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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 pass on specific emotions and cultures to your group, and how much you can infect others determines the boundaries of your leadership. Respect your true feelings, and this will naturally lead to the third element of leadership: find 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 there is room for leadership to flourish. Just as there is no shadow without light, there is no leader 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 submission, implying that followers are subordinates — a term derived from the Latin word 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 authoritative positions, 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 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 the need to handle 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 feel that these leadership and follower positions should be allocated or exchanged based on circumstances and needs, as the roles of leadership and followers are fluid.

Our business cards cannot define who you are, nor can they define your character or leadership ability. 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 in various situations.

However, 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 a team that you truly enjoy working with, as you can only lead people you like.
3. Engage in activities that align with your traits and leadership style.
   Leadership will surely be fully realized, 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 every day, 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 pitch presentations, and communicating with the media. While she is responsible for business, everyone in the team plays a crucial 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. While everyone plays their part in their respective positions, they mistakenly believe they are the leaders of the team. 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, but her team stands out and performs the 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. Furthermore, considering the space they have, her "followers" are more than willing to 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 become aware of the dichotomy between what is right and what they are instructed to do.

Additionally, this structure hinders innovation and the opportunity to experiment, 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 — the self-authored mind — and pick up the pen to become the authors of their own destiny.

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 Stepping into 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 sparking new ideas, motivating groups to take action, guiding and developing others, and becoming a source of intellectual stimulation.

Anyone exhibiting these behaviors will be regarded as a leader, regardless of their rank or status. Therefore, followers need to prove their qualifications for leadership positions through their actions rather than waiting to be appointed. They need to find ways to become leaders instead of 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 present 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)" reaction.

Everyone should heed this lesson: never submit too much to a subordinate role. Use all your strength to consciously learn and achieve what you want. Stick to your integrity. When you have ideas, speak them out loud; 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 does he keep falling into the same pit every time? Because he attributes all problems to external factors. People always like to attribute success to themselves and blame others for failure. On the contrary, I believe it should be the other way around: attribute success to external factors and failures to oneself.

What is attributed to external factors? The success of a business organization is fundamentally shaped by the times; without a significant era, there would be no you. The success of any business is essentially 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 oneself? It means that in the face of failure, one should look for reasons within oneself.

People can see their cognitive problems, but it is not painful enough; the painful part is seeing the problems within themselves. Because when you see that you have so many issues, it is actually hard to face. People are unwilling to see their flaws; only when they feel enough pain will they be willing to stop and reflect on themselves. Therefore, in the face of failure, 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 the 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 in Silicon Valley again? What distinguishes it 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 are often more inclined to disregard established rules in business operations. They are willing to break conventions and make creative and risky decisions in times of crisis. Professional managers follow a set of operational rules approved by the board or management, and their scope of action is limited; they must comply with internal and external laws and regulations. Founders, however, own the company and dare to break rules, taking 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 their boundaries of responsibility, while founders are more likely to take bold risks.

2. Global Sense of Responsibility
   The second key characteristic of Founder Mode is a comprehensive sense of responsibility. Founders are not just shareholders; they typically 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 groups, igniting the team or community to go all out to save the company.

Even after the company goes public, founders often maintain actual control over the company, attempting to continue directing its development through mechanisms like setting up AB shares. This sense of responsibility drives them to take on responsibilities that exceed the capabilities of ordinary professional managers during critical moments in the business.

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

"Despite 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 that require founders' direct involvement and decision-making are often impossible to outsource to others because founders possess the strongest experience in navigating market uncertainties and have a greater need for psychological safety in board communications than professional managers, as well as the adventurous spirit to break free from herd mentality. If these task-oriented responsibilities are handed over to professional managers or teams, there exists an imbalance 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 lead to team members losing their jobs, facing the 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 continuously shifting. Relying on past experiences of professional managers to tackle future challenges in technology-driven enterprises is nearly impossible.

Even if professional managers are capable of managing the company, they cannot erase the cultural management ideology established by the founders themselves, and they must remain vigilant about market volatility and potential personnel changes to ensure they are not eliminated in fierce business competition.

In contrast, professional managers are hired to manage enterprises, with their responsibilities typically defined by the board and accountable to it. Professional managers usually do not take on responsibilities beyond the scope of their contracts, and 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 formed by risk awareness and economic machinery, possessing certain personal qualities and high professional skills and management abilities.

Why Silicon Valley is Re-embracing Founder Mode
During a period of global technological disruptive change, emerging technologies like 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 YC founder 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 the rapid and stable operation of companies during normal times, they cannot unite people's hearts in turbulent macroeconomic markets or during periods of management upheaval.

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 cope with 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 cut non-core businesses, concentrate resources to help the company survive, and launched new home experience products. This series of decisive decisions helped Airbnb turn the situation around during the peak 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 publicly traded 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 performs excellently in crises, it is not without challenges and limitations:

Management Challenges in Scale Growth: As a company grows in size, Founder Mode struggles to cope with complex organizational management. Once a business reaches a certain scale, it often needs to bring in 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 it becomes difficult to operate effectively relying solely on the founder's personal capabilities.

Demand for Rules and Transparency: After going public, companies need to comply with regulations from authorities (such as the SEC), and founders are often not adept at handling these cumbersome compliance requirements. For instance, founders may retain control through AB shares, but still need 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, humanoid intelligent robots, these areas are filled with uncertainties and tremendous opportunities, making Founder Mode more conducive to driving innovation and change.

Companies may explore more management methods 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 those of founders; they have a deep emotional connection and sense of responsibility towards the company and can make bold decisions at critical moments.

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

For technology companies, especially those undergoing rapid development and disruptive changes, 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 stabilize, 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." Under 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 manage a company with 2,000 employees the same way 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 about 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 quirky or even poor by many.

Interestingly, our limited understanding of Founder Mode is encouraging. Look at the achievements that founders have made, even when they have gone against poor advice. 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 tend to have more social resources, enabling 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 usually have a certain understanding of the entire business and related personnel. This comprehensive awareness allows them to identify and avoid decision combinations that threaten survival.

3. Incentive Mechanism: 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.

In summary, the decision-making approach of Founder Mode has its advantages but also carries negative impacts. If this negative impact is ignored, CEOs may find themselves having to intervene in decisions more frequently. 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 this, we could quantify the aging of a 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 start 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 a poor CEO can cause.

Different Stages of Business Development#

The First Crisis: Overload, refers to internal functional dysfunction and the loss of external opportunities. This usually 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 rate. 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 and collaboration 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, once stalled, can never regain vitality.

The Third Crisis: Free Fall, this is the greatest threat that exists. A company in free fall experiences a complete stagnation in its core market share growth, and its business model — the successful factor that had been effective until recently — suddenly seems no longer viable. For such a company, time is scarce and urgent; the management team often feels that the company has lost control, and they cannot identify the root cause or know how to pull the company out of the mire.

These three crises are the most dangerous and tense periods for companies that have successfully passed through 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 one can even transform them into constructive change factors.

Founder Spirit#

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

Regardless of how large the company grows, they always maintain a focus and emphasis on frontline business, always aware that it is the details that make all the 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 possessed by new forces, the emphasis on frontline business, and the spirit of ownership — are the key features of founder spirit. They are expressed in the purest form and are very evident.

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

A strong sense of mission possessed by 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 making decisions that shape the company's characteristics, helping leaders determine hiring and incentive targets, choose suppliers, and investment directions. The great declaration of the sense of mission possessed by new forces is prominently presented before those they wish to connect with.

Business stories have two intertwined narrative threads, regardless of whether the story itself is a success or a failure. The first, and most obvious, thread is the external story of the enterprise. The external factors played out in the market generally include: quarterly profits, shareholder returns, changes in market share, and profit growth. This is the easiest trajectory to track 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: establishing 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 smoothly externally but face numerous internal problems. Others, conversely, develop well internally while struggling 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 get along without undermining each other. However, colleagues keeping their distance essentially reflects a lack of combat effectiveness, which will inevitably collapse under pressure. When they leave the company, they will complain about the poor culture, but aren't they part of that culture themselves?

The Refinement of Social Division of Labor#

The differentiation among various industries is becoming increasingly evident. Typically, people from different industries carry different professional habits and ways of thinking, some of which even become ingrained in their personalities, 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 more rugged, etc.

However, when you closely interact with the top performers from various industries, you can find 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 common traits, 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 bit of "stubbornness" — they will not give up until they achieve their goals. Besides obsession and passion, there is a belief that drives them to persist until the end.

2. Not valuing fame and fortune, remaining detached. A painter, when creating, if they are calculating the price of every inch, is unlikely to produce a work that can be passed down. It is precisely because of this purity that they are freed from many constraints, allowing them to maximize 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 finest wisdom, and then engage in self-creation and breakthroughs.

4. A broad mind, benefiting all. These individuals always consider problems 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). A crucial factor for anyone achieving great things is 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 feel it is "idealistic" or superstitious. In reality, "timing" means that we have intentionally or unintentionally aligned with the trends of the universe and the operation of society, and it 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 dedicated his last time to his family and only met a few outside people.

It is okay; direct, material loves are also valid. 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, smart, or even how great or powerful a person is, it is difficult to avoid death. This is the final common belonging of every person — whether great or ordinary, rich or poor, noble or lowly.

Thinking about death, although we are filled with helplessness and emptiness, we must still "stay hungry, stay foolish" while alive.

Business is an organically structured 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 have taken advantage. When it comes to pricing during financing, there is no fixed standard. Although there are technical methods such as cash flow discounting, PE, or EBITDA multiples, many times it relies on the feelings of both parties. The same goes for IPO pricing; win-win, long-term, and stable development are fundamental.

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

During a bubble, financing is certainly not priced low; even the shrewdest investors find it hard to resist the impulse and madness brought by bubbles. They are closer to the stock market and are more easily influenced by its fluctuations. Whether one can secure funding during a bubble may determine the survival or death of the enterprise; it is also inevitable to receive high valuations during a bubble, and entrepreneurs will not suffer losses.

Any business entity must make money, thus desperately seeking profitability. The key lies in the adaptability of the entrepreneurial team, constantly exploring and innovating. If they cling to unrealistic ideal models from the beginning, these startups may perish in the cradle. When the ideal model is tested in practice, we must be able to keenly find a realistic 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 trial and error. 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 enterprise — business model, team, framework, character, traits, and culture — must be well established, and further growth will follow. 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 homogeneous competitors and become mediocre.

The third and fourth stages are the perfect combination of founder spirit and professional manager management in the market operation.

The fifth stage involves resource allocation for the reconstruction of the industry.

Models#

The successful models of the past can be summarized in the following two ways:
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 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 unable to keep up 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 the encouragement and promotion of the government. 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 push. The wealth stories of VC, PE, and IPOs serve as vivid examples of "letting some people get rich first," making everyone eager.

The fifth reason is the large population base, which creates the world's largest consumer market. The largest consumer market will nurture the largest 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 taught them tolerance and forgiveness. Clearing their lifelong mission, their hearts are filled with desires: the desire for money, the desire for fame, the desire for personal achievement. The saying "eliminate human desires, preserve heavenly principles" makes a lot of sense. 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 emerge at the most appropriate 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 the opportunity is missed.

A general business model caters to market demand; it does not necessarily create new consumer behavior. It can change the rules of the game using new technologies based on existing models, but it does not create new consumer behavior. 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 it and have it be 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 for entrepreneurship can only be effective in specific environments — for example, in China, competing with a rigid non-market system using a good market mechanism. Success varies, but copying and imitating can at most produce a second-rate company.

2. Customer Relationships
   In a specific 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 compelling (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; 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 very bad thing. Rebuilding trust is almost impossible, and there are too many competitors lurking like wolves nearby; if you show any flaws or vulnerabilities, you will be attacked and torn apart.

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

Once the product is out, it is also necessary to feel 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 it themselves. Besides experiencing one's own product, it is also crucial to experience competitors' and peers' products. For example, we once had a television with a very eye-catching blue power indicator light; when you patrol the rooms, you cannot notice the problem with this light. Only by staying in that room and being disturbed by that glaring power indicator light at night can you discover this issue.

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's products include "hard products" like guest rooms and "soft products" like personnel services.

The hotel industry's product 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 instance, 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 their belongings.

Secondly, one must understand human nature, especially its weaknesses. For example, 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 instance, people love to save money and enjoy small bargains.

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 earning points when flying, which can be exchanged for free tickets.

Guests need privacy, convenience, self-service, and environmental friendliness. Excessive service and attention will only annoy and trouble them. A group of people surrounding one or two individuals may 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 word-of-mouth has become unprecedentedly important. A good product may not even need advertising or promotion. Social media platforms like WeChat, Weibo, and Facebook can easily and rapidly spread good or bad word-of-mouth. The hotel industry is a very typical experience industry; water 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 likes and recognition from customers during their experience, thus forming rapidly spreading word-of-mouth, further establishing a brand — only with a brand can one promote chain expansion. 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 design, and your products...

When telling stories, one must also pay attention to moderation and timing. Often, what we should do is not to say what we have done, but rather what we are currently 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; we should share the revolutionary achievements of success with them. Stock options are a good tool. For asset-heavy situations, fewer options can be offered, and 5% is reasonable; for human resource-heavy situations, 10% to 20% is also reasonable.

For entrepreneurs, 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 entrepreneurial companies; the term does not exist in their dictionary.

Founders and Managerial Leaders#

Entrepreneurs relying solely on founder spirit without systematic management experience and knowledge will find it challenging to build a large enterprise, with significant risks. Professional managers, on the other hand, 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, are passionate about the market and products, and are not interested in daily operations. They often believe they are 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 domestic private enterprises, founders (most of whom are also the owners of the business) often prioritize power and nepotism, distrust external professional managers, and are reluctant to delegate authority. In the clash between managers and family members or veterans, they always favor their side. As a result, external managers cannot play their intended roles. If one side's policies are forcibly implemented, many unpleasant situations will arise, and ultimately, managers will leave disappointed.

There are also some professional managers, especially those hired by venture capital-controlled startups, who may erase all contributions of the founders, magnify the company's problems, and attribute all issues to the founders and predecessors. Some even attempt to hijack the enterprise 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. Wealthy individuals should not look down on educated individuals, nor should "sea turtles" look down on "local turtles." 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 essential for a win-win situation. In the current business ecological environment, 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 revolve around ownership structure. Companies where VC and PE hold 70% and those where founders hold 70% differ significantly on many fundamental issues. The type of shareholders determines the composition of the board, and the management team executes the board's decisions. The company's strategy, operational goals, values, and culture 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 through difficulties and hardships.

Founders must be deeply immersed in their products to find the direction for the future.

Focus on Four Aspects: Ideology, Economy, Technology, Community.#

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

1. Ideology
   Ideology is the most important; it is the soul of an organization. A religious organization is primarily maintained by a shared belief, which often touches 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, ideology is equally paramount. A company's values determine all possibilities for that company. 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? Is it kind to employees or exploitative? Is it deceitful to customers or does it bring them value? Is it selfishly surviving or nobly creating beauty?

With numerous different geographical locations, dispersed employees, and diverse backgrounds, families, education, religion, and personalities, promoting a common value system seems challenging.

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

2. Economy
   As a commercial entity, the design of profit distribution is undoubtedly important. The larger aspects involve balancing interests among customers, employees, and shareholders. If one wants to earn more money from customers, raising prices will lose competitiveness, while lowering prices will eliminate profits; employee benefits and compensation 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 types of 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 that differs from family-style caste systems and nomadic random combinations. The currently prevalent organizational form is a top-down, centralized management approach from headquarters to stores. Its advantage is that through the chain network, one 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 the top management and primarily developed internally. The approach of handing it over to the IT head (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 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 has effectively utilized small communities. 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 human organizations exist, such grassroots communities are inevitable. While they may weaken the consistency of the chain in some sense, merely suppressing and attacking them is not a solution. Properly utilizing and guiding them can yield significant results.

For example, recruiting room service staff 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 understand each other better, and aside from friendly competition, they 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 stimulating 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?
First, a united front. When encountering conflicts, do not exacerbate them; instead, strive to find win-win solutions, as harmony can generate wealth. All cooperation must move towards a multi-win direction, uniting all possible forces to run the enterprise and seek the greatest welfare for customers.

Second, go with the flow. While it is commendable to have the courage to go against the current, it is often unproductive. One should do things in accordance with the current, follow the trend, and not act stubbornly or impulsively. In business, one must align with the trends of the market, government, and public sentiment.

Third, go with the tide. When surfing in the ocean, always move with the current and ride the waves. What waves and currents are we encountering now? The "post-80s" and "post-90s" generations are the mainstream customers, mobile internet is the technological wave, and reducing manpower is the trend in cost.

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

The second layer of meaning is "intra-species competition, inter-species win-win." It is difficult for other small trees to survive beside large trees in the forest, but moss and grass thrive because the resources needed by different species are different.

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; people voluntarily do many things without coercion. However, the power of this faith is so great that no business organization can compare.

The second is the command of the military. The duty of soldiers is to execute orders; they must follow commands without doubt or defiance. On the battlefield, disobeying 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 form the foundation of all business. It can even be said that the primary force driving the operation of modern society is business. The distribution of wealth, rewards for innovation, and penalties for laziness are all conducted through the distribution of business 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 it. Purely discussing business interests is not enough to create a balanced and fulfilling environment. The four forces — faith, discipline, interests, and love — can be utilized at different times and places within an enterprise to create a business organization that is as faith-driven as a religion, as execution-oriented as a military, and as loving as a family.

Showing Weakness is Also a Skill#

CEOs, like everyone else, should 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 can you not know this?" We only want to showcase our strengths, discussing what we understand 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 certain, but there is a potential benefit: by showing weakness, not only do you allow more new knowledge to come in, but when you open your heart, more people will be willing to help you.

For a startup composed of different people, aside from seeking funding, the most important task is finding talent. In fact, the methods for finding talent vary at each stage of company development and should be differentiated.

During the startup phase, finding partners is the first stage; what needs to be done is to "grow a heart," meaning finding like-minded friends to partner with and build the company's core culture and values. Once partners are found, the next step is to build the initial team, which is the second stage; what needs to be done is to "build the skeleton," meaning finding employees who believe in you and the company to ensure effective operation. As the company grows, it needs to recruit "talented individuals," which is the third stage; what needs to be done is to "grow flesh," meaning iterating the team for steady development.

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

Good partner relationships do not have a unified behavior standard, but they do have a model of cultural literacy, moral quality, and self-evaluation systems, along with certain interaction patterns.

A solid partner relationship lays the spiritual core for the entire organizational development of the company, which should not be underestimated. So, is it more important to share interests or to have complementary abilities? My previous answer would undoubtedly have been 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 sufficient. If there is not enough liking, significant effort must be spent to cultivate it.

Many people mistakenly believe that finding partners is more about complementary abilities. For example, if I have technical skills, I will 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, there are not many companies that can handle partner relationships well with this structure.

More often, partners come together due to complementary abilities, but they may not have harmonized well on a cultural core. It is precisely because they cannot form a strong sense of identity culturally, meaning they do not genuinely like each other, that they struggle to keep up with many key decisions 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 for seven or eight years, supporting each other, we are not in the best partner state. Of course, this is merely a state that is not "ideal," but it is not a so-called "regret."

So, what does mutual liking mean? It does not imply identical personalities. Think about it; your closest friends are often very different in character, but they must be based on consensus and shared interests. This foundation is mutual liking. Mutual appreciation between partners is crucial for mutual trust, which is very important.

Trust and support are necessary conditions for partners, requiring a process of mutual adjustment. 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, transitioning from a person you have a good impression of to becoming true lovers requires effort; it is not just about two people working on a project and agreeing on terms. Once a family is formed, deeper communication is needed. Only by doing so can there be sufficient understanding of each other, recognizing both the admirable parts and the weaknesses of one another.

This is not about "checking," but about acceptance — you become lifelong friends through entrepreneurship, and you are willing to work with them, even if the 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. Many people hope to find "the best people" when searching for founding employees. When I initially started my entrepreneurial journey, I had the same thought. Later, I realized this was a delusion. The reality we face is that there is neither money nor brand, and with an uncertain future, why would the best people choose you? At this stage, it is already good to find those willing to work with you. If you are looking for partners, you should find those you trust; when looking for initial employees, the opposite standard applies — find those who trust you.

In fact, initial employees can be "a bit slow" without issue. They should analyze your business and company situation thoroughly, ensuring that what you are doing is 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.

Such "analytical" individuals are often senior executives from foreign enterprises, possessing good minds and analytical skills. When it comes to new opportunities, they have a speculative mindset — yearning for internet entrepreneurship, they already have decent incomes, so they approach the startup venture from 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 secures funding and develops to a certain extent, 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 conduct a mapping search.

Engage professional headhunting agencies to help map out potential excellent talents in each field that may fit your company. This approach will increase the accuracy of matching talent 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 startups often avoid this issue, focusing on how promising the business is and how idealistic it is, without discussing compensation. When it finally comes up, it can be disappointing. In my view, no matter how great your business is, you should not expect talents to take a pay cut to join; at the very least, you should reference the average market salary and their previous compensation, offering them what they deserve, rather than using "startups pay less" as an excuse. If money is tight, why hire so many people? The less money you have, 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 grand when I joined, but now I am being criticized and demoted to a lower position?"

Next is attitude. I have found that for the hired individuals, 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 willingness to join the company. The ability to inspire others can even make them prioritize the reliability of the company over its reputation.

This is why choosing founding partners and core employees is so crucial. Their desire 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," this statement can be even more impactful than having 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 before.

It may take several quarters for a company to go from choosing to contact an excellent talent to actually bringing that person into the company. If that person leaves within six months without even understanding what the company and business are about, it is a waste of time for both the individual and the company.

Helping talents "survive" in the new company environment is essentially a relationship of mutual growth. Many companies overlook this stage, spending a lot of energy on tasks. When a talented person enters a new workplace, it can feel like walking on a knife's edge; on one hand, there are the criticisms, 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 with a project is ideal; if they can grow, that is perfect, but the probability of this happening may only be 5%. Shouldn't our responsibility be to ensure that more excellent talents have a 50% success rate rather than just that 5%?

The costs of this approach are often high. First, you need to invest a significant amount to retain that 5% of people, and they will certainly be expensive. Secondly, there are very few people who can survive in the company; when the company finally experiences significant business growth, it will find itself short on talent.

Sometimes, you may find this scenario:
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 requirements for talent, yet the survival rate is so low?

Bringing talent into the company and providing them with a jungle-like environment to adapt is essentially a waste of resources caused by excessive capital, and the outcome will not be good. Conversely, we should invest sufficient energy to help talents succeed within the organization rather than nitpick: "You are receiving such a high salary, so you should 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 through great efforts to bring this person in; if they ultimately do not stay, it is essentially the fault of the corporate culture (money).

Team Dynamics and Conflicts#

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

LS was an example of this. Executives from various industries entered LS, creating a dizzying atmosphere. However, LS completely failed to integrate these individuals, allowing them to waste time together without purpose. Some ambitious individuals left after a few months, while others, being older, stayed on to "retire."

Most startups do not possess the capacity to digest too many external executives of the same level in a short time. Although the company has various problems, one cannot expect a bunch of executives to quickly resolve these issues. How did the "grassroots team" of a startup come together? Two or three partners, along with a dozen or so team members who believed in you, form a team that may not necessarily be highly skilled.

If luck strikes and a good opportunity arises, the company begins to recruit high-end talent. At this point, conflicts arise: the initial team may view the so-called high-end talent as "silver-plated guns," merely for show; meanwhile, the newcomers may look down on the so-called "old-timers," believing they are not competent enough. Such workplace issues are common.

The iteration of teams is an eternal challenge that every company must face. On one side, the founding veterans may accuse you of "burning bridges," "killing the donkey after unloading the cart," or 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 made executives, and the newly recruited talents work under them, significant problems will arise. When "old-timers" cannot manage newcomers, and newcomers do not respect "old-timers," the company is doomed.

Founders#

Another type of boss is one who is particularly determined, boldly moving forward, relocating "old-timers" from key positions, and employing all newcomers. What situation does this create? The neglected "old-timers" will not be willing to help and may even covertly undermine the newcomers to prove their incompetence; after six months, the newcomers will leave. The boss will have no choice but to bring back the old soldiers. Such situations are also 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, a company will struggle to grow and may even perish due to "people" issues.

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

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

1. It allows every employee who has become part of the company to feel a sense of accomplishment, realizing, "I can also decide who joins the company."

2. It alleviates the workload of the HR department while providing employees with a strong sense of participation.

In the company, employees often complain about the boss. They believe the boss hires people based on connections or looks, feeling that 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 to have this person as their colleague, and if their willingness is not strong, what the reasons are.

There also needs to be a consensus within the company that hiring is not just the boss's or HR's responsibility; it is 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 list of demands and then throws it all at HR, blaming HR when things do not go well.

Another common situation arises when a company is rapidly developing; many people will expect a small team leader to bring in many people. This supervisor will undoubtedly bring in their original acquaintances, which can easily lead to the formation of cliques.

At this time, the group composed of people in the company may be somewhat divided into factions, looking down on each other and lacking trust.

At this point, we need to hold a joint meeting to discuss what kind of people the company needs and what kind of individuals should be hired. 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 to ensure 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 also alleviate the tension felt by "old-timers," ensuring they do not feel that the boss is trying to replace them with newcomers. If "old-timers" feel they are being replaced, they will become defensive and set up obstacles, which will consume the company's energy in personnel disputes, leading to significant 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, content to remain mediocre?

For an enterprise, regardless of how rapidly the times change, it must make long-term plans, especially regarding "people," and then gradually proceed. Only in this way will everything you do be for the long-term development of the enterprise rather than short-term benefits.

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

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

This is the nature of companies; thus, one should not approach entrepreneurship with such a mindset from the beginning. The important thing is to think about how to get started.

When discussing strategy, I also mentioned a viewpoint: the mission should be grand, and the strategy should be small; in essence, they are the same.

Of course, everyone may worry that if they make things too small, no one will be willing to support them.

Often, people feel they must tell a grand story to attract attention, secure investment, and entice talent to join. As a result, doing something becomes a matter of chasing trends and making grand claims, hoping to attract resources and people through a big 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 rate 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 it is of no use. 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 lack real significance. Therefore, at this stage, user value and growth rate 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 persisted in, which ultimately returns to the growth speed. If a startup is struggling to grow, it indicates there is a problem. It is like digging; if you dig for a long time without any progress, either the ground is too hard, the location is wrong, or the tool is inadequate. If you persist in digging under these circumstances, it is of little significance; not only will you exhaust your strength and resources, but you will ultimately 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 seems wrong; they cannot explain it to employees or investors. At this point, you may feel uncertain but 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 halted; there is no need to insist that "this path must be correct." Just like an army that gets lost in a certain place, if they do not know where to go, they should frankly tell everyone and then send out small teams to explore, agreeing to meet after two hours. If they find the way back, they should hurry back to report; if not, they should return. This is a trial-and-error process. In simple terms, it is common for startups to head in the wrong direction; during this process, there is no absolute persistence, nor is there a need to hold onto luck.

Of course, if you are truly confident and see the light at the end of the tunnel, continue down that path; even if your judgment ultimately proves wrong, you will have no regrets. If you are not so certain and merely feel you should persist, commanding yourself to believe it lacks power 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, and do not forget that we have no money. If you hold onto luck and only realize something is wrong after a period of time, then completely deny the current plan A and immediately switch to plan B, how can you prove that plan B is definitely correct? At this time, people's mindsets can easily become anxious, and they may develop a gambler's mentality, thinking that since they have lost in the past, they should put all their money on plan B.

Many companies have made this mistake. In the early rounds of financing, we had a tendency to act on impulse. We secured $11 million and confidently sought breakthroughs from the B side, only to find that after executing, six or seven million dollars were gone, and we began to live on the edge, making adjustments and layoffs. This process caused significant harm to the team.

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

Sustainable business is not advocating conservatism but rather a philosophy of survival in the face of macroeconomic and market competition, a more proactive attitude.

Sustainable business is not about avoiding risks for the sake of "sustainability," but rather 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 — this is the way to sustainable business.

Common Practices During a Company's Low Period#

In such cases, the thought process and choices usually go as follows.

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 shrink revenue scales significantly while maintaining positive cash flow or controlling burn rates to drastically reduce losses. Some companies even resort to overdrawing, sacrificing user experience for advertising revenue. When faced with this situation, I often ask entrepreneurs, "Achieving a balance is good; at least you are temporarily safe, but what comes next?" At this point, they often lack a clear idea of how to break through next, merely saying, "Let's survive first."

The need for "safety in balance" may not necessarily be a good choice. If one must speak of 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 hold little significance.

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

When a company believes its goals are grand, it will naturally assume that moving slowly in the early stages is inevitable. Great companies need to do many things in the early stages, and indeed, the initial exploration may be slow, but we must be clear that having sufficient acceleration and the ability to grow rapidly is a necessary condition for the survival of such startups. If we feel we are moving slowly, we can honestly ask ourselves: "Is it because the company has not yet found the internal rules, logic, and motivations for growth?" In other words, we can be slow, but we must know how to grow.

Third, after encountering bottlenecks, they 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 severely 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, which differs from traditional models, is based on boundary-less dissemination, allowing direct contact and service to users from nearly limitless social strata, especially since the advent