Before starting a business, you must first understand these two types of entrepreneurial logic.
Editor’s note: This article is from WeChat public account “Noteman” (ID: Notesman), the author appreciates Xiaoxia.
Content Source: On September 22, 2019, at the 69th Small Table Entrepreneurship Classroom Conference hosted by Xiaotian Table, Xintian Venture Partners Zhang Junyi gave a wonderful sharing entitled “The Money Making Formula in the Eyes of Investors”. As a partner, Note Man is reviewed and approved by the organizer and the speaker.
I will share with you about the entrepreneurship itself and some of our own experiences.
I have been thinking: Many people are looking for why he is going to do something, essentially he is looking for his presence in this society. Ordinary people’s sense of existence is something other than you, such as buying things, buying a car, a house, etc., to reflect their sense of existence.
But I found this group of entrepreneurs, his sense of existence is achieved by what he created… I think there is a very obvious difference.
Our company’s name comes from the Antarctic (Earth) albatross, which can be broken into three words: “There is heaven and earth, the ultimate, and the belief”, which is the basic criterion for our company that we want to invest.
One, there is “world”
How do we understand the world.
The book on the right, The Model thinker, is a dozen models of thinking about complex systems made by a scholar named Scott Page. At the same time, there are millions of people (line Going up and down the line) went through his model thinking class. The thinking of model thinking is not yet popular in China, or there are very few people who know it.
I will introduce it to you first. What is it about? It is actually a modeling ability of human cognitive normalization.
The architecture of physics, the bottom layer of which is actually the basis of mathematics. On this basis, from Newton and Einstein, to the current quantum mechanics, it is actually doing various modeling interpretations in macro and micro.
Proposing a hypothetical model and then collecting data to verify and falsify the model’s ability is a scientific thinking.
ThisThinking has been widely used in the natural sciences, but in the social sciences, its application is not so common because of the participation of human elements.
In fact, many things are the same, that is, we try to recognize the world, the industry and the fate of this enterprise.
Why would we go to such a situation, we must have such a framework of thinking ability, this ability can not be built overnight, but through your subjective feelings, constantly to verify.
“The Matrix”, which was a very brainstorming movie more than a decade ago. In fact, one of its assumptions is that we actually live in a huge computer simulation program, but this computer simulation program is not What we humans built is built from God’s perspective.
But what are we humans doing now? We are using our own computing power to integrate the world’s operations, we want to be our own Creator.
A variety of quantitative processes and modeling processes are also processes that are re-recognized with the world.
1. Two model distributions and two types of entrepreneurial logic
The first is a standard model of normal distribution.
For example, if you open a restaurant, after the stability, the daily business situation is in fact consistent with a normal distribution (also known as “normal distribution”, also known as “Gauss distribution”, is a very important probability distribution. )
For example, in a stable restaurant, it has an average of 100 tables per day. If the weather is bad, there may be 85 tables; if the weather is good and just catch up with the holidays, there may be 120, 130 tables.
So it probably has a business model with a mean of 100 and a finite variance (variance is a measure of the degree of dispersion when a probability variable or a set of data is measured by probability and statistical variance), that is, its imagination is Limited, if you open a restaurant, basically after your input and output are stable, you can measure it.
This is called limited success or failure. The core reason is that every decision of the diners and participants participating in your platform is independent of each other. I can’t influence the behavior of other diners when I come to eat.
Such an independent additive model is basically universal in this small business logic.
Relatively, after understanding the nature of this business, you can make every link more refined, so that your input and output are higher.
But you have to understand that it is limited in itself, your success and growth are basicThe above is generated by a finite number of variables.
The second model is a power-law distribution, and a small number of head players account for the vast majority of the market.
Why did this result? Why are these players not in a relatively balanced distribution? The core reason is that the variables here, the participants’ variables are related, that is, there are influence factors between each other.
For example, the Internet car, Drip has been done for 6 or 7 years, has become the head of the domestic taxi. Its number of employees may be only 15,000, but it directly affects the employment of more than 18 million people. These people are all working together in their organizational system to work together for the organizational system.
The take-away platform is similar. There are more than 600,000 express couriers on the Meituan platform. The morning peaks and evening peaks of daily meals, and the order of 20 to 30 million, it has become the largest instant in China. Distribution network platform, occupying the bulk of the takeaway market.
This is especially true for online platforms such as Alibaba, where the resources mobilized by these platforms have involved more and more relevant parties than they have. It brings the success of the power law, and only the platform of the head gathers to the most supply and demand resources, which forms the platform.
The ancients often said that “every time comes to heaven and earth,” the sentence itself is a vague description of the power law.
In addition, there is another sentence, called “The hero is not free”, how to explain?
There are a lot of former sharing economic companies. Because it built this platform, it started very fast, but the ecological construction is insufficient. When it grows to a certain stage, its commercial closed loop fails to achieve, or when operational efficiency occurs, the variables around it become a reverse effect.
When the external environment changes, when the variables around you start to react, even the most powerful people will be trapped, so we call “the hero is not free.”
If we are to pursue the success of a power law, we must bear the consequences of failure caused by unsuccessful. If we want to understand entrepreneurship, we must first understand what the business itself is.
2. Logarithmic growth and exponential growth
This is a graphical explanation of the growth of early firms: one is a growth curve similar to logarithm, and the other is an exponential growth curve.
Logarithmic growth can achieve rapid growth in a short period of time, but to a certain extent, it will go to the bottleneck period, and then it will break through the bottleneck to achieve secondary growth. Basically, most enterprises do not have such aability.
1 logarithmic growth
Common areas of logarithmic growth: games, social, shared economy, and more.
First, it is To C;
Second, it is essentially looking for itch or points of interest that users have not yet met, and once they are positioned accurately, it can quickly attract users. At the same time, when capital sees momentum, it tends to raise, and when capital comes in, it will bring the curve quickly.
The commonality of many game makers is that its first game is extremely successful. When the second and third games are played, the experience of the first game is copied. As a result, it is considered to be a formula. The second time is not working.
Here, we understand that it is a trend of returning to the average, that is, the success at that time, it is not necessarily your own ability, it is created by your own combined with the external environment.
When you change the time, although the experience is more abundant, your success will change due to changes in the environment and changes in consumer preferences.
A few years ago, we saw that the shared bicycle suddenly came out, occupied all the streets, and now it has begun to regulate and adjust the charges. It has been compiled by the giants and slowly moved toward an orderly operation. In fact, it Experienced a fast growing logarithmic curve.
2 exponential growth
Exponential growth companies, such as corporate services, and some businesses that prefer To B.
America’s corporate service companies have evolved over the course of more than a decade.
Of course, the difference between China and the United States is also very significant. The US business service market is very good. The reason is that they have clear boundaries between each other, they will not grab the land, and they will open each other API and you will have me. I have you. thinking.
But China is often a horizontal and vertical development after entering the market. To seize the market, the entire competitive landscape and the ability and willingness to pay for enterprises are also wide.
In the early stage of financing, the ability of entrepreneurs to grasp the flow of funds is very important. If you have not passed through this process, it will be difficult to wait until the efficiency is formed after the rapid growth. This is a challenge.
3. Internal and external perspectives
In the process of recognizing the world, society, and industry, many entrepreneurs are prone to two types of errors. We summarize the traps from the internal perspective and the external perspective.
1 Customization of internal perspective
First, obsessed with products and technologies, and lack of awareness of customer needs.
Under the internal perspective, many To B companies’ entrepreneurs are obsessed with technology and products, but they don’t know enough about the needs of customers themselves.
For example, the mistakes that entrepreneurs have made in the past few years are particularly easy: they feel that they are very powerful, and others should pay me.
But many Chinese customers don’t have such strong secondary development capabilities. There is a generation gap in the communication process. You don’t have the ability to give it a solution. I don’t have the ability to pick it up, so it’s difficult to realize business realization.
Second, entrepreneurs often pay attention to themselves, but they are not concerned about the industry and their peers.
If there is a big opportunity in an industry, there should be no shortage of entrepreneurs involved. Every family has its own killer. Some entrepreneurs only pay attention to themselves. His lack of cognition of the industry itself and his peers’ perception of subjective prejudice will lead to deviations when the company formulates major policies.
Third, the perception of financing itself.
Many entrepreneurs follow the mechanical valuation logic, but we must understand the current changes in the capital market, we should face it with a kind of mindset.
The fundraising market has changed dramatically this year:
First, the overall funding supply has dropped significantly;
Secondly, fundraising gathered at the head office, and the capital distribution became more and more uneven, gathering together with the head project.
2 Trap from an external perspective
There is an entrepreneur who is a process of hoping to get ahead, but he may not be truly out of his own love and belief.
In the process of starting a business, what is hot, he will rely on the company in that direction, completely regardless of its own characteristics. And the understanding and cognition of the industry is second. He tends to ask others how to do it. What investment institutions like what they do, this entrepreneur is too passive, and lacks basic judgment and industry. Basic confidence in the self.
In fact, entrepreneurs are very difficult, because entrepreneurs who are often self-confident are very confident, but have little attention to the outside; and often pay attention to external entrepreneurs, the internal self-recognition is very limited.
So, a truly successful entrepreneur, the organic combination of the two is particularly important, and this also specifically tests the assessment of the situation and the assessment of their own abilities.
If an entrepreneur does not have a clear understanding of himself, then entrepreneurship is very difficult.
Second, there is “extreme”
The pursuit of the ultimate, I will first talk about a very vivid example.
Assuming that you have a career ladder in your company, the path from the staff to the CEO, for example, there are ten levels, you have to go through the ten-level promotion before you can go to the CEO level.
Assuming there are two employees, the first employee A works very hard and he can be promoted with 50% weight each time.
The second employee B has a weaker ability, a limited level of diligence, and a slightly lesser workload.
We look at each level. In fact, the difference in this ratio is not that big, but if we look at the ten levels, they are actually nine times different.
This is why there are so many differences between people over time. Your hard work and progress make you decide whether you can eventually become the tip of the pyramid. This is the development of normal career.
For an enterprise, its success is essentially a process of pursuing the ultimate.
For example, a US company called ServiceNow, which used to be IT Process Workflows (Workflow) and Informatized SaaS (Software as a Service), of course, it is now more than just IT, it also In the management of employee’s Workflows, as well as the management of users and customers’ Workflows, it has become a US-based basic enterprise service company with process management.
How is it pursuing the ultimate?
This company has four or five competing products, but it has a very head position in this industry, so it is very different from other competing products. We can know its attitude towards products from the following point.
Our competing company often buys a team, basically this product is available, no matter what. For example, I am the parent company. I just named the new product name (parent company + atom company name) and sold it. The product lines of these products are not open, each has its own library, and each has its own UI. So its user experience will be problematic.
ServiceNow, after acquiring a company, let the technical team of the company learn the technical product structure and development specifications of the parent company, and then re-develop the original product according to the unified requirements of the parent company.
This will allow it to acquire a company, and may not generate revenue for the first two or three years, but it will make its product experience very good. From the back-end data form to the middle-office business process, and the front-end UI maintain a very complete experience, so word of mouth and competitiveness have been established more than 10 years later.