Alok Sama spent years in corporate finance as a managing director at Morgan Stanley before joining Softbank as CFO and plunging into founder-CEO Masayoshi Son’s world of high-speed, high-risk decision-making. For Sama, the shift involved many eye-opening experiences, which he later shared in a memoir titled, The Money Trap: Lost Illusions Inside the Tech Bubble (St. Martin’s Press, 2024).
In this episode of Inside the Strategy Room, Sama speaks with McKinsey Senior Partner Vik Malhotra, who is based in the New York office and counsels CEOs and corporate boards and serves as the firm’s Chairman of the Americas. Malhotra is also a coauthor of CEO Excellence: The Six Mindsets That Distinguish the Best Leaders from the Rest (Scribner, 2022). This is an edited and abbreviated transcript of their conversation. For more discussions on the strategy issues that matter, follow the series on your preferred podcast platform.
Vik Malhotra: Alok, you’ve worked with many founders and CEOs during your time as a banker and investor, as well as in your time at SoftBank International. What do founders have in their DNA that lets them balance truly audacious vision with attention to detail?
Alok Sama: No surprise, it is a 24/7, obsessive focus. It’s not a normal life. When I worked for [SoftBank Group CEO] Masayoshi Son, for example, it was incredibly demanding. He would call at 5:00 in the morning, and if he woke you up, there wasn’t an apology—that’s just the way he rolls. But then you see a quality in them you really admire and feel a certain kind of loyalty and a personal commitment. I think that is harder for professional managers to achieve, as they rely on conventional incentives and organizational structures to get people to buy in. It takes a special kind of individual to be a successful founder, and to just keep going in that mode.
Vik Malhotra: The Airbnb CEO Brian Chesky famously described it as “founder mode.”
Alok Sama: Masa Son is in founder mode on steroids. That includes microscopic attention to detail. If we were working on an M&A deal, for example, he would want to know what fees we were paying the lawyers, how much we were paying the PR firm, and every other detail. When we were working on the Sprint deal, I would be on these three- or four-hour calls with Son-san, talking to Sprint’s network team, trying to figure out how to optimize capital allocation. One incident really sticks in my mind—we were on with the Sprint network team. Masa had really done his homework, and he told them, “I spent a couple of hours looking at your network in Houston. You have a blind spot downtown in the shopping mall. I worked with my engineers in Japan, and I’ve got a fix for it.” It’s that level of obsessive detail. This might come as a surprise, because we associate Masa with big-picture vision, but he sees the detail too.
And then there’s this magic, the audacity of hope. It’s an infectious idealism and desire to make the world a better place using technology. And this is how they get people like me to buy into their vision with the same degree of, if not obsession, certainly commitment. They are incredibly demanding to work for, but working for Son-san was a treat and a high point of my career.
Vik Malhotra: How much do founder-CEOs think about culture? Is it something they actively seek to shape?
Alok Sama: I think they do. A lot of tech founder culture is about individualism and unleashing creativity. It is a very different sort of culture. Google’s “airport test” is a prime example—if you were stranded at the airport for a few hours with your colleagues, they need to be interesting enough for you to want to be stuck there with them. Putting people like that together fosters a certain type of creativity and out-of-the-box thinking. I think that’s the key distinguishing feature of the Valley, as compared to most of corporate America, and certainly Wall Street.
It was a huge learning experience for me—I almost had to unlearn everything I had known before that. I came from the Wharton School and Morgan Stanley, where I was schooled in a very nerdy form of finance … And then I entered the world of dealmaking Son-san style. Everything was just so different.
Alok Sama, former CFO, SoftBank Group
Vik Malhotra: In your book, you characterize Son-san as someone who can see the future. How does he stay current on what’s happening to keep that attunement to the future sharp?
Alok Sama: I can’t claim to have unpacked the mystery of Masa Son. He has ideas all the time, and is always testing them, bouncing them off others. He surrounds himself with smart people he respects, and he will call them up or have them in his conference room and scribble on his whiteboard, and make schematics, et cetera. It’s continuous brainstorming. The ideas he comes up with are frequently outrageous or sometimes downright silly, but they are also absolutely brilliant.
Vik Malhotra: People sometimes say he’s crazy, and as I understand it, he actually likes that label.
Alok Sama: Yes, that is how he likes to describe himself. He’s crazy in a technology sense in that he lives in the future. A lot of people think of him as this consummate risk-taker or gambler. I think that’s a mischaracterization because he’s proven his ability to spot technology megatrends repeatedly. For example, one of his finest deals was back in 2006 before I joined, when he was down and out. He went from being one of the richest men in the world to being down to his last billion. And he made this completely audacious bet on Vodafone Japan, the mobile carrier that was bleeding money, with $600 million or $700 million in negative cash flow. And he did the acquisition based on a handshake from Steve Jobs that when something like a smartphone was introduced by Apple, he’d have an exclusive for Japan. He just had this vision of what smartphones would be and how they would change the world. And he was right!
He sees these things a long way ahead of others. Can you call that gambling, if you’re living in the future, and you’re in some sense reading tomorrow’s headlines? Is that really risk-taking? Another aspect that earns him the crazy label is that he deliberately cultivates this image of being unpredictable. This enables him to get deals done quickly, because people don’t want to mess with that unpredictability. They come to the table and think, “I don’t really want to go up against this guy because I can’t predict his next move.” [Uber CEO] Dara Khosrowshahi said this beautifully when SoftBank invested in in Uber, even though SoftBank was investing in many of Uber’s competitors globally: “I’d rather have their capital cannon behind me than against me.”
Vik Malhotra: You also worked with Nikesh Arora who was president at SoftBank when you were CFO. He’s now the chair and CEO of Palo Alto Networks, and the value creation story there has been quite something. What stands out for you about him?
Alok Sama: Nikesh is the brightest person I’ve worked with. His ability to process is phenomenal. What I loved about working with him is that he forces you to up your A game. If you’re keeping pace with him, you’re doing really well. The few times where I was a little bit ahead of him just felt like huge wins. That can be incredibly intimidating, and I’ve seen people wilt in the face of it. But he attracts bright, smart, and loyal people.
The brilliance of Palo Alto Networks is a clearly articulated, easy-to-understand, and focused strategy. That cybersecurity market has been so fragmented, and Palo Alto Networks makes life easier for chief technology officers by meeting all of their needs. They’ve built a winning suite of products that are a case study in how to string together product acquisitions, integrate them, and empower the entrepreneurs behind them.
Vik Malhotra: You left your career in corporate finance to do a master of fine arts at New York University, and soon after you published your book. What motivated you to do that?
Alok Sama: I did not start with the intent to write this book. Rather, I’ve had a closet ambition to become a writer since I was a kid. But growing up in India, priority number one, two, and three were to earn a living. I wouldn’t wish being a writer on anyone if you’re looking to make a living. I was at a stage in life in my 50s where I said, “It’s already late, so it’s now or never.” So I enrolled at NYU for an MFA degree and while there I experimented with fiction and other genres, but I was encouraged to write about my own experiences. It became clear that what I’d been through in this compressed period of six years at SoftBank had a narrative arc for me personally, and also for this larger-than-life character Masayoshi Son, with his massive swings of fortune.
Vik Malhotra: The high-stakes dealmaking and situations you describe in the book often involve elements of seeming outrageousness and excess. That must have been quite a shift for you after your years in investment banking?
Alok Sama: It was a huge change. A lot of people think it’s in bad taste to talk about flying private and all that, but I wanted to describe what I experienced. Having a Gulfstream V at my disposal made me feel like a rockstar. But guess what? It was a hand-me-down from my boss, who had moved on to a Gulfstream VI. And I would wager he has a Gulfstream VII on order. That’s the world of money and power. It was a huge learning experience for me—I almost had to unlearn everything I had known before that. I came from the Wharton School and Morgan Stanley, where I was schooled in a very nerdy form of finance … And then I entered the world of dealmaking Son-san style. Everything was just so different.
One of the first deals I did was in India in 2014, investing in the ridesharing company Ola. I looked at the business model with a very conventional, top-down framework: What’s the size of this market? How much do Indians spend on taxis? And you quickly conclude that this business is absolutely worthless. The negotiation around price was horse trading, almost comical for someone with my background. But Masa said, “Look, Alok, you have to look out five, ten years in the future. Right now, of the $10 you spend on a ride, $7 goes to the driver. Imagine a world with autonomous cars—it completely upturns the business model.” Of course, you have to think about who owns those cars and how much they cost, but trying to put numbers around that in 2014, you just couldn’t do it. The whole thing was a big leap of faith. So that’s the mindset of a tech investor. That’s what was so magical about Son-san and the way he thinks about the future.
Vik Malhotra: You must have had to find a balance between the classic corporate finance thinking and recognizing that there’s huge upside in this tech world, where business models get disrupted all the time.
Alok Sama: I was threading a needle the whole way through. And it wasn’t easy. In all humility, I realized that if I had been with Masa when he decided to invest $20 million in Jack Ma’s Alibaba, I would have said, “Son-san, what are you thinking?” It’s not as if Jack had a vision of: “I want to create the Amazon of China.” He was thinking he had a B2B business model, and had no experience as an entrepreneur or businessman. But Masa saw something there, and had a vision of how things might unfold in China.
Likewise, on the ARM Holdings [semiconductor company] deal, I had to change my thinking. I did the analytics, and the company was trading at 48 times earnings, because it had this rare position of being one of the only listed, pure-play technology companies in the U.K. If you want to control it, you’ve got to pay a hefty premium. There were no synergies to justify that premium. You announce the deal, your stock price will probably take a hit, equal to the premium you paid, in this case, $10 billion. That is exactly what happened. But Son-san had a clear vision: “Alok, this valuation is based on a world where ARM is shipping 17 billion chips to markets, and assuming that might increase by 20 or 25 percent per year, and I think they’re dead wrong. I think the increase is going to be exponential. And soon the chips are going to be connected, intelligent chips.” That was his play. And he’s been vindicated. His mark-to-market gain on ARM is over $100 billion. So you end up being a facilitator in those situations, but a very honest facilitator, because you say your piece and lay out the analytics for him. That’s what you’re there for.
Vik Malhotra: That deal is all the more fascinating because at the time, in 2016, ARM was a little-known company, and now it’s very much the epicenter of everything that’s happening with AI.
Alok Sama: Yes, and that goes back to Masa’s days as a teenager. He tells this endearing story about how he had an emotional reaction to seeing a photo of an Intel chip on the cover of PC Magazine, and has been obsessed with semiconductors ever since. And ARM was a company that he had been watching for the longest time. One thing people underestimate is just how hands-on Masa is in executing a change in strategy. In this case it was positioning the company to be dominant in the design of intelligent processors at the edge of the network, which is what ARM is about now. That’s why the Stargate [AI infrastructure] project involves two technology partners—Nvidia, which owns the market for for chips in servers in data centers, and ARM, which has positioned itself to do the same at the edge of the networks on automobiles, smartphones, and other devices, such as laptops.
Vik Malhotra: The deal with Sprint and T-Mobile also looked unlikely at the outset, from a conventional perspective, and also given the legal opposition and doubt around regulatory issues.
Alok Sama: When I joined SoftBank, Sprint was teetering. Their bonds were trading at 30 cents on the dollar, which suggests financial distress. Masa had bought the company on the assumption that he’d be able to pull off a quick merger with T-Mobile. Well, that didn’t happen, because of the opposition. There were a lot of machinations we had to go through, and Masa was able to reengineer the company’s cost structure to keep it going until we were able to eventually pull off the T-Mobile merger. I think the end result has far exceeded expectations, because of the combination of the T-Mobile brand and Sprint’s spectrum assets, and all the synergies from a horizontal merger like this. At one point we were looking at maybe a $10 billion or more loss, and now it’s a mark-to-market gain, some of it realized well in excess of $25 billion.
Vik Malhotra: You mentioned the Stargate AI infrastructure initiative [led by SoftBank, OpenAI, Oracle, and the investment firm MGX]. What’s your view of it?
Alok Sama: There was no doubt in my mind that this was the direction Masa would move in. His first love is semiconductors. ARM Holdings is at the center of the semiconductor ecosystem, and SoftBank Energy is one of the biggest generators of solar power in the world. Energy to run data centers is critical to AI. So Stargate makes so much sense. It’s a cool deal, and completely in character with Masa’s style of dealmaking, which is when he backs an entrepreneur, he’s all in. In this case, he is all in on OpenAI’s Sam Altman.
Also, the classic SoftBank playbook is to invest in a technology company while creating a joint venture with the investee company for Japan, so SoftBank gets in on the ground floor. The inspiration for that is Yahoo. When SoftBank invested in Yahoo, it created Yahoo Japan as a joint venture, and that turned out to be, and still is, a success story. It’s worth a lot more than the parent company. So in this case, SoftBank, and this has been announced, has created a joint venture with OpenAI to serve the Japanese enterprise market.
Vik Malhotra: After DeepSeek released its large language model chatbot in December 2024, you wrote an article for The Times in which you said that such advances are not a threat but rather an accelerator. You compared it to the 1700s when improved steam engines burned coal more efficiently but coal consumption increased, as better steam engines led to more innovation and increased use of them.
Alok Sama: That is what the British economist William Stanley Jevons, described in what we now call Jevons paradox—it’s a combination of a declining cost curve and network effects. It’s like Moore’s law. I think DeepSeek is a real breakthrough that will make it easier for people to build and accelerate the implementation of AI. To the degree those technology trends are accelerated, you end up seeing an increase in the demand for processing of all variety, both at data centers and at the edge of the network. I’m a believer in that, and I’m wary of going short on anything to do with technology, for now anyway.
Vik Malhotra: Alok, thanks for speaking with us today.
Alok Sama: Thank you. It’s been fun.
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