This time is a huge challenge for all entrepreneurs, but this may also be a window of opportunity.
Editor’s note: This article is from the micro-channel public number “EU-China Venture Camp” (ID: CEIBS_CELC) , Author: Gong Yan, compiled from Notesman (ID: Notesman).
In the first quarter, GDP fell by 6.8% year-on-year, the international epidemic continued to spread, the downside risks of the world economy increased, unstable and uncertain factors increased significantly, and almost all global markets The Matthew effect has intensified, and the speed of iteration has also gone up a layer.
This epidemic is undoubtedly a very bad black swan event, which has caused a particularly big change, but I also want to remind everyone that in a sense, the epidemic Give everyone a chance to “restart”, I suggest that entrepreneurs use this time to re-examine and even reconstruct their underlying logic and business model.
Professor of Entrepreneurship Management Practice at China Europe International Business School, Director of CEIBS Course
One, ultimate thinking
Faced with such a huge change, it is equivalent to standing at the crossroads of the times. At this moment we need to think about two points:
First, what is the “moment of the times” and what drives the era?
Second,” Thinking Tomorrow “, how to form your own differentiated competitive landscape from the perspective of the future.
Whether it is to judge the future trends of the times or stand in the perspective of the future and lay out the pattern of differentiated competition of enterprises, it is not for every entrepreneur. An easy thing.
Entrepreneurs need to be separated from specific competition scenarios, and rationally analyze and judge what is changing and what is unchanged in the industrial scene. Constantly torture yourself:
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What is the ultimate thinking about entrepreneurship?
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What is the ultimate question for entrepreneurship?
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What is the essence of entrepreneurship?
Only by thinking through these issues thoroughly can it be possible to grasp what is changing and what is unchanged in the industry. It sounds abstract, but it is actually very important.
Case:
Hong Kong Li & Fung Group is a global supply chain company founded by the Feng family in the late Qing Dynasty. It is a century-old store and has now passed down to the fourth generation.
The Li & Fung Group has developed greatly under the management of the third generation of heirs. It takes advantage of Hong Kong’s huge opportunity as an intermediary for trade between China and the world, connecting suppliers and factories and controlling the supply network of more than 10,000 factories. Almost all major international brands and retail channels, including Nike and Amazon, are its customers.
At the peak, the company had a market value of 200 billion yuan, which is equivalent to Hong Kong ’s benchmark blue chip company. Its business nature matches Hong Kong ’s international status, and it is a company that maximizes trade. span>
With the development of e-commerce and the rise of the mobile Internet, the role as a supply chain intermediary is becoming more and more marginalized in the entire value system. This general trend is very obviously. At that time, Li & Fung only acquired some brands in the strategic layout. They believed that their company’s own information and digital capabilities were very good, and they could organize a team to be an Alibaba-like international trading platform.
The market value of 200 billion in 2010 is the highest point of Li & Fung, and it is also in full swing in the entire global capital market. After the high point in 2011, the advantage is no longer in Li & Fung. Li & Fung recently issued a notice that the Feng family and the Pros Group will jointly privatize, at this time the company’s market value is only 4 billion Hong Kong dollars. Even if privatization gives investors a premium of about double, the price of privatization is only about HK $ 8 billion, which has lost 95% of its value.
During the ten years from 2011 to the present, Li & Fung has not experienced any major operational errors, nor has there been regular investment errors, diligent Management team, stable operation. The connection and transition of the third and fourth generation successors are very smooth. It has done all the imaginable movements.
But its development cannot keep up with the train of this era, and the era has left it behind. As a global supply chain company, it does not have much position in the control of the factory side or the brand side. Almost big brands, such as Nike, Wal-Mart, and large sales channels have begun to adopt directly, no longer need a middleman role. As a witness of the company’s strategy, it couldn’t help but feel sorry when it sent out the news of privatization.
When we do this kind of abstract thinking, sometimes we may feel that it does n’t make much sense. But from another perspective, if your abstract thinking is not deep enough, once you run in the wrong direction, you will find that all figurative efforts will be completely meaningless.
Everyone ’s past experience is different, which will cause everyone to think differently, but we still have to thinkWhen the time train is moving forward, what exactly is changing and what is unchanged? If we want to follow the changes in this era, what future perspective should we stand at and look at today’s competitive landscape, which will eventually lead to differentiated competition?
Second, do n’t forget the original intention
Recently disturbed financial report fraud incidents caused collective thinking: Where is the boundary between innovation and fraud? It is often just a line, it is difficult to judge.
This line of separation is also easy to understand. Entrepreneurship itself is a very lonely, tormented, and uncertain journey. Entrepreneurs seem to be walking on tightrope, You have a beautiful vision and ideas for the other shore, but when you first set off, it may seem crazy. This is why former Intel CEO Andy Grove wrote in “Only Paranoid Can Survive”:
In this lonely journey, if you are not particularly paranoid or out of place people, it is often difficult to survive in the end, and it is difficult to complete the journey.
Whether the startup is innovating or deceiving, it is difficult to judge with a set of tables or a set of quantitative standards, the only basis for judgment is to return Its mission and values . This sounds very fictitious and difficult to quantify, but it may be the only pivot that can be judged. What is the starting point of this company? What is the end point of the founder’s expectation, longing and struggle? Mission and values may be a yardstick that can finally make a subtle distinction, and this will also determine the ultimate direction of entrepreneurship.
Three, stand out
So What kind of companies can stand the test? I am an industryResearch and research on new business models have recently found that companies that can stand the test of the up-and-down cycle and grow into head companies have one thing in common when they study several head companies in the United States.
The so-called “ top sky ” means that there is a concept beyond the simple product level at the conceptual level, which can have a very high potential energy , Help this company occupy a moral high ground, or occupy the brand high ground.
If it is just a conceptual company, this company is often difficult to withstand the test of the up and down cycle. Therefore, behind “Dingtian” is often “ site “, that is, at its bottom, there will often be one or more “money printing machine” (cash flow) business to support.
An example of Google ’s business architecture:
The bottom layer of Google is the infrastructure layer, with cloud services and hardware.
At the top of the sky, Google explored a lot of concepts: there is Calico that extends the life of humans, there is a smart home company (Nest) that was bought for $ 3.2 billion, There are smart city companies (Sidewalk Labs), venture capital (Google Ventures, Google Capital), biological companies (Google Life Science), research AI (Google DeepMind), autonomous driving companies (Waymo), and energy companies (Google Energy ), Including Internet service companies, fiber optic companies (Google Fiber).
These exploration directions are basically loss-making in business operations, and they have suffered a lot, but they have helped Google occupy strategic heights in various fields. With past acquisitions, some exploratory businesses have gradually developed into cash flow businesses. There are three large banknote printers in its system: Google Advertising (Google AdWords), YouTube, and Android (Android). These three banknote printers can help it support it in dozens of new frontiersClimbing the field.
Google has taken this innovative exploration to the extreme. Today’s head companies can basically find a similar architecture, and in a nutshell, it is a “top-down” model. On the one hand, to have a concept beyond simple products, the company must have the ability to create new concepts. On the other hand, behind the ability to support this manufacturing concept is its strong cash flow business, which will be difficult if either is lacking.
If there is no concept, only the printing machine business is just a business; if there is only the concept, there is no printing machine business, often hanging on the top of the mountain Live the test of the downward cycle.
The above are my three recent thoughts.
There is no doubt that this time is a huge challenge for all entrepreneurs, but this may also be a window of opportunity. I believe that the following will be a new window of opportunity for startups, especially those with certain service capabilities and certain empowerment capabilities.
What is the ultimate thinking about entrepreneurship?
What is the ultimate question for entrepreneurship?
What is the essence of entrepreneurship?
Only by thinking through these issues thoroughly can it be possible to grasp what is changing and what is unchanged in the industry. It sounds abstract, but it is actually very important.
Case:
Hong Kong Li & Fung Group is a global supply chain company founded by the Feng family in the late Qing Dynasty. It is a century-old store and has now passed down to the fourth generation.
The Li & Fung Group has developed greatly under the management of the third generation of heirs. It takes advantage of Hong Kong’s huge opportunity as an intermediary for trade between China and the world, connecting suppliers and factories and controlling the supply network of more than 10,000 factories. Almost all major international brands and retail channels, including Nike and Amazon, are its customers.
At the peak, the company had a market value of 200 billion yuan, which is equivalent to Hong Kong ’s benchmark blue chip company. Its business nature matches Hong Kong ’s international status, and it is a company that maximizes trade. span>
With the development of e-commerce and the rise of the mobile Internet, the role as a supply chain intermediary is becoming more and more marginalized in the entire value system. This general trend is very obviously. At that time, Li & Fung only acquired some brands in the strategic layout. They believed that their company’s own information and digital capabilities were very good, and they could organize a team to be an Alibaba-like international trading platform.
The market value of 200 billion in 2010 is the highest point of Li & Fung, and it is also in full swing in the entire global capital market. After the high point in 2011, the advantage is no longer in Li & Fung. Li & Fung recently issued a notice that the Feng family and the Pros Group will jointly privatize, at this time the company’s market value is only 4 billion Hong Kong dollars. Even if privatization gives investors a premium of about double, the price of privatization is only about HK $ 8 billion, which has lost 95% of its value.
During the ten years from 2011 to the present, Li & Fung has not experienced any major operational errors, nor has there been regular investment errors, diligent Management team, stable operation. The connection and transition of the third and fourth generation successors are very smooth. It has done all the imaginable movements.
But its development cannot keep up with the train of this era, and the era has left it behind. As a global supply chain company, it does not have much position in the control of the factory side or the brand side. Almost big brands, such as Nike, Wal-Mart, and large sales channels have begun to adopt directly, no longer need a middleman role. As a witness of the company’s strategy, it couldn’t help but feel sorry when it sent out the news of privatization.
When we do this kind of abstract thinking, sometimes we may feel that it does n’t make much sense. But from another perspective, if your abstract thinking is not deep enough, once you run in the wrong direction, you will find that all figurative efforts will be completely meaningless.
Everyone ’s past experience is different, which will cause everyone to think differently, but we still have to thinkWhen the time train is moving forward, what exactly is changing and what is unchanged? If we want to follow the changes in this era, what future perspective should we stand at and look at today’s competitive landscape, which will eventually lead to differentiated competition?
Second, do n’t forget the original intention
Recently disturbed financial report fraud incidents caused collective thinking: Where is the boundary between innovation and fraud? It is often just a line, it is difficult to judge.
This line of separation is also easy to understand. Entrepreneurship itself is a very lonely, tormented, and uncertain journey. Entrepreneurs seem to be walking on tightrope, You have a beautiful vision and ideas for the other shore, but when you first set off, it may seem crazy. This is why former Intel CEO Andy Grove wrote in “Only Paranoid Can Survive”:
In this lonely journey, if you are not particularly paranoid or out of place people, it is often difficult to survive in the end, and it is difficult to complete the journey.
Whether the startup is innovating or deceiving, it is difficult to judge with a set of tables or a set of quantitative standards, the only basis for judgment is to return Its mission and values . This sounds very fictitious and difficult to quantify, but it may be the only pivot that can be judged. What is the starting point of this company? What is the end point of the founder’s expectation, longing and struggle? Mission and values may be a yardstick that can finally make a subtle distinction, and this will also determine the ultimate direction of entrepreneurship.
Three, stand out
So What kind of companies can stand the test? I am an industryResearch and research on new business models have recently found that companies that can stand the test of the up-and-down cycle and grow into head companies have one thing in common when they study several head companies in the United States.
The so-called “ top sky ” means that there is a concept beyond the simple product level at the conceptual level, which can have a very high potential energy , Help this company occupy a moral high ground, or occupy the brand high ground.
If it is just a conceptual company, this company is often difficult to withstand the test of the up and down cycle. Therefore, behind “Dingtian” is often “ site “, that is, at its bottom, there will often be one or more “money printing machine” (cash flow) business to support.
An example of Google ’s business architecture:
The bottom layer of Google is the infrastructure layer, with cloud services and hardware.
At the top of the sky, Google explored a lot of concepts: there is Calico that extends the life of humans, there is a smart home company (Nest) that was bought for $ 3.2 billion, There are smart city companies (Sidewalk Labs), venture capital (Google Ventures, Google Capital), biological companies (Google Life Science), research AI (Google DeepMind), autonomous driving companies (Waymo), and energy companies (Google Energy ), Including Internet service companies, fiber optic companies (Google Fiber).
These exploration directions are basically loss-making in business operations, and they have suffered a lot, but they have helped Google occupy strategic heights in various fields. With past acquisitions, some exploratory businesses have gradually developed into cash flow businesses. There are three large banknote printers in its system: Google Advertising (Google AdWords), YouTube, and Android (Android). These three banknote printers can help it support it in dozens of new frontiersClimbing the field.
Google has taken this innovative exploration to the extreme. Today’s head companies can basically find a similar architecture, and in a nutshell, it is a “top-down” model. On the one hand, to have a concept beyond simple products, the company must have the ability to create new concepts. On the other hand, behind the ability to support this manufacturing concept is its strong cash flow business, which will be difficult if either is lacking.
If there is no concept, only the printing machine business is just a business; if there is only the concept, there is no printing machine business, often hanging on the top of the mountain Live the test of the downward cycle.
The above are my three recent thoughts.
There is no doubt that this time is a huge challenge for all entrepreneurs, but this may also be a window of opportunity. I believe that the following will be a new window of opportunity for startups, especially those with certain service capabilities and certain empowerment capabilities.
In this lonely journey, if you are not particularly paranoid or out of place people, it is often difficult to survive in the end, and it is difficult to complete the journey.
Whether the startup is innovating or deceiving, it is difficult to judge with a set of tables or a set of quantitative standards, the only basis for judgment is to return Its mission and values . This sounds very fictitious and difficult to quantify, but it may be the only pivot that can be judged. What is the starting point of this company? What is the end point of the founder’s expectation, longing and struggle? Mission and values may be a yardstick that can finally make a subtle distinction, and this will also determine the ultimate direction of entrepreneurship.