Infiltrating Intelligence & Striving Forward
Infiltrating Intelligence &
Striving Forward

On April 22, 2017, Ms. Jingbo Wang, Chairman and CEO of Noah Holdings, shared her insights with fellow members at Source Code Capital’s 2017 Code Class. Ms. Jingbo Wang has been an entrepreneur for 12 years. This is her fourth 3-year period. During this time, she established the first Chinese wealth management company to be publicly traded in the U.S. She discussed her experience as an entrepreneur, shared her philosophy on running a financial enterprise, confronting the cost of supervision, establishing a foundation for a company to become a time-tested brand, selecting and managing people, and more. Like Noah, every successful entrepreneurial company will have to start from nothing and then expand. Ms. Jingbo Wang condensed this process into three stages: the first stage is seeing a mountain as mountain, seeing water as water, seeing things as what they are; the second stage is seeing a mountain not as a mountain, seeing water not as water, seeing things as something they are not perceived to be by everyone else; the final stage is seeing a mountain once again as a mountain, seeing water once again as water, and seeing through all the perspectives. Entrepreneurs should have a deep understanding of each of these stages. Source Code Capital Code Class 2017 Ms. Jingbo Wang’s full speech is as follows: I’d like to take this opportunity to thank Source Code and Cao Yi for inviting me, and for giving me this opportunity to share some of my experiences as an entrepreneur. Why do I say that entrepreneurship is like a butterfly emerging out of the cocoon after three years? Cao Yi said that this is the third year for Source Code Capital, and this is the third year for a lot of start-ups. Noah also received investment from Sequoia Capital in our third year, kickstarting our process of growing out of the small regional company that we once were. I believe there are great opportunities in the financial management market in China. There are two reasons for this. First, China’s middle class is rising and it has potential to become the country with the largest middle class in the world by 2020. Second, the aging population, and a growing interest in financial management among the Chinese population, will both contribute to greater opportunities in this sector. 1. Without Knowing Operations or Wanting to Operate, Holding onto Licenses is Useless I was recently enrolled in Hupan University and saw a few Chinese characters at their yacht club at Qiandao Lake. The characters read meant: “clean,” “quiet,” “enter,” “competitive,” “respectful,” and “reflective.” One of the characters is “clean,” as in pure. I think a good entrepreneur will have to have a pure heart and produce products that benefit the masses. The process is “quiet,” as quietness can clear one’s mind for deep thinking. Then you need to have an enterprise and take the initiative. I have been in the business for 12 years, and my respect for the industry has only grown. As it is especially the case in the financial industry, veterans are the most cautious and will respect their surroundings the most. The last character means “reflectiveness,” as in, one needs to reflect on the tasks that have been completed, challenges faced, past successes and failures, and learn to draw from their past experiences. In the 12 years my company has been running, it has gone through three stages. For the first stage, I was the product manager. I thought of some services that could be offered to people in the industry and wanted to make that available to customers. During the second stage, the company itself was a product, and for a long time, we focused on internal operations. I believe that in the financial industry, it does not matter if you have amassed a large amount of insurance, banking or security licenses if you do not know management, or do not want to manage – all you will be making is some quick money. The third stage that we are in right now is a difficult stage to be in. What we need to do is figure out how to utilize a traditional company with good cash flow to incubate some new businesses, thus putting ourselves in a good position in the industry. We are still in the process of figuring that out. I think that the biggest risk to a company is when it does not have a general direction. Once you have a direction, the rest can be adjusted accordingly. 2. Fully Understand the Cost of Compliance in the Financial Industry Before founding Noah, I had this deep understanding that in China, individual clients were not well-served. Furthermore, when we first started, we could not service clients with “shallow pockets,” so our target was high-net-worth clients. We were only able to establish a new Internet-based service ecosystem based on the demands of white-collar clients. In these 12 years, Noah faced many temptations, but we had many adamant stances as well. In 2014, all you could hear was that the internet would overturn the entire financial industry. All we could hear was that the client experience was the top priority, and you needed to be “T+0” for everything. However, of all the “T+0” client experiences we have heard of, every one of them had to have some other money put in to cover for it. If you said the investment had an annual interest rate of 8% just for a day, the need for funding source would be great, and the risk would be high. We also faced many issues, but what I think is more important, is the need to distinguish the temptations from the opportunities. Otherwise, we cannot have longevity in this industry. We need to fully understand the cost for compliance in the financial industry, for the risk of the industry is lagging. For example, the passion people had for the internet within the industry back in 2014 was in many ways misplaced. It seemed like it...
“People do not know that they have fallen into a pit until they are in it.” Entrepreneurship is naturally associated with difficulties and problems. You cannot avoid treading through tough waters, and the process of falling into and getting out of pitfalls in entrepreneurship can only be experienced and learnt by the entrepreneur themselves. Entrepreneurship is a training ground for physical strength, mental resilience, and brain power.
Compared to many entrepreneurs, Qin Zhi counts as one of the fortunate few to have personally led a startup to successfully list on NASDAQ. He is less fortunate, however, in managing relations with controlling shareholders, and was eventually “forced out” of his own venture. Going through these ups and downs has given him unique insights on the entrepreneurial experience and on people relationships. At the 2017 Code Class Annual Meeting, Former CEO of Autohome, Qin Zhi, shared some of his insights with Code Class members. Mr. Qin’s full speech is as follows: Thank you, moderator. I was very nervous when I came on stage earlier. I had not been on a stage in a year. During that time, I was busy fighting, and then I was unemployed and staying at home. Now, I am positioning myself as a middle-aged man. So first of all, I am very grateful to Source Code Capital for giving me the opportunity to share some personal insights here. I have nine years’ worth of experiences and some unique learnings, particularly from events in the past year, and I hope they can be helpful to you. 1. Entrepreneurship is not a one-person game All entrepreneurs are playing a big game, an entrepreneurial game – but I would like to remind everyone that it is still a game, it should not consume your entire life. We must work hard in the game, we must be dedicated, and we must concentrate. But take a step back and think about it – the game has rules, but it is a game after all. After it is over, there is so much more out there. Many times, entrepreneurs talk about what their initial purpose is. We are initially trying to create change, whether it is change in our own lives, change in the environment around us, change in the experience of Chinese consumers, or an unmet need. A single person alone is not capable of creating this change – it requires a lot of help. This is the importance of relationships. You can have people who help you, you can let your shareholders, your team, customers, and partners to help you. Let me share with you my personal insights in these relationships, divided into three areas: Shareholder relations Colleague relations Customer relations 2. Thinking from the standpoint of shareholders Let me talk about shareholder relations first. I guess, when I talk about shareholder relations, you may think that I am about to comment on my current relationship with the controlling shareholder of Autohome. That would be wrong – I would actually like to discuss a shareholder relationship from a time before Autohome. Following a quarrel that occurred last June, the dust slowly settled. For a while, I held a grudge, because while traveling along a road that I thought would lead to Kangzhuang Avenue, I suddenly had to get off the car, and it left me behind while I stood there. This of course, was not a good feeling. At that time, I was resentful, but gradually I have come to realize that it is not the case. I was the one who did not successfully manage the relationship, not the controlling shareholder or the majority shareholder. I used to have a great relationship with them. Don’t forget, from August to September in 2009, I was part of a company merger. When our controlling shareholders took control of the Board of Directors, I became the CEO of the entire company. At that time, we were two businesses: cars and IT. In terms of qualifications, the shareholders had a lot of trust in me. At the time, the overall atmosphere could be said to be harmonious. During the process, they changed teams three times, and each one was quite good. We wanted to go public in 2012 or 2013. Listing is always a test for every entrepreneur to prove themselves. There will naturally be some disputes in this process, and I still remember that we had to fight for special voting rights. In that small room, I said only they had the right to vote. This was unfair. They were wrong. If this was to be the case, I threatened to go to Hong Kong to arbitrate and tell the world. I think this process must have hurt the other side, because I did not think about it from their perspective. In their view, the company would eventually become a publicly traded company, and they also had to maintain control from their side for self-protection. In the event that we issued additional stocks or options, they would lose control of the company. I did not think of that at all – my ultimate goal was just to go public. Driven by this goal, I felt that I was right, and that people who disagreed with my plan were wrong. Later on, our other shareholders had problems. They needed to buy the shares of other shareholders in cash before listing in order to continue the listing process, but the company did not have enough cash. In the end, the controlling shareholder and our company pooled the capital together. Following the acquisition of the shares, Autohome successfully listed. Of course, you could also say the majority shareholder’s objective in helping the company was simply to protect his own investment and interests. But think about it – just two or three weeks prior, we had just quarreled. Even despite conflicts, they were still willing to help us solve the problem together and avoid a prolonged listing process of another year and a half. They really helped us. Looking back now, I realize that I was not considerate enough to others. I did not have enough empathy in viewing things from their perspectives and their needs. The final result was definitely because I lacked these perspectives. As this relates to you, you have a lot of investors’ money. You all have shareholders. Each of us will more or less experience changes in our mentality. I...
At the 2017 Code Class Annual Meeting, Founder and CEO of Toutiao, Yiming Zhang, shared some of his insights with Code Class members on the topic of, “As a CEO, You Must Avoid Rational Conceitedness. It’s about Context, not Control.”  
On Source Code Capital's 2017 Code Class, Chairman of Hui Zuo shared Lianjia's vision and perspective on the real estate industry. Hui Zuo believes that to analyze the real estate industry, four aspects need to be considered. First aspect: Commercial real estate. The core business of China's real estate industry is currently still residential, a prospect for commercial real estate is promising. Second aspect: Population distribution. Position ahead of time using predictions of future population distribution. Third aspect: Classifying the industry. Segmenting the industry into construction, trading platform, real estate aftermarket and market for financial services. Fourth aspect: Online-to-offline. There are opportunities for online to enhance all industries offline. There is still great potential for offline businesses in the real estate industry, thus online need to stay connected to offline.
There is a general consensus within the business world that the success of Meituan is inseparable from its invisible offline army. At the 2017 Code Class Annual Meeting, Wang Huiwen, the CEO of the catering platform Meituan-Dianping, took a retrospective look at Meituan through the lens of the fierce group purchasing battle that occured. Did Meituan’s standard strategy really consist of “encircling cities from rural areas” as regarded by outsiders? Can Meituan’s success be attributed to its strategic adherence or tactical flexibility? Meituan’s experiences are worthy of reflection for many of us.
Source Code Capital announced during the 2017 Code Class that former CEO of Kingsoft Dr. Hongjiang Zhang joined Source Code as a Venture Partner.
Code Class Annual Meeting Videos and Speeches: