Alok Sama on the smear campaign against him at SoftBank, and working with Masa

Although WSJ named the people involved in this campaign, Sama himself has been silent on the matter so far. For the first time, he has gone into some detail on what transpired then, in his book, ‘Money Trap: Grand Fortunes and Lost Illusions Inside the Tech Bubble’, fresh after receiving his Master of Fine Arts degree from New York University.

Sama declined to be drawn into who he thought was responsible for the smear campaign or whether it was resolved fully.

But in his book, Sama addresses how the matter was discussed internally within SoftBank and how it took a toll on him and his family. Despite support from his bosses, Sama paid a price. When the group’s $100 billion Vision Fund 1 was launched in 2017, SoftBank founder Masayoshi Son (known popularly as Masa) asked Sama to step aside as the firm’s investors, or limited partners, conducting due diligence had questions about the rumours surrounding Sama.

Read also: SoftBank’s Rajeev Misra used campaign of sabotage to hobble internal rivals

Is the book then an attempt by Sama to set the record straight?

“I’m not setting any records straight because I don’t think the record needed to be set straight. I’m expressing my feelings and emotions at every stage of this book," Sama said in a video interview from the US, where his book was launched on 17 September, ahead of Lionel Barber’s ‘Gambling Man’, a biography on Son that’s scheduled for release next month. In India, Sama’s book will be available from 19 September.

“For example, the toughest section for me to write about was my relationship with my parents, with my father. There’s some really introspective self-examination. Whatever I wrote about the smear campaign was written in that spirit. As far as I’m concerned, there is no record that needs to be set straight," he said.

“Nobody I know, from Masa Son downward, believed the lies about Nikesh and me. But it was just very hurtful at a personal level," Sama added. “So I was trying to communicate a personal hurt. I’m just laying it out there in terms of what I lived through, that it was quite horrifying."

The book also presents a detailed narrative of how Sama worked with Masayoshi Son and how some of SoftBank’s greatest investments of the last decade were executed. Sama narrates how Son—most renowned for his bet on Alibaba that would yield the firm $72 billion in gains over 23 years—would ignore naysayers to pull off an audacious investment into British chip designer Arm Holdings in 2016.

SoftBank, which paid a 40% premium to acquire Arm, is currently sitting on over $100 billion in gains on the investment, which would wipe out its losses from several deals that went sour from its Vision Fund, including WeWork.

“Cooks vs hunters"

A defining passage in the book talks about how Masa values “hunters" (people who bring in the deals) at SoftBank over the “cooks" (those who would execute the deals). Masa labels Sama a “cook" and advises him to be more like a “hunter".

Sama, who once led Morgan Stanley’s investment banking team in India, had worked with Masa on the Arm Holdings deal and executed the merger of SoftBank’s (then) troubled investment Sprint with T-Mobile.

“It was not because I thought he was wrong. He was right. The Arm deal is a great example. Masa was the hunter, he identified it and said let’s go get it. I was the cook, in the sense I found a way to get it done. Would I have bought Arm on my own? No," Sama said.

But this feedback from Masa would hurt and contribute towards Sama’s exit from SoftBank in 2019. Yet, Sama is largely adulatory about Son, though he also talks about Masa’s “hubris" and how SoftBank ended up overpaying for assets such as WeWork.

“There will be people who say Masa is a risk-taker. But there are others—and clearly I am in the second school of thought—who feel that he doesn’t feel fear because as he says, he lives in the future. And when you live in the future, investing isn’t risky," Sama said.

“For example, when I value Ola Cabs, I think the addressable market is what Indians spend on taxis. Masa is thinking second order; he is living in a world where nobody owns cars anymore."

Sama’s continuing adulation of Masa is evident despite the years gone by. “SoftBank without Masa is like a church without Jesus," Sama said. “I don’t talk to him, and I miss talking to him, but he seems to be as energetic as ever in terms of his thinking and his activity."

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On SoftBank’s India deals

Sama’s book offers a detailed perspective on how SoftBank’s Vision Fund came to invest into fintech firm Paytm despite Arora and Sama passing on it earlier. Also, some investments were awkwardly made.

Sama writes how at one point Masa persuaded Oyo’s founder Ritesh Arora to take $500 million for his hospitality chain, even though the latter did not want to. Oyo used that money to expand into international markets, which would become a sore spot for the company. Oyo subsequently had to undergo a restructuring.

Sama’s book also has a fair bit of praise for Snapdeal founders Kunal Bahl and Rohit Bansal, and Ola Electric’s Bhavish Aggrawal.

In the interview, however, Sama observed that SoftBank appeared to have sharply reduced its focus on India in recent years.

“I have been gone from SoftBank for five years. But as an observer, what you can read for yourself is that Masa Son’s focus seems to be on artificial super intelligence and on the chip industry. His focus is less about backing entrepreneurs in India and China," Sama said.

That said, he notes that India has not been hurt by SoftBank’s absence. “There is no shortage of interest or capital into India. India has been the collateral beneficiary of people turning their backs on China."

All said, Sama hopes that Masa Son will read his book. “I would like him to read the book. I hope he does, and I hope he likes it," he said.