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What I don't get about the Vision Fund is how so many of its investments lack (pun intended) vision. Other than the ARM, Nvidia, and a few billion in biotech (

What I don't get about the Vision Fund is how so many of its investments lack (pun intended) vision. Other than the ARM, Nvidia, and a few billion in biotech (about $3 billion[1]) investments, so much of the fund has gone into pretty "obvious" traditional startups. If I had a $100 billion fund, I wouldn't be swinging for these singles and doubles (which Uber and WeWork were by the time Softbank got involved, although these companies can still provide value to customers). Vision Fund should've been out-competing Google X to become the financial backer of basically the next Bell Labs. Instead of 3% biotech and 20% Uber and WeWork and Wag, I'd have flipped those two numbers. The biggest loss from the Vision Fund is the opportunity cost of all the great disease-eliminating, fundamental-science research that could've had much greater upside than WeWork. And I never hear that opportunity cost discussed. EDIT: I've added an additional comment with more supporting arguments for taking bigger risks but more ambitious risks when managing large sums: https://news.ycombinator.com/edit?id=21096651 https://news.ycombinator.com/edit?id=21096651 [1]: https://finance.yahoo.com/news/softbanks-vision-fund-deploying-100-billion-185127309.html https://finance.yahoo.com/news/softbanks-vision-fund-deployi...

manigandham 7y ago
It's just a nice name. It's a generic fund to invest mostly oil money and designed to focus on tech for the higher returns. The problem is that the fund is massive and there's a limit to how much capital you can efficiently deploy at once, especially with such a disconnected leadership team. The size was originally used as a brute-force growth tactic and competition clearer, but now it's clear that it's just leading to unviable business models and vastly inflated valuations while hurting more promising companies that have to compete in this bubble environment.
pdq 7y ago
The problem when you have so much money to invest is that your customers need to actually invest it. It's much harder to invest $1-$5M at a time when you can just go back to the WeWork pool and drop $2B. It's like painting a wall mural using fine tipped brushes, rather than wide paint rollers or a paint gun. You get the job done so much faster, but your quality will suffer tremendously.
- petra 7y ago
  What about scaling a VC organization ? With hundreds of managers, A lot of institutional knowledge, helpful infrastructure for said company, and deep ties between companies ? Come to think of it, it has many similarities to Google X. But that's extremely hard to build.
  - jacquesm 7y ago
    You're describing Ycombinator.
    - deleted 7y ago
      [deleted]
    - ineedasername 7y ago
      Sure, though from what I found the Vision Fund is about 10x larger than Ycombinator, so doing the Ycon thing at a VF level would probably involve some scaling challenges. But fundamentally, it seems a better way to go about things than putting nearly all of your eggs into late-stage start ups with highly correlated business models & failure modes.
    - the_watcher 7y ago
      Since when did YC have hundreds of managers?
  - southerndrift 7y ago
    Where do you get the people to entrust millions or billions? The organization will be flooded with networks of people who will scam away all money. Such an organization has to be grown slowly. But that takes too much time if you have the opportunity to manage huge amounts of money right away.
  - seem_2211 7y ago
    There has been disappointingly little success from all of Google X's many investment dollars. I think with the hundreds of managers, institutional knowledge and helpful infrastructure comes a bureaucracy that kills a lot of what it creates.
KoftaBob 7y ago
It sounds like moonshots were the original goal for them, then they realized how much slower and capital intensive atom based innovation is, compared to "bits" based innovation. They wanted to invest in the next SpaceX, then were tempted by the much faster "growing" entities like WeWork.
threeseed 7y ago
Except that this isn't what Vision fund is about. What you are describing is more like a pre-seed/seed fund of which there are thousands around including YC. Sure they don't have the capital but that is often not the blocker for most of these companies. Vision fund is focused on taking successful companies global. And using their capital to knock out competitors and their experience in managing execution risk. And their "vision" seems to be focused on a world where everything is provided by autonomous and robotic systems. And where Uber, Wag etc are the brands that leverage them.
- loganfrederick 7y ago
  Yeah, I get that and my post was kind of an implicit difference between what they "are" versus what I think they "ought to be" (admittedly easier to be in my armchair investor seat than Softbank's). But their returns from Uber, WeWork, and Wag kind of support my point, whereas ARM and Nvidia support yours/theirs. My broader point is that most informed technologists would've said three years ago that the ARM and Nvidia investments made more long-term sense than Uber and WeWork, yet Uber and WeWork are a disproportionate amount of the portfolio. So if the Vision Fund isn't even going to succeed at the "scale big companies globally" approach, I'm not sure they would've done much worse going with the approach I suggested (or doing more deals like ARM and Nvidia, maybe they could've taken a huge activist stake in IBM or other large existing tech cos).
  - nemothekid 7y ago
    I’m unsure the point of the vision fund was to make safe long term bets. At the end of the day, it’s unclear to me how nvidia would use an extra 10B dollars - other than pour that into R&D (in which case does that really cost $10B - and if your thesis is R&D, universities tend to do a better job anyways). The thesis for Uber (and wework) was simpler - assuming they had sound unit economics, give them $XB to repeat all over the world. In fact if Uber didn’t mistakenly give Lyft a second life, Uber might be in a much better spot. I think the problem is, companies like Uber, Wework and Wag work really well in wealthy cities like SF and NYC, but not as well in other cities. I live in SF and WeWork “works” there are glut of companies coming in and out of the VC machine that need temporary space that end up needing to also scale up quickly. However that’s unique to SF and SF is such a large market, maybe it looks sound until it doesn’t.
codesushi42 7y ago
Instead of 3% biotech and 20% Uber and WeWork and Wag, I'd have flipped those two numbers. LMAO! Yes, Uber, WeWork and Wag are terrible investments. But you clearly have no understanding of biotech or how time horizons work for investments. Biotech research is long, expensive, and risky. It is not on a 4 year time horizon like tech, nor can you go to market within 12-18 months.
- loganfrederick 7y ago
  I get that, but there are biotechs that can get funded on an order of magnitude of tens or hundreds of millions. If the Vision Fund with $100 billion can't make biotech investments work, who could? That's kind of my point; if Vision Fund at scale can't make risky investments work, who could? The only alternatives are the existing profit-machines like Google (Google X) or governments. I am also not the only one with this thought; Professor Andrew Lo of MIT has a final chapter in his book "Adaptive Markets" about how he might structure a similar "big problem solving fund" akin to the Vision Fund but with arguably bolder ambitions. https://www.amazon.com/Adaptive-Markets-Financial-Evolution-Thought/dp/0691135142 https://www.amazon.com/Adaptive-Markets-Financial-Evolution-... https://publicpolicy.wharton.upenn.edu/live/news/2784-can-financial-engineering-cure-cancer-a-talk-by-dr https://publicpolicy.wharton.upenn.edu/live/news/2784-can-fi... And before someone argues that "they're likelier to lose a lot of money trying riskier investments", they just seemingly lost a lot of money on the "easier" investments. So if you're going to lose money, I'd rather it be on trying to solve hard problems than paying Adam Neumann.
  - codesushi42 7y ago
    You are missing the point. Do you know anything about this industry? Biotech is not anything like your "traditional" tech companies, they operate in a completely different dynamic. It is not risky in the same way. It can take many years to realize that your proof of concept is a failure, and there's no "pivoting" like in the tech bro world. Are you prepared to realize that after 10 years and many millions of dollars later you will be unable to even try to sell whatever you were researching? You are at the mercy of the FDA. You can expedite this a bit by going the medical devices route instead of developing therapeutics or pharmaceuticals for instance, but it will still take you years to go from R&D to market. If you ever get there. This is why phony genomics software platforms are all the rage today. but there are biotechs that can get funded on an order of magnitude of tens or hundreds of millions. If Vision Fund at scale can't make risky investments work, who could? Again, you are completely ignorant of this space. Biotech is not the same problem. You can't just throw more money at it and expect to see results like you can in a growth market defined by first-mover advantage and outspending your competition. Biotech is insanely risky, as is any other scientific endeavor. It is science and experimental. It is not a chat app, real estate scam, or overpriced juicer. The comparison makes no sense.
synaesthesisx 7y ago
Right - there are incredible cancer immunotherapy and other biotech startups that are on the cusp of HUGE things. Softbank is clearly at a point where it has more capital than sense.
- onlyrealcuzzo 7y ago
  I'm pretty sure $50Bn could get us Fusion. Instead it got us slightly better taxis. We've only invested $1Bn in fusion (according to this article: https://www.greenbiz.com/article/fission-fusion-capital-flowing-new-frontier-nuclear-technology https://www.greenbiz.com/article/fission-fusion-capital-flow...). Physicists have been saying "we're close" for like 70 years. It took the Manhattan project the equivalent of $23Bn. If we had the same type of investment, we could have clean and (almost) free energy forever. Instead we spend like 20% of GDP on energy per year. And destroy our only planet... It's not like the stakes are high or anything.
  - dmurray 7y ago
    > We've only invested $1Bn in fusion (according to this article) This is patently untrue. ITER, the source cited in that article [0], gives a cost so far of $15 billion and rising just for one facility. What the article actually says is that $1 billion has been invested by venture capital firms in fusion since 2002. Most of the investment, like in the Manhattan Project, comes instead from government sources. [0] http://www.iter.org/faq#Do_we_really_know_how_much_ITER_will_cost http://www.iter.org/faq#Do_we_really_know_how_much_ITER_will...
  - perl4ever 7y ago
    "When the technology matures, according to Mowry, the wholesale price for fusion fuel is expected to be around $50-60 per megawatt-hour" I think it's telling that the most optimistic scenario they can come up with is "someday it might be competitive with fossil fuels if you consider the cost of fuel only". The thing is, if fission is uncompetitive in the long run because of capital costs, can you, with a straight face, claim that fusion will be better, even in 50 years? Edit: Of course, making fossil fuel more expensive would change the calculus. But my point is, since that is a prerequisite to addressing climate change anyway, we shouldn't be talking about fusion as a particular alternative.
deleted 7y ago
[deleted]
thecleaner 7y ago
A large part of this vision fund is basically Saudi oil money. These folks realize that oil doesn't have that much future if you think in terms of hundreds of years, so they are looking to diversify. Vision fund is not a tool to be on the cutting edge, its just a means to not be left behind. Hence they let VC market decide which horse is worth backing and then they swing their dollars around to see what happens.
- codyb 7y ago
  I guess it’s just a different vision then. Theirs is the vision of a Saudi ruling family with enough capital to survive the collapse of demand for oil over time.
- pmiller2 7y ago
  Hundreds of years? There’s a reasonable probability _human civilization_ doesn’t have hundreds of years on this planet.
  - james_s_tayler 7y ago
    I've noticed that assumption is heavily baked in everywhere you look. I'll bet after the hundreds of thousands of years we have made it so far, humanity, in one form or another, will continue to persist.
    - pmiller2 7y ago
      I didn’t say “humanity.” I said “human civilization.” I do think there’s hope for humanity, but I’m a lot more bearish about civilization.
      - nine_k 7y ago
        If human civilization collapses and humans go back to hunter-gatherer subsistence, it means death to about 95-97% of humans. Not precisely an extinction, but still not a lot of hope.
  - 7y ago
viach 7y ago
> disease-eliminating, fundamental-science research It is hard to show "traction" and "exponential growth" with this kind of things.
rrss 7y ago
FYI I'm pretty sure the vision fund dumped its entire stake in nvidia. Maybe they'll sell arm next.
baobabKoodaa 7y ago
When you have $1M to invest you have a ton of options. When you have $100B to invest, your options are more limited.
- pmiller2 7y ago
  I don’t think that’s true. When you have $100B and are hoping to earn a 10x return, your options are limited. $100B is only about 2.5 the size of Harvard University’s endowment, IIRC. You could manage that $100B like an oversized hedge fund and still make money, but probably not 10x returns.
  - dragonwriter 7y ago
    > You could manage that $100B like an oversized hedge fund The largest couple hedge funds are in the broad neighborhood of that size, so perhaps not too oversized.
  - baobabKoodaa 7y ago
    Your options are more limited even if you would be happy with steady-ish returns averaging 12%/year. There simply isn't as many options to choose from.
listenallyall 7y ago
...another guy telling people how they OUGHT to spend their money. "I would have..." ::eyeroll:: It's an investment. Their top priority likely isn't eliminating diseases. Nor do most investors think it's wise to compete against Google.
- loganfrederick 7y ago
  I’d use a similar response to another commenter for this one as well: https://news.ycombinator.com/item?id=21096376 https://news.ycombinator.com/item?id=21096376
raiyu 7y ago
The Vision fund was never really about funding breakthrough technology but instead moving the Saudi's economy away from a dependence on oil. That aside, when you have $100B investing it is actually quite challenging. Take Stripe, for example, a fantastic private company that is valued at over $33B, but it has raised drastically less money than Uber or WeWork. In order to deploy $100B it isn't enough to make $300MM bets because it would require 333 such investments. Just imagine. You would need 330 companies the size of Stripe and lead a late stage growth round to deploy that amount of capital. Now Stripe has raised less money because they are more capital efficient and aren't burning cash like Uber or WeWork. With Uber, at least there was a game plan because it was a tech company. Now it isn't important to debate how much of a "tech" company Uber is, simply think of tech as leverage. Which is the basic idea of tech companies, meaning that you write code once and then you can infinitely replicate at a near zero cost. While building something physical, your cost doesn't decrease towards this zero amount. People also thought that DST was crazy when they invested at Facebook at a $10B valuation, but that has worked out well for them. So regardless, Uber was a good investment and worth the risk, and still we have to wait and see where Uber is trading in 2-3 years time. The real problem for the Vision fund is that to deploy this capital they necessarily need money losing businesses. These companies need funds to grow, so it allows them to absorb more capital which makes deploying $100B a lot easier. Now Uber has leverage because of it's network. If you open your iPhone and you don't have an Uber waiting for you then you will stop using it. So actually there is real value in the network there. For WeWork there is no "tech" and there is no leverage. Certainly the tech side is obvious, just look at the employee head count and the leverage side is also non-existent. There being more than 10 WeWorks in the same city for me doesn't actually make my experience of WeWork any better or worse. Which has been proven by how many coworking startups have sprung up to compete with them and are having no issues filling their office space. So here you have a large money losing business with no leverage and as a result giving it a tech multiple was blindingly obvious to many people that it was a bad idea. With that the Vision fund is running into real hot water. They need large growing companies in order to deploy their investment capital, but investing in money losing businesses is a risky, especially when the largest money losing businesses don't have real leverage and aren't real tech companies. This just all unraveled a bit quicker than Softbank would have liked, but it isn't at all surprising. To see other investments of theirs falter isn't surprising either. Because they will all follow the money losing model in order to absorb the capital, but unless they truly offer leverage then they will be either displaced, or they won't provide enough value to eventually out run their costs.
banachtarski 7y ago
The vision fund was a joke to me ever since the investment into Improbable (which I regard as an outright scam).
- mprev 7y ago
  I’d love to read more of your take on Improbable.
chewz 7y ago
Masayoshi Son exhibits - in my opinion - typical traits of gambling addict. A person who is trying to replicate the kicks he got from his first, lucky bet on a horse races. (Alibaba in his case) So you should not analyse SoftBank investments in terms of logic but more in terms of underlying self-destructive behavior.
goatinaboat 7y ago
The “vision” of Uber, WeWork and so on is to radically redefine the relationship between worker and company and company and regulators, then the Vision Fund can swoop in and profit in a world with no workers rights, benefits, job security etc. Fortunately it seems that people are waking up.
jpalomaki 7y ago
One question is: Why would a promising startup take a $5-20M investment from Vision Fund and not from somebody else? If you are $10M investment in a fund of $100B you won't be getting much support or mind share from your investor. It's not just VCs shopping for companies to invest in. It's also companies thinking from whom to take the money.
- sokoloff 7y ago
  Some companies are perfectly happy to take dumb money. It’s still money.

manigandham 7y ago

It's just a nice name. It's a generic fund to invest mostly oil money and designed to focus on tech for the higher returns. The problem is that the fund is massive and there's a limit to how much capital you can efficiently deploy at once, especially with such a disconnected leadership team. The size was originally used as a brute-force growth tactic and competition clearer, but now it's clear that it's just leading to unviable business models and vastly inflated valuations while hurting more promising companies that have to compete in this bubble environment.

pdq 7y ago

The problem when you have so much money to invest is that your customers need to actually invest it. It's much harder to invest $1-$5M at a time when you can just go back to the WeWork pool and drop $2B. It's like painting a wall mural using fine tipped brushes, rather than wide paint rollers or a paint gun. You get the job done so much faster, but your quality will suffer tremendously.

petra 7y ago
What about scaling a VC organization ? With hundreds of managers, A lot of institutional knowledge, helpful infrastructure for said company, and deep ties between companies ? Come to think of it, it has many similarities to Google X. But that's extremely hard to build.
- jacquesm 7y ago
  You're describing Ycombinator.
  - deleted 7y ago
    [deleted]
  - ineedasername 7y ago
    Sure, though from what I found the Vision Fund is about 10x larger than Ycombinator, so doing the Ycon thing at a VF level would probably involve some scaling challenges. But fundamentally, it seems a better way to go about things than putting nearly all of your eggs into late-stage start ups with highly correlated business models & failure modes.
  - the_watcher 7y ago
    Since when did YC have hundreds of managers?
- southerndrift 7y ago
  Where do you get the people to entrust millions or billions? The organization will be flooded with networks of people who will scam away all money. Such an organization has to be grown slowly. But that takes too much time if you have the opportunity to manage huge amounts of money right away.
- seem_2211 7y ago
  There has been disappointingly little success from all of Google X's many investment dollars. I think with the hundreds of managers, institutional knowledge and helpful infrastructure comes a bureaucracy that kills a lot of what it creates.

KoftaBob 7y ago

It sounds like moonshots were the original goal for them, then they realized how much slower and capital intensive atom based innovation is, compared to "bits" based innovation. They wanted to invest in the next SpaceX, then were tempted by the much faster "growing" entities like WeWork.

threeseed 7y ago

Except that this isn't what Vision fund is about. What you are describing is more like a pre-seed/seed fund of which there are thousands around including YC. Sure they don't have the capital but that is often not the blocker for most of these companies. Vision fund is focused on taking successful companies global. And using their capital to knock out competitors and their experience in managing execution risk. And their "vision" seems to be focused on a world where everything is provided by autonomous and robotic systems. And where Uber, Wag etc are the brands that leverage them.

loganfrederick 7y ago
Yeah, I get that and my post was kind of an implicit difference between what they "are" versus what I think they "ought to be" (admittedly easier to be in my armchair investor seat than Softbank's). But their returns from Uber, WeWork, and Wag kind of support my point, whereas ARM and Nvidia support yours/theirs. My broader point is that most informed technologists would've said three years ago that the ARM and Nvidia investments made more long-term sense than Uber and WeWork, yet Uber and WeWork are a disproportionate amount of the portfolio. So if the Vision Fund isn't even going to succeed at the "scale big companies globally" approach, I'm not sure they would've done much worse going with the approach I suggested (or doing more deals like ARM and Nvidia, maybe they could've taken a huge activist stake in IBM or other large existing tech cos).
- nemothekid 7y ago
  I’m unsure the point of the vision fund was to make safe long term bets. At the end of the day, it’s unclear to me how nvidia would use an extra 10B dollars - other than pour that into R&D (in which case does that really cost $10B - and if your thesis is R&D, universities tend to do a better job anyways). The thesis for Uber (and wework) was simpler - assuming they had sound unit economics, give them $XB to repeat all over the world. In fact if Uber didn’t mistakenly give Lyft a second life, Uber might be in a much better spot. I think the problem is, companies like Uber, Wework and Wag work really well in wealthy cities like SF and NYC, but not as well in other cities. I live in SF and WeWork “works” there are glut of companies coming in and out of the VC machine that need temporary space that end up needing to also scale up quickly. However that’s unique to SF and SF is such a large market, maybe it looks sound until it doesn’t.

codesushi42 7y ago

Instead of 3% biotech and 20% Uber and WeWork and Wag, I'd have flipped those two numbers. LMAO! Yes, Uber, WeWork and Wag are terrible investments. But you clearly have no understanding of biotech or how time horizons work for investments. Biotech research is long, expensive, and risky. It is not on a 4 year time horizon like tech, nor can you go to market within 12-18 months.

loganfrederick 7y ago
I get that, but there are biotechs that can get funded on an order of magnitude of tens or hundreds of millions. If the Vision Fund with $100 billion can't make biotech investments work, who could? That's kind of my point; if Vision Fund at scale can't make risky investments work, who could? The only alternatives are the existing profit-machines like Google (Google X) or governments. I am also not the only one with this thought; Professor Andrew Lo of MIT has a final chapter in his book "Adaptive Markets" about how he might structure a similar "big problem solving fund" akin to the Vision Fund but with arguably bolder ambitions. https://www.amazon.com/Adaptive-Markets-Financial-Evolution-Thought/dp/0691135142 https://www.amazon.com/Adaptive-Markets-Financial-Evolution-... https://publicpolicy.wharton.upenn.edu/live/news/2784-can-financial-engineering-cure-cancer-a-talk-by-dr https://publicpolicy.wharton.upenn.edu/live/news/2784-can-fi... And before someone argues that "they're likelier to lose a lot of money trying riskier investments", they just seemingly lost a lot of money on the "easier" investments. So if you're going to lose money, I'd rather it be on trying to solve hard problems than paying Adam Neumann.
- codesushi42 7y ago
  You are missing the point. Do you know anything about this industry? Biotech is not anything like your "traditional" tech companies, they operate in a completely different dynamic. It is not risky in the same way. It can take many years to realize that your proof of concept is a failure, and there's no "pivoting" like in the tech bro world. Are you prepared to realize that after 10 years and many millions of dollars later you will be unable to even try to sell whatever you were researching? You are at the mercy of the FDA. You can expedite this a bit by going the medical devices route instead of developing therapeutics or pharmaceuticals for instance, but it will still take you years to go from R&D to market. If you ever get there. This is why phony genomics software platforms are all the rage today. but there are biotechs that can get funded on an order of magnitude of tens or hundreds of millions. If Vision Fund at scale can't make risky investments work, who could? Again, you are completely ignorant of this space. Biotech is not the same problem. You can't just throw more money at it and expect to see results like you can in a growth market defined by first-mover advantage and outspending your competition. Biotech is insanely risky, as is any other scientific endeavor. It is science and experimental. It is not a chat app, real estate scam, or overpriced juicer. The comparison makes no sense.

synaesthesisx 7y ago

Right - there are incredible cancer immunotherapy and other biotech startups that are on the cusp of HUGE things. Softbank is clearly at a point where it has more capital than sense.

onlyrealcuzzo 7y ago
I'm pretty sure $50Bn could get us Fusion. Instead it got us slightly better taxis. We've only invested $1Bn in fusion (according to this article: https://www.greenbiz.com/article/fission-fusion-capital-flowing-new-frontier-nuclear-technology https://www.greenbiz.com/article/fission-fusion-capital-flow...). Physicists have been saying "we're close" for like 70 years. It took the Manhattan project the equivalent of $23Bn. If we had the same type of investment, we could have clean and (almost) free energy forever. Instead we spend like 20% of GDP on energy per year. And destroy our only planet... It's not like the stakes are high or anything.
- dmurray 7y ago
  > We've only invested $1Bn in fusion (according to this article) This is patently untrue. ITER, the source cited in that article [0], gives a cost so far of $15 billion and rising just for one facility. What the article actually says is that $1 billion has been invested by venture capital firms in fusion since 2002. Most of the investment, like in the Manhattan Project, comes instead from government sources. [0] http://www.iter.org/faq#Do_we_really_know_how_much_ITER_will_cost http://www.iter.org/faq#Do_we_really_know_how_much_ITER_will...
- perl4ever 7y ago
  "When the technology matures, according to Mowry, the wholesale price for fusion fuel is expected to be around $50-60 per megawatt-hour" I think it's telling that the most optimistic scenario they can come up with is "someday it might be competitive with fossil fuels if you consider the cost of fuel only". The thing is, if fission is uncompetitive in the long run because of capital costs, can you, with a straight face, claim that fusion will be better, even in 50 years? Edit: Of course, making fossil fuel more expensive would change the calculus. But my point is, since that is a prerequisite to addressing climate change anyway, we shouldn't be talking about fusion as a particular alternative.

deleted 7y ago

[deleted]

thecleaner 7y ago

A large part of this vision fund is basically Saudi oil money. These folks realize that oil doesn't have that much future if you think in terms of hundreds of years, so they are looking to diversify. Vision fund is not a tool to be on the cutting edge, its just a means to not be left behind. Hence they let VC market decide which horse is worth backing and then they swing their dollars around to see what happens.

codyb 7y ago
I guess it’s just a different vision then. Theirs is the vision of a Saudi ruling family with enough capital to survive the collapse of demand for oil over time.
pmiller2 7y ago
Hundreds of years? There’s a reasonable probability _human civilization_ doesn’t have hundreds of years on this planet.
- james_s_tayler 7y ago
  I've noticed that assumption is heavily baked in everywhere you look. I'll bet after the hundreds of thousands of years we have made it so far, humanity, in one form or another, will continue to persist.
  - pmiller2 7y ago
    I didn’t say “humanity.” I said “human civilization.” I do think there’s hope for humanity, but I’m a lot more bearish about civilization.
    - nine_k 7y ago
      If human civilization collapses and humans go back to hunter-gatherer subsistence, it means death to about 95-97% of humans. Not precisely an extinction, but still not a lot of hope.
- 7y ago

viach 7y ago

> disease-eliminating, fundamental-science research It is hard to show "traction" and "exponential growth" with this kind of things.

rrss 7y ago

FYI I'm pretty sure the vision fund dumped its entire stake in nvidia. Maybe they'll sell arm next.

baobabKoodaa 7y ago

When you have $1M to invest you have a ton of options. When you have $100B to invest, your options are more limited.

pmiller2 7y ago
I don’t think that’s true. When you have $100B and are hoping to earn a 10x return, your options are limited. $100B is only about 2.5 the size of Harvard University’s endowment, IIRC. You could manage that $100B like an oversized hedge fund and still make money, but probably not 10x returns.
- dragonwriter 7y ago
  > You could manage that $100B like an oversized hedge fund The largest couple hedge funds are in the broad neighborhood of that size, so perhaps not too oversized.
- baobabKoodaa 7y ago
  Your options are more limited even if you would be happy with steady-ish returns averaging 12%/year. There simply isn't as many options to choose from.

listenallyall 7y ago

...another guy telling people how they OUGHT to spend their money. "I would have..." ::eyeroll:: It's an investment. Their top priority likely isn't eliminating diseases. Nor do most investors think it's wise to compete against Google.

loganfrederick 7y ago
I’d use a similar response to another commenter for this one as well: https://news.ycombinator.com/item?id=21096376 https://news.ycombinator.com/item?id=21096376

raiyu 7y ago

The Vision fund was never really about funding breakthrough technology but instead moving the Saudi's economy away from a dependence on oil. That aside, when you have $100B investing it is actually quite challenging. Take Stripe, for example, a fantastic private company that is valued at over $33B, but it has raised drastically less money than Uber or WeWork. In order to deploy $100B it isn't enough to make $300MM bets because it would require 333 such investments. Just imagine. You would need 330 companies the size of Stripe and lead a late stage growth round to deploy that amount of capital. Now Stripe has raised less money because they are more capital efficient and aren't burning cash like Uber or WeWork. With Uber, at least there was a game plan because it was a tech company. Now it isn't important to debate how much of a "tech" company Uber is, simply think of tech as leverage. Which is the basic idea of tech companies, meaning that you write code once and then you can infinitely replicate at a near zero cost. While building something physical, your cost doesn't decrease towards this zero amount. People also thought that DST was crazy when they invested at Facebook at a $10B valuation, but that has worked out well for them. So regardless, Uber was a good investment and worth the risk, and still we have to wait and see where Uber is trading in 2-3 years time. The real problem for the Vision fund is that to deploy this capital they necessarily need money losing businesses. These companies need funds to grow, so it allows them to absorb more capital which makes deploying $100B a lot easier. Now Uber has leverage because of it's network. If you open your iPhone and you don't have an Uber waiting for you then you will stop using it. So actually there is real value in the network there. For WeWork there is no "tech" and there is no leverage. Certainly the tech side is obvious, just look at the employee head count and the leverage side is also non-existent. There being more than 10 WeWorks in the same city for me doesn't actually make my experience of WeWork any better or worse. Which has been proven by how many coworking startups have sprung up to compete with them and are having no issues filling their office space. So here you have a large money losing business with no leverage and as a result giving it a tech multiple was blindingly obvious to many people that it was a bad idea. With that the Vision fund is running into real hot water. They need large growing companies in order to deploy their investment capital, but investing in money losing businesses is a risky, especially when the largest money losing businesses don't have real leverage and aren't real tech companies. This just all unraveled a bit quicker than Softbank would have liked, but it isn't at all surprising. To see other investments of theirs falter isn't surprising either. Because they will all follow the money losing model in order to absorb the capital, but unless they truly offer leverage then they will be either displaced, or they won't provide enough value to eventually out run their costs.

banachtarski 7y ago

The vision fund was a joke to me ever since the investment into Improbable (which I regard as an outright scam).

mprev 7y ago
I’d love to read more of your take on Improbable.

chewz 7y ago

Masayoshi Son exhibits - in my opinion - typical traits of gambling addict. A person who is trying to replicate the kicks he got from his first, lucky bet on a horse races. (Alibaba in his case) So you should not analyse SoftBank investments in terms of logic but more in terms of underlying self-destructive behavior.

goatinaboat 7y ago

The “vision” of Uber, WeWork and so on is to radically redefine the relationship between worker and company and company and regulators, then the Vision Fund can swoop in and profit in a world with no workers rights, benefits, job security etc. Fortunately it seems that people are waking up.

jpalomaki 7y ago

One question is: Why would a promising startup take a $5-20M investment from Vision Fund and not from somebody else? If you are $10M investment in a fund of $100B you won't be getting much support or mind share from your investor. It's not just VCs shopping for companies to invest in. It's also companies thinking from whom to take the money.

sokoloff 7y ago
Some companies are perfectly happy to take dumb money. It’s still money.