Continuing its webinar series aiming to support its network in navigating through the crisis caused by the Coronavirus outbreak, Endeavor hosted a one-hour strategy session, featuring Marcelo Claure. The CEO of SoftBank Group International & Executive Chairman of WeWork, shared his experience as a renowned “fixer” and explained how he is shepherding some of the world’s most iconic companies through the current crisis.
Marcelo Claure is best known as the CEO of Sprint, leading the comeback of the third largest U.S. wireless carrier and architecting the recently approved $27BN merger with T-Mobile. Before that, he founded Brightstar, the world’s largest global wireless distribution company with operations in 50+ countries and $10BN+ revenues. Now, as CEO of Softbank Group International, Marcelo is responsible for overseeing WeWork’s long-term strategy and growth-led transformation, in addition to the other household names making up the $100BN Vision Fund’s portfolio like Arm, Fortress, SB Energy, and Boston Dynamics.
Marcelo opened the discussion by sharing his view of Endeavor’s impact. “Let me start by expressing the amount of respect I have for Endeavor. You are an incredible organization that brings together high-quality entrepreneurs. 58% of our Latin American portfolio companies are Endeavor Entrepreneurs, which is fantastic. I find it outstanding, the ability of this organization to gather the best in class.” he explained.
Marcelo was born in Bolivia, Latin America. Soon after finishing his studies in the United States, he became the International Manager of the Bolivian Soccer Federation, with the ambition to take Bolivia to the World Cup. According to Marcelo, “My salary was zero because the Federation was broke. In fact, we had to pay for everything. But we had a dream, we wanted to do the impossible and we took Bolivia to the World Cup for the first time in my country’s history. This taught me that everything is achievable”.
Soon after that, Marcelo returned to the US, where he bought his first software shop. The company soon became the largest independent retailer in the North East, all the way from Maine to North Carolina. “This is why I love this country. It’s the American dream, you come, you work hard and then you sell. I sold my first business and what I learned was that it was really difficult to get mobile phones, as the two existing distributors were very bad. This is when I knew I had to beat them” he explained.
This is when he founded BrightStar, with the goal to provide excellent distribution services in Miami. Soon, the company became number one in Miami, in Latin America and in the United States and was present in 51 countries. BrightStar became the largest wireless distribution company ever. “We reached $10bn in sales. We became something that was really unique for me, which was the largest Hispanic business ever. Being a Hispanic, being a Latino, that was a lot of pride.” Said Marcelo.
During the company’s great success, Marcelo travelled to Japan, where he met Masayoshi Son, the founder & CEO of Softbank and the two of them started to conduct business together. When Masa bought US Sprint for $26bn, the largest investment made by a Japanese company, he proposed to Marcelo to unite all the phones that they bought at BrightStar, at SoftBank and now at Sprint, and create a buying company. “He told me ‘If we unite our procurement, we will be the largest buying company in the world and I want you to be the CEO of that, while you are still running your little business called BrightStar’” explained Marcelo.
That was the moment when he shifted from a distributor to the largest buyer in the world. “It was fun, we delivered incredible results and then Masa invited me to join the Sprint Board, which was an intimidating moment for me. Sprint was founded in 1899, it was an American Iconic company and the 9th largest telecom in the world. The moment I entered the Boardroom of Sprint, it was like the first time I went to Disneyworld as a kid and I thought ‘Oh my god, finally, I am in the Board of a publicly traded company.” He explained.
“Soon after I joined the Board, Masa told me that the company was very close to bankruptcy and he suggested that I became the CEO. I told him that I couldn’t be CEO, firstly because I had my own company, BrightStar, and secondly because I didn’t know how to run a Telecom. This was another level for me. Masa told me that he would buy BrightStar and that he would teach me technology. Finally, I decided to go for it and run Sprint.” Said Marcelo. “In a very short period of time, we went from having the worst brand to having a great brand and from losing millions of customers to gaining millions of them. We saved a company that was 3 months away from bankruptcy. It was fascinating to see how you can earn the trust of 70.000 employees, change the brand and reignite growth.” He added.
Marcelo took the time to discuss the challenging times when he had to let go 30.000 people at Sprint. “We were honest and transparent with our employees and we treated them with dignity and respect. Before I took over Sprint, executives would stay at home on the days when they were letting people go. For me it was the opposite: Executives would be here, we would show our faces”.
Regarding the people that stay, he insisted on the fact that they must be treated even better. “If you do that, you will be amazed. People used to say that if you lay off 30.000 people, you will not be able to walk through the campus. That’s a lie. People will always respect you if you explain to them why you are doing this and what is the goal you are trying to achieve. Treat people with dignity and respect and make sure you help people on their way out.” He added.
Marcelo encouraged entrepreneurs to never be scared of growing. “Even in COVID-19 times, companies that are going to thrive and survive will be the next market leaders. There’s a specific advantage that you have when you’re the market leader, that in times when the economy is growing, you grow faster and in times when the economy is suffering, you survive, while your competitors are going out of business. So my advice is, grow as fast as you can, gain as much market share as you can and make sure that your unit economics are solid and that if something goes wrong, you can start generating cash”.
According to Marcelo, “Today there is less competition when it comes to fundraising. Entrepreneurs have the power to play venture capital firms against each other, in order to get higher evaluations in better terms.” “If you have a great business that is growing, is solving a problem, you should raise money whenever you need it to execute the business plan that you set forward. So, I don’t see that big of a change.” He added.
Regarding what will happen after the crisis, Marcelo pointed out that we have now learned that people are capable of working from home and we have realized that we can accomplish things that we didn’t think we could do, sometimes even better than before. “However, having social contact and sitting in groups where you can brainstorm is still important. As humans, we like to be a part of a community.” He explained.
“These things should somehow coexist in a world where there is still the need for social distancing, until we find the test and the proper vaccine.” He added. Marcelo also explained that right now, the demand for WeWork is stronger than ever. For that reason, and they have redesigned all of the company’s buildings, so that they can implement social distancing measures. “We’ve marked up where you can sit and we have eliminated certain things that congregated people.” Said Marcelo.
He also stated that in the near future, we are going to leverage what we have learned, that people are capable of working from home. He also explained that the future of headquarters is going to be diminished, meaning that there will still be headquarters, but not everyone will need to be in the same place at all times. “A lot of things are changing, we are going to live in world where workforce is spread all over the place.” He said. “The whole world is changing. Many e-commerce, food delivery, online education and online medical businesses that we have invested in, are thriving right now. It’s fascinating how fast the world is changing and entrepreneurs are adapting to it.” He added.
Marcelo revealed that when he first started, he felt like he needed to do everything fast and make immediate changes. “I think that now I have learned to think more, take time and plan better, and that works way better for me. These crises happen everyday and what I’ve learnt is that sometimes if you take a step back, get all the facts and do more thinking, you will arrive at a better solution.” He explained. Regarding the current crisis, Marcelo said that “Something great comes out of every crisis. Being stuck with my wife and my six kids at home everyday has taught me a whole new thing about parenting and it has shown me that I actually love this part of my life.”
The webinar wrapped up on a positive note. Marcelo urged people not to get discouraged, as difficult times make us stronger. “Some of our businesses have decreased their revenue by 80% and nobody could have predicted that. But if you can manage through a crisis, you can manage through anything. This is the moment to take tough decisions that you otherwise wouldn’t. If you must reduce cost, that’s fine, nobody is going to judge you for trying to run a business. Those entrepreneurs who know how to manage through crisis are the ones that will thrive afterwards. If you can manage through a crisis, trust me, you’re about to build the world’s best company.