It’s a bold vision: 50,000 new American jobs to be created by a series of investments from Softbank Capital. And with the investments coming from a $100 billion fund, that jobs number feels like a sure thing. What’s not certain, however, is where those jobs will be located.
“We don’t mind where the companies are,” Ron Fisher, SoftBank Capital’s cofounder and managing partner, told CNBC’s Jon Fortt last week. The two were in conversation at a VentureBeat event to launch our Heartland Tech channel and upcoming Blueprint conference. “If we find a great AI company in Austin, we’ll put money behind that. We don’t have a natural bias to only invest in the Silicon Valley area,” Fisher said.
The two spoke about supporting entrepreneurs and creating jobs across America: from Kansas to Kentucky and beyond. Fisher described the process as Softbank investing in “a combination of early stage technology companies and later stage technology companies, which will then grow their work forces wherever they are.”
The following is a transcript of the conversation between Fortt and Fisher. It has been edited for clarity and brevity.
Jon Fortt: Growing up in Silicon Valley and reporting, I learned early on — at least I was told — that there were a few key ingredients you needed if you wanted to create a Silicon Valley. You needed universities that attracted smart people. You needed corporations, big companies. You needed venture capitalists to invest in new ideas. And you needed culture, a beautiful place, a place where cultured people wanted to live. Is there any way to hack that? If we’re really going to have tech prosperity outside of the traditional places, it seems like we have to somehow hack that in a different way.
Ron Fisher: We approach things a bit differently. We come from a very pragmatic point of view. We’re looking to create jobs by investing in great entrepreneurs, backing entrepreneurs and helping them grow. We’re somewhat agnostic as to where that happens. Obviously, in terms of deal flow an enormous amount of deals happen in Silicon Valley, so our investment teams are primarily based in Silicon Valley.
But when it comes to making investments, it’s an entrepreneur that determines where their work force is. We’re there to help those companies grow. There was the mention of 50,000 jobs that Masa committed to creating for the U.S. That’s a derivative of investing, we think, over the next several years, $50 billion in the U.S. economy. That’s going to be a combination of early stage technology companies and later stage technology companies, which will then grow their work forces wherever they are.
Fortt: If one of your portfolio companies came to you and said, “We have a great idea to build out an office in Lexington, Kentucky, because the cost of living is lower there, there’s a university, people might want to live there,” would you say, “Sure, why not?”
Fisher: Of course. In fact, we’re going through a couple of situations — one company we invested in recently, a company called OneWeb, which is building the next generation of low earth orbiting satellites, they decided for obvious reasons to go to Florida, where the space center is. They’ll be hiring 2000 to 3000 engineers in that area. You’re talking about providing the right kind of jobs based on where that makes sense for them. We’ve invested in an ecommerce company which saw an opportunity to buy a manufacturing entity in the Philadelphia area — a very good place to save a lot of jobs, more than 600 jobs. It’s really focusing on what’s best for the company.
Fortt: You’re the vice chairman of Sprint, based in Kansas City. Are there advantages to being there for a company like that, as opposed to being in other places? Would you encourage companies, perhaps portfolio companies, to look for opportunities in non-traditional places?
Fisher: I never visited Kansas City before we made the investment in Sprint, but it’s turned out to be a very good place to do what we’re doing around building a mobile operator. People, once they move to Kansas City, don’t want to move out. It’s a good schooling system, affordable housing, and now more of a technology ecosystem. The whole downtown area of Kansas City has been totally revitalized. A lot of small companies are moving in. Google Fiber is in Kansas City. It’s become a good ecosystem for Sprint, being able to attract talent. We have a marketing group based downtown. That’s been very good for us.
Fortt: Interesting challenge that even a place like Austin is held up as being a second-tier tech hub, on par with the likes of New York, and increasingly LA. But I keep hearing from people around Austin that it’s a great place to start a company, but it’s a tough place to grow a company, because the capital that’s based around Austin likes making smaller bets. If even Austin is having trouble creating the big companies you need to have an ongoing engine, is there something that needs to shift to make that happen?
Fisher: I think that’s more a comment on how venture capital has worked traditionally, in that venture capital has for the most part been very much a local technique. You have the Silicon Valley companies that don’t invest a lot outside Silicon Valley. One of the advantages we’ve seen with the focus on what we’re trying to do in terms of global scale — again, we don’t mind where companies are. If we find a great AI company in Austin, we’ll put money behind that. We don’t have a natural bias to only invest in the Silicon Valley area. We’re looking at it on a global basis….
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