revolution.
• The firm doesn't have deployment targets but invests $40 to $50 billion annually without a fixed cycle.
• The goal is to support founders who can contribute significantly to the AI revolution.

We like to say that investors seek economic gains. We are vision capitalists. We believe in the AI revolution, and we want to make sure that we're helping create the AI revolution.

Marcelo Claure differentiates SoftBank from traditional investors by highlighting their commitment to fostering the AI revolution rather than merely seeking financial returns.

• Meetings with entrepreneurs like Jack Ma (Alibaba) and Travis Kalanick (Uber) have been significant due to their vision and potential.
• Masa's ability to recognize an entrepreneur's potential at an early stage and make large bets sets SoftBank apart from other investors.

Meeting with Jack Ma as he was thinking of where was Alibaba going and where was Alipay going?

Marcelo Claure recalls a notable meeting with Jack Ma, illustrating the kind of high-caliber entrepreneurial talent that SoftBank engages with.

• Marcelo Claure's hypothesis was that Latin America lacked capital, which hindered growth.
• By providing capital and operational support, SoftBank has helped create numerous unicorns in the region.
• Latin American entrepreneurs are innovating across various industries, not just fintech.

My hypothesis was, if you're able to provide the right capital, if you're able to provide the right operating group that can help them scale, can you go ahead and make some amazing companies?

Claure explains his strategy for Latin America, which involved providing both capital and operational expertise to help companies scale and succeed.

• Marcelo Claure acknowledges that some Latin American businesses are adaptations of models from other regions but stresses the importance of localizing them.
• Some Latin American companies have become global leaders, surpassing their counterparts in other countries.

I would say that they're a tropicalized version of other business models, and there's nothing wrong with that.

Claure addresses the criticism of Latin American companies being copycats, explaining that while they may be based on existing models, they are adapted to meet local needs and circumstances.

• SoftBank Latin America did not have a predefined portfolio construction but sought the best entrepreneurs across various sectors.
• Investments include a diverse range of industries, with a willingness to try new approaches and assist in company building.

No, we didn't have a portfolio construction. We knew where we had invested in the vision fund, in fintech, in software, food delivery, mobility, ecommerce, proptech, etech logistics, and others.

Marcelo Claure describes the lack of a rigid portfolio construction for SoftBank Latin America, highlighting the focus on finding the best entrepreneurs regardless of the industry.

• Managing conflicts in investments is challenging, especially in geographically focused areas like Latin America.
• SoftBank navigates this by investing in different companies that may evolve into competitors as they expand.

So, first of all, in Latin America, it's even harder because it's tough to manage conflict when you're geographically focused, right?

Claure discusses the complexities of managing investment conflicts within a specific geographic focus, acknowledging the difficulties that arise when portfolio companies become competitors.

• SoftBank manages potential conflicts of interest when investing in companies in the same industry.
• They use "Chinese walls" to ensure confidentiality and prevent information sharing among investment partners.
• Marcelo Claure emphasizes the importance of being honest and straightforward with entrepreneurs about their investment strategies.
• They sometimes invest in competing companies, but they are cautious and transparent about their actions.

"And what we do at that point in time is we basically split the responsibilities within investment partners. We build these Chinese walls to make sure nobody except me can see what they're doing."

This quote explains the internal strategy of SoftBank to manage conflicts of interest by separating responsibilities and restricting information flow.

• SoftBank is considered a premier brand in Latin America, more so than in other regions.
• Marcelo Claure attributes this to their long-term capital approach and the fact that they don't have to please external investors (LPs).
• SoftBank's willingness to invest in a startup's journey from early rounds through to IPO and beyond is seen as a significant advantage.
• Both Marcelo Claure and Masayoshi Son are founders themselves, which resonates with other entrepreneurs.

"We're long term thinkers, right? This is long term capital."

Marcelo Claure emphasizes the long-term investment philosophy of SoftBank, which contrasts with the shorter-term focus of other funds.

• SoftBank disrupted the venture capital industry with its $100 billion Vision Fund.
• They faced criticism and resistance, especially in the U.S., but have proven successful with their investment model.
• Marcelo Claure believes in providing entrepreneurs with sufficient capital from the start to focus on their business rather than constant fundraising.

"While people used to write these small checks, we suddenly showed up with $100 billion, and we disrupted the way venture capital works today."

Marcelo Claure explains how SoftBank's large-scale investments changed the traditional venture capital model, which initially met with resistance.

• SoftBank distinguishes between companies where the entry price is critical and those where it's not.
• For companies with massive market opportunities, the entry price is less significant.
• Marcelo Claure regrets passing on Newbank due to price sensitivity and learned from that mistake.
• They are disciplined in investments where the market size is smaller and price matters more.

"The key is to determine in advance if it's a company where price matters or it doesn't."

Marcelo Claure discusses the importance of assessing whether the potential growth of a company justifies a higher entry price.

• The American market is receptive to Latin American companies.
• Latin America's market size and income per capita make it an attractive investment region.
• SoftBank has successfully taken Latin American companies public and expects more IPOs in the near future.
• Marcelo Claure believes in the strength and potential of the Latin American market.

"The desire for banks to take Latin American companies public is very large, and the desire for investors to basically come into Latin America via public stocks in the technology sector is huge."

Marcelo Claure highlights the significant interest from banks and investors in taking Latin American tech companies public.

• SoftBank's investment strategy has not changed despite increased competition.
• They focus on being part of a large tech ecosystem and helping companies scale globally.
• Marcelo Claure is proud that Latin American entrepreneurs now have more investment options.
• SoftBank competes and sometimes partners with other investors like Tiger Global Management.

"There's no other company in the world that can invite an entrepreneur to be part of the largest tech ecosystem in the planet."

Marcelo Claure touts the unique value proposition of SoftBank's global tech ecosystem for entrepreneurs.

• SoftBank's entry into the market changed the rules for venture capital.
• VCs can no longer afford to be complacent or take advantage of entrepreneurs.
• Entrepreneurs now have multiple choices for investment partners, leading to a more competitive and dynamic market.

"Prior to Softbank and after Softbank, the rules have changed."

Marcelo Claure talks about the transformative impact of SoftBank on the venture capital industry, creating a new landscape for investments and startups.

• Marcelo Claure manages his diverse responsibilities by empowering talented individuals to execute tasks.
• He focuses on finding good talent, providing them with power and holding them accountable.
• Despite challenges, such as the WeWork crisis, Claure maintains productivity through effective delegation and partnership.

"The most important part is find good talent, provide the talent, the power and accountability to execute for you."

Marcelo Claure shares his approach to managing a high workload, which involves trusting and empowering his team.

• Marcelo Claure emphasizes the importance of having a strong team to manage various business opportunities.
• He credits his ability to manage multiple roles to the effectiveness of his teams.
• By delegating responsibilities, he can focus on where he can be most helpful each week.

And having a strong team of good people enables you to get more stuff done and allows you to continue to pursue new opportunities.

This quote highlights the value of a competent team in achieving more and pursuing new ventures, which is essential for effective leadership and business growth.

• Marcelo Claure looks for a combination of intelligence, emotional intelligence, hunger, work ethic, and ambition in people he wants to work with.
• He values subject matter expertise, passion for winning, and compatibility with the team culture.
• Marcelo's role has evolved to focus more on coaching his teams across various industries.

All of the above.

This quote succinctly confirms that Marcelo values a comprehensive set of qualities in his team members, which contributes to the success of his management style.

• Marcelo Claure sees himself as a coach to his team rather than running businesses directly.
• He mentions Marcello Masa as his own coach.
• The transition from bearing the weight of responsibility to coaching others to handle it marks his evolution as a leader.

And then my job now, probably the biggest job of my career is right now, where I spend most of my time coaching my team and not running specific businesses.

This quote reflects Marcelo’s current focus on mentorship and guidance, which is a crucial aspect of leadership development and team empowerment.

• Marcelo Claure's perspective on money has evolved; he believes that those who work for a mission rather than for money are more likely to become rich inadvertently.
• He criticizes the notion that money is the sole indicator of success.

People who do it for a mission, they're going to get rich without realizing it.

This quote challenges the conventional wisdom that financial gain should be the primary goal, suggesting that a mission-driven approach is more likely to yield wealth.

• Marcelo Claure recommends the book "Endurance" about Shackleton's voyage, for its lessons on leadership and perseverance.
• He draws parallels between Shackleton's challenges and those faced by entrepreneurs.

So when I look at what Mr. Ernest Shackleton was trying to do and the adversity and the many times that most human beings would have quit, it is the exact same thing what entrepreneurs and founders basically face as they're building a company, because nobody can tell a founder all the adversities they're going to face till they finally build a company that's sustainable.

This quote emphasizes the importance of resilience and leadership in the face of adversity, a quality Marcelo admires and sees as vital for entrepreneurial success.

• Marcelo Claure regrets not investing more in Mercado Libre and not investing in Bitcoin earlier.
• He expresses a strong belief in Bitcoin and the importance of trusting one's gut in investment decisions.

Trust your gut and go big.

This quote encapsulates Marcelo's investment philosophy, highlighting the significance of intuition and boldness in making successful investments.

• Marcelo Claure is proud of changing the Latin American landscape through transformative investments.
• He launched the Opportunity Fund to support black and Hispanic entrepreneurs, addressing the challenge of raising capital for minority groups.

Changing the latin american landscape, because we basically transformed the entire region and knowing that our effect or investment has caused so much positive change in the region, that's huge for me.

This quote reflects Marcelo's pride in his impact on Latin America through strategic investments that drive positive change.

• Marcelo Claure advises punctuality and emphasizes the importance of following one's gut instincts.
• He acknowledges the difficulty of adhering to his own advice about punctuality.

Don't be late punctuality is important, especially when working with Masa, because japanese do that.

This quote underlines the importance of punctuality in professional settings, particularly in different cultural contexts, and Marcelo's personal challenge with it.

• Marcelo Claure has invested significantly in Latin America and plans to continue at a rate of $5 billion a year.
• He is optimistic about the region's potential and committed to supporting its growth through strategic investments.

Over the course of the last two and a half years, we have deployed three and a half billion. We expect to deploy 5 billion only this year in Latin America.

This quote indicates Marcelo's bullish stance on Latin America and his strategic investment plans for the region's future development.