What Masa learned from a famous fisherman
There is no question that Masayoshi Son, or “Masa,” the founder of Softbank, is a legend in the business world. Recently, Softbank made history by becoming the most profitable company in Japan history by reporting a $45.8bn net income in FY2021. The number is double Toyota’s net income.
One of the reasons behind this monumental feat is his ability to invest in disruptive companies early. CB Insights estimates Softbank to have invested in 59 unicorn companies so far ($1bn+ valuation), placing them second place in the top unicorn investors in the world. Alibaba, Bytedance, Didi, Grab, Oyo, and Coupang are famous investments.
And one of the secrets behind his tremendous success is his ability to make seemingly impossible deals happen. This is a list of some of the biggest deals he has ever made.
Negotiating with the test examiner of UC Berkeley to give him more time and a dictionary for his University exam due to his language barrier
Investing $2M in Yahoo! in 1995, followed by $105M in 1996
Partnership with Yahoo! to set up Yahoo! Japan in 1996, which went on to become public in 1997
Investing $20M in Alibaba back in 2000
Acquisition of Fukuoka Softbank Hawks in 2005
Acquisition of Vodafone Japan in 2006
Signing an Exclusive Sales Partnership with Steve Jobs for the iPhone in 2007
Majority ownership of Sprint in 2012
Arm acquisition for $31.4bn in 2016, and divestment to nVIDIA for $40bn in 2020
There is a famous story in Japan explaining Masa’s negotiation technique.
“Do you know the secret to successful negotiations?” — Masayoshi Son
“Oh, what’s that?” — Softbank Employee
“Negotiation is all Koitori Mashan (Carp Fisherman Mashan) — Masayoshi Son
Masa explains that the secret behind negotiation is a fisherman.
“Koitori Mashan” was a famous river fisherman in Ukiha City, Fukuoka Prefecture, near the birthplace of Masa. He had a unique fishing technique that allowed him to catch carps with his bare hands.
“Koitori Mashan” would fish during the cold winters of Japan. Initially, he would eat nutritious foods from a few days ago to get in shape. Next, on the day of the fishing, he would stay near a bonfire to warm his body to the point that he would be sweating.
Then, he would lie quietly on the riverbed near the carp nest. Ultimately, the carp naturally approaches him in search of warmth. Finally, “Koitori Mashan” gently embraces the carp and goes back to the land. An elegant way of catching his prey. Masa is alluding that the secret behind his deal-making is to create situations in which the partner naturally agrees with you.
Masayoshi Son’s Deal with Steve Jobs
His deal with Steve Jobs to exclusively sell the iPhone in Japan embodies this technique. In 2005, two years before the official launch of the iPhone, Masa first heard about the iPhone from Steve Jobs.
During that time, ringtones that were about 30 seconds long were extremely popular in Japan. Son Masayoshi wanted to capitalize on the market, and he shared his idea with Steve Jobs by presenting an idea for an iPod with mobile functionality. Upon realizing that Masa had shared the same vision, Steve Jobs presented him with the business plan for the iPhone. This was a huge “aha moment” for Masa, and he needed to win exclusivity for the iPhone in Japan.
Masa reveals the conversation at the time in a segment with Charlie Rose.
“I gave [Jobs] my drawing, and Steve says, ‘Masa, you don’t give me your drawing. I have my own,” Son said. “I said, ‘Well, I don’t need to give you my dirty paper, but once you have your product, give me for Japan.’
The problem at the time was that Softbank was not even in the mobile carrier business. So what did Masa do? In March 2006, he purchased Vodafone’s Japanese unit to enter the mobile carrier business.
What else did Masa do to woo Steve? In June 2006, Softbank Mobile announced a logo change. The logo changed to a silver two-line logo, which was very close to Apple’s simplistic design philosophy.
In addition, he decided to reform Vodafone’s store completely. The new store design was an all-white store layout, which was reminiscent of an Apple Shop.
In the final negotiations with Steve Jobs, Masa articulated his long-term vision for wireless internet and his ambition to become the number one Internet company in Asia.
This was how Masa, who was not even in the mobile carrier business when hearing about the iPhone, beat NTT, a Japanese telecommunications behemoth operating since 1952. And the results paid off as Apple’s iPhone has gone on to become one of Japan’s top-selling mobile devices. One study found 66% of former NTT subscribers jumped ship to a carrier that sold iPhones.
Masa created an environment that was so attractive for Steve Jobs that he naturally agreed with Masa. On paper, the obvious decision would have been to partner with NTT, the Japanese mobile carrier with the largest market share and government backing. But Masa’s negotiation tactics successfully reversed the situation by gaining Steve Job’s trust in distributing and marketing the iPhone.
Look at Masa’s other deals. You can see that he selects a seemingly risky area that is yet to be cultivated and creates an alluring environment that allows partners to gather to Masa and agree with his terms naturally. It is similar to Koitori Mashan, who provided warmth to the carp in an otherwise chilled river.
Personally, working in an AI startup in the B2B enterprise field, the lessons behind Masa’s negotiation tactics are precious. One lesson is the ability to have the foresight and firm conviction to select an area yet to be developed.
Another lesson is the persistent focus on creating an attractive environment for your counterpart rather than focusing on the selfish motivations of increasing your sales.
Finally, it is also essential to stop and examine a deal to consider whether you are the carp or the fisherman.