Uber (lost money on the IPO), Cruise (just delayed their launch, still have no product or revenue), they bought Boston Dynamics (super awesome technology but the business doesn't seem viable), Light (really awesome idea to change mobile photography, but seems an obvious failure at this point), Zume (a pizza chain buildings robots that's raised hundreds of millions of dollars...they do not have any production robots), Nuro (another overhyped self-driving startup, because Uber and Cruise weren't enough billions)...this is not an exhaustive list. I have repeatedly said SoftBank is some of the dumbest money in the Valley, and I stand by that proclamation.
Now that said, it is expected that most investments in any VC portfolio will fail! Something like a 70% failure rate, with 20% being moderately successful, and 10% being very successful is considered very good for the VC industry. But at the end of the day it's ROI - you make money or you lose money. I think SoftBank is going to lose more money than all the other VC firms simply because they started with more money to lose.
"Something like a 70% failure rate, with 20% being moderately successful, and 10% being very successful is considered very good for the VC industry."
While that's true overall, I don't think those expectations are the same for the kind of very-late-stage, pour rocket fuel on the fire investments that the Vision Fund is making.
For seed-stage investing, definitely.
The problem for late-stage investors is that it's really hard to get the same "grand slam" economics on your winners that early-stage investors can, so it's harder to make up for a bunch of washouts.
1) Uber strategically is looking pretty good. They are the market leader in most countries and their Uber Eats business is turning out to be quite lucrative.
2) Self driving cars is a long term project so of course Cruise isn't going to have anything released just yet.
3) Boston Dynamics just launched their latest robot and has already seen pretty good adoption amongst enterprise customers. There is a huge need just in the resources industry for technologies to assist with compliance. Let along going more mass-market like construction sites.
4) Light have pivoted to being an autonomous car sensor company. And as we know there is significant potential demand in this space.
5) Nuro actually has more potential than most of the self driving car companies around by aggressively focusing on a single use case i.e. consumer goods delivery.
You effectively summarized all my points towards "Uber is fine," "Boston Dynamics is fine," and "self-driving cars are fine."
Uber is hemorrhaging money and are still competing against Lyft. What is their path towards profitability other than raising prices and losing customers? How do they become anything other than a glorified taxi company? Even if you disagree with me, you can't deny that the stock is trending downwards right now and is expected to continue to fall until after the lockup period for employees is up - that's when I think we'll see a glimpse of what Uber is really worth.
Boston Dynamics has been passed around constantly because nobody wants to keep them once they realize they can't make money. Spot is a cool robot, but they don't release a price. How many people want to spend the better part of $100k (or a leasing option) on something with incredibly limited utility? The market is tiny since the military keeps rejecting their machines.
If you believe in self-driving being the future, fine. Then that's a logical bet. I adamantly believe self-driving is like nuclear fusion - it's decades and tens of billions of dollars away from being commercially viable, if ever.
> Being pretty negative on those companies.
That's because I know how easy it is to make demoware and how hard it is to make a real product.
> How do they become anything other than a glorified taxi company?
Just curious, what's wrong with that? A global taxi dispatching service that's always available, always (debatably) efficiently routing drivers to passengers sounds like a game-winning plan. Regular taxi dispatching services weren't doing these things well, on top of just sucking since they had no real competition for so long.
https://www.businessinsider.com/running-list-softbank-invest...
Now that said, it is expected that most investments in any VC portfolio will fail! Something like a 70% failure rate, with 20% being moderately successful, and 10% being very successful is considered very good for the VC industry. But at the end of the day it's ROI - you make money or you lose money. I think SoftBank is going to lose more money than all the other VC firms simply because they started with more money to lose.