As China enters a technology-driven era, the way we create value will change, so how can we see the trend of technology-created value? We all talk about “value investing” and “creating value.” What is the nature of value? Every large enterprise and economic entity is actively promoting digitization. What is the underlying logic of the digital value creation flywheel? As the main force of today’s times, whether it is to start a business, choose a career or do scientific research, we are faced with great opportunities brought by the change of times, then, how should we grasp these opportunities?
Recently, Dr. Qi Lu, founder and CEO of Qiji ChuangTan, delivered a keynote speech at a series of recruitment activities held by Qiji ChuangTan, sharing his views on these issues and his thinking methods for analyzing the market of The Times.
Author: Dr. Lu Qi
This paper is based on Dr. Lu Qi’s speech at Fudan University. The details are as follows:
The theme I want to share today is “create value with technology and seize opportunities with action”. Today, there are many opportunities in China’s innovation and entrepreneurship landscape, and the core of seizing opportunities is to observe trends and guide actions.
Do any great thing, always is the depth of insight, seize the opportunity, action-oriented.
In addition, from the perspective of entrepreneurship, ecology is particularly important. I will introduce to you how Qiqi Entrepreneurship Camp can cooperate with you to build an ecology and interact with entrepreneurs.
The first article “China + Technology” is a historic market opportunity
I. China has entered a technology-driven era
First of all, for entrepreneurs, need insight into the pattern of the market. Today, China’s innovation is already in a different pattern, and last year (2020) was a watershed.
Because human history is largely determined by black swan events, small probability events have a big impact. The COVID-19 in 2020 brings together and accelerates things that might have happened 30 or 40 years later. The four core trends have been pulled very short. First, the social foundations of digitization. A modern economy can no longer imagine working and communicating without a digital social foundation. Second, open up new frontiers of life science. The foundation of any modern economy is defence, which in the past is against man and in the future is against invisible enemies (such as viruses). At the same time, the life sciences themselves are developing at a high speed. Third, sustainable energy. The development of human history has entered a state where energy can no longer be sustained in accordance with the original structure. From the overall industrial picture we can see, the biggest industry in the next decade is likely to be the industry brought about by sustainable energy. Fourth, the global center is shifting to Asia, not only the economic center, but also the center of science and innovation.
These four big trends are drawn so closely together that everyone can see them very clearly. China’s economic development in the past 40 years has created a miracle in human history, which can be basically said to be driven by “China plus the open market”.
The theme of China’s development in the coming decades will undoubtedly be “China + Technology”, which is driven by several factors:
First, it is clear that China must build its own core technology ecosystem.
Second, science itself is advancing at a rapid pace and entering a new paradigm, which is inseparable from entrepreneurship and innovation. I’ll talk about some of our observations and thoughts in a moment, including why universities, research and innovation and entrepreneurship are increasingly interconnected.
Therefore, the theme of this era is undoubtedly “China + technology”. From the perspective of market, economy and development, this is the biggest market opportunity in history.
For example, one of the investment institutions of Quinta Ventures is the Massachusetts Institute of Technology in the United States. The logic of their investment in us is very simple, which is “China + technology”. Is this plate very large? Is. In this market, like YC this model will hold? Will be. Is a team like Lu worth investing in? Is. The logic is simple.
At the same time, the macro market of economic development is very important, including demand, supply, circulation and other basic elements; Consumption upgrading, China in the consumer end, the demand is on the rise, brand spillover, we all understand the new consumption opportunities; Urbanization still has 20 or 30 years to go.
Demographic challenges and opportunities; Diversified ladder structure is important. I didn’t have this concept when I was working in the US. It took me a while to work in China to understand this. A few years ago Larry Summers, the former president of Harvard University, came to me to discuss a question. China’s per capita income is one fourth of that of the United States. Why does China have world-class Internet companies and high-tech companies? I didn’t think it all through at the time, but in hindsight I think the answer is this. China’s economic development is hierarchical. There is not much difference between the first tier of China and that of the United States. Many high-tech companies are not even much different from their American counterparts.
For innovation, the ladder nature of China is a big advantage, because in the United States this system cannot grow Meituan, Pinduoduo, etc., because of its labor structure and industrial structure: agriculture in the United States has been industrialized. North America is an accident of history, China’s economic development is more like the rest of the world, from agriculture to industry to the current technology driven era. It is easier for China’s innovation to spill out to areas other than North America, and the innovation results from China are more likely to go to Southeast Asia, Europe, Africa, Latin America and so on. In the market environment, there are new infrastructure and “14-5”, as well as the “double cycle” this market.
Overall, we can logically say that China’s market today has a very unique opportunity from the perspective of innovation, and each of us is living in an era of ample opportunity.
To understand the market, we must do things in line with the attributes of The Times, that is technology-driven.
II. How to analyze the future trend in the technology-driven era
Technology is always linked to demand. Technology drives, demand pulls, and market accelerates at the same time. This is the core feature of this era.
If it is driven by technology, it cannot be separated from production, education and research. In a non-technology-driven economy, universities, research institutes and mainstream businesses are not so closely linked. Universities belong to universities and businesses to businesses.
However, if it is driven by technology, the connection is very tight. The core is a closed loop, starting from the government, supporting universities and research institutions with policy investment for infrastructure construction, and then there is an early-stage entrepreneurship and innovation ecosystem, allowing these startups everywhere, from zero to one, to pursue opportunities for technology commercialization.
In this closed loop, innovation and entrepreneurship is a special point, it is a force, everywhere. Every commercializable opportunity is driven by people, and some mainstream enterprises will grow out of it. They will generate greater social and commercial value, and generate more tax revenue for the central government. Governments at all levels will support scientific research, which is a big closed loop.
In this closed loop, the relationship between industry, education and research needs to be closely connected, especially research-oriented universities and entrepreneurial ecology.
Each of us has more and greater opportunities, but the path from technology to business value is longer and more complex. The key is to have insight, to see the direction of the future, and to take action to seize the opportunity.
How to gain insight? I want to share with you a framework for thinking about it. How to see the future? From technology to market business value is a very long chain, how to use a clear way to help each of us to see the future, look deep, look far, so as to grasp the opportunity?
Insight into the future, the starting point to understand the nature. What is the nature of value? What is the nature of technology?
With an understanding of the essence, we can first look at the structure: the structure is a stable relationship between the components of a complex system; Then we look at the development system, which is the mechanism for the formation of new phenomena; Then you look at the trend, which is the driving force that shapes the future state.
To talk about trends, you have to know the driving forces. The driving force of human beings is always the constant pursuit of knowledge and wealth. The whole history of mankind is to understand and transform the world and constantly pursue knowledge and wealth.
It should be pointed out that wealth is a broad concept, which is the universal ability to satisfy people’s needs and desires.
Based on these, we can judge “how does technology create value”?
The second is an insight into the trend of value creation by technology
I. Analytical framework: insight into the future trend of technology-created value
The essence of | value is the ability to meet human needs
A lot of people talk about value investing, or building a valuable company, but what is the nature of value? I’ve read a lot of discussions about value, and I’ve found that a lot of them define value in terms of value, which is self-recycling.
To define value, I summarize my current thinking. I believe that value is essentially the ability to meet human needs. Specifically, it is “the ability to continuously meet the needs of users and customers through the market now and in the future”.
There are a few key points here :(1) there is a difference between the user and the customer in the market. They are not necessarily the same person. The customer pays, the user is the user, and he may or may not pay. (2) The value itself is the ability to meet the needs of users and customers, and the essence is a kind of ability; (3) it is the ability to meet demand “now and in the future”, and it must be sustainable; (4) It must go through the market. Not a single word missing from this definition is value.
For example, if you have a factory, or if you have a research facility, and you continue to build things that will meet human needs in the future, then you have value. That’s the essence of value. Everything we do is built around human needs.
The core of | technology is to use information to organize energy transformation and meet people’s needs
What is the relationship between technology and value? I’m going to start with the nature of technology, and a lot of people have misconceptions about technology.
First, it is based on natural phenomena
Second, it has a corresponding scientific theory to explain the natural phenomenon
Third, it has an informational process, and it’s programmable.
Fourth, it has an energy conversion process, which is also executable.
Fifth, use information to plan energy transformation to meet people’s needs. Whether it is a biological process, a physical process or a chemical process, it is all energy conversion. There is no other way.
To sum up, the core of technology is to use information + energy to change natural phenomena and meet human needs. Technology and human needs are inseparable, which is the core structure system of technology.
The key of | technology to create value is to grasp the relationship between value creation and market price with long-termism
The development system of technology is always to develop technology with scientific theory from science, while technology creates new wealth in the economic development system. The development system of value is the economic system, such as the market. The market is a wealth creation system, and it enables technology to find demand better in this system to land.
What you need to think about here is that price and value are two things:
– The price of a company is an assessment of its value under certain market conditions, such as the price at which it trades in the primary market and the secondary market.
– The value of the company is the ability to meet the needs, the ability to continue to meet the needs of users and customers through the market now and in the future.
To be a good startup, to really create a lot of value, you have to stick to long-termism. Because the market environment is always changing, but the constant is “whether human needs are met”, so the core key of technology to create value is long-termism.
To be a good startup, we need to focus on “Am I meeting the future needs of more and more people” over the long term, and we need to be a company of increasing value.
We also need to get a good handle on the relationship between value and price, because without financing, without doing commercial exchanges in the market, you can’t sustain a company. In my previous definition, something of value must be able to continuously satisfy people’s needs, and in order to be sustainable, there must be a conversion between value and price, whether in the primary market or the secondary market.
The structure, system and trend of technology-driven economic development
So let’s take a closer look at history using the methodology that I’ve just described, and look at the opportunities that we have today in terms of history.
If you look at the history of mankind, the picture above, on the vertical axis is the size of the economic system, and on the horizontal axis is time.
First, the history of human development is largely driven by the development of universal technologies, whose structural core is the relationship between information and energy. When we talk about technology, what matters most is what kind of information structure is used for what kind of energy conversion. Nothing else matters. What determines everything is the process of energy conversion and the structure of information. The second is the system of economic development. There are three systems of wealth development in human history, all of which are defined by the structure of energy and information.
| different system of economic development of The Times
The core of economic development depends on the internal structure of our development system, whether it is the 1+1=2 system, or the 1+1>2 system, or the 1+1>4 system that we are in today. Why is the digital economy so important? Because it’s 1 plus 1 times b0, 4. This is what logic can deduce and analyze. (Note: Here, 1+1>2 and 1+1>4 are used for reference from Mr. Li Lu’s relevant speeches and literature).
Agricultural Age (1+1=2)
In the agricultural era, energy was mainly solar energy, and energy conversion was photosynthesis, which required certain land and chemical components such as nitrogen and phosphorus. The energy is free, the transformation process is simple, so the information structure is simple, so what people have to do is also simple, that is, labor. The agricultural age lasted for thousands of years, and it was a flat growth curve (see the orange curve in the image above).
It is important to note that the industrial age did not replace agriculture. The industrial age brought more tools, such as fertilizing and weeding, to make agriculture better. The information age can also make agriculture better.
But the core productivity of agriculture itself is land. If you had all the smart people in the world, if you only had two acres of land, you would only produce two acres of land. So the agricultural age was all about controlling the land and carving up the land. There is less excess output, so trading is simple without a complex open market. Therefore, the agricultural era is a 1+1=2 market, and the relationship between output and core capacity (land) is basically linear.
The Industrial Age (1+1>2)
The beginning of the industrial age is the energy revolution, human began to use fossil energy, its carrier is electricity. There are three different stages of industry, mainly energy conversion efficiency.
Industry 1.0 is the conversion of energy from mechanical equipment, 2.0 is the conversion of energy from electrical equipment, 3.0 is the conversion of energy from electronic equipment, and the conversion efficiency is progressive step by step. Industry 4.0 will be very different. It will be driven mainly by information and digital.
In the industrial age, due to the need for equipment to transform energy, people do more complex work, information process is more complex, need a process. At that time, universities were born, and engineers and scientists became professions, because human society needed a lot of skills, such as engineers, tailors, cooks, lawyers, etc., to work together.
From the mid-18th century to the present day, for 300 years or so, this curve (the green curve above) has grown very fast, and its core capacity is human skills plus plant and equipment. The industrial age was a much faster economy, and it was a 1+1>2 system. Why is that? To take a simple example, if it is a shoe business, a factory can produce a certain amount of shoes, and then for a factory, the output of shoes is not simply the combined amount of the two factories, but more. Adam Smith, the reason is division of labor and trade. After the division of labor, some people specialize in making shoelaces and others specialize in making sole, everyone is more focused, more efficient and more productive. Trade brings more opportunities upstream and downstream.
The Information Age (1+1>4)
We are in the information age today, as shown in blue in the picture above. The starting point is in the middle of the last century, mankind invented the universal computer, it can efficiently process information, use calculation to simulate and predict, design how to meet people’s needs faster and better; It can produce business value and social value more efficiently with less energy and in a short time. This blue curve is going up faster and faster, because it’s a 1+1>4 development system.
First of all, the core capacity of the information age is no longer human skills and equipment, but talent (R & D and market) + technology (rapid combination of resources). Why is 1+1 greater than 4? To answer with the same example above, when the scale of a factory expands to two, more knowledge is deposited, especially through data and software; Data allows us to understand demand more and better, and software drives allow us to meet demand faster and more efficiently, so output relative to core capacity has a multi-superlinear growth relationship.
Twenty years ago, the most valuable companies were the giants of the industrial age, such as cars and oil companies. Now they are mostly the leaders of the digital age, and more will follow. Entrepreneurship no matter what business, we must try to stand on the blue curve to do. And more and more of what we do is we do it with data and software. In essence, digitalization is the ability to assist, expand, replace or even surpass human beings. There are many products, such as content recommendation and e-commerce platform, which can do things far beyond human beings’ ability, and their production capacity will be increasing.
| scientific development into the fourth paradigm
In retrospect, we should also pay attention to the evolution of the system of scientific development. There are four paradigms for the development of science:
The first paradigm: The first paradigm of science is empiricism and the deep thinking of people, such as Plato, Aristotle, etc., who also made many discoveries in the agricultural age.
Second paradigm: In the industrial age, the development of science entered into the second paradigm, which was dominated by systematic experiments and analysis. Since Galileo, scientists and engineers began to become a profession and do scientific research in an organized way. Universities also came into being during this period.
Third paradigm: The third paradigm of science is systematic theory aided by computational simulation.
Fourth paradigm: The fourth paradigm of science is data-driven, using data and computing power to explore the frontiers.
The development of science has gradually entered the fourth paradigm. As we move into the fourth paradigm, science and commercialization are really inseparable, like, where do we get our data from? How do you get data in college? Where do the domestic research data come from? A large amount of data can only be obtained through a large number of commercial activities, so the relationship between the industry, education and research is different. As they get closer and closer, the iterative closed-loop becomes more and more compact.
For entrepreneurs, especially technology-driven and ambitious entrepreneurs, we need to pay attention to the opportunities presented by the evolution of the scientific development system. Today’s global mainstream system of scientific development was proposed by Vannevar Bushs (1944), The Endless Frontiers of Science, with several key points:
– Mass creation of research universities where graduate students and professors work together to advance research
– Research universities largely drive engineering research, not purely basic research
– Establishment of a large number of national laboratories
– Funded by the government, the research direction is mainly led by scientists themselves
Under the new scientific paradigm, this model is increasingly inadequate.
Today’s scientific frontiers are increasingly being driven by a handful of big companies and a new generation of research start-ups. To take a simple example, who is leading information science today? Not Stanford, MIT and other universities, but Google, Microsoft, Amazon, Alibaba, Tencent and Byte, a series of big companies. Today, it is not Dachang that is at the forefront of AI, but OpenAI and DeepMind (which is in Google but is essentially an independent startup). Similarly, commercial spaceflight today is led not by Boeing or NASA, but by commercial spaceflight startups such as SpaceX.
Why is a research startup leading the way? Because in this day and age, if you have the best technology, if you have a big idea, if you have the ability and ambition, you have the opportunity to get a lot of capital and stay ahead of the curve. This is a chance for everyone in this room.
| the global development of regional economy
In the age of agriculture, the economy was mainly located in the areas suitable for agricultural development, basically everywhere. The first stage of the industrial age took place in Britain, for mechanics, mechanics, and early physics were the most studied and most widely studied in the British Isles. From continental Europe, such as Germany, to North America, such as the United States, the United States has largely monopolized the frontier of research for the past few decades.
But now the frontier is likely to shift to Asia. On the one hand, the economic center is clearly shifting to Asia, and on the other, as research enters a fourth-paradigm era, large industrial and talent clusters have the opportunity to drive a new generation of research-oriented start-ups and drive science faster.
III. The structure, system and trend of digital-driven economic development
After talking about history and trends, let’s talk about the mainstream that drives history today — digitalization. What is digitization? Why is digitization important? What is the nature of digitization? What is its internal structure, development system and trend?
| what is digital?
First of all, what is digital? I think digital has a stable structure. The core of digitization always has six components, none of which is dispensable, but it always revolves around the needs of people, and digitization is humanized to some extent.
The beginning of digitization is to obtain information, express information, store information, transmit information, process information, and finally deliver information according to a certain kind of human needs. This is the core of digitization.
The first is to get information, we need to be able to sense, so there are all kinds of sensors.
The second is to convey information. Much of today’s information is expressed in symbols and words. The revolutionary nature of deep learning is a breakthrough in expression, no longer in words but in floating point-based overlapping vectors, which suddenly opens up the possibilities of a new generation of perception and all kinds of computing.
Third, after expression to store. Information can be written down on paper, stored on disk today, or stored in genes later.
Fourth, the transmission of information, to meet the needs of people, information often needs to cover a region, a country, the whole world and so on.
Fifth, processing information, using computing power to solve a task. Herbert Simon is the only person in human history to win both the Turing Prize and the Nobel Prize, and he has a very systematic theory of how people solve problems, any need, any problem, you can design a task to solve it by calculation.
Sixth, the delivery of information, is the delivery of computing results to people, to meet our needs. Today a large amount of information delivery is output on the screen for people to read, and more and more delivery is directly to control a device, or even directly to control a living system, etc.
We look outside a layer again, access to information is to get the data, the data is the expression form of information, the information, we have to meet the needs of people, know should use what kind of tasks needs a model to meet the needs of people, we call it a algorithm, the algorithm also have to go after the calculation, to calculate force, with silicon today, may be other ways in the future.
The essence of computing is to simulate, design, test how to meet certain requirements with very few people and very little time on a system architecture, and finally calculate the information and deliver it later.
What connects everything here is software, software is the medium, and the core is data, algorithms, computing power, human needs and tasks. This is the true meaning of digitization, which is the extension of people’s knowledge and ability, and helps people to complete tasks faster and better to meet their needs.
| digital opens the flywheel is extremely efficient value growth
Previously, we have analyzed that digitization is the extension of human knowledge and ability, and its process is unstoppable. I think the digitization process will continue to accelerate.
In the era of digital economy, it is basically driven by large platforms, such as PC, mobile Internet, the new generation of artificial intelligence and cloud. Once you have a platform, it has a stable abstraction level for software, you can write software, and it often has a hardware architecture for that software, such as x86, ARM, Risk-V, etc. It works wonders and explains why 1+1>4.
First, the cost of computing power gets lower and lower, which is Moore’s Law, every 18 months, the density doubles, the cost goes down, so the supply side gets cheaper and cheaper. That’s why digital-driven economies tend to make things cheaper and cheaper.
Second, software driven, which can iterate quickly, many software products iterate every two weeks. Like species, species that evolve faster are more likely to survive.
Thirdly, data precipitation. Every time software or hardware is called, there is data precipitation, which carries the understanding of human needs and the task of meeting the needs. Data precipitation is knowledge precipitation.
Fourth, social ecological network synergy. In the industrial age, how to coordinate? In the factory, it is mainly internal and upstream and downstream collaboration, and today it is the whole society collaboration, which is far more efficient than the factory. If I make shoes, I know who wears my shoes, who sells my shoes, and so on. I have customer data, and I can do product design, logistics, customer service and payment collaboration, and bring them all together.
The digital economy is an extremely efficient growth model, with the exponential decline of costs, faster and faster iterations, more and more data precipitation, and more understanding of needs. The collaboration is not in the factory, but in the whole society. It is an extremely efficient value growth flywheel.
To summarize, why is digital transformation happening in almost every country and why is it so important? You’re essentially taking a 1+1>2 economy and turning it into a 1+1>4 economy. The key is how? How to promote the process of digitization?
| digital process system structure, development and trends
The process of digitization has rules to follow, its structure, development system and trend.
What is the structure of digitization? Digitization has always been platform driven. On average, there’s a new computing platform every 12 years or so, and that’s the way it has moved historically.
The structure of the platform includes the foreground and the backend. The foreground is the interactive capability and the backend is the computing scale. Its development trend and driving force are the width and depth of digital coverage.
In the PC era, for example, representative companies included IBM and Microsoft. I’ve been at Microsoft for more than eight years, and Microsoft is an amazing company that has digitized the desktop of the corporate office: documents, information management and circulation in the enterprise. It’s essentially a mouse and keyboard company, but it’s built a $4 trillion industry ecosystem.
Next, in the era of mobile Internet, the representative enterprises are Apple, Samsung and Google. What do they digitize? It is people’s social communication information and People’s Daily behavior, travel, payment, social contact, etc.
In the era of artificial intelligence, the physical world and the digital world merge together, so it’s driven by the deep integration of digital, and then platform by platform, and then down, about 12 years or so, this is the trend of digital development.
IV. The (endless) frontiers of technological development: structures, systems, trends
If we put digitization together with other cutting-edge technologies, it is the following chart, and its structure, system and trend are all shown here. Let’s talk a little bit about the frontiers of digitalization. The frontiers of digitalization today are very multi-dimensional, and there are three big platforms moving forward at the same time.
| digital frontier: the three big platform at the same time
(1) Mobile Internet/Cloud
Our current mainstream digital platform is in the era of mobile and cloud, and its front end started with finger touch interaction. Today, the perception ability of mobile phones is getting stronger and stronger. With positioning, positioning is very important, logistics, taxi, and other opportunities brought by positioning. Next came cameras and video, lidar, and so on.
You have to pay attention to the video. There’s a huge opportunity here, and we’ve been waiting for it historically. Because for all of today’s human-computer interactions, the core logic is to describe a mental space in words, words, and images, and interact with that mental space by clicking and scrolling up and down. What does this logic mean? It represents indirect, not direct, interaction between a person and the object they want to interact with.
However, short videos, Kuishou and Douyin have basically opened the door to direct interaction. You can go to a broadcast studio and say to the anchor, “Boss, this bag is very nice, can you let me look inside, or can you give me a 20% discount”. Such interaction means that people begin to directly interact with the physical world and natural society, which opens a new door. In the future, there will be more and more software-driven direct interactions, which will evolve new content, communication, social interaction, e-commerce, enterprise services and so on.
Background, in the cloud era, we should pay attention to the cloud native. Cloud native is not only the software system into a series of micro-services, gateways, Mesh organization enterprise and C terminal such visible experience, more importantly, it will drive the future hardware update and software system reconstruction.
Video native will happen, and there is no doubt that video carries far more information than words and images. Future human-computer interaction, enterprise management will be based on video streaming. Today’s Internet is mainly for the text image, non real-time interaction, designed for audio and low latency is useless at interaction, must do direct interaction with video on the Internet, live class, the recorded lesson, etc. Various kinds of interaction, it brings a new foundation platform, a new generation of Paas, a new generation of Iaas, opportunity very much. There’s a startup in Shanghai called VoiceNet, which is amazing, and it represents a lot of similar opportunities.
(2) AI/ edge and 5G
Today, the era of artificial intelligence has begun. Today’s AI is based on deep learning, and its core essence is a new computing cornerstone. In essence, it expresses information with overlapping vectors and extracts features efficiently and quickly through a simple optimization process. With these features, we can quickly and efficiently solve the tasks we care about, such as visual recognition tasks and language interaction tasks.
The reason why this new computing method can become an important source of a lot of economic value is that it can project the signals of the physical world directly into this vector space. All sensors, controllers, and all physical modes can be applied. From the perspective of human-computer interaction, the doors of all interactive modes are open. In the past, interaction was mouse and keyboard. Now, it’s dialogue, visual interaction, and in the future, tactile interaction. Natural interaction can be turned on.
And on the back end, the opportunities for innovation are huge. The chip and the underlying software will have to be rebuilt over time, and today’s X86, ARM, etc., will not make it into the future because they only work effectively in very low dimensional situations where the control flow can be reliably predicted. China needs to rebuild its ecology. Although it faces a bottleneck, the timing is lucky because the original chip and the underlying software have to be redone.
In my opinion, this heterogeneous computing is the real mainstream computing in the future. In the past, X86 and ARM should be considered as the heterogeneous design of computing history, because the mainstream of the future is intelligent computing system. Architecturally speaking, people are regarded as an intelligent system. It mainly deals with high-dimensional information and uses a large number of highly parallel data as the mainstream of computing.
Intelligent cloud/edge, human development is always path dependent, the future of artificial intelligence is on the basis of today’s cloud and mobile end to move forward, so it will naturally generate intelligent cloud and edge, especially 5G edge computing.
There are also opportunities for new backends, particularly new data and computing platforms. Just to mention, in the age of AI, one of the new core capacities is data. Let me give you a simple example. If you had all the engineers in the world to build a voice interaction application, you wouldn’t be able to do it without 20,000 hours of labeled data.
Data is the core capacity in the age of artificial intelligence, but the replication cost of data is zero. If the gold can be turned into new gold, then the gold is not gold, so how to use new computing platforms like private computing, to turn data into productivity, there are a lot of opportunities, of course, like OpenAI, with big models, big computing power, new platforms like GPT1, 2, 3, 4, 5… In this way, the future model can be made very quickly as long as it is fine-tuned and few shot learning, so this is an opportunity for new IaaS /Pass.
And to talk about the breadth and depth of digitization, essentially the era of artificial intelligence opens up the integration of the physical world and the digital world, the digital ecology of the future will have a new generation of defining experience.
The history of the past, every era has been a digital ecology of defining experiences, the PC era was the invention of Windows, the mobile era was the iPhone in 2007, and we’ll talk about why this is a defining experience, because it launched a new era.
In the age of artificial intelligence, the defining experience has not yet arrived, but it will soon. A car with upgradable, extensible software that drives itself. A complete, software-defined and extensible hospital, factory, school, etc. Each of these defining experiences can kick-start a larger business ecosystem. The era of artificial intelligence is full of opportunities, including new life sciences, drug development systems, and more.
This is about self-driving cars, and the yellow on the picture above is the ecology of electric cars, which you’ve been paying attention to lately. More and more companies are entering the market. From the perspective of exploring the potential of future large-scale businesses, it is rational that they should all enter the market.
We have a lot of communication with Chinese car manufacturers. In May this year, Qiji made the first product docking between a start-up company and a car manufacturer. We talked a lot about the leaders, why are they building electric cars? Just to get a ticket to get in. Into what scene? Autonomous driving will bring the commanding heights of a new generation of information industry.
The car of the future is a software can be defined by the electronic electrical equipment (it will be driven by good hundreds of millions of lines of code), it will be the high ground of the information industry, the development of information industry will always be a mother of ecological, today mother ecological is the mobile phone, such as apple, huawei, Google, Qualcomm, many other products are based on the derived products.
The next mother ecology will be the automobile. Meanwhile, the electric vehicle represents the commanding height of the new energy industry, which is the turning point of human energy system from fossil energy to new energy.
There has never been such a commercialization opportunity in the history of mankind, occupying the commanding heights of both the information and energy industries, so if you have the ability today, you should grab a ticket and give yourself a chance. There will be more announcements to come.
(3) New frontiers
The new generation of digital front desk capabilities include AR, VR, and brain-computer interfaces. AR and VR can integrate the physical world with the digital world to bring new experiences, such as Ready Player One.
The new background is also up, although quantum is still far from commercialization, but the technology has been developing rapidly, it will take time.
Once quantum comes out, it is a complete ecology. In the early stage, it is likely to be quantum chemistry, quantum materials, etc. Of course, quantum computing will bring subversive effects.
| new energy, new life science, materials science, the new frontier in the field of space, etc
Today, other technological frontiers are developing at a high speed. Here are a few of them:
(1) New energy
The first is energy, and there is no doubt that society as a whole must find a form of sustainable regeneration. Carbon capture technology, new battery and storage technologies, hydrogen energy, bioenergy, and eventually our solution could be controlled nuclear fusion, because all the natural energy on Earth, like solar and wind, is ultimately produced by solar fusion; It’s hard, of course, but fusion is the most effective if it’s controlled.
(2) New Life Sciences
The life sciences are undergoing major changes, and based on the leaps in perception over the last few years, we have genomes, and in particular the cost of genetic testing has been going down; Other perceptual systems such as low temperature electron microscopy and so on; At the same time, artificial intelligence algorithms and large computing power make drug design, drug research and development, and precision therapy all develop in the direction of data-driven and computing, which is the fourth paradigm of science, which brings a lot of opportunities.
(3) New materials science
Materials science, a little bit behind, but also moving in that direction. A lot of the opportunities in China are more industry driven — chips, biotech, energy, etc. The chip industry, in particular, needs to find more good ways; Computation-driven forms of research and development will also move forward.
(4) New space
And finally, commercial spaceflight, because space is always needed to meet human needs. In terms of how to look at commercial spaceflight, we might as well look back to the past, like the Chinese Zheng He went to the Western Seas, or Portugal and Spain started to find the New World, if Zheng He had found the New World, maybe the history of today is different. The analogy to today is to go to the moon, Mars and other space, to find the space suitable for human commercial development, the future will be very different. The early applications of commercial spaceflight were for remote sensing and communications on Earth, such as Starlink.
Remote sensing system or the environmental data of the whole earth, including the climate, wind power, carbon dioxide emissions of the whole earth, etc., China also has a lot of start-up companies, the United States also has a lot of start-up companies, this direction of development has been very fast.
The structure, system and trend of demand
As we said earlier, the development of any technology is always linked to the needs of people. However, a misunderstanding we observed is that many people use technology for the sake of technology, rather than using technology to meet the needs of people.
Here we analyze the demand, demand also has its structure and system, according to which we can judge its future trend.
| C end demand: the user can never meet
On the needs side of the individual, there is a simple theory, Maslow’s Hierarchy of Needs. The bottom needs to be fed, the bottom needs to be safe, the top needs to be recognized and so on. From an innovation perspective, one concept I highly recommend is a letter Bezos wrote to investors three years ago, and his personal understanding is that users are never satisfied. People’s needs will never be met, because there is always a better way to meet them better.
Based on this, we can use a system to analyze the needs of the people and the technology-driven opportunities for innovation. For example, simply from the perspective of population, duration, 365 days and stage, the population can be divided into the elderly, children, professionals, students and so on. Based on this, we can draw a table and see how each type of person would be allocated 24 hours a day.
From the perspective of innovation, we believe that communication has a great breakthrough space, especially real-time asynchronous communication based on video. Whoever makes this work first can obtain great commercial value.
Entertainment, we think, is a need that will grow in the long run. There is always a need to kill time, especially to kill it meaningfully.
Education and health care are the two industries in China where the demand far exceeds the supply. They are very special. There are many professions for human beings to choose. If I had to pick one, it would be education, as long as education is good, everything else will be good. The long-term prosperity of a country depends on its efforts in education. This is a particularly important opportunity, and we all need to pay attention to it.
At the C end, from the perspective of entrepreneurship, I would like to share with you an idea, that is, how to consider long-term and deep needs. Good entrepreneurs often think deeply about needs. Let me give you a few examples for your reference:
First of all, the modern mobile phone that we all use today, it originated from Apple’s iPhone in 2007, and at that time, I was at Yahoo, and Steve came to Yahoo a lot. In 2007, when the first iPhone came out, it was a terrible phone. It didn’t work. The first iPhone was bound to AT&T, which provided a subsidy of 300 yuan and a cost of 600 yuan. There were 6 apps fixed on it, including 2 apps for Yahoo, 2 apps for Google, and 2 apps made by Apple itself, without any ecology.
I was one of the first people to buy an iPhone, and at the time, everybody was excited to get an iPhone, and it was a defining experience, and there was a new era, and this phone was different. Why is that? The iPhone in 2007, what does it satisfy? I can’t get through and there are only 6 apps. Why is everyone so excited? In my opinion, the core of it is to meet the needs of people to get information anytime and anywhere, because people are an information animal.
The first iPhone was thick and heavy, like a brick, but on a single charge, you could use it for at least a day, you could carry it in your pocket, you could have access to information 24 hours a day, you could have access to information anywhere, you could have access to information 24 hours a day, you could not have access to a computer because you had to sit at a desk. The iPhone ushered in the defining era of 24/7 access to information, anytime, anywhere. To sum up, the bottom layer of iPhone meets people’s demand for access to information anytime and anywhere.
Let me give you another example. As we all know, Edison invented the electric light, but he couldn’t sell it for 7 years. He couldn’t find an application. The death penalty has been tried before in history, and it didn’t work. Could you please tell me what needs electricity meets for people? I think electricity meets people’s need to convert energy anytime and anywhere.
Why was Edison able to change history and make great inventions? Since electricity satisfies the need to convert energy anytime and anywhere, lighting is just an application. At that time, people didn’t want to buy Edison’s electricity because oil lamps worked so well, candles worked so well, and the lighting needs were basically met. But with electricity, we can have electric irons, electric fans, microwave ovens, wrinkled clothes, converted energy, ironing it. How did I iron my clothes before? Use a coal stove to boil water for scalding. Access to energy for conversion at any time is the lowest level of demand. Good entrepreneurs should seize this historic opportunity and have a deep thinking and grasp of the bottom level of human needs.
Let me ask you one more question. Elon Musk founded Tesla. What needs did he satisfy? What pain point did he solve? Is Tesla meeting people’s transportation needs? That’s already been met. We have so many gas cars. Why is this one company so unique and worthy of our attention, and what needs does it fulfill? I think he fulfilled the human need to have children and grandchildren alive.
Without new energy sources, we all know that there is a high probability that our children and grandchildren will not be able to survive on this planet. This is a deep need, people are a very special species, we want not only ourselves to live well, but also the next generation to live well, their next generation to live well, this need needs to be met.
A good entrepreneur, especially one who can really change the world, wants to start this kind of fundamental innovation by thinking deeply about the needs and meeting the needs of a large number of people better.
| B requirements: reduce cost, increase their income
Based on the consideration of time, I don’t speak the B end, B side also has its structure, it will always need to reduce costs, increase output, always need to manage the production, sales, customers, employees, supply chain, such as capital, enterprise’s informationization, the fourth industry, there are large and small B, B big demand and the demand of the small B B are very different, No company in history has ever been able to serve both Big B and Little B.
Just to talk about it, why wasn’t agriculture digitized before? Because agriculture can’t be digitized effectively, even if you give it a phone, you can’t get the information, the phone as a sense, it has no way of knowing how rice is growing, how wheat is growing, it has to use sensors. In the field of agriculture, digitalization, automation, information technology and intelligence work together. Before artificial intelligence, agriculture could not be digitized, so this opportunity comes together and is superimposed.
We also need more of the foundations of enterprise digitization, especially open source technologies.
The reason why today’s information industry is so flourishing is mainly the software deposited in the past 40 or 50 years. For every start-up project and every new application, programmers don’t write much code, because most of the code has already been written and is modular. Therefore, open source is very important.
The fourth industry, the digital transformation mentioned above, will pull up the primary, secondary and tertiary industries together, and all of them will have the opportunity to change from 1+1>2 to 1+1 BBB4.
The third article
We need hacker culture:
Solve problems creatively with your hands
1. Career choice trend in the era of technology-driven innovation
| today and in the future, to create wealth most career is what?
The picture above was found on the English website and changed after translating it into Chinese. This is an interesting graph, but the core point is that in the course of human history, because of the different times of productivity, there was a human occupation that created the most wealth, or to put it bluntly, made more money.
Early on it was hunting, farming, and later it was warriors, because in medieval Europe the people who looted and looted and provided protection made a lot of money. At the end of last century, as an investor on Wall Street, he made a lot of money buying and selling companies.
In this era of the 21st century, there is no doubt that entrepreneurship is the biggest career in wealth creation.
When I looked at this map, I thought: What’s the next career that will generate the most money?
For me, there is no doubt is a scientific research (research), especially the use of a new paradigm in scientific research, which is based on the fourth paradigm, the commercialization and deployment, namely, a large amount of data and a lot of work force, constantly explore front, the new research will be not in the traditional sense of the ivory tower, it will open up a new human occupation, also will be the most professional to create fortune.
| how to think about the younger generation stage of career planning
Here are some ideas for a rough career stage.
In your 20s, the best thing to do is walk fast. Because of the low opportunity cost of being 20, you should try everything you can to get your feet wet, and you’ll quickly hone important skills.
In your 30s, you need to optimize for going far, because to do something big, you need to go fast as well as far. In your 30s, you need to build a support system; Having a good family, an understanding spouse, like-minded friends can go a long way with you.
In your 40s, you optimize the platform: Either build your own platform or find a platform where you can be fully present and open to value creation.
After the age of 50, you can start thinking about what a second career might be. Today’s scientific development can make human life longer and better, so more and more people will have a second career, the second career is mainly suitable for you and can continue to do. For example, I finally considered for a long time, and chose to do Qiangji, the physical energy may be 15 years, maybe lucky, can work for 20 years.
This is a simple phased career plan.
| if you are a student
In school, no matter what your major is, it is more important to learn the way of thinking. At Yahoo, I employ more than 3,000 engineers, and at Microsoft, I have more than 14,000 engineers on my team, and it’s been my observation that most of the things you learn in school, most of the things you learn in school, you probably don’t use in the workplace. What is more important is to exercise the learning method and thinking ability in school.
Personally, I think that some foreign universities do a better thing is — hacker culture, that is, hands-on creative problem solving. Do it. Go into the lab, do chemistry and biology experiments, write computer code. Do it.
If you have the opportunity to work as an intern, joining a startup should also be considered by everyone. I used to recommend internships at big companies, but now I recommend internships at startups. Startup companies give you more opportunities and the salary is not too low.
In college, networking is very important. Many good entrepreneurial teams in the United States were classmates in college, such as Bill Gates and Steve Ballmer at Microsoft, Larry Page and Sergey Brin at Google, and so on. Find long-term like-minded people in the university and move forward together.
At the same time, my personal experience is that by the age of 25, 80% of people don’t know what they want to do in the future and don’t think it through, and that’s OK. If this is the case, I think you can find a can learn good opportunity and income, ideally, in alibaba at the age of five, or tencent at the age of five to join them, so, many, basic can wealth free after company listed, wait until you want to clear out their own business, can bring their own team. Of course, there are also 20% who clearly think that they are going to be scientists or professional managers in the future, so do it as soon as possible, don’t wait to think clearly, don’t think clearly to find opportunities that can both learn and make money.
| the choice of career direction
At present, several mainstream career directions are work, scientific research and entrepreneurship.
In terms of work, they work in large factories, government offices and public institutions. The advantage is that the income is relatively stable and there is room for learning and growth. Relatively speaking, it makes you less motivated and less stressed. When you’re younger, you can think more about driving, and more stressful situations, so that you can go forward a little bit more. As mentioned earlier, you should try more in your 20s because your opportunity cost is low.
In terms of research, I personally think that considering research today, especially with new methods. OpenAI, as you know, was incubated by YC, by Elon Musk and Sam Altman, is a new kind of research institution, and it also raises money, but it’s not a limited liability company, it’s not a limited partnership, it’s a special institution. I think it represents the trend of the future form of research to some extent. It needs financing, it can publish articles, it can be commercialized, and it also directly solves major scientific problems.
In terms of entrepreneurship, college students should never worry about lack of experience or industry experience. From our experience in YC, starting a business is a very magical thing. We all have the same starting line. Even if we are young, we have the advantage of being young. Being poor, having no house, is also an advantage.
Entrepreneurship and innovation are usually done in a new way, but big companies often have no advantage, even if there are many people. People need to discuss and reach consensus on “what should be done”. But the world has changed and it needs to be done in a different way, and in this case, a small, young team has an advantage. When you consider starting a business in college, you must take into account that you have a technical background. You have a lot of advantages at the starting line. Experience is of limited value in a new startup track and can sometimes be a liability because new approaches are needed.
The choice of | business direction
In the choice of entrepreneurial direction, we generally recommend this method to choose, which has three core dimensions: observation, thinking, and verification.
For example, if you want to start a business in space rocket propulsion, you need to keep watching, reading, thinking, reading articles, talking to people in the industry, talking to people in the industry over a period of time, and you will develop a proposition that this is what the future of commercial space propulsion should be.
Once you have this proposition, you have to verify it immediately, quickly, and the best way to verify it is to talk to someone. Our biggest advice to entrepreneurs is to constantly talk to customers, talk to users, iterate quickly and validate, in the whole process, what you need to optimize is your unique insight.
The most important thing investors care about in any startup is that you have a point of view and no one else does. The best thing to do at your chosen startup track is always to be a little ahead of the curve, look a few steps ahead of others on the track, and have a unique perspective.
Finally, no matter you are starting a business, or go to a big factory, agencies, do scientific research, is to grasp the opportunity. But opportunity is like bus, it doesn’t matter if you miss one, there will always be another one. The key is prepared and able to get on when the bus comes.
In addition, my personal conclusion is that networking is important. There is an American saying: “You get your job not because of what you know, but because of who you know.” This is a reality in society, and it is important to invest time in building good relationships when planning one’s career.
Second, grasp the development path of start-up companies
Next, I will tell you a little bit about entrepreneurship. Entrepreneurship has its structure, development system and trend.
| early startup core structure
In the early days, the structure of a startup looks like the one above, with the founder or team of founders at its core. The qualities that are most central to a founder team and that we are most concerned about are the following:
First, the ability to judge the future. A good founder is someone who can always see the future a few steps ahead of everyone else on the track. This is very important. It’s almost impossible to do without this ability.
Second, I have strong thinking and communication skills. In the early stage of a business, the core ability is thinking and communication. Communication is behind financing, hiring people and introducing strategic partners. It is very important for a founder to think clearly and speak clearly.
Third, action oriented, problem solving. This is particularly important. At the early stage of the business, I would face different problems every week. One week I would look for a place, the next week I would look for an employee, and the next week I might need to get a certificate. At YC, the best entrepreneurs solve different problems every week. If an entrepreneur has been working on the same problem for three weeks, that’s not going to work.
Fourth, enduring internal drive. Most of the time, we think it’s OK to start a business for wealth and fame, but it’s not enough. Really do well, go far, to have an inner dream, a kind of heart, a wish to force, let you go far for a long time.
Therefore, a good entrepreneurial team, with this core, can constantly change people to come in, and constantly build capabilities through organizational methods.
| the development of early startup system: to build core competencies
The core of entrepreneurship is to create value. What is value? It is essentially the ability to continue to meet the needs of customers and users today and in the future. Its development system is determined by this nature, and its value is realized by building six core competencies:
First, technological research and development capability. To be frank, most of today’s Internet startups don’t necessarily need this capability. Today’s Internet and mobile Internet don’t need to develop new technologies. Existing technologies can be used.
Second, the ability of product development. Without product development capabilities, you can’t meet future demand.
Third, the ability of products to meet demand. Even if you make the product, it is not enough. You must use the product to meet the demand. For this reason, the online product must be operated and maintained, A/B test, and adjusted.
Fourth, the ability to acquire business value. It’s not enough that the product has the ability to meet the demand, you can’t sustain, you have to be able to receive money to sustain, the startup has to survive, so it needs to be able to monetize.
Fifth, the ability to reach users/customers. Start-up companies need to have more channels to reach more and more customers through marketing and operation capabilities.
Sixth, access to capital (financing capacity). Early stage startups need to raise money constantly to run the whole model. Raising money is an ongoing process from seed, angel, PreA, A, B, C, etc., to listing on the secondary market, etc.
| startup the future value of space
Let’s talk about financing. When you raise money from investors, the valuation of the company doubles from $50 million. Why? Your valuation depends on the one thing you do, but whatever you do, we can use the “out of the bowl, out of the pot, out of the field” model.
In the bowl: that is, with your product today, suppose you have 10% market share in five or ten years, what is the unit Price of your product and how many people can use it. The simple calculation formula for the value is P×Q (Price×Quantity). This is the value in your bowl, which you have to calculate.
In the pot: in the future can be derived new products, such as you are doing mobile phone, can do glasses, can do AR, VR and so on. Or the same product, the mobile phone can be sold in China, it can be expanded to India or Pakistan, this is called the pot, this can also be counted.
Field: the business value that can be generated by crossing borders with your core competencies within the same company. The best example is apple, the company’s core competence is the best combination of technology and art, apple made the car now, if apple make house one day, you don’t strange, apple made the house must be the most beautiful, without a doubt, its core is the crystallization of technology and science, the company will continue to crossover. That is the value of the field.
When you go to raise money, you need to know “what’s in the bowl, what’s in the pot, what’s in the field.”
Valuations go up in the startup process because the company has increased capabilities, such as new technical or product capabilities, and because increased capabilities inherently mean reduced risk.
There are four major risks in starting a business:
First, market risk. Most entrepreneurship is a market risk, and many entrepreneurial projects are fake demands, which do not exist and do not need to be met. The other situation is that even if you find the right demand, the channel products can not be sold. For example, most of the enterprises To B die in Sales, and the cost of selling is more than the profit you earn. These are two situations of market risk.
Second, technical risk. Some of the startup technology is not in place, too early.
Third, execution risk. In the process did not do a good job, stepped on the pit, can not climb out.
Fourth, capital risk. There are some projects where all the above risks have been solved, but they need to burn a lot of money and a lot of capital. For example, quantum computing, quantum computing is very rare in the United States, it requires a lot of money. Today’s capital markets have not been able to adequately meet this demand for financing, and there is indeed a risk of capital. So entrepreneurs have to think about where the risk is, how to constantly build capacity, constantly reduce the risk.
Three, grasp the five core elements of early entrepreneurship
There are five key takeaways for early stage entrepreneurs, especially in the early stages.
First, decide exactly what to do.
It’s important to figure out exactly what to do. It’s a process of constant thinking and iteration. It’s very important to think clearly. A good example is Alibaba. What does it do? Use technology to make it easy to do business. But they didn’t quite figure it out at first, and after a lot of thinking, they found it. What business is Disney in? Bring joy into every home, this business is good, think clearly not animation, not movies, but to bring joy (including amusement parks, toys, clothes, etc.) into every home. It’s all about figuring out what I want to do, what I can do, what I should do.
Second, identify the value of what the company is doing.
The reason why a start-up company has value is that it has enough capacity to meet the demand now and in the future. In the market, the valuation is the above mentioned P×Q, which is calculated respectively in the pot, the bowl and the field.
A good entrepreneur must have a path plan, including how to become a unicorn in five years. It’s important to raise money in the U.S. A lot of investors have to ask, how do you make $100 million a year?
Third, grasp the tuyere.
The first element of entrepreneurial success is the entry time, to do the right thing at the right time, this is more important than anything else.
In addition, to find potential energy, my personal experience, the market can not push, the market can only follow the trend. A good entrepreneur must see the momentum go in. For example, a simple and crude way is to watch Apple. The day Apple decides to enter the market is the best signal. Because Apple was never the first. It wasn’t the first to make a phone, it wasn’t the first to make a watch, it wasn’t the first to make a tablet. Part of the reason why the electric car market is so hot today is because of Apple’s entry.
Fourth, build barriers.
In the YC and the miracle system, we think that any good business, it must have barriers, and without barriers, it will not be a good business.
Sometimes, you may have the luck to do it first, but everyone rush in, what do you do? You need to think: how can barriers be created? Barriers include network effects, ecological effects, scale effects, special resources, patents, and so on. A good entrepreneur will think very clearly about how to make it impossible for others to copy me.
Fifth, build a competent team organization.
Why are we the team that can do these things? A lot of times investors will say, you’re all right, this business is great, but I can find another team, why invest in your team?
You need to explain why you can do this thing well. The key here is to improve the speed of cognition and open your mind. I see a lot of teams, the cognitive improvement is very fast, the mind can not open, if the mind is narrow, the good people will not come in. People with a broad mind can introduce people who are better than themselves, and constantly improve the ability of team iteration and stimulate the ability of the team.
Four, the two most important things in the early days:Accelerate product market matching,Live longer
The probability of early business success is very low, before you start a business, must think clearly, whether this is a very worthwhile thing, that is to say, even if it is not worth it, live up to yourself, you are proud of yourself, your parents are proud of you, the home is proud of you, in a word, you are doing something worth doing.
Why is the startup rate low? Because starting a business is hard, there are so many problems to solve along the way. To support more and better entrepreneurs, all institutions in China need to be willing to work together to build a good ecology and help entrepreneurs in different dimensions and in different time periods.
A brief introduction to the innovative altar.
We’re called StrangeVenture, not StrangeVenture Capital, and essentially we want to build an entrepreneur community, because we think that the best way to help entrepreneurs on all dimensions is to have a community.
The founder of YC, Paul Graham, is my colleague in Yahoo! In 2005, when he started YC, I also helped him in Harvard University. Therefore, I highly agree with the core of YC after long-term observation. But due to international relations, they decided that YC China would not do it. I am very grateful to my team. At that time, there were 6 of us in total. We decided to do it by ourselves and decided to raise funds by ourselves.
Let me briefly talk about the model of Qiji. We follow the model of YC to build an entrepreneur community. What we specifically do is to start a business camp. At Startup Camp, we work with entrepreneurs to solve their core problems.
We have a road show day, a road show day approach, to help entrepreneurs raise money. Today China’s ecology is similar to that of the US, and capital is on the strong side. On our roadshow day, we turned it upside down, because every investor is also worried about losing the next Alibaba, the next byte, and the next Tencent.
We have roadshow day twice a year, 1000 investors, 30 companies come on stage, three minutes to talk about their investment projects, turn the process upside down, let 1000 investors chase 30 projects instead of entrepreneurs chase them, as much as possible to help founders raise money better.
We do two things at Startup Camp, because there are only two things that are important for early stage startups: first, accelerating product market matching; Second, help startups survive better.
| how to accelerate the matching products market
The core of why product market matching is so important is its historical reasons and historical trends. With the progress of technology, more and more people choose to venture, there are more and more ideas, more and more good technology, product development faster and faster, but, to be ready to cut into the market, everyone only 24 hours a day, it can form a bottleneck, the bottleneck of the mouth will be more and more difficult, not to advance is to go back. And you can see it in the picture below.
Let me give you an example, so you’ll Get a better sense of this. Is making games competitive with making content? B: He must be. He spends time playing the game and doesn’t read the content. You only have 24 hours in a day, so it’s getting harder and harder to get over. But more and more entrepreneurs want to come in, so what? The only thing you can do to increase your chances of success is to run fast and take small steps.
Whenever you have a great idea, don’t wait for the product to come out, just go talk to people, get feedback, break your startup into small steps, keep verifying, and keep reducing your opportunity cost.
Set product market matching target
How do you do that? We have a simple way to do it, and we’ll show you. First of all, every entrepreneur must set a clear Product Market Fit. How to set this goal? Let me interpret this picture for you.
The core point of this graph is that any technology-driven product, its life cycle is always like this, depending on the psychological and social distribution of people. For example, young people are always open, and the older they get, the more conservative they tend to be. Rich people will never be price sensitive, willing to buy anything, not rich people will always be price sensitive, etc.
The left blue here, on behalf of the early adopters, bad product they can use again, the next wave of people is more important, a wave is called a “visionary”, these people tend to be the company’s executives, they have a vision of the future, always looking for new products to help realize your dreams, the price is not sensitive, and willing to risk, this kind of person is valuable.
The next wave is the people who are favorable to technology and willing to adopt new technology, but they are pragmatic. When they decide whether to use a new product, their core consideration is whether their competitors or peers will use it. If they use it, I will use it. This is the chasm, where most startups die, as shown in red above, we call it Death Valley. In this case, users don’t come one by one, they come together.
What is a true product market match?
True product market matching is close to crossing the chasm. There is a definition, from an American investor, Marc Andreessen, one of the main inventors of the PC Internet, which says that the real product market match should have three points:
First, I found a profitable market, and I wanted to prove that I could make a lot of money. Generally there is income, sometimes you really can not find income, can find income letter of intent, the content of the agreement I do what conditions, you agree to buy my products at what price, this is the next best thing. The core is that there must be income.
Second, I’m meeting a user and customer need, and I need to verify that we’re meeting a need that no one else has met before, or that I’m meeting better. Let’s say you save two hours a day. Or maybe it’s cheaper and you cut the price by 50%. Either way, make sure you have specific information about how well you fulfill a particular need.
Third, incomes are growing at a high rate, or will. This is the most important point. Our experience is that when a startup doesn’t see growth early on, either the product isn’t right, or the product is right, and the market isn’t right, or it’s a fake demand. If there is no growth, sorry, reconsider.
A start-up project, in the early stage, is to dig a well, the first drop of water, the second drop of water and so on are from the same water source, the water from the back is rolling in, this is growth, the same need is met by you, you have found water. We often say in YC that poor entrepreneurs have dug a pit with three drops of water and three orders, all of which are different people with different needs. It is useless and there is no growth.
Entrepreneurs must design goals that include these three goals: making money, meeting demand, and growing.
With this goal in mind is fast iteration, and we strongly recommend that each team take a two-week iteration period. One week is too fast, one month is too long, three weeks is not a natural cycle, two weeks is the most normal, most teams are two weeks, must be collaborative, action oriented, problem solving, the core is to reduce the cost of trial and error.
It is impossible not to make mistakes in the process of starting a business. The only way you can increase your chances is by running fast and small, turning a big hole into a small one that you can climb out of very quickly.
In our startup camp, it’s about working with people, solving problems together every week.
| how to live longer
And finally, how to survive. Most companies are like that. You can’t support yourself with income in the early days. That’s what technology driven companies are like. You have to rely on other capital, you have to raise capital, you have to articulate these six things, what are you doing, why is it valuable, why is today the best time to get in, how do we create barriers? Why are we the best team to do these things well? How do we do growth?
At our startup camp roadshow day, each team goes up and has three minutes to talk about this. But to tell the truth, these three minutes are not easy. Behind these three minutes is constant combing, constant thinking, constant iteration.
Finally, I would like to briefly mention the registration process of our entrepreneurship camp. Qiji entrepreneurship camp is held in spring and autumn every year, and the application form is filled in on the official website. Our system is, instead of looking at the BP [business plan], we want you to fill out a questionnaire, answer the questions, and the questionnaire has a 60-second video about yourself.
We hope to lower the threshold of innovation and entrepreneurship, because most of the investment institutions are hierarchical, you step up the PPT, it is inside layer by layer, you do not know how far the final.
For us, once you fill in the application form, 100% of our partners will see your application form. We focus on the highlight of each project. We look for entrepreneurs with potential that others are afraid to invest in.
There is no limit to the scope of our application, which can be applied at any stage, round of financing, industry, country or region. In this phase of our venture camp, there are foreign entrepreneurs from Europe. Their artificial intelligence can improve the quality of cement production. China is the largest cement market, so it is suitable for landing in China. They are a non-Chinese speaking start-up team, but they have a great business. All in all, Qiji is a China-based, globally oriented investment and acceleration agency.