What’s up with SoftBank?

This time last year, Masayoshi Son was the laughingstock of the investing world.

The SoftBank CEO had bet a big part of his ~$99B super-VC Vision Fund on WeWork and — pardon our French — it ate sh*t.

The 63-year-old billionaire is not the type to dwell, though.

He lost $70B in 2000 when the dotcom bubble burst

But still had the intestinal fortitude to cut a $20m check to a little-known Chinese entrepreneur named Jack Ma. That investment in Alibaba is now worth $100B+, or a 5000x return. #FlexingOnEm

Post-WeWork, Son has shed a ton of assets to make room for more bets. He raised $80B+ in cash by selling stakes in SoftBank’s Japanese telecoms unit, T-Mobile, Alibaba, and the entirety of chip designer ARM.

Some of that money has gone into a massive Big Tech options bet (e.g., $AMZN, $GOOGL) dubbed the “NASDAQ Whale.”

The Vision Fund was in the red but rallied

In the 3 years of its existence the fund is up ~10%, according to The Economist. While the NASDAQ has returned 10x over the same period, some of Son’s bets that have gone public are doing nicely:

• 10X Genomics (an increase of ~11x on invested capital)
• Guardant Health (8.5x)
• Vir Biotech (3.6x)
• Slack and Uber (meh)

The Vision Fund still has stakes in hot startups that are benefiting massively from the post-pandemic digital reality: DoorDash, ByteDance (TikTok parent) and Coupang (South Korea’s Amazon).

SoftBank is raising a SPAC because… why not?

There’s concern that Son could use this popular financing vehicle to bring one of his dud startups to the markets (FYI: if Son SPACs WeWork, we’re shutting down The Hustle).

The Vision Fund has already placed $83B across 92 firms while a second (less famous) Vision Fund has done 13 deals, per The Economist.

In a (maybe) apocryphal fundraising story, Son told Saudi Arabia’s Crown Prince, “give me $100B and I’ll give you $1T.”

Well, Vision Fund 1 is a 12-year investment vehicle, meaning we have 9 years to go… so Masa may very well get the last laugh.

The Ferrari F1 pit crew is a case study in efficiency. In the GIF above, it takes them a mere ~3.5 seconds to swap out a race car’s tires.

And as it turns out, studying this team’s efficiency was beneficial to other fields: A children’s hospital in England integrated aspects of the pit crew’s process to help prevent post-surgery deaths.

Interdisciplinarity at its finest

In the mid-1990s, the Great Ormond Street Hospital for Children in London conducted a 2-year review of its surgical process and realized its handover procedure was causing errors that severely compromised patient safety.

So, they videotaped their process and sent it to an F1 pit crew team to ask for advice.

One key suggestion was to improve the handover choreography among team members. For example, the anesthetist was assigned the same coordinating role as a pit crew’s “lollipop man” (the person who waves in the car).

After implementing the changes, the hospital’s error rate declined by 66%, according to Wharton professor Ethan Mollick.

This isn’t the first borrowed innovation

The OG version is Henry Ford adapting processes from the meatpacking industry to make car assembly lines. Per Harvard Business Review, more recent versions include:

• 3M, which found a solution to deal with facial skin infections by consulting theatrical make-up artists
• An escalator company that copied techniques from the mining industry to install escalators in shopping malls

To find these innovations, HBR suggests looking to industries that are:

1. Distant from your own (to maximize the novelty of the solutions)
2. More advanced (they’ve solved the hardest problems)

Now if you’ll excuse us, we’re going to go find a way to integrate this innovation into our newsletter business:

We all have that friend who had the most “life-changing experience” during their 2-week meditation retreat in northern Thailand.

While some used to mock these free souls, everyone is now trying to calm their minds amid the insanity of quarantine life — many at the push of a button.

Mental health startups have attracted ~$1.4B in funding through the first 9 months of the year, already more than all of 2019, according to Pitchbook.

There have been a string of mental health mega-rounds

A good chunk of this funding has come from 9-figure deals:

• Amwell, which provides behavioral health and telehealth services, raised $194m in May before going public last month
• Mindstrong, a platform to provide therapy for severe mental health issues, raised $100m in May
• Lyra Health, which deals with digital behavioral health, raised $110m in August

Now, Calm wants to (somewhat ironically) get in on the mania, with a reported fundraise of $150m at a $2.2B valuation.

There’s been a massive spike in mental health issues

A CDC study from June revealed that 31% of Americans struggled with anxiety or depression.

These figures are a scary jump from <10% in 2019, almost certainly related to stressors brought on by the pandemic.

This dramatic rise — combined with the ease of accessing mental health apps and a dearth of direct flights to Southeast Asia — means the money will likely keep rolling into this space.

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