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 hope that when you meet with shareholders and have conflicts, you will ask yourself whether, at the time you received the investment, you were doing them a big favor, or they were helping you. Think more about these things – I think you should be grateful to investors, because without their trust, you would not be where you are today.
3. The CEO is fulfilled by his or her team and partners
Now let me talk about the relations between colleagues. This includes entrepreneurial partners, company executives, and employees. Being a CEO still comes with its fair share of problems. I always criticize my colleagues for not thinking about the bigger picture. They should be thinking about problems from the perspective of the company, and not just from the perspective of their own department. This is a real problem. We often have such feelings and feel that the company is only assessed from the perspective of one person within it.
If we look at a problem from the company’s perspective, we hope that the manager will motivate his team to make sacrifices and take care of the issue – he would most likely not be able to take care of the situation solely by himself. Have you ever thought about what kind of results he could achieve if he tried to solve the problem himself?
Perhaps this manager cannot keep up with the development of the company. At the very least, however, you should give credit where credit is due – they are showing consideration for the overall situation. You should thank them for this, for taking care of the future of the company, and for taking care of our needs.
We do not tend to admit this, because we feel that it is right to take care of the overall situation. It is very correct to take care of the company’s overall situation and its future. Every employee should do this.
There have been many times when my team has shaped and fulfilled me, and not the other way around. This is not always easy to admit. This is the relationship between us, as entrepreneurs, and our colleagues.
4. Trust your customers and take the initiative to move forward
Let’s move on to customer relations. I was at Autohome for a long time. Some people said that “the customer is always right,” and we all sneered. What do we think customers are? Each of us is also a consumer and a customer. When we buy something, we also want to receive the best things for the lowest price. However, companies want to make money and customers want to spend less on high-quality services. How do we solve this problem?
Our experience is that, similar to the previous two types of relationships, it is more about being considerate and taking care of others’ feelings. This does not necessarily equal a price cut or a concession on financial interests, rather, it is cultivating a service mentality. Through providing good service, many times you will find that the customer has changed, and their unreasonable demands are gone.
I will also share with you a story about believing in customers. I forgot the specific time. At the end of 2014 or early 2015, there was one incident. The information of 3 million users across several servers was stolen. Someone had found a back door into the system and we did not realize it. Really, it was our responsibility and we did not do a good job.
At that time when we were discussing the matter, there were a few concerns. Firstly, will those customers who had their information stolen be harmed? Our first instinct was that they would not, because at that time, Autohome did not really do e-commerce, so there was no money in our users’ accounts. The account was just a username and password, so rather harmless as long as the user was prompted to change their password. This was our first thought, to not make a sound, and as long as this issue blew over quickly, things would be okay.
However, a very intelligent and wise manager noted that we were not seeing the whole problem. He said that our assessment was not completely right. The user’s same username and password are likely to be used for other accounts. Other accounts may be linked to the user’s money, personal data, and a variety of other information. We were obligated to inform the users of what had happened to us, and then advise them to modify their usernames and passwords in other accounts that were using the same log-in’s.
There was a dispute among us. Firstly, what if users were informed of the breach and then proceeded to talk about it on their microblogs? Secondly, if a customer claimed to have suffered losses elsewhere, and Autohome admitted that their username and password were breached on its grounds, then Autohome would be considered liable. We debated about this for a long time. What should we do?
In the end, we made a decision to announce the breach and communicated with each user, mostly through mobile phone numbers and email. Our call center personnel called customers every day to explain the breach, and then advised them to modify their other accounts immediately.
If a customer were to seek what would be (in our opinion) an unreasonable request from us, we would tell them, “Look, we are post-80’s parents, constantly telling their children of the mistakes that they made, and that only by admitting mistakes can children be good.” We would tell the customer, “we hope that, even today, we can repeat the same words to our own children – instead of having to say that one should not own up to their mistakes, or that doing so would carry punishment.”
For the first time, we believed that our customers were right. Admitting our mistake was good for us as well. We resolved 3 million cases, and there were no lawsuits – in fact, for many customers, their impression of the company even improved. Many said that they could have never thought that a company would care so much about them, so they were willing to continue using Autohome. Even if you have a crisis, it is not a problem – a crisis is just a crisis. This is something that we felt very touched by.
In our relationships, we are often only thinking about ourselves and are apprehensive because we feel that we are living in an uncertain environment. We sometimes do not dare to take a step and believe that “by being good to you, I believe that you will not be bad to me.” All three kinds of relations – shareholder, colleague, and customer relations – can be affected by this phenomenon.
That experience taught our team a lesson, and that is, the result of your relationship with anyone is actually a projection of your inner attitude towards them. If you are very good to them, you do not have an ounce of selfishness, act purely for their sake, and are willing to accept all their reactions and outcomes. In many cases the result is good. If you insist on doing this, you will get very good results.
5. Leaving room for others creates a future for yourself
Doing business is a bit like success, often relying on luck, and failure is sometimes inevitable. Therefore, for us, in these three kinds of relationships, we should think about how we treat others, regardless of whether they are our stakeholders, employees, or customers. If you think about yourself too much, it will eventually seem like the more you do, the more you mess things up. You need to put yourself aside and complete the task at hand – that is your contribution to society. Once you do this, you will achieve good results, and you will find the help you need.
I have two more pieces of knowledge I’d like to share. The sooner you illuminate your point of view and the sooner you communicate your likes and dislikes, the easier it is to distinguish between yourself, and your competitors and enemies. The less frequently you express your point of view, the more likely your friends around you will not know what you are doing, will not know what your rules are, will not know what your principles are, and they will not know how to help you.
After you reveal your point of view, there must be some people who are willing to move closer to you because they are willing to be with you, and they believe in the same things as you. The most frequent argument in a company is that: you have your ideas, I have my ideas, everyone thinks their ideas are right, but are these ideas right for the company?
The best way to do this is to define what is good for business. Once you agree on a definition, it is easy to communicate on other differences. Let us choose which good thing to do for the company and many things will be solved – this is an important lesson.
My current thinking is that in Chinese society, to leave room for others is to create a future for yourself. Pushing others out of the way is a lose-lose situation.
If we want to change the surrounding environment, we can consider others a little more, think a little more about others, and put ourselves down a little, so that our relationship with everyone around us will become more collaborative and harmonious.
This is my sharing today. Thank you all!