The astonishing buying/investing power of SoftBank has altered much of the world’s way of thinking … [ ] about businesses.
Photo by Eloise Ambursley on UnsplashIs it just me, or has the reduction in WeWork’s ostensible value from $47B to $8B caused a frisson of schadenfreude in the business world? Could it be a sign that moving fast and breaking things, attacking and cannibalizing the competition, might NOT always be the best methodology? In recent years, in business as in global politics, it seems that bullying and behaving with the droit du seigneur of an 800lb gorilla has not only been sanctioned but also admired.
My new least favorite word in the English language, “disruption,” has been passionately embraced by the business community; my second least favorite, “scalability,“ is almost as popular.
The astonishing buying/investing power of SoftBank has altered much of the world’s way of thinking about businesses.
On the one hand, in the absence of other metrics, valuing a business at a multiple of what people are willing to pay for it makes sense.
In the absence of profitability, or a clear business model leading to profitability, what does that even mean? Those who know about these things tell me that rapid growth has a lot to do with this enormous valuation.
The now-departed COO of another SoftBank company, this one in the real estate industry, commented recently that “we aren’t concerned about profitability” at this time.