The Softbank Vision Fund hasn’t had an easy time of it and we use this as an example of the bro-cul (bro-culture) focus that might have contributed to some of their current woes.

They’re not alone. Simply more heavily tracked by the tech media.

First, there was WeWork, which very publicly and unceremoniously came crashing down (time will tell if new CEO Sandeep Mathrani, who comes from the real estate sector and has a successful turnaround history, according to the Bloomberg News, will save the company), despite CEO Masayoshi Son’s abundant/blind faith in ousted founder/tech-bro Adam Neumann (we are aware that WeWork is not nor was it ever a tech company, but Neumann did manage to spin it that way).

Softbank Vision Fund-backed Brandless ($100M investment) was next, with an announcement last week that the direct-to-consumer personal care and packaged goods company was being shuttered after just two years. Considering that WeWork was founded in 2010 and took nearly 10 years to blow through its $4B Softbank investment, we can only posit that that old Silicon Valley mantra to fail fast paid off, in this case…Only $100 million lost. In two years!!!

Now there’s Zume, the pizza-making robotics company with another tech-bro at the helm and with a SoftBank investment of $375 million (with a promise of double that, if the business took off).

Those are a few considerable firehoses of cash that Softbank dispensed. Uber (co-founded by tech-bro Travis Kalanick) was also a Softbank investment. As Bloomberg Businessweek observed, “If a founder seems brash enough, charismatic enough, reminiscent enough of a younger (Softbank CEO) Son, some of SoftBank’s rigorous ­business-model tests appear to melt away.”

 

Once again, it basically comes down to the bro culture (bro-cul), which, the perception seems to go, is necessary to reach unicorn status.  Most unicorns – broken or not – were male-founded companies with pie in the sky and head in the clouds ambitions. The failure of Web 1.0 was investors throwing too much money at too much youth and inexperience. With the latest iteration, investors are chasing unicorns, and given Softbank’s record (we are aware that Brandless had a woman cofounder – Tina Sharkey – who stepped down in 2018) and the latest spate of tech IPOs that didn’t exactly distinguish themselves, it seems tech is due for an attitude/vision readjustment.

Tech-bro founders have two tracks: achieve unicorn status and world domination. Simaltaneously. They’re ready to fly before they’ve tested their wings – and the market. All well and good, but company profits – or even earnings – rarely if ever keep pace with hockey stick growth and you can’t have it both ways, which is why we’re seeing fast in, fast out, as in the case of Brandless and Zume.

Unicorns are often also bro-cul dominant, and tend to manifest themselves – when they’re true unicorns rather than paper unicorns, qua those that never reach unicorn status in terms of actual revenue – when there’s a major shift in the tech landscape, such as with the Age of Social: think Facebook, Twitter, YouTube. Tech is in an interim/shift period – that stage before the next sweeping change – yet investors are still chasing potential unicorns. Softbank’s Vision Fund #Fails should be a not only a cautionary tale, but a heads up that the current stage of tech has plateaued: it hasn’t stopped, but may be time to focus on the ‘lesser creatures’ (from Quartz: A brief guide to the fantastic, wondrous creatures of tech industry jargon) who can achieve sustainable traction and potentially offer an ROI. Companies that no doubt follow that simple rule of business: think global, act local. Baby steps first, test, then run with it.

Look at Techcrunch’s latest list of pre-IPO ‘unicorn’ companies that also generate lots of revenue. Movable Ink, for example, has not raised over $1B so, by Silicon Valley’s definition, is not a unicorn, yet generates “more than $100M or more in annual recurring revenue.”

One Silicon Valley-based investor recently tweeted that an investor he had spoken to said that he considered $100M in annual revenue a ‘lifestyle business.’

Many so-called unicorns are now drowning in their own once-promising press and failure to deliver. Bro-cul hubris is no guarantee of success. As the Quartz piece noted, “The tech industry is fond of building mythology around its biggest firms. And as many have noted, the valuations for which these startups are thus named – unicorns, centaurs, etc – are often fantasy too.”

Time to do away with yet another Silicon Valley mantra, unwritten and unstated though this one might be: “think global, act bro-cul.”

Onward and forward.