10 Questions with Fred Episode Fourteen | Every Internet Company Will Combine Blockchain Technology in the Next Three Years, Says President of Meitu Mike Cai on 10 Questions with Fred

10 Questions with Fred Episode Fourteen | Every Internet Company Will Combine Blockchain Technology in the Next Three Years, Says President of Meitu Mike Cai on 10 Questions with Fred

Sept 14th 2018| Investment By:Sakura
Artificial intelligence is icy, and has no emotion, thinking or soul, it will be difficult for artificial intelligence replace the human being in a long period.

Time: At 10:00 PM, May 2

Wechat group: Mars 3.0 wechat group


Mike Cai: Chairman of Meitu, founder of 265.com. From 2005 to 2007, successively held the China Internet Webmaster Conference for three times and was praised by the webmasters as the personal website godfather. Ever invested tens of excellent websites like Storm, etc., and become a famous Chinese angel investor.

Fred Wang: Founder of Mars Finance, founder of Linekong (HK.8267), partner of Geek Founders, and former Senior Vice President of Kingsoft.

Following is the sorted dialogues script:

Question 1

Fred Wang: We all know that you got your first pot of gold from the domain name. You ever transacted uc.cn, qiyi.com, fm365.com, t.cn, 360.cn, g.cn, weishi.com and other excellent domain names. Thus, you are also awarded as the “King of domain names”. In April 2005, you funded the board and lodging in Xiamen and held the two-day “first-session China internet webmaster conference”, inviting 150 webmasters of 150 most heavily- trafficked personal websites, including Xingping Li (hao123), Shengdong Pang (51.com), Michael Yao (58.com), Gary Wang (iTudou), YUJUN (9238.com), Xiaoshe Meng and etc. as well as domestic internet moguls Jun Lei, Hongyi Zhou, Ren Liu and IDG and representatives of mainstream investment institutions. This session of webmaster conference is generally appraised as the mark indicating the transformation from personal website to commercial website and it also innovates the internet grassroots entrepreneurship. Why did you want to organize this webmaster conference?

Mike Cai: I was engaged in internet from 2000. I began with domain names out of the following reasons; firstly, because the first is I have no technology background; and secondly, starting up a business with domain names has low cost. Registration of domain names may be done with one computer and a little fund.

In 2003, I started to be engaged in the personal website 265, and came to Beijing then and obtained IDG investment. I was the first one to get the IDG mainstream fund investment on grassroots website at that time. I think there are still more personal websites and personal webmasters needing such platform to get venture capital, so as to become bigger and stronger. This is why I organized the holding of website conference.

The reason why I selected Xiamen is that my business started from Xiamen, so I want to help some personal webmasters of Xiamen. 

Fred Wang: Why did you select domain name and personal webmasters for your internet entrepreneurship? And what inspirations did the experiences of domain name and personal webmaster give you for your investment and entrepreneurship?

Mike Cai: The experience associated with domain name and personal webmaster greatly influenced my future investment and entrepreneurship. Domain name is a basis for internet. I could understand the domain name registration information of all websites in the course of registering a domain name, including how to design the website, who design the website and how to design it successfully, all of which gave me great help.

At that time, what I have already been able to do was that I knew the personal webmasters of websites with flow IP above 10000 and knew how they did it. Such learning is very important. Later when I was engaged in the angel investment field, I could quickly understand the successful angel investors in China and exchanged with them. Similarly, I am interested in the blockchain, and will contact the most successful investors in China and even in the world who are engaged in the blockchain within the shortest time.

This is a methodology of mine. I hope that you will be inspired by it.

Question 2

Fred Wang: On Apr. 24, China Angel Investor Conference 2018 was held in Hong Kong. I know Jobs Lei, Kai-fu Lee, Bob Xu, Charles Xue, Xiangyang Yang, Boquan He, Gavin Ni, Hongjia Gong, Fan Bao, Gang Wang, Michael Yao, Yue Yuan, Liqing Zeng and you are the members of angel conference. What did you talk about at this conference? Do you think whose achievements are most? As an influential investor, should do you think value in addition to return on investment be considered or not? How do you do it? Ha-ha, this problem is a little extensive, but your opinions may be valuable.

Mike Cai: China Angel Investor Conference holds an external meeting once a year with a view to promoting angel investment and encouraging entrepreneurship. As for why we hold the conference in Hong Kong, it is because the angel investment has been done well in China. We shall develop it globally, and Hong Kong is just a place integrating Chinese and Western culture. Through this conference, we hope to discuss the future investment direction so as to make greater achievements.

As for whose achievements are biggest among 14 persons of the angel conference, I think their achievements can’t be judged completely by economic indicators and profitability. Each person actually has his/her own methods. Now, I would like to talk about features of each person in my opinion.

As for Kai-fu Lee, his investment style is relatively logic. He may measure one project logically with respect to data, team and development direction. He also prefers to invest in such persons with experiences in bigger companies.

As for Bob Xu, I think his style is relatively romantic. As long as your project can touch him and he thinks it is interesting, he will invest in it. 

As for Charles Xue, he is a person who most easily accepts new thinks I’ve ever met. He may invest many projects. As long as they do not cost much, he’s willing to invest in them. Among many projects, he may hope that any of them can become a hot one. 

Xiangyang Yang as a person with feelings often pays for feelings. In early days, when he invested in medical field, he wondered whether China could make breakthroughs in medical field to save more lives. Later, he invested in hardware field because he thought China was weak in terms of industrial manufacturing, and he was willing to help some Industry 4.0 projects.

As for Jun Lei, he often invested in projects of those he was familiar with or projects introduced by those he was familiar within his early days. In addition, in my opinion, his criteria are whether there is any opportunity for this project to be recognized by more investors and establish a strong team. I think this is his style. 

As for Gang Wang, he is the youngest in the angel conference. I think his investment style is most mature. He almost goes deep into the team, including direction, talent and capital.

As for whether angle investment has values, I think each person is the same. They all wanted to make money in early days. Once they have earned enough money, they may consider more about social value. For instance, Hongjia Gong of HIKVISION has earned RMB tens of billions. One day when I chatted with him privately, he said he was very wandering and didn’t know how to utilize this money. Later he got it: Now that the God gives him so much money, he should bear more responsibilities and help more persons. So, he is increasing his investment scope and investing all his money in more and more projects.

So do I. Actually, I invested in at least hundreds of websites. Several successful ones may be known by you. But there are still many unsuccessful ones. When I invested in them, I also knew they might not produce profit or have no commercial value. But if I thought they might help more people, I was willing to invest in them.

I would like to give two examples. I invested in xinnong.net, a website that helps farmers to develop agriculture through farming and planting technology. At first, I also thought this project might not produce profit. But it could actually help some farmers understand how to perform farming more efficiently and was of great significance. In addition, I invested in a website named Daibang.com which developed in Hunan and Hubei. At that time I hoped it could become Chinese Yunus to provide petty loan for farmers. Although it has been more than 10 years since I invested in this project, and it is basically not a success so far. It actually has already helped a lot of farmers.

Fred Wang: Several more questions. Who was the most unexpected winner in the past decade? In your career of investment and entrepreneurship, did you have a chance to get close to create a company with the scale like BAT?

Mike Cai: I believe that grassroots can make a success. Therefore, each person has a chance to succeed.  I have never thought who can’t succeed. 

Of course, I had a chance to invest in a company like BAT previously. For instance, I had a chance to invest in Xiaomi of Jun Lei. But its financing was very quick and its scale was very big in the beginning. And the scale exceeded the scope of angel investment at that time. Although I thought Xiaomi would succeed, I didn’t take the initiative to invest in it.

And I also missed Meituan of Xing Wang. I remembered that in 2007 he found me and wanted me to invest in Meituan. He said he just sold his xiaonei.com and prepared to enter the group purchase market. At that time I thought the group purchase would hardly become a huge commercial platform. But Xing Wang is very competent. With his great efforts, he finally made a great success in Meituan development starting from group purchase business.

Then I missed toutiao.com of Yiming Zhang. I knew him in 2005 when he was developing Kuxun together with Shichun Wu. Later, he started 99fang.com based on which Yiming Zhang developed toutiao.com. At that time, I just wanted to return to Xiamen for entrepreneurship. So, I left Beijing and failed to cooperate with Yiming Zhang.

Actually, these three projects are close to BAT. As long as I took more initiative, I could have invest them, but I missed.

Question 3

Fred Wang: Since 2005, you have successively invested in 4399, Baofeng, 58.com, Zhihu.com and other famous projects. You have made a success in classical investment. However, why did you make a voice in “3 o’clock sleepless blockchain” WeChat group and turn yourself into a pioneer in blockchain investment? Later, why did you opt to gradually become inactive in 3o’clock wechat group? And why did you make little voice in a period?

Mike Cai: As I said earlier, it is inappropriate to include internet in the classical business. I think that the Blockchain is essentially a P2P-based technology and also a new business arising from internet technology.

I saw a brand-new value of the blockchain, just like my feeling on the internet in 2000. At that time, I thought the internet was a huge opportunity. Now, I also hope persons around me and other persons can recognize the value of blockchain and participate in it. That is the original intention of my voice in 3 o’clock WeChat group.

Why did I become inactive gradually later? Because blockchain is a brand-new thing, it will inevitably cause great disputes. Although blockchain is the future trend, it needs time. I don’t hope all persons are too optimistic in the short period and invest in it blindly. Furthermore, I have some traditional investment and affairs to deal with. So, I became inactive later.

Fred Wang: Why do you think “3 o’clock sleepless blockchain” Wechat group was very popular in the Spring Festival? And who contributed it more? You have ever said that “for the blockchain is the biggest bubble in the history. It will be the most risk if you do not participate in it.” what do you think of it?

Mike Cai: The first key figure for 3o’clock wechat group is Hong Yu since it is initiated by him. In the first beginning, he asked the persons involved in games and entertainment to enter the group. Since the Spring Festival was round the corner, all group members issued red packets in the group. Moreover, some entertainment celebrities also joined the group, thus forming a popular trend.

During this process, I think I’ve made contributions in three aspects:

Firstly, I proposed that the group master may rotate .Each person might act as the group master according to his/her different theme styles.

Secondly, I put forward three-point rule. The first one is that red packets can’t be issued in the group. We are all engaged in the blockchain, and it may be something classical to issue red packets. Since issuing red packets may flood the screen, it is impossible to flood the screen if red packets cannot be issued. The second one is that issuing coins or candies may be allowed provided that wallet codes are not sent in the group. The third one is to welcome, praise and compliment others, provided that such welcome, praise and compliment cannot be copied repeatedly, but be written in a sincere and positive manner.  In our WeChat group, a common circumstance is that when a famous figure appears, all the other members welcome him and applaud, resulting in the same information flooded on the screen. If you want to give a welcome speech, you should write it on your own. 

Thanks to the three-point rule, there are more theme discussions in the group with meaningful discussion contents. Furthermore, these viewpoints are communicated. Therefore, the 3o’clcock wechat group became popular.

Thirdly, after joining the group, I invited some internet investment moguls to enter the group, including Yan Yan, Neil Shen and others. Meanwhile, I also invited some blockchain moguls into the group, including Jihan Wu, Xiaolai Li and others. Thus, internet investment was combined with blockchain investment, thereby increasing its influence.

Later, the 3o’clock wechat group was extremely popular because of many factors. Many famous guys including Weixing Chen, Chu Shuai, Dovey and Fred Wang, et al played an important role. the bright character of Weixing Chen impressed everyone, and he did well in the research on monetary economics; Chu Shuai expressed his unique viewpoints on the development of blockchain technology; Dovey invited several American blockchain investment moguls to participate in the discussion; 10 Questions with Fred Wang further extended the popularity and depth of 3o’clock wechat group. Of course, participation of many guests and experts such as Ming Zeng, Dong Yang also helped attract more attention to 3o’clock wechat group.

Of course, another extremely important reason was that it was in the Spring Festival holiday. Due to lack of hot topics, people were available. Therefore, the group became a nationwide phenomenon. 

As for bubble, there were many bubbles involving capital market in the human history, including Tulip Bubble, 1929 US stock market crash, 1997 Asian financial crisis and 2008 US subprime crisis. However, such bubbles were basically regional and did not cover the whole world. The current BitCoin covers the whole world and humankind, so the storm has the greatest scale. Thus, if it were a bubble, the bubble must certainly be the ever biggest one in the human history.

There are more than 30,000,000 persons who are engaged in BitCoin and digital currency. Although the number is just an early start, it will possibly cause a global revolution. Then, will the digital currency succeed in the future? I don’t know, but it is just beginning. So, I think that non-participation is the biggest risk.

Question 4

Fred Wang: Many people are confused about Beauty Chain (BEC). In the afternoon of Feb. 23, Beauty Chain BEC was publicly traded in OKEX. On the same day, the opening quotation boomed by more than4000%. As reported by Securities Times, among 7.0 billion of BECs, 99.9321% were held in the top four addresses with quantity of BECs distributed in a centralized manner. Moreover, Beauty Chain BEC white paper did not disclose the rules regarding private placement and public offering, or offer public subscription. Within one month after listing, Beauty Chain BEC dropped by 80% in terms of price. For many people, coin offering is ICO. Would you please introduce ICO to us? Can we learn anything from this model?

Mike Cai: Firstly, what I want to emphasize here is that BEC beauty chain is not developed by Meitu or me.

Everyone is discussing ICO. But ICO doesn’t represent the blockchain or the digital currency. Not all digital currencies will make the ICO. For instance, BTC which was built in 2009 didn’t make private placement or ICO. It is normal because it doesn’t need fund raising. 

Secondly, many people think that only when ICO is completed can it be traded in the exchange, which is also a misunderstanding. Currently, more than 50% of digital currencies traded in the exchange don’t make ICO. Some involving angel investment and private placement don’t make ICO to the public, but they can be traded in exchange.

Thus, coin offering does not mean ICO. And the viewpoint that only ICO is accomplished can the trading be done in the exchange is a misunderstanding. For this mode, I think more blockchain projects won’t select ICO in the future.

The most successful project for ICO is ETH presently. Its initiator Vitalik is very young. He selected ICO because he needed funds to develop the Ethereum. However, if some companies like internet companies have funds and technical team, they can develop the blockchain projects without demand of raising money and of ICO. So, I think more projects will be developed in this mode in the future.

For an exchange, what currency can be listed? The currency to be listed shall be highly circulated especially with scattered address. Upper chain query shows that there are 360,000 scattered BEC addresses, a very considerable figure. After all, EOS only has about 400,000 scattered addresses.

If an exchange finds that you have sufficiently scattered addresses with sufficient negotiability, it may be willing to help you go public even without notifying you. For BTC and ETH, Satoshi Nakamoto has never had its coin listed in any exchange, but all exchanges volunteer to list BTC and ETH in their exchanges. As an exchange, if it allows BEC to be traded, it may think that it has sufficient addresses, up to 360,000. 

In addition, I would like to analyze why BEC rose sharply on the day of BEC listing? Sharp rise is actually a disadvantage for an exchange. When IPO is made in a stock market, it may have a pre-market trading and a matchmaking trading. But the digital currency exchange does not offer any pre-market trading. Therefore, the price of the coin may rise by dozens of times as long as someone spends thousands of dollars at the listing moment.

Many coins may boom by dozens of times on the first day of listing in the exchange, while their trading volume may be extremely low. Possibly because it was said that BEC was associated with me, it was reported by the media as a speculation. In fact, this is the common practice for most newly-listed coins. In such case, I also think that the exchange should be reformed and offer pre-market trading.

As for 7.0 billion of BECs, 99.9% of which are in the top four addresses, it further indicates that BEC has no any reshuffle action. Otherwise, it may raise the fund. In addition, it may make the coin available in the exchange for trading, However, only zero point X percent of BEC can be inquired online. The quantity of BEC coins in OKEx exchange has never exceeded 3 million. How does it cut the leeks? If it wants to do so, it should offer most BECs in the exchange for trading.

At that time, BEC could be obtained by two means: one was by blank investment, namely free offering. With the other means, you might obtain BEC by taking or sharing pictures through the then partner BeautyPlus. With such two means, you may get BEC free of charge. 

It was listed in the exchange for the purpose of finding a place where BEC obtained for free can be traded. Of course, a few persons might buy BEC at a high price. But such circumstance only occurred in few people not so frequently. To my knowledge, the trading amount of BEC on the listing day did not exceed $100 thousand. Later, daily average trading amount didn’t exceed $100 thousand. 

Though I didn’t deal with BEC, but I want to analyze this process based on my knowledge.

Fred Wang: Coincidentally, Meitu also launched a blockchain wallet product “BECWallet” in February. Then, is the BEC Beauty Chain the asset of Meitu listed company? What is the relationship between BEC beauty chain and Meitu? Beauty Chain BEC event produced a great social dispute, which might go out of your expectation. Could you please make an explanation to the public in “Ten Questions with Fred Wang”?

Mike Cai: Just as we said in the announcement, Meitu has nothing to do with beauty chain BEC. It is not an asset of Meitu listed company. Beauty chain is a blockchain project incorporated in Singapore in the form of independent foundation. Indeed, I have not found any introduction to the team in its white paper. To my knowledge, BEC team wants to keep a low profile and doesn’t raise fund externally. The introduction to the team isn’t included in the white paper. Some blockchain projects also adopt this low-profile mode.

On the contrary, if it is a fraud and reshuffling project, it may ask a lot of bigwigs to act as advisors of the team. If you want to raise more fund and want more people to buy your coin, you should list your team and ask several bigwigs for support. It can be done easily.

To my knowledge, BEC Foundation should make a deep reflection after this event. It will display its BEC team members when appropriate and re-plan the development of BEC development.

BECWallet was developed by Meitu. Since Wallet is permitted by the policy, Meitu wanted to get involved in the blockchain and developed BECWallet. At that time, we cooperated with Beauty Chain BEC through overseas product beautyplus. With 3 miliion users overseas, therefore Meitu wanted to make an attempt among these users so that it might understand how the blockchain could be combined with internet products for implementation. Later, as we all know, due to great dispute and major technical bugs found in BEC itself, Meitu terminated its cooperation with Beauty Chain BEC.

Fred Wang: On April 22, hackers found bugs in BEC Beauty Chain, resulting in additional issuing of a large number of BEC. Finally, hackers sold off 11 million BECs. Someone said that BEC’s market capitalization of up to $28 billion dollars returned to zero instantaneously on that day. Meanwhile, OKEX also stopped the trading of BEC. Later, Meitu announced the termination of overseas promotion and cooperation of its overseas product BeautyPlus with BEC Beauty Chain. Why did BEC have the technical bugs discovered by hackers? Many persons are concerned about the security of blockchain.

Mike Cai: It is a misunderstanding with respect to the statement of “BEC’s market capitalization of up to $28 billion returned to zero”. The market capitalization of $28 billion was calculated by someone through multiplying the highest trading price of $4 on the first day by the total issuance of 7.0 billion BECs. It is a wrong calculation formula.

Here, I would like to make popularization. For the calculation of market capitalization of a digital currency, what we calculate is generally its circulation rather than total volume. For BTC, Ethereum or EOS, the market capitalization of any digital currency is calculated based on the circulation rather than its issuance volume.

Therefore, the market capitalization of BEC is issued through blank investment and application scenario. To date, based on my knowledge, only 9 million BECs are circulated in the market, resulting in the market capitalization of only a few million dollars.

In addition, many people said that the price of BEC dropped below its offering price. This viewpoint is also a mistake. At that time, the offering price of BEC in OKEx was $0.1 and was $0.35 until it was attacked by hackers. So its price had never dropped below the offering price. It cannot be defined as dropping below the offering price when the price falls to a price from the highest price. The price of BEC has never dropped below its offering price. Similarly, we cannot conclude that the price of BEC drops below its offering price since its price drops to $9,000 from the highest one of $20,000. 

I want to praise OKEx because it identified the problem at 1:45PM on April 22 and stopped its trading when BEC event occurred at 1:18PM on April 22. OKEx showed a quick response and prevented the users from suffering any loss. 

To my knowledge, by April 28, BEC had completed the rollback, and all transactions were rolled back. All users who have bought fake BEC got the refund and none of such users got harmed Hackers sold off 11 million BECs and got 60 Bitcoins. But hackers only transferred 20 Bitcoins with the remaining 40 Bitcoins frozen by the exchange in time.

BEC Foundation bore the loss arising from all transactions and made additional 10% compensation to users. BEC Foundation also took active measures for remedy. It immediately coordinated two exchanges for rollback, refunded the trading fee, and made appropriate compensation. Secondly, it detected all codes and their security, and re-issued new smart contracts. Thirdly, it completed the mapping of 9 million new, externally circulated BECs within the shortest period, sending up to 360,000 BEC wallet addresses. Therefore, no user suffered any damage. 

Later, BEC’s technical bugs were specially explained in some technical forums. Such problems occurred in dozens of Ethereum ERC20-based digital currencies. BEC was the first that resulted in hacker attack because it got more attention. I think it may be a good thing for the entire industry, and also allow people to pay more attention to blockchain security.

Actually, the blockchain is brand-new, and it has a great value with huge risks. This event may be referred by the entire industry and later enabled the entire industry to check its own security bugs. I think it may be a good motive.

It also allows us to think that it is not as simple as issue a coin to make blockchain entrepreneurship. In view of a very high threshold for blockchain entrepreneurship, it not only involves the technology, but also imposes strict requirements for your economic logic on coin issuing, your marketing ability and your community operation capability. Only when you understand them well, can you succeed in a blockchain project. Moreover, the person issuing a coin needs to utilize all the credits that you’ve accumulated in your lifetime. If you don’t have the determination to implement the blockchain project for a long period, you should not issue any coin freely.

Question 5 

Fred Wang: How many Bitcoins have you bought? When did you begin to invest in the blockchain project? Till now, how many blockchain projects have you invested in? In the early morning of April 21, you shared some points in “3o’clock sleepless blockchain” group, mentioning that: “this rebounce won’t benefit everything except for base currencies such as BTC, ETH and EOS. Other coins can be implemented with the support of strong interpersonal connections and a capable team.” Is it part of your blockchain investment logic? In the bear market basic index during the past months, can you disclose your profits and losses?

Mike Cai: In January 2018, I only had less than 10 Bitcoins. It was just for fun. When I determined that blockchain and Bitcoin have a bright future, I set up a goal of owning 10,000 Bitcoins.

In December 2017 when the price of Bitcoin reached the peak, I didn’t buy any because I thought its price was too high. At the end of January 2018, with its price drop, I kept buying bitcoins. Now, I have achieved the small goal basically. 

In my opinion, the biggest difference between investment and speculation is that: when you buy a stock or a digital currency, you may be happy if its price keeps falling. In such case, you may keep buying it, which may be defined as investment. However, if you keep regretting and complaining at the falling price, it may be defined as speculation. Of course, in deciding to investment in some subject, you must conduct careful research and analysis to form a firm belief.

I’ve invested in a dozen of blockchain projects totally, including Theta, Ontology (ONT), Cortex (CTXC), ArcBlock (ABT), Zipper (ZIP), YeeCall (YEE), Dxchain (DXC), Charter (CAF) and others. Some of them have produced great returns while others remain in the red till now. 

Though the blockchain projects I’ve invested in may have floating profit or loss, this is only a short-term performance. Since blockchain is at the initial stage, many scenarios can’t be implemented and need multilateral support and tolerance. . In the long term, many projects need to be verified over time. I am very optimistic about them.

In my opinion, the investment in blockchain is just as that in internet in 2000. It is hard to ensure that most projects will succeed expect for a few. But, if you select one blockchain project correctly, you may get returns dozens of times.

What I want to emphasize here is that when I as an investor invests in some blockchain projects. and the price of the coin you have invested rises, I will get profit In such case, any user which has bought it may also get profit, so all the people will be happy; . However, if the price of the coin that I’ve invested in falls, I will lose my money, so will other users.. In such case, they can’t say that once Mike Cai invests in the coin, you will be assured to get profit. I think we cannot understand this logic like this.   Investors may also invest in wrong projects.

I want to stand for other investors. The users should carefully distinguish the projects. They cannot consider a project will definitely produce profit just because some bigwig endorses the project or invests in the project. Such investment logic is certainly wrong.

In the bear market at the end of March 2018, it was the most difficult time for most blockchain investors. At that time, the prices of Bitcoin and Ethereum fell to $6,500 and $360, respectively. But all of us neglected a trend: In the long run, their prices are actually on the rise. Here, we take Bitcoin as example. On March 31, 2018, the price of Bitcoin was less than $7,000. On March 31, 2017, that of Bitcoin was only $1,000; and that of Bitcoin in 2016 was just $400. What was the price of Bitcoin in 2005? Less than $100. Therefore, based on this trend, the price of a digital currency is actually on the rise except with significant fluctuations involved.

What I want to emphasize is that before January of 2017, lots of new ICOs were issued and any of them may be on the rise due to lack of sufficient distinguishing capability. In my opinion, with the experience and lessons regarding bear-market during the period, people may have stronger distinguishing capability. Not all coins will on the rise. Instead, only those who are down-to-the-earth and those projects which can be implemented have the bright future.

Blockchain investment provides ordinary investors with the same opportunity of entry as famous investors and famous investment institution. Everyone is at the same starting line. Blockchain projects also reflect that famous investment institutions are not necessarily smarter than ordinary investors.

For investment in a project, institutional investors are only involved in it a little bit earlier than ordinary investors, Once the project is listed in an exchange, everyone has the same opportunity. If you are optimistic about the long-term development of a project, it will be right for you to invest in it at any time.

Fred Wang: on December 15, 2017, you mentioned in the speech at Hannan “Internet +” Entrepreneurship and Innovation Festival that “the blockchain economy has resulted in a recognition revolution. And its core is not technology but the reconstruction of commercial logic”. Would you please further talk about your understanding? In addition, do you believe that the blockchain project can be independent of Token? Someone compares blockchain to token economy, saying that Token is inseparable from blockchain.

Mike Cai: According to my understanding, blockchain is developed on the basis of P2P technology. In fact, P2P technology is not new since it actually emerged in 1999. The big revolution caused by it is because Satoshi Nakamoto applied P2P technology to digital currency, resulting in value transfer and consequently the change of overall business logic.

Similarly, token extended from the development of digital currency, including ICO, makes us reconsider whether the organizational structure may be changed?

In 1600, the first company in the world, Dutch East India Company, was established; in 1606, the first stock in the world, stock of Dutch East India Company, was formally issued. But in the long history of human development, several hundred years only mean a short period. Therefore, ICO and token will possibly allow us to rebuild an organizational structure in the future.

Therefore, only by rethinking its business logic can we really understand blockchain. If we want to employ a person in some day, can we accomplish it by paying the salary to him or giving the incentive like token? These factors should be considered. It can be seen from the example of Satoshi Nakamoto that once the founder puts forward an idea and creates a project, Bitcoin still exists even if we don’t know if it can survive and he doesn’t care about it. All of these have overturned our recognition.

Can a blockchain project be independent of token? I think it can. Of course, a good blockchain project needs to be combined with token so as to give full play its value.

But, some projects may not use token. Especially in terms of technology, China and US are using the blockchain mode to restructure the banking system. Australian Stock Exchange plans to deal with stock transaction with blockchain technology. Many examples show that blockchain technology can be independent. And it is applied in many enterprises since it may improve the efficiency.

As for why I choose internet entrepreneurship, it is because it doesn’t need social intercourse and I can focus on what I like to do. Now, I like blockchain because I want to choose the spirit of freedom. If a person is unknown, he can concentrate on his own business! Actually, I miss the days very much when I was in Xiamen before 2004. At that time, no one knew me or chatted with me. So, I could concentrate on my own business and consult others voluntarily. Once a person becomes well known, it may bring some advantages, information resources and influence along with corresponding disadvantages.

Group friend: Which is more important, blockchain technology or its implementation and application? I personally think its implementation can promote technological change and upgrade. What do you think of it?

Mike Cai: I think many blockchain projects will be implemented in 2019. Presently, it firstly begins in the fields of finance, game and recreation. 

Question 6

Fred Wang: 265.com and 4399.com you developed many years ago are tools that meet universal simple needs of internet without too much technological content. 265.com was sold to Google and 4399.com is the China’s largest mini game platform to date. Let alone the subsequent Meitu, which has 450 million monthly active users. All companies you’ve invested in and started up are basically not driven by the technology as the core.

With the development of internet industry, more and more emphasis has been attached on the technological arms race. Apart from BAT, machine learning for toutiao.com, system security for Cheetah, and search technology accumulation for Sogou cannot be realized without a team of powerful technological capacity. Among the rising stars emerged in recent ten years, Yiming Zhang, Xing Wang and Xiaochuan Wang are either programmer or technical product managers. Compared with them, will the entrepreneurs with the background of grassroots webmaster have the opportunity to realize the current development of Meitu?

Mike Cai: In the early stage of Internet development, 265.com met the most common demand at that time. Without needing to enter the website address, you could find the website quickly through 265.com. Similarly, 4399.com actually also met a demand at that time. Many parents restrained their children from playing online games, but allowed their children to play small fragmented games. Therefore, we developed 4399.com by seizing this opportunit. Meitu has also accumulated hundreds of millions of users with a simple retouching tool. 

I believe that some projects may not need too much technological content at the beginning. But in a certain stage, it may be encountered with a bottleneck inevitably. We have already been aware of it since technology-driven capacity can develop users more quickly.

To date, Meitu has made great achievements. . Actually it began to focus on technology several years ago, and has been always employing a great number of technical personnel. Possibly many people don’t know why it need more than 2,000 persons to design a retouching software. Among more than 2,000 employees of Meitu, 70% of them are engaged in technology and products. Such products as BeautyCam and Meitu Xiuxiu have applied a great deal of big data, AI, machine recommendation and other technologies.

In my opinion, the entrepreneurs with the background of grassroots webmaster have the opportunity to develop the biggest company. As a saying goes, “Birth cannot make a great person”. You have never imagined that BAT can develop into current state. Therefore, I think that everyone has an opportunity. Especially in blockchain, a brand-new field, there must be a company that is equivalent to or even surpasses BAT in the future.

But what I must emphasize is that some projects might develop well at the beginning possibly because they had good idea or powerful marketing capability. But in the future, they should combine it with technical capability and have the ability to build a management team. Only through this can they accomplish a great project.

An entrepreneur should have the ability of self-learning and continuous improvement. It can be seen that it is impossible for the founders of BAT or Meituan or toutiao.com to make today’s achievement without powerful self-learning ability self-correction ability and continuous improvement.

Question 7 

Fred Wang: In 2017, you also paid more attention to artificial intelligence and industry 4.0. And our common interest may involve such areas as short video and internet finance. What do you think of the Internet entrepreneurship opportunities that were particularly hot at that time? It seems that there are less people who talk about it.

Mike Cai: Development of any technology may undergo the following stages: all persons are talking about a surge upon its emergence; some time later, they find that it has not developed rapidly as expected. Later, some people quit while others stay. Then, the greatest value may appear a few years later.

Two years ago, all of us discussed artificial intelligence, industry 4.0 and others, all of which are not hot spots this year. However, to my knowledge, lots of companies have already made great progresses. SenseTime focusing on computer vision and deep learning is also invested by me. It has performed excellently in either layout or application of artificial intelligence (AI). Another Xiamen-based AI company with my investment has also entered in the profit stage.

Blockchain is the present hot spot. Everyone likes to pursue hot spots. So they neglect AI. But I believe that AI can be properly combined with blockchain in the future.

The blockchain is very popular now. But compared to the investment made in internet and AI, the investment made in blockchain is much less. The internet undergoing high-speed growth has not only attracted most of talent and capital, but also produced a huge value.

Fred Wang: Not long ago, Meitu appointed Professor Shoucheng Zhang from Department of Physics of Stanford University independent non-executive director, member of Nomination Committee and member of Compensation Committee. Why was Professor Shoucheng Zhang appointed as independent non-executive director? How did you know him? Danhua Capital owned by Professor Zhang previously focused on AI, but later he quickly made difference in the blockchain field. What’s the common understanding between you?

Mike Cai: Actually, I knew Professor Zhang several years ago when I went to Silicon Valley. At that time, he invited me to invest in his Danhua Capital and I became LP of Danhua Capital. And I was confident in its AI layout. We often communicated with respect to our perspective on the future. Coincidently, Danhua Capital was involved in blockchain earlier. I think it is a good consensus. Both of us find the huge opportunity of blockchain.

As Chairman of Meitu, I strive to promote my company in developing blockchain technology in view of huge opportunities brought by blockchain. So, we appoint Professor Shoucheng Zhang as independent non-executive director, which is very natural. Similarly, Meitu appointed Kai-fu Lee as director, because we agree with his promotion in Meitu’s AI

Consequently, it can be seen from appointment of Kai-fu Lee who is proficient in AI and the cooperation with Shoucheng Zhang, an expert in blockchain, that Meitu shows an open attitude towards future technological changes.

Fred Wang: What do you think of the relationship between blockchain and internet in the coming three years? Will it be barely fused or gradually overturned? And what’s the proportion of blockchain and internet entrepreneurship projects in your future portfolio?

Mike Cai: I think that fusion between blockchain and internet will be sped up so that we possibly distinguish which is a blockchain project and which is an internet project. The present combination of mobile internet and new retail is a good example. Alibaba has invested in many new retail projects. And it is difficult for us to tell whether Alibaba business is online or offline..

In the next three years, every internet company will possibly have technologies involving blockchain. Similarly, a good blockchain project will certainly combine existing internet technology and user resources to become a stronger one. This is my understanding.

As for the proportion of blockchain projects in my future portfolio, I actually didn’t set a proportion. The reason is that Longling Capital established by me has no LP and all investments in it come from my capital.. For any investment project of mine, there is no requirement for time or field. Once I am optimistic about it, I will invest in it.

I ever said in China Angel Investor Conference 2018 that each investor has different channels and methods. My investment rules are as follows: the first one is not to follow rule. The second one is to embrace the new changes. And the third one is to serve more people.

The first one is not to follow industrial rules. Because rules are useless, social progress is much faster than rule formulation.

The second one is to quickly accept new things. As long as a new thing emerges, you should be able to accept it quickly.

The third one is to serve more people. Since people are involved in dealing with everything, the business model is to serve more people. In the past 10 years, I have had access to many grassroots. So, I prefer to invest in grassroots. But in recent years, I have been investing in someone from big companies, or elites or grassroots, provided that the team is excellent enough.

Question 8

Fred Wang: As to the regional entrepreneurship, I remembered that in 2004, 265.com established by you won the investment by breaking two records of IDG (lowest academic qualification, failing to graduate from high school; no business proposal PPT). Later, you relocated 265.com to Beijing where you had more and more opportunities to contact mainstream figures and companies involving internet.

Mingming Huang, former COO of 265.com and founder of FutureCap, recalled that you chatted with the entrepreneurs in a Nanchizi quadrangle dwelling beside The Palace Museum, at least over ten groups of people every day. One day, Xin Feng led me there. And I hadn’t leave Kingsoft at that time. Most of the first-generation internet startup companies in China were established in Beijing because Beijing has various advantages including policy, resources, talents and media. Furthermore, such advantages are accumulated to certain extent. But why did you return to Xiamen for starting a business again?

Mike Cai: I conducted entrepreneurship in Xiamen during the period from 2000 to 2004. Later I went to Beijing under the influence of Jun Lei. In 2003, I came to know of Jun Lei. When he bought a domain name from me, we often chatted in telephone, and he continuously encouraged and motivated me: Mike, why don’t you come to Beijing for further development? Then, I went to Beijing for entrepreneurship in 2004.

In 2008, I sold 265.com to Google. There would be more opportunities for me to stay in Beijing in terms of interpersonal relationships or other advantages. But I returned to Fujian out of three considerations.

Firstly, I found that I was a little bit famous, and more and more people contacted me. I felt it was wasting my time. Secondly, I was anxious that it is hard to achieve further development. If I left Beijing, a prosperous city, and returned to Xiamen, I could find an opportunity for re-start and quiet growth. In addition, I conducted entrepreneurship alone in Beijing while my family was in Xiamen, so I wanted to go back home to accompany them. Thirdly, I had the hometown issue. I was born in Fujian and departed it for development. I wanted to return to Fujian and help more entrepreneurs there.

Of course, I made relatively remarkable achievements after returning to Xiamen. In addition to 4399.com and Meitu Xiuxiu established by me, I also invested in more than 10 internet companies. According to the top internet enterprises in Fujian released by the government of Fujian Province, half of them are invested by me or associated with me.

Fred Wang: In the era of internet, a lot of aggressive Fujian entrepreneurs emerged. Many of them have become  legendary figures among Fujian merchants: you are native of Shishi, Quanzhou, Fujian; Xing Wang of Meituan and Yiming Zhang of toutiao.com are both native of Longyan, Fujian; Simon Fong of Snowball comes from Wuping, Fujian; Jun Xiong, founderof 91 phone assistant comes from Longyan, Fujian. Ketuan Zhan, CEO of BITMAIN, is native of Fuzhou, Fujian...Persons from Fujian have strong business ability. Many people always regard you as a businessman rather than an industrialist, and say that you are a typical Fujian merchant and like to make a quick buck. How do you think about you?

Mike Cai: Actually, people from Fujian are good at doing business. Many excellent Fujian enterprises have emerged in the traditional industry, like Heng’an and Anta. And most of Fujian merchants are associated with industrialists.

Possibly, some Fujian merchants did some instant-effective things. But I don’t think you can regionalize it just because a few people did it. This is unfair. You don’t label and regionalize the people due to minority of people or companies. In the future, internet entrepreneurship and blockchain entrepreneurship are cross-region and even cross-border.

Someone says I lilke to make a quick buck. On the contrary, all of the most successful investments need time.

Let’s take registration of domain name as example. In 2000, it took RMB 60 to register a domain name. I didn’t get the real return until 2010 and afterwards. If I sold domain names in 2003 or 2004, a good domain name might be sold at RMB tens of thousands. However, every domain name might be sold at RMB hundreds of thousands and even RMB 1 million in 2010. Therefore, the investment in domain names may produce returns after more than 10 years.

There are two projects invested by me with the highest return are 58.com and Baofeng Technology, both of which were invested by me in 2005. I didn’t get any return until 2015. In 2008, I established Meitu. So far, it has been ten years.

If you invest in a digital currency and rapidly earn money in areas including blockchain, it is very hard to realize further development and expansion. Here, what I want to advise to the teams involved in entrepreneurship of blockchain projects that quick fund-raising or too quick growth are double-sided sword, which may cause a great obsession to entrepreneurs. It may be possible for them to make it to the end. t 

As for the bear market occurred in the front three months of this year, I think it was a very good opportunity. Without this bear market, many people who has got the investment quickly may forget  their original intention of entrepreneurship, resulting in a coin speculation market. In such case, many projects would not realize further development.. The bear market just gave the entrepreneurs an opportunity to practice so that those down-to-the-earth teams may stand out.

Question 9

Fred Wang: Steve Jobs mentioned at the graduation ceremony of Stanford University that life is connecting the dots to some extent. Each helpful person that an entrepreneur has met during the entrepreneurship, just like the Dots mentioned above, may have continuous and progressive effect on individuals. On Dec. 21, 2016, you released a letter of thanks prepared for Meitu listing return dinner, recalling the 30-year history of entrepreneurship and how you grow up from a muddled young man to a business leader. During each important phase of your life, you met many helpful persons, including Charles Xue, Kai-fu Lee, Young Guo, Dongfeng Wang, Mingming Huang, Feng Xiao, Bo Feng, Michael Yao, Yan Yan, and Lin Xiao, etc. They all provided great help and support to you. Just now, you mentioned that Jun Lei ever advised you to go to Beijing for entrepreneursip. Many people feel unrecognized, which means they didn’t encounter some helpful persons. How do you think of the “helpful person” during your career?

Mike Cai: I actually prepared a letter of thanks at the Meitu listing return dinner, but it was mainly for those guest present. There were a lot of persons who were not present but did help me a lot.I was also appreciated for their help. They included Jun Lei, Charles Cao of Sina.com, former 265.com COO James Qin, former 265.com CTO Xinglu Lin (Lin Xiao), etc. I think I am a lucky guy, because I have met so many people who helped me during my entrepreneurship.

If a person or an enterprise wants to succeed, he or it may encountered many setbacks. During this process, he may encounter many helpful persons, even a programmer who helps you revise a BUG, or a salesman who helps you win an important order……these are factors that affect your success. That is why we say that failure is inevitable and success is incidental. To succeed, many links are required, including good fortune. Otherwise, you will hardly succeed.

It is the case for entrepreneurship. If you succeed at some point, it may because there are many factors regarding fortune. But if a person wants to succeed continuously it is closely associated with his own efforts, self-learning and self-change ability in addition to fortune. Everyone may have several important turning points in his life. At each point, you cannot move on unless you make a right choice. 

In 2000 when I started a business and registered domain names on my own, I ever felt that: Why those VCs invest in Charles Zhang, Jack Ma and William Ding? Why did they neglect me? Later, I gradually understood it. Firstly, check out what you have and what you can do. Secondly, do your job and keep accumulating until you make some achievements. In such case, investors will naturally find you or help you. If you think you must complete the fund-raising or you cannot start your business unless you meet some conditions, you will never succeed.

Question 10

Fred Wang: I remembered a book Out of Control written by KK. It is a “voluminous book” about machine, system, biology and society. This book about social evolution written by the author in 1994 becomes the “prophecy” that subsequently verifies the development of internet step by step. The author’s thinking mainly involves two aspects: one is that the future of the entire world shall have a decentralized and distributed structure, which is the meaning of theme “out of control”. The other is that the boundary between biology and machine is more and more obscure, and they will be finally integrated into a super life. What impresses me most is the detailed description of the group behavior of bees. Bees have no uniformed management and commands while a single bee is often confused when looking for pollen. However, when many bees give democratic votes on “pollen in a direction” fed back by some scouter bees, the overall bee group may gradually form a uniform opinion for efficient honey gathering. Nowadays, will the blockchain make us the bee groups that crawl in the public blockchain and the community, respectively?

Mike Cai: I agree with the opinions of Fred Wang. Previously, I also recommended the Out of Control written by KK, in which, many contents can be realized in the blockchain society. Especially, it mentions that the structure of human society may be like the honeycomb.

But if we become the bee groups that crawl in the public blockchain and the community, respectively, I don’t hope so because it indicates that more than 90% of persons on the planet are repeating the same thing. No aspiration, no future. It is really a woeful thing.

I prefer to hope that there will be several major public blockchains in the future blockchain world, and we can establish some basic applications, thus forming a diversified situation. Meanwhile, thousands of, and even hundreds of thousands of blockchain communities exist to form a different ecological scenario like earth. 

Recently, I have watched the film Ready Player One directed by Steven Allan Spielberg for three times. I think this film gives us greater inspirations. With the development of AI, many persons may live in a virtual world in the future. It makes me reflect whether it is the life we want for the future.

Or, greater inventions will appear in the future, allowing everyone to do what they want to do rather than almost same work. That will be a truly exciting dream world!

Therefore, AI and blockchain will indeed boost the development of human society, thereby improving  social operation efficiency and creating more wealth. But, I think humanistic spirit must be included to make the world meaningful.

If we only pursue technological advancement, efficiency and wealth, we mayl not be happy in the end. For me or many rich men that I have contacted, when our wealth has increased by a lot, what we can consume remains unchanged. Finally, most people will reflect what we should do for the society and which direction we should drive the society? This is actually what I firmly believe in.

No matter how artificial intelligence develops, it is hard to replace the human beings. Because artificial intelligence is icy, and has no emotion, thinking or soul, it will be difficult for artificial intelligence replace the human being in a long period.

Value delivery involved in blockchain means solving our currency issues with basic logic. But what’s the real value in the future? I think it is not necessarily in the form of currency. If our emotion and thinking can be valuable through the blockchain in the future, for instance, the value of litterateur thinking can be directly delivered and embodied, that will be greater.

Final question

Fred Wang: Mike, if you were still the fledgling young person, which field will you invest all your money in?

Mike Cai: I think I am still the fledgling young person. Youth is not associated with his age but his mind. If you feel you are very young, you will still be a fledgling even if you are in your 80s . 

I will continuously embrace new changes. But presently I want to try my best to operate Meitu. Meanwhile, I will also focus on the application of new technologies such as AI, and blockchain. A new technological revolution will appear in the future. I think I will try my best to invest in it.

Fred Wang: What’s your life aspiration for the future?

Mike Cai: What a pity. Of three aspirations I made in 2011, only half of them have been accomplished. The first one is to travel to 100 countries. Now, I have traveled to about 50 countries. I think life means travel. 

The second one is to own a company worth ten billion dollars. Now, I am working hard for it. I hope that this objective can be achieved in the near future. Meitu is closest to the objective. I will keep working hard.

The third one is about my hometown issue. I come from a rural area. Later, I went abroad and then returned to Xiamen. After that, I went to Beijing for entrepreneurship. Then I went back to Fujian. After dropout from high school, I’ve been through a lot, including being a street vendor, clothing retail, construction and doing various businesses as well as the high-tech internet. It would be very interesting if I could write them down.