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Leadership#

Leadership is a hope that ignites the light of humanity within a specific combination of values among a group of people: it does not operate on secular values within social groups, nor does it require learning from others. People with different personality traits can form their own unique leadership cultures. You can only influence the specific emotions and cultures of the groups you belong to; how much you can resonate with others determines the boundaries of your leadership. Respecting your true feelings will naturally lead to the third element of leadership: finding the field you truly love. Your leadership can only be exercised in matters that resonate with you. In other words, the group you lead should choose matters that suit you.

Whether it is a company or an individual, it is essential to find suitable matters that align with one's traits, so that leadership has room to flourish. Just as there is no shadow without light, there is no leadership without followers. These two are interdependent and complement each other's shortcomings.

Followers are the symbiotic communication between leaders and those seeking guidance. However, this term has long carried a connotation of subservience, implying that followers are subordinates—derived from the Latin term for "lower order." This notion is extremely misguided.

Although the concept of followers is often associated with hierarchy, in real organizations, important matters are accomplished through horizontal and meaningful discussions. While individuals may "own" symbolic authority, for an organization to develop successfully, the relationships between authoritative figures and staff need significant improvement.

In fact, in the best social systems and organizations, difficult adaptive work is indeed accomplished. Leadership is not a fixed or rigid position but a set of fluid and decentralized activities. The ambiguity of roles allows the most suitable individuals or groups to take on leadership responsibilities, especially when they are more capable of completing tasks.

The Importance of Playing Non-Positional Roles

The business world is becoming increasingly complex, driven by geopolitical pressures, technological advancements, and a generation of knowledge workers with looser organizational ties. The demands for rapid decision-making and handling incomplete information create greater pressure. Therefore, leaders and followers need to collaborate more closely to address these challenges.

Leaders and followers inherently imply duality. However, in reality, the connection between leaders and followers does not exist in a binary form. We believe that the positions of leadership and followership should be allocated or exchanged based on circumstances and needs, as the roles of leadership and followership are fluid.

Our business cards cannot define who you are, nor can they define your character or leadership abilities. Leadership is a team sport; regardless of the formal positions or roles we hold, we all need to exercise our leadership at different times and under various circumstances.

But do not worry; anyone can gain leadership regardless of their traits, because everyone has leadership potential. In the process of gaining leadership, I have summarized three points to share with you:

1. Be brave and be yourself.
2. Build the team you truly enjoy, because you can only lead those you like.
3. Engage in matters that align with your traits and leadership style.
   Leadership will surely be fully exercised, and you will become a person of leadership.

For example, a partner at a communications consulting firm responsible for business. As the world accelerates towards net-zero emissions, she meets with industry leaders almost daily, yet these leaders are often criticized. She has four junior partners and three directors under her, tasked with researching the industry, attending conferences, developing intellectual property, conducting presentations, and communicating with the media. While responsible for business, everyone in the team plays an important role. Weekly team meetings are informal, free-form, and without a chairperson. The structure of these meetings is simple, and everyone is invited to participate. Although everyone plays their part in their respective positions, they mistakenly believe they are the team leader. The competitive environment is fair; she describes the meetings as "democratic thinking," with ideas coming from those with the clearest insights. There are no barriers preventing any team member from temporarily "playing an inappropriate role," such as visiting clients.

Other teams within the company have more traditional and hierarchical structures, yet this team stands out and performs best. This success can be attributed to strong yet humble self-awareness. Margot has made progress in leadership development, finding that this leadership style is non-threatening. Moreover, considering the space they have, her "followers" readily take on leadership roles. This, in turn, fosters their own growth and development.

This phenomenon is explained through "orders of consciousness." The population is in the third order, the social order, where they rely on, seek, or are constrained by authority. This mindset often stifles their viewpoints and drains their energy. They may recognize the dichotomy between what is right and what they are instructed to do.

Additionally, this structure hinders innovation and opportunities for experimentation, often leading to negative consequences. These individuals need to maintain courage in the face of authority. As Kegan puts it, they must enter the fourth stage—self-authored thought—and pick up the pen to become the authors of their own destinies.

This means listening to the voice of integrity, independence, and being "down-to-earth." This is not an easy task; it requires communication between leaders and followers. It may involve guilt rather than permission.

The Three C's of Entering Leadership
As the sixth President of the United States, John Quincy Adams, said: "If your actions inspire others to dream more, learn more, do more, and become more, you are a leader." Followers are fully capable of inspiring new thinking, motivating groups to take action, guiding and developing others, and becoming sources of intellectual stimulation.

Anyone who exhibits these behaviors will be regarded as a leader, regardless of their rank or status. Therefore, followers need to demonstrate their qualifications for leadership positions through their actions, rather than waiting to be appointed. They need to find ways to become leaders, rather than waiting to be included.

Courage: Gently challenge leaders when you disagree, rather than remaining silent. A simple email or casual conversation over coffee is sufficient. Clenching your teeth will make you part of the problem and create internal discord because you are not being true to yourself.

Context: Suggest that the team do things differently. Try changing the way and location of team meetings. Lower the level of the boardroom table and see if simply sitting in a circle without physical barriers changes the energy and participation. There was once a top team that could interact widely and sincerely did this.

Thus, the efficiency of this team is very high, closely connected, and harmonious.

Communication: Learn the art of communication: carefully pose challenges, seek other viewpoints, and use expressions like "I wonder..." instead of "I think...". This is a clever way to inspire an idea without immediately triggering a "Well, I think (the opposite)" response.

Everyone should heed this lesson: never be overly subservient to subordinate roles. Use all your strength to consciously learn and achieve what you want. Stand firm in your integrity. When you have ideas, voice them loudly; time is shorter than you think.

Founders#

What is attributed to external factors? The success of a business organization is essentially the same.

So I wonder why he keeps falling into the same pit? Because he attributes all problems to external causes. People always like to attribute success to themselves and blame others for failures. On the contrary, I believe it should be attributed to external factors and internal causes.

What is attributed to external factors? The success of a business organization is essentially shaped by the times; without a significant era, there would be no you. The success of any business is fundamentally a product of its time. Of course, it is also important to keenly seize the opportunities presented by the times, but without a significant era, you will not succeed.

What is attributed to internal causes? It means that when failures occur, one should look more within oneself for reasons.

People can see their cognitive problems, but it is not painful enough; the pain lies in seeing the problems within themselves. Because when you see that you have so many problems, it is actually hard to face. People are unwilling to see their shortcomings; only when the pain is sufficient will they be willing to stop and examine themselves. Therefore, facing failure and learning from pain will greatly benefit you.

Founder Mode vs. Professional Manager Mode
The comparison between Founder Mode and Professional Manager Mode has become a hot topic. Especially in Silicon Valley, with rapid technological changes and industrial upheaval, Founder Mode is once again being praised. The founder of Airbnb successfully saved the company through hands-on management during the pandemic, sparking discussions about the two management modes. The co-founder of Y Combinator wrote a blog about Founder Mode, receiving high praise from Silicon Valley giants like Elon Musk.

So, what exactly is Founder Mode? Why is it being widely praised again in Silicon Valley? How does it differ from Professional Manager Mode? This article will delve into the connotations, practical applications, and significant impacts of Founder Mode on business success from the perspective of technological entrepreneurship.

Core Elements of Founder Mode

1. Breaking Rules and Exceeding Responsibilities
   The first notable characteristic of Founder Mode is breaking rules. Compared to professional managers, founders tend to be less constrained by established rules in business operations. They are willing to break conventions and make creative and risky decisions during crises. Professional managers follow a set of operational rules approved by the board or management, with limited room for maneuver and must comply with internal and external laws and regulations. Founders, owning the company, dare to break rules and take on greater responsibilities.

For example, in the case of Airbnb, founder Brian Chesky personally took over the company's management during the pandemic, promptly adjusting strategies to successfully respond to the global halt in tourism. Professional managers, when faced with similar global challenges, often stagnate due to boundaries of responsibility, while founders are more likely to take bold initiatives.

2. Global Sense of Responsibility
   The second key feature of Founder Mode is a comprehensive sense of responsibility. Founders are not just shareholders; they usually have a deep emotional and mission-driven connection to the company. When the company is in trouble, founders can spread ideals and beliefs to their teams, igniting emotions that drive the group to do everything possible to save the company.

Even after the company goes public, founders often maintain actual control over the company, attempting to continue guiding its development through mechanisms like dual-class shares. This sense of responsibility motivates them to take on responsibilities that exceed the capabilities of typical professional managers during critical moments for the business.

Compared to the traditional modular design of the manager model, Founder Mode requires founders to be deeply involved, breaking the principle that "CEOs can only interact with the company through direct reports."

"Despite the existence of opposing views on social media, as a small company, we clearly need founders to be hands-on compared to those large companies that have already built business barriers. If you can't even understand some core issues, how can you expect to find someone capable to solve them? At this point, you should first ask yourself: Why me?"

Some key matters require the founder's personal involvement and decision-making, as these tasks are often impossible to outsource. Founders possess the strongest experience with market uncertainty and a greater need for psychological safety in board communications compared to professional managers, and they dare to break free from the herd mentality of risk-takers. If these task-oriented responsibilities are handed over to professional managers or teams, there exists a disparity between market returns and psychological expectations. If done well, the company profits and grows, benefiting the board or management, while in a constrained economic market environment, employee expectations for returns are limited; if done poorly, psychological expectations and market goals can lead to team members losing their jobs, facing risks and responsibilities of failure. The risks and psychological expectations of professional managers and founders are clearly not on the same level.

Moreover, in today's rapidly changing market environment, technological advancements are evolving daily, and user preferences are constantly shifting. Relying on past experiences of professional managers to address future challenges in technology-driven companies is nearly impossible.

Even if professional managers have the ability to manage a company, they cannot erase the cultural management ideology established by the founders themselves. They must remain vigilant about market volatility and potential personnel changes, ensuring they are not eliminated in fierce business competition.

In contrast, professional managers are hired to manage companies, with their responsibilities generally defined by the board and accountable to it. Professional managers typically do not take on responsibilities beyond the scope of their contracts; if they exceed their authority, they may face legal risks.

Professional managers lack the sense of belief in matters that founders possess; they only have a secular mindset shaped by risk awareness and the economic machine, possessing certain personal qualities and high professional skills and management talents.

Why Silicon Valley is Re-embracing Founder Mode
During a period of global technological disruptive change, emerging technologies such as AI-generated content (AIGC) are rapidly altering industry landscapes, and extraordinary management is called for during extraordinary times.

The mindset of professional managers performs well in addressing routine management issues, but when faced with exceptional situations like pandemics or global lockdowns, their standardized management often proves ineffective. At this time, the flexibility and innovative thinking of founders become particularly crucial.

As the founder of Y Combinator wrote in his blog, Silicon Valley needs leaders who can quickly adapt to market changes and dare to take risks.

While the caution and methodical approach of professional managers can ensure rapid and stable operations during normal times, they cannot rally people’s hearts in turbulent macroeconomic markets or during political upheaval in management. Only those founders who dare to take risks and break existing frameworks can lead companies to meet new challenges. This is why, driven by successful entrepreneurs like Musk and Jensen Huang, Founder Mode has once again become the mainstream voice in Silicon Valley.

Practical Applications of Founder Mode: Case Analysis

1. Crisis Management at Airbnb
   In the global market ravaged by COVID-19, Airbnb's professional managers were unable to respond to the sudden lockdown of the global tourism industry, while founder Brian Chesky personally took over the company's management and made direct management decisions. Chesky decided to reduce non-core business operations, concentrate resources to help the company survive, and launched new home experience products. This series of decisive actions helped Airbnb turn the situation around during the worst of the pandemic.

2. Continuous Innovation at Tesla
   Elon Musk's Founder Mode has played a crucial role in Tesla's success. Although Tesla is already a mature public company, Musk continues to lead the company's strategy, guiding the development of a series of innovative projects such as autonomous driving and battery technology. He broke the rules of the traditional automotive industry and propelled the electric vehicle revolution.

Challenges and Limitations of Founder Mode
Although Founder Mode excels in crises, it is not without challenges and limitations:

Management Challenges in Scaling: As a company grows, Founder Mode struggles to cope with complex organizational management. Once a business reaches a certain scale, it often needs to introduce professional managers for standardized management. For example, when a company's employee count expands from dozens to thousands, the complexity of management significantly increases, and relying solely on the founder's personal abilities becomes insufficient for effective operation.

Demand for Rules and Transparency: After going public, companies must comply with regulations from authorities (such as the SEC), and founders are often not adept at navigating these cumbersome compliance requirements. For instance, founders may retain control through dual-class shares, but still require professional managers to help the company meet legal and financial transparency requirements.

Future Trends of Founder Mode
Despite the mainstream media's portrayal of professional managers dominating most mature enterprises, the influence of Founder Mode will continue to exist in the technology sector. Especially in emerging technology fields such as artificial intelligence, quantum computing, and clean energy, where humanoid intelligent robots are involved, these areas are filled with uncertainty and tremendous opportunities, making Founder Mode more conducive to driving innovation and change.

Companies may explore more management approaches that combine Founder Mode with Professional Manager Mode. Some professional managers who have served as CEOs for extended periods are beginning to exhibit traits similar to founders; they have a deep emotional connection and sense of responsibility toward the company and can make bold decisions during critical moments.

The opposition and integration of Founder Mode and Professional Manager Mode in the process of establishing enterprise management is not just a choice of management style but also a strategic choice for companies to respond to market changes.

For technology companies, especially those undergoing rapid development and disruptive change, the advantages of Founder Mode in establishing corporate culture and team integration during the very early stages are self-evident. However, as companies mature and achieve stable growth, the professional management capabilities of professional managers remain indispensable for the stability of the company.

Currently, one thing is quite clear: it will break the principle that "CEOs can only interact with the company through direct reports." In Founder Mode, "cross-level" meetings will become the norm rather than an unusual practice. Moreover, once this restriction is lifted, countless possibilities will be available.

For example, Steve Jobs used to hold an annual team-building meeting for what he considered the 100 most important people at Apple, and these individuals were not necessarily the top 100 executives in the company's organizational structure. Imagine how much determination it would take to implement such a practice in an ordinary company?

However, how useful is this practice? It can make a large company feel like a startup. If these team-building meetings were ineffective, Jobs probably would not have continued hosting them, but I have never heard of other companies doing this, so we still do not know whether it is a good idea or a bad one, which reflects our limited understanding of Founder Mode.

Clearly, founders cannot continue to manage a company with 2,000 employees as they did when there were only 20; there will inevitably be a degree of power decentralization. The boundaries of autonomy and the clarity of information dissemination may vary from company to company. Even within the same company, as management gradually gains trust, these boundaries may change over time.

Therefore, Founder Mode will be more complex than Manager Mode, but it will also be more effective. We have already seen some clues from the explorations of individual founders.

Another prediction regarding Founder Mode is that once we figure out what it is, we will find that some founders have already been approaching this model to a large extent. Although what they do may be seen as eccentric or even poor by many.

Interestingly, our limited understanding of Founder Mode is encouraging. Looking at the achievements that founders have made, even when they have gone against poor advice, they have achieved this success. Imagine what they would do once we can tell them how to run their companies like Steve Jobs instead of John Sculley (former Apple CEO).

At least two impacts will arise:

1. The consequences of the decisions themselves.
2. A new organization capable of making better or worse decisions.

Paul Graham's perspective overlooks the discussion of the second impact. When a company's CEO jumps in to change a decision made by an employee in a professional field, even if the CEO is correct, it will have a certain negative impact on the people in the organization and the organization as a whole. This impact needs to be repaired in a timely manner so that the organization can iterate and continue to cultivate the ability to make the next better decision.

Multidimensional Connections#

Founders serving as CEOs of organizations have at least three unique advantages that enhance the survival chances of the organization:

1. Social Resources: Founders serving as CEOs have more social resources, allowing them to break through the limitations of others' imaginations and help the organization find new solutions or paths to success.

2. Breadth and Depth: Founders serving as CEOs have a certain understanding of the entire business and related personnel. This comprehensive awareness enables them to identify and avoid decision combinations that threaten survival.

3. Incentive Mechanisms: Founders as CEOs are more willing to invest wholeheartedly in their current endeavors, while professional managers are more concerned with whether their current performance can pave the way for their next job.

Overall, the decision-making approach of Founder Mode has its advantages but also negative impacts. If this negative impact is ignored, CEOs may find themselves needing to intervene more frequently in decision-making. As the number and complexity of decisions increase, this game will inevitably collapse.

Notes:#

[1] A more euphemistic way to express this is that experienced C-level executives are usually very good at managing upwards. I believe anyone who understands this world would not disagree.

[2] If this practice of team-building meetings becomes common, even mature companies filled with office politics would start doing it, we could quantify the aging of the company by the average depth of invitees in the organizational chart.

[3] I have another, less optimistic prediction: once the concept of Founder Mode is established, people will begin to misuse it. Founders will use Founder Mode as an excuse not to delegate things that should be delegated. Meanwhile, professional managers who are not founders will decide to act like founders. To some extent, this may work, but if it does not, the result will be chaotic; modular management at least limits the damage that poor CEOs can cause.

Different Stages of Business Development#

The First Crisis: Overload, refers to internal functional dysfunction and the loss of external opportunities. This often occurs when a rapidly growing company led by a young management team attempts to expand its business quickly.

The Second Crisis: Stalling, refers to many successful companies suddenly slowing their growth. Rapid development leads to complex organizational hierarchies, which also causes employees' originally clear divisions of labor to become blurred, and it is precisely this clear division of labor that gives the company focus and momentum. Stalling is a moment of confusion for a company: the accelerator of development is no longer as effective and responsive as it once was, and young competitors begin to gain a foothold. Most companies that stall can never regain their vitality.

The Third Crisis: Free Fall, represents the greatest threat that exists. A company in free fall experiences a complete stagnation in its core market share growth, and its business model—which had been effective until recently—suddenly seems unviable. For such a company, time is scarce and urgent; the management team often feels that the company has lost control, yet they cannot identify the root cause or know how to pull the company out of the mire.

These three crises occur at the most dangerous and tense times for companies that have successfully navigated the startup and early growth stages. The good news is that these crises are predictable and often avoidable. The killers of development hidden within these crises can be anticipated, and people can even turn them into constructive change factors.

The Spirit of Founders#

The spirit of founders constitutes an important source of competitive advantage for young companies when facing larger, resource-rich industry competitors. It has three main characteristics: a sense of mission inherent in new forces, a sense of ownership, and a focus on frontline operations. In companies led by founders or where the principles, models, and values followed by employees in daily decision-making and behavior still have a significant influence, these characteristics of founder spirit manifest as three key traits.

Regardless of how large the company grows, they always maintain a focus and emphasis on frontline operations, always aware that it is the details that make a difference. Moreover, they possess a sense of ownership, a strong sense of responsibility towards all employees, customers, products, and decisions.

These three characteristics—the sense of mission inherent in new forces, the emphasis on frontline operations, and the sense of ownership—are the key features of the spirit of founders. They are expressed in the purest form and are very evident.

After a company grows larger, people often lose the spirit of founders. The pursuit of scale growth increases organizational complexity, leading to redundancy in business processes and systems, which dilutes the sense of mission inherent in new forces, and the company faces challenges in maintaining its original talent levels. These deep-seated, subtle internal issues then lead to the deterioration of the company's external performance.

A strong sense of mission inherent in new forces can provide a company with focus and purpose, both internally and externally. It is most effective when applied in areas such as human resources systems, advertising, product features, and customer-centric decision-making, especially in the trade-offs that shape the company's characteristics, helping leaders determine hiring and motivation targets, choose suppliers, and direct investment.

Every business story has two intertwined narrative threads, regardless of whether the story itself is a success or failure. The first, and most obvious, thread is the external story of the enterprise. The external factors that play out in the market generally include quarterly profits, shareholder returns, changes in market share, and profit growth. This is the most easily traceable trajectory and the one most people—boards, investors, media, and the public—choose to follow. It is a story about how a company defeats its competitors by better serving its customers, thus winning external competition.

The second narrative thread unfolds internally within the company, and it is not as obvious. This thread generally includes building the business, developing and retaining a group of high-quality employees, strengthening corporate culture, optimizing systems, learning from experiences, adjusting business models, reducing costs, and motivating employees to continuously achieve their own and the company's goals.

Some companies operate exceptionally well externally but face numerous internal issues. Others, conversely, develop well internally but struggle externally. Ultimately, if a company wants to succeed, it must excel in both areas. The two narrative threads must intertwine and exert force together. If you have a disastrous internal environment, it is impossible to maintain profitable growth in a competitive market; if you fail in market competition, you cannot sustain an efficient internal culture for long.

Company Politics#

Company politics is when you say I am not good, I say you are not good, I am with him, you are with him; working together, it is already quite good if two people can be amicable and not undermine each other. However, colleagues keeping to themselves essentially reflects a lack of combat effectiveness, which will inevitably collapse at the first clash. When they leave the company, they will complain about the poor culture, but are they not part of that culture themselves?

The Refinement of Social Division of Labor#

The differentiation of various industries is becoming increasingly evident. Typically, people from different industries carry different professional habits and ways of thinking, some of which even solidify into personality traits, becoming labels for these professions. For example, finance and lawyers tend to be conservative, politicians are rational, pastors are kind yet rigid, artists are strong in personality, businessmen are flexible, scientists are somewhat aloof, and soldiers are relatively rough, etc.

However, when you closely interact with the top performers from various industries, you can discover a noticeable sense of convergence. Their views on matters are usually very consistent, and their mindsets and value systems also tend to converge.

These top performers share many commonalities, which can be broadly summarized as follows:

1. Persistence, focus, and single-mindedness. Those who can make a name for themselves in an industry usually possess a certain "stubborn" spirit; they will not give up until they achieve their goals. In addition to obsession and passion, there is a belief that drives them to persist until the end.

2. Not valuing fame and fortune, remaining aloof. When a painter is creating, if they are calculating the price of every inch, they are unlikely to produce a work that can be passed down. It is precisely because of this purity that they have fewer constraints, allowing them to fully unleash their talents and achieve accomplishments that are difficult for ordinary people to attain.

3. Inclusiveness, without barriers. They do not cling to the dogmas of predecessors, nor do they limit themselves to existing routines; instead, they draw nourishment from different industries and people, inheriting humanity's best wisdom and then engaging in self-creation and breakthroughs.

4. A global perspective, benefiting all. These individuals always consider issues from the perspective of the majority's interests rather than from their own selfish gains. Such resource allocation can yield the greatest benefits, while dissipating resources generates the most efficient energy, feeding back into the social system and forming a stable virtuous cycle.

5. Good luck (random distribution of people and things). All successful individuals have a crucial factor: timing. Many people overlook this factor, always summarizing experiences based on themselves, thinking how capable and great they are. When it comes to luck, many people think it is "idealistic" or superstitious. In reality, "timing" means that we have intentionally or unintentionally aligned with the trends of the universe and the social operation, which has nothing to do with superstition.

Since ancient times, humanity has been exploring a question: how to live our lives. Many people do not think about this question; many are obsessed with certain things (power, money, fame, profit, etc.) and cannot see clearly. Steve Jobs' answer was: find what you love and spend all your time on it. Do not live for others; live for yourself. In his final moments, he adhered to this principle. He devoted his last time to his family and only met a few outsiders.

It does not matter; direct, material loves are also acceptable. As long as we can find them and they are what we truly need and love, it is worthwhile to strive for them throughout our lives.

Life is the same for everyone, neither more nor less, neither biased nor impartial. No matter how capable, successful, intelligent, or even how great or powerful a person is, they cannot escape death. This is the final common belonging of every person—great or ordinary, rich or poor, noble or lowly.

Thinking about death, although we face it with helplessness and emptiness, while alive, we still need to "stay hungry, stay foolish."

Business is an organic value chain in society, where all participants in each link have their necessity for existence. Profit sharing and co-existence are also essential; there is no question of who is good or bad; the key is to participate in this central mentality.

Some founders are overly concerned, always feeling that others are taking advantage. When it comes to pricing during financing, there is no fixed standard. Although there are technical methods like cash flow discounting, PE, or EBITDA multiples, many times it relies on both parties' feelings. The same goes for listing pricing; co-win, long-term, and stable development are fundamental.

Regarding bubbles, many people criticize and complain. In fact, smart people can do many things with bubbles, such as financing, recruiting talent, and attracting attention for free.

During a bubble, financing is certainly priced high; even the shrewdest investors find it hard to resist the impulse and madness brought by bubbles. Whether one can secure funds during a bubble may determine the survival or death of a business; bubbles also inevitably lead to overvaluation, and entrepreneurs will not suffer losses.

Any business organization must make money; thus, seeking profits is essential. The key is the adaptability of the entrepreneurial team, constantly exploring and innovating. If they cling to an unrealistic ideal model, these startups may perish in their cradle. When the ideal model is tested in practice, we must be able to keenly find a realistic and feasible path, and then persistently expand our achievements to accomplish great things.

Additionally, the trust of investors is crucial; they must be able to give you time and space to experiment and maneuver. Therefore, when seeking investment, choose funds and teams that understand the Chinese market.

Just like growth and development, within three years, the foundational aspects of the business model, team, framework, character, traits, and culture of this enterprise will have matured, and the subsequent focus will be on further growth. For enterprises, three years is a critical threshold; if they can reach a certain level within three years, the hope for the future is significantly greater. This is because the growth speed of entrepreneurial enterprises in China is relatively fast, with many imitators and followers. If one fails to stand out within about three years, they are likely to blend into a pile of homogenized competitors and become mediocre.

The third and fourth stages are the perfect combination of the spirit of founders and the management of professional managers.

The fifth stage involves resource allocation and reconstruction within the industry.

Models#

The successful models of the past can be summarized into two types:
One is low-cost labor "Made in China"; the other is the transformation of the operational speed of traditional service industries, upgrading them to advanced service industries, where e-commerce, advanced management, and market-oriented mechanisms are common means of upgrading.

The first reason is that many industries, especially the service industry, have long been trapped within systems and policies, failing to develop fully and keeping pace with market demands. Now it is like opening up a new world, with enormous potential for industrial integration and development.

The second reason is the long-term rapid development of the economy, which has driven strong demand, and demand drives the market and enterprises. The manufacturing industry is oversupplied, while the service industry is far from meeting demand.

The third reason is government encouragement and promotion. The central government implements mercantilist policies, and local governments spare no effort in attracting investment, providing support in terms of taxes, land, and funds.

The fourth reason is the capital market's assistance. The wealth stories of VC, PE, and IPOs serve as vivid examples of "letting some people get rich first," igniting everyone's ambition.

The fifth reason is the large population base, which creates the world's largest consumer market. The largest consumer market will nurture the largest-scale enterprises globally.

The support of VC, PE, and the capital market is a booster for our entrepreneurial enterprises to develop rapidly and extraordinarily. Although they come with the intention of making money (sometimes aiming for big profits), they objectively help us entrepreneurs. When we have no money, they provide us with funds; when we worry about risks, they share the risks with us; when the enterprise has not yet turned a profit, they provide funds for us to achieve leapfrog development; once the enterprise meets certain conditions, they amplify our assets in the market, allowing many to realize their wealth dreams. It can be said that without these investors...

Founders have experienced too much: loyalty, betrayal, trust crises, fraud, and conspiracies, even love and hate, but these experiences have cultivated tolerance and forgiveness. Clearing one's lifelong mission, the heart is filled with desires: the desire for money, the desire for fame, the desire for personal achievement. The saying "eliminate human desires, preserve heavenly principles" is quite reasonable. When your inner desires calm down, you can better understand the essence and meaning of life.

1. Business Model
   The business model is the most important. A successful business model needs to appear at the right time; it cannot be too early or too late. Every business opportunity has a window period. If it is too early, it becomes a martyr; if it is too late, seizing the high ground becomes difficult, or even missing the opportunity altogether.

A general business model caters to market demand; it does not necessarily create new consumer behaviors. It can utilize new technologies to change the rules of the game based on existing models, but it cannot create new consumer behaviors. For example, you can sell clothing online, but you cannot make people stop wearing clothes and switch to shawls.

A good business model withstands the test of time and practice. Just like a new piano, it is generally impossible to buy one that is perfect; it needs tuning to sound pleasant. A business model going back and forth between ideals and reality is normal; it requires continuous optimization and iterative upgrades.

A good business model must be unique and innovative. Relying on low costs and high efficiency in entrepreneurship can only be effective in specific environments—such as in China, competing with a rigid non-market system through a good market-oriented mechanism. Success varies, but copying and imitating will at most yield a second-rate company.

2. Customer Relationships
   In a certain niche market, the number of customers is actually fixed. Attracting as many followers and fans as possible is the top priority for us entrepreneurs. Perhaps your product is good (like Apple), perhaps your story is good (like the renaming of Zhongdian to Shangri-La), perhaps your values resonate (like Muji), or perhaps your cost-performance ratio is high (like budget hotels). The so-called "focus, excellence, and shout" is because in this era of extremely rich products and fully symmetrical information, only focus can produce good products, only excellence can impress customers, and only shouting can touch customers' hearts and souls.

In the hotel industry, customers include both guests and franchisees, and the needs of both groups must be considered. Franchises sell credibility; if the product is poor, it is a breach of trust, which is a terrible thing. Rebuilding trust is almost impossible, and there are too many competitors lurking like wolves nearby; any slight vulnerability will lead to attacks and bites.

Understanding customer needs should not rely on the opinions of market research companies or consulting firms but should involve role simulation, imagining oneself as the target customer, and empathizing with their needs. Then, through the design of various application scenarios, identify customer pain points. In addition to surface-level needs, it is also essential to explore deeper needs, including resonances within value systems.

Once the product is launched, it is crucial to experience customer feedback on-site. Any reviews and market research cannot compare to on-site experiences. On-site, one must not only observe and communicate but also experience the product oneself. Besides experiencing one's own product, it is also important to experience competitors' and peers' products. For example, we once had a television with a very conspicuous blue power indicator; when you patrolled the rooms, you could not notice the issue with that light. Only when you stay in that room and are disturbed by the glaring power indicator at night can you discover the problem.

3. Making Good Products
   Manufacturing produces tangible products, such as a piece of clothing or a pair of scissors. The internet deals with software products, such as WeChat or Keynote. The service industry provides certain services, sometimes combining software and hardware. For example, the hotel industry includes "hard products" like guest rooms and "soft products" like personnel services.

The product of the hotel industry is a whole; even the front desk's attire, the attitude of service personnel, the quality of breakfast, and the speed of Wi-Fi all constitute the hotel's product.

Spring water warms the ducks first. Whether a product is good or not, customer experience is the most accurate measure. Every detail and every type of guest is very important and cannot be neglected. For example, the height and width of toilets differ between Eastern and Western people; if the toilet is too high, one has to tiptoe to use it. Additionally, tourists need large wardrobes to conveniently spread out various clothes, while business travelers prefer open wardrobes without doors, as this makes it easier to remember.

Secondly, understanding human nature, especially its weaknesses, is crucial. For instance, people are inherently lazy and seek convenience. Adding an escalator to the second floor can effectively direct foot traffic, while stairs and elevators yield vastly different results. For example, people love bargains and enjoy getting small discounts.

We can design some free offerings, such as complimentary bottled water and Wi-Fi, which are very popular. Additionally, loyalty programs are appealing to people like me; I still prefer points for free flights when flying.

Guests desire privacy, convenience, self-service, and environmental friendliness. Excessive service and attention will only annoy and frustrate them. A group of people surrounding one or two individuals will also be seen as environmentally unfriendly. That kind of aristocratic formality is no longer in vogue. The All-Season brand was launched precisely to cater to this characteristic of modern people.

With the promotion of the internet and mobile internet, customer reputation has become unprecedentedly important. A good product may no longer need advertising or promotion. Social media platforms like WeChat, Weibo, and Facebook can easily and rapidly spread both good and bad reputations. The hotel industry is a very typical experiential industry; temperature, noise, comfort of bedding and sheets, and the softness or hardness of beds are all experiences that guests genuinely encounter. If done well, it may not necessarily receive praise or spread, but if something is not done well, it can easily lead to dissatisfaction.

The importance of products cannot be overstated; products are essentially the landing of business models on customers. Therefore, every entrepreneur must be a product expert, or in today's trendy terms—a product manager.

Starting from human nature, using a geek spirit to make good products, gaining genuine recognition and approval from customers during their experience, thus forming rapidly spreading word-of-mouth, further establishing a brand—only with a brand can one promote through chains. This logic and path will never go out of style in any era. All deception, opportunism, and pseudo-innovation will reveal their flaws over time.

To build a lasting brand, making good products is fundamental and key.

5. Brand Story
   Every brand is unique, and every brand has its own story. We entrepreneurs must learn to tell stories. Use vivid language to express your passion, your dreams, your business, your designs, and your products...

When telling stories, it is also important to pay attention to moderation and timing. Often, what we should do is not say what we do not do, but rather what we have done or are at least doing. We cannot lie, but we can choose not to say or not to say everything. Exposing strategic goals too early can also provide ammunition for peers and competitors.

For key talents, while we cannot offer high salaries, we must not deceive them; instead, we should share the revolutionary results of success with them. Stock options are a good tool. For asset-heavy situations, fewer options can be offered, and 5% is reasonable; for labor-intensive situations, 10%-20% is also reasonable.

In entrepreneurship, passion is crucial, and igniting passion is an important task for leaders. Maintaining and nurturing passion is equally important. Book clubs, study groups, and even beer gatherings or outdoor training are effective channels for maintaining entrepreneurial passion. The office is brightly lit at night, and working overtime on weekends and holidays is the norm. There is no concept of overtime in startups; the term does not exist in the dictionary of a startup.

Founders and Managerial Leaders#

Relying solely on the spirit of founders makes it difficult and risky to create a large enterprise without systematic management experience and knowledge. Professional managers have limited advantages during the startup phase and may even hinder progress. Whether intentionally or unintentionally, my three companies have combined these two aspects well.

Founders typically have backgrounds in marketing, technology, or specific industries; they are passionate about the market and products but are not interested in daily operations. They often believe themselves to be smarter than others. They are highly adventurous, act decisively, have distinct personalities, and their shortcomings and strengths are equally prominent, preferring to do things their way.

They often take an open-ended commitment to the enterprise, meaning that their business consumes a significant portion of their time and often becomes their life. Many view running a business as a challenging game and a source of deep personal joy.

Professional managers (most commonly referred to as "career managers") are usually well-educated, many graduating from prestigious American universities, having worked in multinational companies for many years, and received systematic professional training and exposure. They are rational, objective, and focus on numbers and logic. They often differ from founders in passion, risk-taking, decisiveness, innovation, and macro vision.

In some private enterprises in China, founders (most of whom are also the owners of the company) often prioritize power and nepotism, distrust external professional managers, and are reluctant to delegate authority. In the clashes between managers and family members or veterans, they always favor their own side. As a result, external managers cannot play their intended roles. If one side's policies are forcibly implemented, there will be many unpleasant situations, and ultimately, the managers will leave disappointed.

There are also some professional managers, especially those hired by venture capital-controlled startups, who will erase all contributions made by entrepreneurs, magnify the company's problems, and attribute all issues to the founders and predecessors. Some even attempt to hijack the company to gild their own careers and seek personal short-term benefits.

Both founders and managers are valuable and scarce resources that should respect each other and coexist equally. The "wealthy" should not look down on the "educated," nor should "overseas returnees" look down on "local talents." Neither can replace the other. If this principle is not followed, the cost in the market economy will be severe.

In a rapidly growing business environment, mutual learning and joint growth are the keys to a win-win situation. In the current business ecosystem, an ideal entrepreneur should bridge Eastern and Western practices. They should not only be familiar with local business logic and environment but also deeply understand Eastern historical culture and traditions; they should not only understand the language and rules of doing business in the West but also learn to apply modern enterprise's efficient management methods and tools.

All enterprises fundamentally rely on their equity structure. Companies where VC and PE hold 70% and those where founders hold 70% differ fundamentally on many issues. What kind of shareholders there are will determine the composition of the board, and the management team will execute the board's decisions. The company's strategy, operational goals, values, and culture will also resonate with the shareholders' will.

An ideal excellent enterprise should have a strong major shareholder combined with professional managers' expertise to be powerful, lasting, and stable. A soulless and ideal-less enterprise will only become a cold money-making machine and a tool for wealth creation.

What are the characteristics of founders? They have a strong sense of crisis and are extremely sensitive—crisis means danger and opportunity. Artists are sensitive to emotions, while we are sensitive to the business environment. This sensitivity, I believe, is cultivated through long-term contemplation and continuous struggle in the face of life and death, difficulties, and trials.

Founders can only find the direction for the future by deeply immersing themselves in their products.

Focus on Four Aspects: Philosophy, Economy, Technology, Community#

These four aspects correspond to the essence of the four typical organizational principles of humanity: philosophy corresponds to religion, economy corresponds to business, technology corresponds to the military, and community corresponds to family.

1. Philosophy
   Philosophy is the most important; it is the soul of an organization. A religious organization primarily relies on a shared belief to maintain itself, often touching on fundamental issues such as life and death, meaning, and the soul. This metaphysical recognition transcends all possible physical forms, making it more enduring and reliable. Several major human religious organizations have lasted for thousands of years.

Although business chains are commercial organizations, philosophy is equally paramount. A company's values determine all its possibilities. For example, what is the purpose of the enterprise? Is it to make money and go public, or to create greatness? How does the enterprise view customers, employees, shareholders, and society? Does it treat employees well or exploit them? Does it deceive customers or bring them value? Is it selfishly surviving or nobly creating beauty?

With many different geographical locations, dispersed employees from various backgrounds, families, education, religion, and personality differences, promoting a common value system seems challenging.

In fact, everyone yearns for some form of greatness and nobility, hoping to find a mission to dedicate their lives to. An ordinary life can only find meaning by integrating into the great.

2. Economy
   As a commercial entity, the design of profit distribution is undoubtedly important. The larger aspect involves balancing interests among customers, employees, and shareholders. If you want to earn more money from customers, raising prices will lose competitiveness; if prices are too low, the enterprise will not make a profit; employee benefits and treatment must also be appropriate and moderate.

3. Technology
   Modern large chains cannot operate normally without appropriate technological tools and means.

What I refer to as "technology" actually encompasses two different management tools. One is the hierarchical structure commonly used in modern enterprises, consisting of headquarters, branches, regions, and stores, with processes, controls, audits, approvals, assessments, and other norms and systems.

Modern enterprises, including regionally dispersed large chains, need to be organized in some way, which is neither a family-style caste system nor a nomadic random combination. The current prevalent organizational form is a top-down, centralized management approach from headquarters to stores. Its advantage is that through the chain network, it can obtain the abstract thinking and wisdom of the "critical few" at headquarters, allowing many public functions to be efficiently, high-quality, and low-cost "shared" and "reused." The downside is that it can easily become rigid and dogmatic.

It is no exaggeration to say that an excellent enterprise must have an excellent IT team. IT projects must be led by top management and primarily developed internally. The approach of handing over tasks to IT leaders (regardless of their title) or outsourcing is both irresponsible and unlikely to yield good results.

5. Community
   China is a country with a strong sense of interpersonal relationships. In the transition from ancestral halls to offices, many people still retain the warmth of their hometowns deep within.

Large chain enterprises, like other businesses, are also significantly influenced by small communities such as fellow townsmen, classmates, mentors, colleagues, and friends. We often find that if the employees of a store are united, that store often performs well in terms of both sales and service.

Haidilao is a company that utilizes small communities exceptionally well. Initially, they hired people from Sichuan, their hometown, fostering unity and cohesion, and they even sent bonuses to their mothers, effectively garnering support from family members.

As long as it is a human organization, such grassroots communities are inevitable. While they may weaken the consistency of the chain in some sense, suppressing and attacking them is not a solution. Properly utilizing and guiding them can yield significant results.

For instance, recruiting room attendants through hometown connections allows them to help each other; using mentor-mentee relationships to train employees fosters a sense of achievement for the mentor and gratitude from the mentee, leading to smoother collaboration within the chain; those who graduated from the same training academy are more likely to help each other when facing problems and difficulties. As long as they can do their jobs well, forming cliques is not a bad thing.

Guided by a common value system, fully utilizing existing technological means and tools, mobilizing communities towards goals aligned with the enterprise, and igniting the enthusiasm and vitality of frontline workers to create value for the business, while sharing that value with all creators, is not only the management philosophy of large chain enterprises but also that of all enterprises.

The Yin-Yang Principle in Business#

What principles do we follow in business?

1. United Front. When encountering conflicts, do not exacerbate them; instead, strive to find win-win solutions, as harmony can lead to wealth. All collaborations should move towards a multi-win direction, uniting all possible forces to do well for the enterprise and maximize benefits for customers.

2. Go with the Flow. While it is commendable to have the courage to swim against the current, it is often unproductive. Actions should align with the flow of water and the prevailing trends; do not act stubbornly or impulsively. In business, one should follow the trends of the market, government, and public sentiment.

3. Go with the Tide. When surfing in the ocean, always move with the flow of water and the waves. What waves and currents are we encountering now? The "post-80s" and "post-90s" generations are the mainstream customers, and mobile internet is the wave of technology; reducing manpower is the trend in cost.

4. Disruptive Innovation. The entire industry must change; one must continuously destroy old structures from within and create new ones, including new consumption methods, new growth methods, new markets, new communication methods, and new presentation methods.

The Law of the Jungle. Most people's understanding of the law of the jungle remains at the surface level, which is "survival of the fittest." In fact, the law of the jungle has three layers of meaning.

The second layer means "intra-species competition, inter-species co-win." It is difficult for other small trees to survive next to large trees in the forest, but moss and grass thrive because the resources needed by different species are not the same.

Human Organizations#

There are four representative forces that can be applied and referenced in enterprise management.
The first is the belief of religion. The main force that sustains religion is faith. This force directly points to the heart, and people voluntarily do many things without coercion. However, the power of this faith is so great that no commercial organization can compare.

The second is the command of the military. The duty of soldiers is to execute orders; they must follow orders without doubt or disobedience. On the battlefield, failure to obey orders can lead to execution. This force is coercive; although the cost of breach is high, the execution power is strong.

The third is the interests of enterprises. The essence of business is interests, which is the foundation of all commerce. It can even be said that the primary force driving the operation of modern society is commerce. The distribution of wealth, rewards for innovation, and penalties for laziness are all conducted through the distribution of commercial interests.

The fourth is the love of family. This is the cohesion of the smallest human organization and the most natural, biological force.

Although an enterprise is a commercial organization, all four forces should be applied within the enterprise. Purely discussing commercial interests is not enough to create a balanced and fulfilling environment. The four forces—faith, discipline, interests, and love—can be utilized in different times and places within the enterprise to create a business organization that is as faithful as a religion, as disciplined as an army, and as loving as a family.

Showing Weakness is Also a Skill#

CEOs, like everyone else, must learn to show weakness in organizing people. They often say, "I can't do it; you tell me what I should do." In this regard, I feel I have suffered greatly because I was unwilling to show weakness. Many people are like this; they do not want others to see their shortcomings, do not want to expose their weaknesses or things they do not understand, and are often afraid of being told, "How could you not know this?" We only want to showcase our strengths, boasting about what we know and excel at, but we never dare to show weakness.

Human nature tends to be instructive; if you actively seek advice from others, they are generally willing to share. Whether what they say is right or wrong is not the point; there is a potential benefit: by showing weakness, you not only allow more new knowledge to come in, but when you open your heart, more people will be willing to help you.

For a startup company composed of different people, besides seeking funds, the most important task is to find people. In fact, the methods for finding people vary at each stage of company development and should be differentiated.

During the startup phase, finding partners is the first stage. The goal is to "grow hearts," meaning to find like-minded friends to partner with and build the core culture and values of the company. Once partners are found, the next step is to build the initial team, which is the second stage. The goal here is to "build the skeleton," meaning to find employees who believe in you and the company to ensure effective operations. As the company grows, it needs to recruit "talented individuals," which is the third stage. The goal is to "grow flesh," meaning to iterate the team and ensure steady development.

The first stage is undoubtedly about finding partners. Partners are the core of a startup company; you do not need too many, just a few people. Generally, partners can only be found among those you know, like friends who share the same ideals. The status and capabilities of partners are essentially a projection of your own state at that time. In simple terms, you can only find people similar to yourself.

Good partner relationships do not have a unified code of conduct but do have a model of cultural literacy, moral quality, and self-evaluation systems, along with a certain mode of interaction.

A solid partner relationship lays the spiritual foundation for the entire organizational development of the company, which should not be underestimated. So what is more important, shared interests or complementary abilities? My previous answer was undoubtedly complementary abilities; now I can boldly say that mutual liking is more important than anything else, especially for the initial core team, where mutual liking must be strong enough. If there is not enough liking, significant effort must be invested in nurturing it.

Many people mistakenly believe that finding partners is more about complementary abilities. For example, if I am good at technology, I should find a product-oriented partner and then a sales-oriented partner. However, this is not the case. Although, in a general sense, the relationships among company partners are often complementary, in reality, very few companies can handle partner relationships well with this structure.

More often, they come together due to complementary abilities, but culturally, they may not have blended well. It is precisely because they cannot form a strong sense of identity culturally—that is, they do not genuinely like each other—that they struggle with many key decision-making issues later on, as the three of us have not truly formed a common value proposition.

This may not be an ideal partner relationship; our personalities and cognitions differ. Although we have been friends supporting each other for seven or eight years, we are not in the best partner state. Of course, this is merely a state of being "not ideal," but it is not a so-called "regret."

So, what does it mean to share interests? It does not mean having identical personalities. Think about it: your closest friends are often very different in character, but they are based on consensus and shared hobbies. This foundation is shared interests. Mutual appreciation between partners is crucial for mutual trust, and this is very important.

Trust and support are necessary conditions for partners, and the process of necessary adjustments is essential. Sometimes, partner relationships are similar to marriage or romantic relationships—arguments are inevitable, but you must ensure that you do not decide to part ways because of disagreements. This trust takes a long time to cultivate.

Just like in a romantic relationship, moving from a favorable impression to becoming true partners requires effort; it is not just about two people working on a project and agreeing on terms. Once a family is established, deeper communication is needed. Only by doing so can both parties gain sufficient understanding, knowing both the parts they appreciate and the weaknesses of the other.

This is not about "looking," but about acceptance—because you become lifelong friends through entrepreneurship, you are willing to work with them, even if that endeavor ultimately fails, you will not feel regret. Therefore, this is a process of mutual selection, also aimed at avoiding complaints like: "When we first collaborated, we were so passionate; why does it falter when we encounter issues?"

Building the Framework: Finding Trustworthy Startup Employees#

Once partners are found, everyone begins to build the framework and look for initial employees during the startup phase. Many people hope to find "the best people" when searching for founding employees. When we initially started Yidao, I had the same thought. Later, I realized this was a delusion. The reality we face is that we have neither money nor a brand, and our survival is uncertain; why would the best people choose you? At this stage, it is already good to find someone willing to work with you. If you are looking for partners, you should find people you trust; when looking for founding employees, the opposite standard applies—you should find people who trust you.

In fact, founding employees can be "a bit dull," and it is okay. They should analyze your business and company situation thoroughly, ensuring that the tasks are reliable. For a startup, everything is still in its infancy, so you must convince them that this venture is indeed reliable, which is very challenging from their perspective.

These "analytical" individuals are often senior executives from foreign enterprises, who are smart and good at analysis. When it comes to new opportunities, they have a speculative mindset—they yearn for internet entrepreneurship, and their income is decent, so they approach the startup with a critical perspective. This is a rather passive state and wastes a lot of time. Therefore, during the startup phase, it is better not to seek such individuals; instead, look for those who are simple and willing to believe in you.

As the startup company develops, the business has made some progress, and the team needs to expand. How should recruitment be conducted at this stage? At this point, there is no need to limit oneself to a small circle; we need to take the next step in transformation. Borrowing a term from headhunting, we should do mapping—conduct a map-like search.

Engage professional headhunting agencies to help fully map out excellent talents that may fit your company in each field. This approach will increase the accuracy of matching talents with the company.

What are the standards for excellent talents when choosing a company?
First is compensation. Here, compensation refers to current earnings plus expected earnings, which includes salary and equity. Many startup companies often avoid this issue, discussing how promising the business is and how idealistic it is, but they do not talk about compensation. When it finally comes up, it is often disappointing. In my view, no matter how great your business is, you should not expect talents to take pay cuts to join; at the very least, you should reference the market's average salary and their previous compensation, giving them what they deserve, rather than using "startup companies have little money" as an excuse. If money is tight, why hire so many people? The less money there is, the more you should allocate it to suitable individuals, allowing them to do more.

Consider this: even if this person is indeed lured to you with a pay cut, they will certainly feel a sense of sacrifice, leading to psychological imbalance: "I have taken such a pay cut; why am I still treated poorly? Why was everything so grandiose at first, but now I am being scolded and demoted to a lower position?"

Secondly, attitude matters. I have found that for candidates, whether the company's boss or the person they interact with makes them feel comfortable during conversations plays at least a 50% role in their decision to join the company. The charisma of a person can even make them prioritize the reliability of the company over its reputation.

This is why the choice of founding partners and core employees is so crucial. Their eagerness for talent and their gentle attitude towards people will play a decisive role in attracting excellent talents later on. If you say, "Our company lacks someone like you; having you would make us better," the impact of this statement can be even more significant than that of a particularly charismatic boss or a well-known company.

Finally, it is essential to find the right people to help talents quickly adapt to the company. At this point, the challenge has just begun, meaning you need to invest more energy than ever before.

Bringing an excellent talent into the company can take several quarters. If this person leaves in less than six months without understanding the company and its business, it is a waste of time for both the individual and the company.

Helping talents "survive" in a new company environment essentially establishes a relationship of mutual growth. Many companies overlook this stage, spending excessive energy on tasks. When a talented person enters a new workplace, it can feel like walking on a tightrope; on one hand, they face scrutiny, challenges, and exclusion from old colleagues, while on the other hand, they must prove themselves through their work. This is actually the laziest and most simplistic approach. Testing a newcomer through a project is ideal, but the probability of success may only be 5%. Shouldn't our responsibility be to ensure that more excellent talents have a 50% chance of success rather than just that 5%?

The cost of this is often high. First, you need to invest a significant amount to retain that 5% of people, who will undoubtedly be expensive. Secondly, there are very few who can survive in the company; when the business truly develops, you will find that talent is scarce.

Sometimes, you may find a situation where:
A person you initially thought was incompetent, whom you did not choose, goes to another company and performs exceptionally well.
Why? Perhaps we should reflect: why is the talent funnel in our company so narrow, with such high demands for talent, yet such a low survival rate?

Bringing talent into the company and then placing them in a jungle-like environment to adapt is essentially a waste of resources caused by excessive capital, and the outcome is unlikely to be good. On the contrary, we should invest sufficient energy to help talents succeed within the organization rather than nitpicking: "You are receiving such a high salary, so you should naturally perform excellently." If this is the mindset, the survival rate of newcomers in the company will be very low.

We can think from a different perspective: the organization has gone to great lengths to bring this person in; if they ultimately do not stay, it is fundamentally a failure of the corporate culture (money).

The Contradictions of Team Dynamics#

Many people believe that if talented individuals gather in one company, that company will be different. However, when a large number of executives from different industries and fields rapidly converge in one company, the company will certainly lack the energy to integrate them quickly, which is very dangerous.

LS experienced this situation. Executives from various industries entered LS, creating a dizzying effect. However, LS did not integrate these individuals at all; they simply let them hang around aimlessly. Some were ambitious and left after a few months; others, being older, stayed on to "retire."

Most startup companies do not possess the capacity to digest too many external executives of the same level in a short time. Although the company may have various issues, it is unrealistic to expect a bunch of executives to quickly resolve these problems. How did the "grassroots team" of a startup come about? It started with two or three partners and a dozen or so individuals who believed in you, and their skills may not have been very high.

If luck strikes and a good opportunity arises, the company begins to recruit high-end talent. At this point, contradictions arise: the founding team feels that the so-called high-end talents are merely "silver-plated gun barrels," just for show; meanwhile, the newcomers may look down on the so-called "old-timers," believing they are not competent enough. This kind of workplace issue is quite common.

The iteration of the team is an eternal challenge that every company must face. On one side, the founding veterans accuse you of "burning bridges," "killing the donkey after unloading the cart," and being "cold-hearted," while on the other side, every step forward in the company—from financing to team expansion—requires team iteration. If these "old-timers" are placed in high positions while the newly recruited talents work under them, significant problems will arise. When the "old-timers" cannot handle the newcomers, and the newcomers do not respect the "old-timers," the company is doomed.

Founders#

Another type of boss is determined and boldly moves forward, transferring "old-timers" from key positions and fully employing newcomers. What kind of situation does this create? The neglected "old-timers" will not be willing to help and may even subtly sabotage to prove that the newcomers are incompetent; after six months, the newcomers will leave, and the boss will have no choice but to bring back the old soldiers. This situation is also quite common; LS experienced this.

What does an ideal situation look like? As the team progresses, newcomers continuously join, and "old-timers" actively help newcomers integrate and play their roles while finding suitable positions for themselves within the company to continue utilizing their abilities. If this hurdle cannot be overcome, it will be challenging for a company to grow, and it may even perish due to "people" issues.

How can this problem be resolved? Collective interviews. Many companies, after entering the phase of large-scale recruitment, adopt a step-by-step "one-on-one" interview approach. They allow company employees to collectively participate in the process of interviewing newcomers.

The company can create a pool of employees for the interview panel based on employees' tenure, ratings, and other criteria, allowing employees to join. For each interview, three to five people form a representative interview panel for the company, with anyone available participating. This approach has two benefits:

1. It gives every employee a sense of achievement, making them feel, "I can decide who joins the company."

2. It can reduce the workload of the HR department while giving employees a strong sense of participation.

In the company, it is common to encounter employees complaining about the boss. Employees believe that the people the boss hires are based on connections or appearances, thinking the boss is misguided. In fact, everyone is responsible for their choices. These individuals may not understand HR; they only need to judge based on feelings: whether they are willing for this person to become their colleague. If the willingness is not strong, what is the reason?

It is also necessary to reach a consensus within the company that hiring is not just the boss's or HR's responsibility but a shared responsibility of everyone in the company. When the entire company can reach such a consensus, the work done by HR will merely fulfill procedural functions. The most frightening situation is when everyone presents a pile of demands and then throws them all to HR, blaming HR when the results are poor.

Another common scenario arises when a company is rapidly developing; many people expect a small team leader to bring in many people, and this leader will definitely bring in their original acquaintances, which can easily form cliques.

At this point, the company, as a group of people, may have some divisions and mutual distrust. On one hand, we need to hold joint meetings to discuss what kind of people the company needs and what kind of individuals are required. The purpose of the discussion is to help everyone understand that the company needs new talent, not because the boss wants to replace people, and it should also make employees feel that finding new talent is not solely the boss's responsibility. In the past, I found it most distressing to make decisions and implement them, only to be criticized by everyone. This is actually incorrect; the responsibility should be shared.

On the other hand, through communication, we can alleviate the tension of the "old-timers," who will not feel that the boss is trying to replace them with newcomers. If the "old-timers" feel they are being replaced, they will become wary and create obstacles, which will consume the company's energy in internal conflicts, leading to severe losses.

The development of a company relies not only on strategy and funding but also on people. Why, then, do you invest little energy in "people," use ineffective methods, yet are unwilling to break through and settle for mediocrity?

For a company, regardless of how rapidly the times change, it must plan for long-term development, especially in terms of "people," and then gradually move forward. Only by doing so can everything you do be for the long-term development of the company rather than short-term benefits.

Facing a "three-no" state, first, there is no team; even if there is one, the existing team is not sound or strong enough; second, funding is inadequate, and there is not enough capital; finally, there is no established business model.

These issues are challenges that every company will inevitably face. Therefore, there is no need to complain; the first phase is inherently a process of going from nothing to something. This process is similar to a child being born who cannot speak, walk, or eat. Many entrepreneurs always complain: "I have no money, no people, so I can do nothing."

This is the nature of a company, so one should not approach entrepreneurship with such a mindset; the important thing is to think about how to start.

When discussing strategy, I also mentioned a viewpoint: the mission should be grand, and the strategy should be small; the core is essentially the same. Of course, everyone may worry that if things are done too small, no one will be willing to support them.

Often, people feel they must tell a grand story to attract attention, so that capital is willing to invest, and talents are willing to join. As a result, doing something becomes a matter of chasing trends and making grand statements, hoping to attract resources and people through a grand story, and then getting things done. Many people think this way today.

In reality, during the 0 to 0.1 phase, the first consideration should be whether there is a clear user value, followed by whether the growth speed is fast enough. Even if many investors will ask what your business model is, as an investor, I am increasingly uninterested in this question because I know that caring about it is futile. For a company in the 0 to 0.1 phase, there is no so-called business model; the reports and models provided by entrepreneurs are essentially for investors' viewing, and they are not meaningful.

Therefore, at this stage, user value and growth speed are the most important concerns for entrepreneurs.

No Absolute Persistence#

For a company, growth speed is crucial; conversely, if a startup grows slowly, entrepreneurs will begin to doubt themselves, feeling that something must be wrong. This is also a common issue in the entrepreneurial process.

It is normal for entrepreneurs to have doubts; we only need to judge whether this matter should continue to be pursued, which ultimately returns to growth speed. If a startup is struggling to grow, it indicates that there is a problem. It is like digging; if you dig for a long time without any progress, either the ground is too hard, or you are in the wrong place, or the tool is ineffective. If you persist in digging under these circumstances, it is not very meaningful; it will consume your energy and resources, and in the end, you will still give up.

When encountering such situations, you must stop and recognize that stopping is also normal. Sometimes entrepreneurs have a mindset that feels giving up is wrong; they cannot explain it to employees or investors. At this moment, you may not have a clear idea, but you still encourage the team, saying, "No problem, follow me, and we will definitely find a way out." This kind of motivational approach is not very useful for genuinely solving problems.

Stopping does not mean giving up. It is normal to encounter situations where progress is stalled; there is no need to insist that "this path must be correct." Just like an army that gets lost in a place, if they do not know the direction, they should frankly tell everyone and send out several small teams to search, agreeing to meet again in two hours; if they find it, they should return quickly to report; if not, they should also come back. This is a trial-and-error process. In simple terms, it is common for startups to take the wrong direction; during this process, there is no absolute persistence, nor is there a need to cling to luck.

Of course, if you are truly certain and see the light on this path, then continue down it; even if your judgment ultimately proves incorrect, you will have no regrets. If you are not so sure, merely feeling that you should persist and forcing yourself to believe it is not powerful, because sincerity is more important than anything else, and you cannot use the word "persistence" to deceive the team.

When you are uncertain about the direction, it is best to first validate your assumptions; do not forget that we have no money. If you cling to luck and only realize something is wrong after some time, then completely deny the current plan A and immediately jump to plan B, how can you prove that plan B is definitely correct? At this moment, people's mindsets can easily become anxious, leading to a gambler's mentality, thinking that since they have already lost in the previous attempts, they should put all their money on plan B.

Many companies have made this mistake. Yidao's A-round financing was initially quite substantial. We raised $11 million and confidently sought breakthroughs from the B side, but as we executed, we quickly lost six or seven million dollars, leading to a tight financial situation, adjustments, and layoffs. This process was very damaging to the team.

Always remember this: money is limited, so spend it wisely.

Being evergreen does not advocate conservatism but represents a philosophy of survival and competition in the macroeconomic and market economy, reflecting a more proactive attitude.

Being evergreen is not about avoiding risks for the sake of "evergreen" but about considering the present from the future's perspective. In the future, you will undoubtedly face a brand-new era; what are its trends, and where is it heading? If you examine the present from a future perspective, you will think about what to do today to prepare for that future, managing the enterprise with a more proactive and exploratory attitude, which is the way to be evergreen.

Common Practices During a Company's Low Period#

In such situations, the following thoughts and choices are usually made.

First, "hibernation theory," which involves layoffs and reducing investments. To ensure financial safety and quickly achieve a balance between income and expenditure, entrepreneurs prefer to minimize revenue scale while maintaining positive cash flow or significantly reducing the rate of cash burn through adjustments. Some companies even resort to overdrawing, sacrificing user experience for advertising revenue. In such cases, I often ask entrepreneurs, "Achieving a balance between income and expenditure is good; at least you are temporarily safe, but what comes next?" At this point, they often do not have a clear idea of how to break through next, simply saying, "Let's survive first."

The need for a sense of "safety" in achieving "balance" may not necessarily be a good choice. If we must talk about safety, we see many traditional industries, such as small restaurants and shops, making profits from day one, but from an innovative business perspective, such companies are not very meaningful.

Second, because of "greatness," things become "very slow."

When companies believe their goals are great, they naturally assume that moving slowly in the early stages is inevitable. Great companies need to do many things in the early stages, and it may indeed be slow during the exploratory phase, but we must be clear that having sufficient acceleration and rapid growth is a necessary condition for the survival of such startups. If we feel that we are slow, we can honestly ask ourselves: "Is it because the company has not yet found the internal rules, logic, and driving forces for growth?" In other words, we can be slow, but we must know how to grow.

Third, after encountering bottlenecks, companies may attempt to survive by relying on differentiated niche products.

After hitting a bottleneck, even if there is profitability, the market for niche products is too small, and the company's growth potential will be very limited. At this point, it is essential to decisively pivot. Here, it is necessary to discuss why differentiated niche products struggle to survive in the internet world.

First, the value of the internet, distinct from traditional models, is based on boundary-less dissemination, allowing direct contact and service to users from nearly all social strata, especially since the advent of the fully online mobile internet. Therefore, using the internet for services, the more users, the better; the longer or more frequent the engagement, the better. We can create new, differentiated value for users, but it is best not to filter out differentiated user groups. In other words, the strategic positioning of internet business should target all users.

If one chooses not to cover all users, the first problem encountered is cost, which directly manifests in the internet as