Traditional financial valuation skills are frequently useless in technology investing
Alok Sama · Former SOFTBANK CFO: My Honest Experience Working With Masayoshi Son | Alok Sama | The Neon Show · Nov 29, 2024 · at 19:52
Former SoftBank President and CFO Alok Sama reflects on transitioning from conventional investment banking to large-scale technology dealmaking.
0:00 / 0:26exact quote · 26.8s
▶ Watch the full episode on YouTube → 720p mp4 · rendered on demand · StarZero watermark
“I have to say that there's a lot you have to, or I had to unlearn because the analytical skills you pick up valuation, for example, are frequently not that meaningful in a In a technology investment universe. So there was a little bit of a fair bit of unlearning to do. And you know, because it's frequently once again, as I described in the book, you know, you're kind of putting a price tag on dreams almost.”
quote is from the automated transcript, cleaned for reading: filler sounds and stutters are removed, nothing is rephrased. names can be misheard (the analysis reads context, assessments check outside sources). how →
More from Alok Sama
Masayoshi Son would not have invested in Alibaba using traditional advisors
“If he started making all these investment decisions based on advice, like people like me, I don't think he would have done the Alibaba deal”
Nvidia's 40x PE valuation is not outrageous given its 75% margins
“Nvidia is the poster child, right? I mean, that's the one everyone talks about in Nvidia. Again, I haven't looked at that. Don't look, I don't follow stocks on a daily basis, by the way, I'm not a research analyst or a portfolio manager, but at 35 to 40 times …”
Public tech markets are not in a dot-com style bubble today
“It's nothing like the bubble we saw in the year, 2000. Cisco as a provider of the plumbing for the internet is the closest comparable. Cisco is trading at 200 times earnings. So I don't think we're in bubble territory in the world of technology yet. I think th…”
Raw processing power is commoditized among top business and IIT graduates
“I think that that is somewhat commoditized. A lot of people have that. And a lot of people you end up interviewing who coming out of the top business schools or IOTs or whatever, Processing power intelligence is something you can take for granted.”
Blitzscaling works brilliantly for platform technology models with network effects
“The idea of blitzscaling Reid Hoffman introduced that into the vernacular, you know, the idea that you just grow at all costs. And that's something that works brilliantly for platform technology models. Right? Where you don't worry about profitability. It's al…”
The romanticization of entrepreneurial suffering is driven by survivorship bias
“Kind of the idea of desirable suffering, I don't buy into that at all. Yeah. You hear stories about people like Sansan who crashed and burned, picked themselves up. You don't hear stories about people who just crashed and burned, right? There's nothing desirab…”