Copy
Outlier Ventures Weekly Brief Issue #16  View Online
 
  contact@outlierventures.io
Softbank's 300 year vision is already outdated
 
Softbank's capital is everywhere. From an on-demand, dog walking app to the latest in autonomous mobility, the fund's investments have changed the very dynamics of how venture capital works. Bold bets sized anywhere between $100 million to multiple billions have birthed new industry leaders, created new economies and generated generous returns. From Alibaba to Uber, Masayoshi Son has consistently taken large bets in businesses that change our lives. However, his broad 300-year-old vision could be outdated. Our CEO, Jamie Burke recently penned down his thoughts on why that's the case. We cover it in the week's newsletter.

Image source: Link 
 

Why a winner takes most strategy may be flawed

Economies of scale and network effects are a core part of Softbank's investing model. It focuses heavily on a winner takes all approach to ensuring market success. By investing in similar ventures around the globe and even merging a few of them, Softbank ensures that they hold bulk of the market share for product categories and the data that comes with it. The current portfolio focuses largely on synergistic categories such as real estate (offices, storage, robotics) or e-commerce and logistics (last mile delivery). These are usually AI optimised companies that at scale, with a data advantage could put most competitors out of business on a long enough period of time. 

The move to "global utilities"

We are witnessing a global shift from cloud computing to large scale, open-source internet protocols that come with the same benefits of scale, but through decentralised marketplaces. Bitcoin is a prime example of this. It mobilised billions in specialist hardware and electricity - all in pursuit of tokens that were released on the basis of a simple algorithm and reward system. At Outlier Ventures, we are seeing our portfolio enable this transition. For instance, Haja networks help enable interoperability between traditional databases. Fetch, on the other hand, helps autonomous economic agents unlock value from data. When combined they provide an emerging stack of technologies that level the playing field for startups by bringing economies of scale for a longtail of market participants. This means many of the old advantages that underpin Son’s vision such as data monopolies and centralised IT infrastructure will be available to all through these new ‘global public utilities’.



A possible alternative

A simple, effective hedge for Softbank right now would be to deploy a small chunk of their $100 billion towards open, decentralised networks. Given their experience with the dot com bubble and the present state of token markets, it may be a good time for entry. One thing the ecosystem is in short of is patient capital. Softbank could lead large rounds of protocols that complement their existing portfolio. This could bring in much-needed capital and help accelerate the rate of adoption we see in the space. 

Read the entirety of Jamie's piece here and stay tuned for an update to our convergence stack coming soon from the team!

 
Interesting Reads For The Weekend
 
 
1. Crypto in 2019 - Kleiner Perkins

2. 4th ICO/STO Report - PWC

3.  From Co-ops to Cryptonetworks - A16z

4. Moore's law for self driving vehicles - Medium
 
 
 
tw
 
Just bought a ⁦ @Trezor  hardware wallet with bitcoin through @CashApp
tw
 
tw
 
in
 
 
    Email a Friend  
You can update your preferences or unsubscribe from this list
This email is intended only for the person to whom it is addressed and may contain confidential information. No one else may place any reliance upon, copy or forward all or any form of this email in any way. If any addressing or transmission error has misdirected this email, please notify us immediately by responding to us directly, and ensure that the email and any attachments are immediately and permanently deleted and is not used, disclosed, copied, printed or relied upon in any manner. In no event shall Outlier Ventures Operations Ltd or Outlier Capital LLP be liable for any direct, consequential, incidental special, punitive or other damages, whatsoever (including without limitation, damages for loss of business profits, business interruption, or loss of business information), even if Outlier Ventures Operations Ltd or Outlier Capital LLP have been advised of the possibility of such damages. Outlier Ventures Operations Ltd may monitor email traffic data and also the content of this email for the purposes of security.

Outlier Ventures Operations Ltd is registered in England and Wales, company registration number 10722638. Outlier Ventures Operations Ltd is an appointed representative of Sapia Partners LLP which is authorised and regulated by the Financial Conduct Authority (Firm Reference Number 550103).

Crypto-currencies can be extremely volatile and subject to rapid fluctuations in price, positively or negatively. Investment in one or more crypto-currencies may not be suitable for even a relatively experienced and affluent investor. Each potential investor must make their own informed decision in connection with any such investment (after having sought independent financial advice thereon).

The content provided in this email is provided for information purposes only. It is not intended as an offer or solicitation to enter into any proposed transaction or investment.

In this email you will find links to other websites; they are for your convenience or to provide additional information, they are not an endorsement or a financial promotion. Outlier Ventures Operations Ltd Is not responsible for any contents, data, opinions and or reliability of the linked websites, and does not necessarily endorse views expressed on the linked website, and does not accept liability for the accuracy or completeness of any such information or opinions which can be subject to change without notice.
You can update your preferences or unsubscribe from this list






This email was sent to <<Email Address>>
why did I get this?    unsubscribe from this list    update subscription preferences
Outlier Ventures Operations Ltd · C/O Milsted Langdon LLP · 46-48 East Smithfield · London, Middlesex E1W1AW · United Kingdom