This article comes from Morningside Capital
A few years ago, in our internal activities, Zhang Fei, a partner of Morningside Capital, was the moderator, and Lin Xinhe, the co-founder and managing partner of DCM China, Liu Qin, founding partner of Morningside Capital, had a dialogue with investors.
Today, we share some of the wonderful ideas of the dialogue, hoping that you can gain something.
You will see the following questions discussed:
The moment of epiphany about life
What are the principles of Lin Xinhe’s judgment on the two dimensions of people and affairs in venture capital?
An important secret to inspire and grow with outstanding entrepreneurs: Tell the truth and stick to your integrity
What’s the difference between the founders of billion-dollar companies and billion-dollar companies?
Imagine 10 years later, what investment direction are you optimistic about? What kind of person do you want to be?
Q1
Zhang Fei: The first question is about the moment of epiphany in life. Which moment motivated the two of you to become Lin Xinhe and Liu Qin today?
Lin Xinhe: I am a Taiwanese, and my family when I was youngI went to live in the United States together. Although I went to a better school, Stanford, I found that there is indeed a ceiling in the United States. I encountered a great setback in life when I was looking for a job. I also wanted to understand at that time. You don’t want to control your destiny, you have to put your destiny in your own hands.
So I started out of school and started Sina. My parents actually agreed, but my friends at Stanford thought I was crazy.
At that time, I didn’t say who I would become in the future, just holding my breath, people looked down on me, so I must make something to see. Life is so short, you must be different from others. This also affected my subsequent investment style and must not follow suit.
Liu Qin: Hurst (Lin Xinhe) is a returnee, I am a grassroots. I was born in 1973. I went to college early, graduated at the age of 20, and returned to my hometown to join Wuhan Iron and Steel. At that time, Wuhan, this company is like today’s BAT, where I worked as an engineer for 4 years.
One year, a fire broke out in our factory. The cables in the computer room were burned. We were sent to repair it. The cables of the equipment in the equipment room are all laid underground. Like the sewer, the cable trench is full of burnt plastic, filled with toxic gases after burning. I was there for a month.
At that moment, I seemed to be awakened. My life can’t always be in the cable trench. Although this is a job that makes most people feel good, this is not my passion. So I decided to quit my job and later left Wuhan to Shanghai.
Q2
Zhang Fei: The two have many similar characteristics in investment. The number of invested companies is small but the success rate is high, and they cover all types of entrepreneurs. I guess there are some very effective investment principles behind these successes. For example, as mentioned by Richard (刘 芹) in the previous lecture, what are the principles of judgment that Hurst (Lin Xinhe) firmly believes in judging the two dimensions of people and events in venture capital?
Lin Xinhe: I started my own career and encountered many dark moments, but I think Sina was able to do it at that time because I really wanted to make it successful. Because of this experience, I later understood that when I was investing, the founder of the company I was investing in must have a mentality that he did n’t start a business to make money, he started a business to achieve one of his life. Goal, success is more important than making money.
But when you are looking at an entrepreneur today, the time you have known him is very short, and the time you can make decisions is only a few days, at most two weeks. You are not his family, nor are you classmates, so you can’t actually make any judgments about that person’s personality. In this case, the only thing that can be judged is this market and this industry, and is this strategy right?
I usually ask entrepreneurs a question, has anyone else thought about it? In fact, this is indirectly asking who his competitors are? If many people have thought about this, frankly, the chances of getting voted will be relatively small, which is also the point that I said earlier.
Q3
Zhang Fei: How to grow together with entrepreneurs? Especially from the early stage to the middle and late stage, the company is becoming more and more successful, and the founders and investors will also face more and more unknowns. How can the company go to a higher level? How to inspire each other with the founder at this stage? I would like to hear the experience shared by the two.
Lin Xinhe: When I started my business, the people who helped me the most were those who told me the truth, no matter how sad I was at that time, or how annoying that person was.
At that time, Sina almost hung up several times, but they all told me something before hanging up. Of course, I couldn’t hear it at that time because either it was difficult to hear or I thought the person Don’t understand at all. But when I really had a problem, I realized that they were right. Although it is painful to face the truth, it is necessary to make strategic adjustments, cut people, replace people, and even give up something.
Because I have experienced this myself, when I change my status to become an investor, I and the entrepreneur, no matter how well his company does, I just want to be the one who tells him the truth, no matter if he feels trouble, no matter He did not respond well.
I voted 58 in the same city, I had a fight with Yao Jinbo, and then I didn’t talk to him for a year.
Zhang Fei: Don’t you worry that he will never talk to you?
Lin Xinhe: Yes, I don’t care. You must uphold your integrity. Richard said earlier that many investors are a cheerleader. I’m not an applause. I think you make an investment and you have to have Integrity. If you say you want to please that person and you lose your Integrity, I think I’m back to saying that you are doing it for money This thing, not to do it wellLove, because as long as things are done well, money will come, but I do n’t want to be so absolute, sometimes you do n’t necessarily have money, but I think as long as you do well, you will feel comfortable in your heart With a sense of accomplishment, I think this is the most important.
Liu Qin: Yes, in fact, we all have the same goal. In Chenxing, what is our relationship with entrepreneurs? Being friends are just telling the truth and being true friends. The YY and Xueling we vote for are typical examples.
After YY went public, I and Li Xueling had two key collisions.
For the first time, Xue Ling wanted to fully delegate the rights and responsibilities to the senior management team below. He believes that a CEO must care about everything, indicating that the company is not large, and he hopes to give people below the space to realize the potential of the people below. To a certain extent, I agree with his point of view, but I have a different view on the scale and balance of decentralization. I candidly express my different opinions, and even today we still maintain the face of different opinions. A trust relationship that can be fully expressed.
For the second time, he began to think about opportunities in overseas markets shortly after the listing. It should be in 2014/15, he started to propose to do overseas layout. Frankly speaking, I am worried that the timing is too early, causing The company is not focused. But for his bold strategic ideas and ideas, although I was not completely convinced, I still felt that I could not be killed with a single stick. This was also when the company finally decided to spin off Bigo to focus on overseas markets. We still chose to believe in the courage and judgment of Xue Ling as an entrepreneur and decided to invest 10 million US dollars. Bigo’s early development also experienced many irregularities, but looking back at Xue Ling’s judgment and timing of overseas market trends, it reflects his vision and determination.
Q4
Zhang Fei: Telling the truth is actually a very important principle. The next question is related to the previous question. For billion-dollar, ten-billion-dollar, and 100-billion-dollar companies, the challenges they face are very different. The two think that the founders of these three orders of magnitude differ in Where and what are the easy mistakes founders make at these key nodes?
Lin Xinhe: When I started my business, I did n’t feel that I was smarter than others. You just happened to have an idea, and you started business naturally. We also have several billion-dollar companies with valuations from 0 to 1. Arrived, and then luck is better. But to change from one billion to ten billion, at this time, it depends on the organizational ability of the entrepreneur. Is there any way he can build an organization from one person?