On December 6, 2014, the first "Code Class" of Source Code Capital and High and Low Grade Homecoming were held at Commune by the Great Wall. A dozen LPs of Source Code Capital and CEOs of all investment companies gathered together to exchange. A number of LPs' speeches are full of wisdom and later we will present them.
Ten years ago I came back from the United States to start a business. Over the past decade I have been an entrepreneur, and today I’m still an entrepreneur. I have three sections of entrepreneurial experience. The first two sections are not successful. Meituan development from 2010 to the present is still OK, but it is still struggling. I can share many lessons with you, but later I think no experience is fully applicable. Whether my own lessons or other person’s summary, for almost every piece of right advice, I can always find a lot of counter-examples.
For example, development speed and growth is very important for start-up companies. It is said that there is a motto in Silicon Valley, which is a bit vulgar but very direct: Keep growing, fuck everything else. Only growth is important, and everything else is not important. As long as you can maintain high growth, all the problems can be tolerated, concealed or will not break out at least in the short term. A lot of problems were likely to be a problem at that time. After you grow tenfold or a hundredfold, it is not a problem and even naturally disappears without the need to solve. Indeed many cases are like this. To a great extent, this sentence is right. I think so, because we have gone through a lot of the things. Every company has a lot of problems. Meituan also has many problems today. But the most important thing is to keep continued growth, and then a lot of problems at least have the opportunity to solve.
Give you a suggestion: do not say there are many problems, this problem is very important; I want to stop to solve the problem. Start-up companies must not stop. No problem is worthy stopping, or even slow down to be resolved, otherwise, it will be more serious and quickly break out to the entire company.
But there are counter-examples. All things have counter-examples. If you grow too fast, a lot of the problems are unable to control, causing troubles.
In my own experience, Meituan is among the first batch of group-buying websites. But from the second half of 2010 to the first half of 2011, the market is extremely crazy. Countless money drops in. Numerous teams conducted rounds of financing. They poached talents each other and threw money everywhere. For a period of time, Lashou and 55tuan grew more quickly than Meituan, and developed at high speed. They basically quickly collapsed in the second half of 2011. Their failure is not because of Meituan, but they grew too quickly. When they started business, they said they would be listing after a year and a half. There is an exaggerated example. 55tuan directly said it would be listing on some day of 2011, and then it used this way to poach people, so all their plans are made to this. When capital markets or the external environment is not good, the company cannot adapt and quickly collapsed. So this is a counter-example.
On the other hand, many suggested that the focus is important. Lei always said the key to entrepreneurship: focus, extreme, public praise, fast. Focus is ranked first, because entrepreneurship competes in individual and team. All resources are like the blade, the more focused, the more powerful, which is easy to understand. Especially for start-up companies, no matter how much help and support, your resources are relatively limited, so the focus is very necessary, but there are also counter-examples.
First, focus means you focus on the things, and do not deal with a lot of things. But if your own business scope is too small, you sometimes rest on your laurels, and finally you will find your pattern is completely lost, and it is impossible to win no matter how hard you work. Such as electricity providers, Taobao was very powerful a few years ago and had strong capital, but it also a lot of wrong things. But the most important thing is that it chose the way of a bigger platform. Looking back, if those companies that started up around 2003 focused on being a vertical electric provider, they basically had no hope of winning, which is strategically defeated from the start. You can easily find counter-examples for the right advice.
So I think repeatedly, the truly most valuable advice is an idea of our ancestors. A saying in “Daxue” of Four Books and Five Classics is about the Confucian ideal, how a gentleman should be: self cultivation, family harmony, country management and world peace. I felt more and more interesting in the last year. I'll interpret why "self cultivation, family harmony, country management and world peace" is a piece of good advice for entrepreneur’s self-cultivation.
From a certain perspective, Confucius is the entrepreneur 2,500 years ago. He started from the state of Lu and had his own idea and business plan. He hoped how to rule the country, but he needs to get support. He got no support at local place and then he traveled everywhere to raise money and acquire resources, hoping to turn his idea into a reality to change the world. This is a story of Confucius.
Conversely, look at the “world peace”, which means entrepreneurs have to dominate and have a market. You have to completely occupy the market. "The world" is your target market. It is very important to define what things you are able to do. You have to choose the right target market, which has enough size and value, because entrepreneurship is to solve the problem in the final analysis. If the problem you solve is not big enough, the value you create is not big enough. Therefore, the right market is your world. “Peace” means that you shall do, and completely occupy and monopolize it. Recently, a book “Zero to One” was written by Peter Thiel, which talked a lot. Especially for Internet companies, competition is a bad thing. You shall quickly end competition and monopolize the market, in order to create maximum value. “Peace” is a bit like this. No matter by what means, the sooner the better. So this is the goal, the company finally need "world peace."
How to achieve “world peace”? You cannot do everything by yourself. Someone need to write code, do the design and talk with the client, you need to “manage the country”. “The country” means your entire enterprise. I think we should use the word enterprise, rather than company, because the company is only one form of enterprises. Enterprise perhaps has other forms. We can see that Ali, Mi or BAT focus on building the ecosystem in the development process. A company has a single business at the beginning and is divided into the functional departments. When it has more business, it is divided into business divisions and business groups. If it has investment companies and various partners of the ecological chain, it forms a “country.” “World peace” needs to rely on your enterprise and the whole team. Country management is to design and govern the entire enterprise and related ecosystem. How to “manage a country”? The last step is “family harmony”. For entrepreneurs, family is your direct subordinate. No matter what size the company has, CEO can directly manage about seven people. Direct subordinate is the same as your family. No matter what size the company has, personal energy is limited. Their quality, input degree and effectiveness have a crucial impact on your plan of country management and world peace. How to understand “harmony”? There are several meanings: first, you have to coordinate this team, because the start-up companies need different functions to complete one thing. A single person is difficult to be versatile, so teamwork is required. The various roles are needed. This point is very important; otherwise it will affect the progress of the entire company. The second meaning is to regulate. A very interesting approach is that you read “Daxue” in English, because sometimes we are too familiar with a language. When foreigners are translating, they must thoroughly understand it and choose the most accurate translation. “Daxue” in the English uses the word “regulate”, namely law regulation, which sounds strange, but it makes sense. A team has a dozen people, although small, but their thinking is not completely consistent. How can you make their way of thinking as consistent as possible? That is teamwork. When everyone has greater energy, the final resultant force is not necessarily greater. Everyone shall have strong ability and work hard to push things forward. In addition, you shall find a way to treat them equally regardless of their ability, attitude, or standards. This whole thing shall be orderly, and the standard is to be aligned. You can lead people around well, so that they trust you and are willing to invest. They affect others layer by layer. This is what “family harmony” means. How to achieve “family harmony”? It requires self cultivation. As CEO, you're the backbone and ceiling of the company. If you cannot improve yourself, the whole team and the entire company is unlikely to enhance, and the whole thing cannot be bigger. I think the CEO needs to do a lot of things. One very important thing is self cultivation. Each day I examine myself in three approaches. You need to keep reflecting, learning, and constantly think of ways to improve. “Self cultivation” has many levels. As business is concerned, you need to enhance in physical, mental and intellectual way. After all, entrepreneurship is a very hard thing. To do one thing well, you need to be strong and durable. You have to learn from all the places, books, people around, older and younger people, your successes and failures in the past, or other people's successes and failures at the lower cost. So I think self cultivation shall be followed by family harmony, country management and world peace, which of course, is in terms of the whole context of start-up companies. This sounds virtual. But in the more rapidly changing environment, you have to seize those things that are not likely to change. If you believe the theory that The Singularity is Near: a fundamental change in the human will happen from 2045 to 2048, you will believe before that, all things will only get faster, without no chance of relaxation.