Entering ADSL, and the Yahoo! BB crisis (2001)

A company that could tolerate a loss twice its sales

The heart of this decision is not simply that SoftBank entered the ADSL business, but that it tolerated, for several years, a loss exceeding twice its sales. For an ordinary company, faced with its first bottom-line loss since going public and outside voices saying there was “nothing for it but to break the company up,” it would have been natural to rein investment in. Son Masayoshi did not, because he had a calculation that once the single figure of subscriber numbers was piled up, profit and loss would surely reverse, and he concentrated resources on that one point. Whether it could keep investing in the thick of the crisis was what decided this wager.

Just as weighty is that the pattern acquired in the midst of this crisis long defined the SoftBank that followed. Take share first, accepting losses, and recover afterward — the idea established with ADSL was repeated in the fight for mobile subscribers and in PayPay’s lavish giveaways. The experience of enduring a loss twice its sales, one can say, forged the very competitive style of a SoftBank that pours capital in concentration to wrest share away.