10 Questions with Fred Episode Twenty-Eight | Hang Zhou Said Frankly: Fights with Wolf Spirits Do Not Suit Me and I Don't Enjoy It Either

10 Questions with Fred Episode Twenty-Eight | Hang Zhou Said Frankly: Fights with Wolf Spirits Do Not Suit Me and I Don't Enjoy It Either

Dec 25th 2018| Investment By:Mars Finance
"Fear of failure is the biggest devil inside entrepreneurs."

In October, Hang Zhou, the founder of yongche.com, published the book Re-understanding Entrepreneurship in which he reviewed his 20 years' entrepreneurial experience for the first time and talked about his gains and losses frankly. In 1994, Zhou established TICO Digital Group and made the first pot of gold. In 2010, he set up yongche.com and enter the travel field. In 2016, he gradually retreated from yongche.com and joined Shunwei Capital as an investor. Hang Zhou is not only a serial entrepreneur, but also a witness and observer in China's 20-year wave of Internet entrepreneurship.

"Look outward at the world, look inward at yourself", what kind of scenery and storm hidden in the "thinking on the way" as an entrepreneur and investor?

At this point, Hang Zhou came to "10 Questions with Fred" and had a candid and frank conversation with Fred Wang, a veteran entrepreneur, for three hours.

The sharp points are as follows --

1. The extremely wolf-like antagonistic war is not suitable for me, and I never like it.

2. Suggestions for travel enterprises: users' travel problems are far from being solved, so practitioners should not run off course or deceive themselves by telling stories.

3. Some entrepreneurs now complaining about being devalued by investors, and it is possible that the valuation given by others is close to the real value.

4. As for entrepreneurship, the bubble era is over, and the next one will be an "era of honesty".

5. Learning to survive a downturn is a basic skill for an entrepreneur. Don't expect to solve your own problems by cheating stupid money. 

The following is the full text of the dialogue:

Fred Wang: Hi, good afternoon everyone, welcome to Mars Finance "10 Questions with Fred" episode 28 -- "friends" offshoot. I am in Shatin, Hong Kong. I visited the Chinese University of Hong Kong in the morning and just came back to hotel lobby. Today, the guest is an old friend of mine, the founder of yongche.com, a serial entrepreneur, now an venture partner of Shunwei Capital.

Let's take a look at Hang Zhou's experience:

In 1994, Hang Zhou and his brother founded "TICO Digital Group", which has developed into one of the largest professional audio-visual and service groups in China. He then moved overseas.

In 2010, he went back to China and started yongche.com which first created the industry pattern of domestic Internet car using.

In 2014, he became a student of Hupan University.

In 2017, he joined Shunwei Capital as a venture partner.

Not long ago, when I was in the bookstore of the airport, I came across Hang Zhou's newly published book Re-understanding Entrepreneurship: Thinking on the Way as an Entrepreneur, in which Hang Zhou talked about his entrepreneurial experience and inspiration in the past 20 years.

If you have read Peter Thiel and Blake Masters' 0 to 1 and Ben Horowitz's The Hard Thing About Hard Things, I suggest you read Hang Zhou's new book. There are many new things that are not covered in the above two books. I understand that Hang Zhou has his own unique entrepreneurial thinking and methods in the book, which embodies many abstract theories. I recommend you to read it.

Hang Zhou named the book as "Re-understanding Entrepreneurship", which takes the thinking and experience of an entrepreneur as the main line. In my opinion, it's not so much a reflection on individual entrepreneurship as an attempt to awaken the collective thinking of today's entrepreneurs. Now, let's start our "10 Questions with Fred Wang".

3 big gains & 3 big suggestions for starting a business

Fred Wang: First of all, in the last year or two, many of my friends, especially those very successful entrepreneurs, have published books, such as Hongyi Zhou's Subverter: Autobiography of Hongyi Zhou and Yonghao Luo's Entrepreneurship on the Road. It seems that they are not the first time to publish books. Kaifu Li, who has always attached great importance to preaching and teaching, has also published two new books, AI and AI·Future, which I am studying. I haven't finished reading your book because I always stop to think. But I roughly looked through it, I think it is an interesting book, because you wrote it and you are a man with stories.

I have known Hang Zhou for about 3-4 years. At first, we met at a friend's dinner party. My impression is that Zhou has big bright eyes, a smile on his face and always raises some questions which make everyone think deeply about. In my eyes, he is a wise man. I feel that anyone has dinner with Hang Zhou will be truly delighted. In Hang Zhou's friend circle, there are entrepreneurs, scholars, artists and celebrities from all walks of life.

Hang Zhou named the book as "Re-understanding Entrepreneurship", which takes the thinking and experience of an entrepreneur as the main line. I'd like to say it's not so much a reflection on individual entrepreneurship as an attempt to awaken the collective thinking of today's entrepreneurs.

In your opinion, what are the three biggest gains you have made since you started your business? What are your top three tips for entrepreneurs? For starters, what should they pay attention to when starting a business? What advice would you give to a veteran serial entrepreneur, such as someone like me, who is starting a second or third business?

Hang Zhou: First of all, thank you, Fred Wang. I think you really understand me. I especially like what you said "It's not so much a reflection on individual entrepreneurship as an attempt to awaken the collective thinking of today's entrepreneurs".

You asked me about three gains since I started my business. Since I have been doing business all the time, I would like to tell you what I have gained from the most recent venture. The first is to make my life more open, it is like I swim in sea and then I know what the sea is, what the waves are, what is the saltiness of the sea. It is fair to say that entrepreneurship gave me a world-class perspective. I have made friends with many leaders in the global technological innovation industry, and their world-class perspectives in entrepreneurship, investment, technology and other aspects have elevated me to a very high level.

Second, I'm bolder, because I've been through a very big, unprecedented competition in the history of business, and I've seen big scenes and spent a lot of money. Third, I have a greater confidence in my innovation ability, I will be more determined to do more things including original thinking, rather than follow the crowd.

Speaking of giving advice to entrepreneurs, they face different problems at different stages. For a startup, do not do PR, do not do BD, be careful and just keep your nose to the ground and do the right thing. The most correct thing for a startup is to do a good job in your products, learn about your users every day, and make meaningful innovation. For veteran serial entrepreneurs, let go of the mindset of desiring success but fear of losing.

The reason why we are still on the entrepreneur road may be that we want to achieve greater success. But at the same time, our past achievements become the burdens on our shoulders and make us be afraid of failure. The fear of failure will become the devil inside of us, which makes us afraid to take a all-new journey and unwilling to really put down the halo and suffer hardships.

Fred Wang: In 2005, Kaifu Li came back to China and founded Google China. Soon after that, he published his book Be Your Personal Best, which caused a huge stir. In my opinion, this book was the first spiritual guide on the market at that time that emphasized individual struggle and guided young people to realize themselves. But today I want to talk about another dimension, which is looking inward at yourself, that is, how the practitioners really see themselves. Sometimes, we find that after years of struggling with dreams of self-realization, the most important thing we learned is reflection, and to find real self, namely, we moved to the philosophy level of "where I come from, where I gonna go". Or, we may think of it as a stage of entrepreneurship, when we stop for a moment, we forget about gains and losses, and start to think about "where I come from, where I gonna go" instead.

What do you think when you are in "that moment"? Of course, I believe you have more than one "that moment".

Hang Zhou: The first is to think about the past, what happened in the past and what we can learn from the past. The second is to look at the present, what state you are in. Understanding your true self regardless of your needs, your current state, your fear, your desire is often quite difficult. The third is to think about the future, that is, what you truely want. People want a lot things, but there's a good way to help you to choose.

I'm going to share with you here. I once told a good friend that I was very anxious because I wanted to have a greater career, I wanted to be more successful, I wanted to have more money. He then asked me a very wise question, if you have enough money of desired amount, what will you do with it? I said I was going to do blah blah blah. And he said you should consider whether these things have much to do with money or not. In fact, when he gave me this kind of feedback, I felt enlightened and I knew exactly what my heart really wanted.

In addition, I have another good method, when you feel hard to choose, hard to put down, ask yourself a question: if you can only do one thing in future, what will you do? At this moment, what you really want becomes clearer. When someone asks me, I say, if I could only do one thing in my future life, I would like to be an economist very much. I know exactly what I want.

What is the root of entrepreneurs?

Fred Wang: Second question, although the identity of Hang Zhou has changed to "Shunwei Capital venture partner", in my eyes, the life of Hang Zhou is an entrepreneurial life. If I use a word to position Hang Zhou, I would still like to use "entrepreneur". What I want to talk about is the starting point. What do you think is the root of entrepreneurs?

For example, taking college entrance examination is an important step in many people's life, but different people have different tendencies. Some people like model aircraft since childhood, he is willing to apply for all aerospace-related majors; some people only want to attend schools with the highest level of education, in order to be able to go to Peking University and Tsinghua University, he is even willing to specialize in food, ha ha... everyone has different value orientation. I think, entrepreneurship also has a similar process, especially the first step of entrepreneurs. Some entrepreneurship come from a paranoid love of a certain thing, and some from the ultimate pursuit of self-realization.

I have often said that entrepreneurship is one of the best self-cultivation in today's peaceful times. For a person from a humble background, the most important way to achieve self-realization is to start a business, in addition to discovering, inventing and innovating in professional fields. What is your starting point? What is your motivation? Is it out of interest or the ultimate goal of personal self-realization?

Hang Zhou: My first period of entrepreneurship was in the mid-1990s. At that time, the most important thing was to do a successful business, despite what it was. At that time, your cognition, your resource background and your historical opportunity were just like that. This is the first stage, but there was a problem that after gaining some success, you may find you lack enough motivation, because you do not love that thing actually and you are not an enthusiast.

Although I was doing loudspeaker box business at that time, I was not an enthusiast, and I was not fascinated by sound or electronic equipment. I just thought about how to run a successful company, so I indeed took some winding paths in this process. Therefore, at that time, there was no hesitancy about whether the company should expend to a broader field in the upstream and downstream of the industrial chain, because it was a bigger pursuit for you to expand the boundaries and make your company bigger.

Fred Wang: If we temporarily call those who have passion and love as A, and those who hope to achieve self-realization as B, in your opinion, which kind of people belongs to A, or B, or both A and B?

Hang Zhou: Some people who don't pursue achievement, and just like to start businesses belong to A. I wonder if there has been some fear in their heart. That is to say, they are not sure that they will succeed, which means that they do not dare to pursue success. So I want to ask, is it in some way an escape? On the contrary, some people who just regard entrepreneurship as a tool or way to pursue a sense of success, belong to B. There are too many them, but this is understandable.

In addition, the company of B-kind people will seem to grow in size, but actually become more and more common in the end. I compare this kind of company to a fat middle-aged man.

It is better to combine the two aspects, to enjoy the entrepreneurial process and actively pursue success at the same time. Because you have the former, when you are in the pursuit of career success in the process, you will not get lost easily. In order to be successful, many people are easy to abandon their principles or even give up some of their original intentions.

Fred Wang: It reminds me of Steve Jobs and Steve Wozniak when they started their business in a garage. When Jobs and Woz first worked together, they made a digital version of the blue box. Woz bought diodes and transistors, and worked hard to design a circuit that he was most proud of. After test, both of them are excited. I think Steve jobs was very good at combine interest and self-realization. He can make something that he likes, at the same time, the market size of it can be enlarged and its consumers think it is real cool. Jobs could make such a product, while Woz was more interested in his own interests.

Jobs and Woz started their business in a garage

Hang Zhou: I have dealt with Woz. He is a ordinary hacker without Jobs.

Fred Wang: We has to go back to another topic, which is how to look at the outside world. Jobs clearly understood the outside world better than Woz. It's hard for an entrepreneur to be successful if he always looks inward. Even if entrepreneurs are armed with the spirit of craftsman, if they ignore the timing, competitive environment, the team and competitors, it is difficult to start a big and strong business.

When we studied SWOT analysis, S and W were our comparative advantages and disadvantages, while Q and T were opportunities and threats from the outside. How do you see the outside world? The world is changing so fast, how many enterprises leaders must face that "after today's feast, where is tomorrow's breakfast"?

Hang Zhou: I think people faces different opportunities in different historical periods. Actually, there are great limitations. Not every story can be as romantic as the garage one in silicon valley in which a product just was made out of interest. In the second stage of my entrepreneurship, I was bolder when considering starting a business again because I had made some money. I can choose what I am interested in and want to do at this time. Of course, my rational mind will limit me and tell me that I should find an intersection between what I want to do and what I can do.

In fact, I had a lot of wild ideas at that time. Compared with the first stage, I started more from what I wanted to do than from what resources and connections I had in the second stage. There's always an infinite number of ideas in our heads, but finally I come back to feasibility. There were so many things I wanted to do, including mobile payments, e-reading, and mobile social networking. But many of them are beyond my ability, or the external environment is not allowed me to do so. As a result, I finally choose a thing better suited me, which is car hailing industry.

Of course, in the future, you can enter a more and more free state, that is, you become increasingly bolder. Now when I think about what I want to do in the future, I may be much bolder, even if my ability is a little insufficient. As long as I want to do it, I do it.

"Reunderstanding failure"

Fred Wang: To tell the truth, what App do you use to take a taxi at present? Haha, a screenshot is needed to prove it. Will this bother you?

Hang Zhou: Not at all, I use the fastest one.

Fred Wang: Are you still considering the travel market? Maybe it is unexpected for you when you first started your business that the travel industry has such a big market today. What would you say if you gave a suggestion or tip to all travel companies today?

Hang Zhou: I don't think about it anymore. It is a past thing for me. The world is so big, why bother. The suggestion is that the user travel problem is far from solved, do not run off course, do not tell a story to deceive themselves.

Fred Wang: Lost to the opponent, and lost the company, is this Hang Zhou of yongche.com? In fact, losing the company is not terrible, many people sold the company, let investors cash out soundly. Everyone is happy. In the TV series Lurk, the protagonist Zecheng Yu said: "There is a failure called occupation, there is a victory called retreat." Have you heard of it?

Hang Zhou: Yes, but why you describe me so miserably? Why not say: I created an industry, experienced the entrepreneurship, did my best to settle all the investors, now I left and live in a better life... I've written about "reunderstanding failure" in detail in my book, and you can read it.

Fred Wang: I'm not saying you are miserable. In 1985, because new products of Apple (Apple , Apple Lisa and Macintosh) fail miserably, and Jobs is proud at that time, he was finally chased away by Apple's board of directors. In 1997, when apple was in trouble, Jobs chose to return to the company, and a new era of apple was thus created. Have you ever thought of such a thing?

Hang Zhou: Unless I have new creative ideas in this field. What if Jobs didn't come back? Wouldn't he be great?

"I never set a timetable for doing something"

Fred Wang: Fourth question, it is worth mentioning that Hang Zhou went to Shunwei Capital of Jun Lei and Dalai Xu to be an investment partner. Venture Partner is a title that some of you may not be familiar with. It is a position that a frontline entrepreneur or a company executive who has achieved a lot in a certain field will be invited by a well-known VC to take after leaving the company. This role is very subtle. From my experience and observation, many people regard being an investment partner as a preparatory action to conserve energy, figure out the direction, and then wait for the opportunity to start a business. A lot of people followed this routine.

For example, Hongyi Zhou in 2005 sold 3721 to Yahoo, and then left Yahoo to become an venture partner of IDG. In 2006, Hongyi Zhou continued to found Qihoo 360. Similarly, after Sheng Fu left 360 in 2008, he went to Matrix. In 2009, he left Matrix and founded Keniu. Later, Keniu was merged with Kingsoft security and renamed Cheetah Mobile before going public. Now Hang Zhou has been invited to Shunwei as an investment partner. Haha, to tell you the truth, Hang Zhou, do you have a timetable for coming out again? If you have the opportunity to come out again, what field do you prefer?

Hang Zhou: I am very grateful to Mr. Lei and Mr. Xu for giving me such an opportunity to join Shunwei as a venture partner. On the one hand, being a venture partner gives me a lot of freedom and space, at the same time it gives me the opportunity and allow me to participate in the investment to learn what is investment. I have known more about the frontline and cutting-edge entrepreneurship through investment, and obtained enough information and the sensitivity to innovation, these are the gains I got in the investment learning process.

As for timetable, I don't think there should be any. I started thinking about what else I could do after 2004, it took me 6 years before I found the second thing I truly want to do. And in this process, I also spent half a year at Yahoo in 2007 as a consultant in Yahoo China. I had a variety of rich experiences. I think it is very important to have a rich experience in life. A person should not simply repeating what he is going to do. Life is not moving on the established track, just go along with the heart, and follow the trend, perhaps your future has already happened, but we do not know it. It's a little bit fatalistic to say that. But I indeed think things are like this. Don't worry. If you make a timetable for yourself and you fail to make it, you will be extremely anxious, which is a very bad state.

Fred Wang: I can learn a lot from Lei for sure. Since you joined Shunwei Capital in April 2017, how many entrepreneurs have you met so far? Can you tell me something that or someone who impresses you? BTW, Yahoo was Alibaba's asset in 2007. No wonder you are familiar with Alibaba.

Hang Zhou: I have met many entrepreneurs in Shunwei. Every day, people come and go to talk about projects, meetings and investments. I have met as much as two or three hundreds in two years. I can't comment on a certain thing, because entrepreneurship itself is a very interesting thing, but many startups and projects founders have given me great inspiration. Frankly speaking, I have several feelings.

On the one hand, the trend I saw from them told me which way the world was heading. Second, when I meet people, I often surprised that founders are great. I think if I go back to over a decade ago, I would have been a fool at their age. They are much better than I was at the same age. Third, I have seen a lot of entrepreneurs with not only glory, greatness and strength of human nature, but also human weaknesses, especially many entrepreneurs have a lot of delusions. Just like human nature, entrepreneurship is like a mirror that can test human nature.

One big problem I saw in a host of entrepreneurs is that they do too much things. They always think that everything is an opportunity and they should seize all. In addition, I don't know whether it is intentional or unintentional, when starting a business, people in the business easily turn to be to be blind. They always think that they are doing well, competitors are not as good as them, and they have opportunities but their competitors have not. These are states that are very bad for entrepreneurs.

"The bubble age for entrepreneurship ends, an honesty age is coming"

Fred Wang: Fifth question, the words "tough 2018", "unemployment wave" and "being optimized" have been frequently discussed by the public recently. According to a recent report by zhaopin.com, the number of IT&Internet job openings in the third quarter of this year fell 51 % from last year, the second consecutive quarter of negative demand growth. Overall job demand in the financial sector also fell 46% from last year. "I used to get calls from headhunters every day, even several a day, which almost like harassment calls, but now I haven't received any calls from headhunters for more than one month," an investigator said. On Dec 5, the state has come up with a big measure to stabilize employment, the Chinese government network released a message "the state council: 50% unemployment insurance premium can return to the enterprises do not lay off workers or less layoffs", the policy is good, but sounds a little embarrassed.

How do you see the employment situation in China in the future? In the last episode of 10 Questions with Fred, Xiaoping Xu make us more optimistic, in order to avoid blindness and one-sidedness, please talk about your views. What would you say if you gave advice to the authorities?

Hangzhou: Speaking of the future situation, I know Mr. Xu is a optimist, I think he likes an old urchin. He is curious and enthusiasm about all the new things. He gives people hope and power to embrace all the things and the future, which I feel is very good. Because Xiaoping Xu was also my angel investor, I have also looked for Xiaoping Xu in difficult times, looking for great support spiritually. It is very much valuable there is someone like Xiaoping Xu giving support and strength when people are in a fragile time.

But when it comes to the judgment of the future situation, I may have different views with Xiaoping. Xiaoping said that the golden era is over, but the platinum era is coming. I think, especially in the mobile Internet technology cycle, we can say the past decade is a bubble age. Now, from the perspective of investment, the quality of entrepreneurial companies is not very good in that age. A large number of start-ups are lack of innovation, and the market size and growth are not very good either. There are many such projects.

Now a lot of companies are being overvalued, frankly speaking, there are founders saying that they are very depressed because getting financing is very hard with a lot of discount and all this. Here's how I put it. I said why you be so frustrated? You think you really used to be worth so much money? It's just like beer foam, and it's possible that the value investors gave you is much closer to your true value.

I think it is more practical if you realize that bubbles exist in some of the highs reached by the company such as company value and GMV, and these highs are not real, a you accept the reality to some actions and take some actions to face the future. What's more, in the future, I think when a bubble age is over, it may be followed by an honesty age, in which entrepreneurs don't blindly spend money to do marketing, and everyone is more pragmatic and pay more attention to products and the needs of users, constantly do something meets user requirements, reduce marketing, PR, exposure to various forums, I think it is a good thing anyway.

As for suggestions to the government, reduce the employment pressure. Frankly speaking, In my opinion, the less the government interferes in economic activities, the better, especially in micro economy. It is better not to interfere. The government's biggest support for innovative and entrepreneurial enterprises is to ignore and neglect them, and then set rules for long-term implementation to maintain the stability of policies. I think this is the most important thing, do not let entrepreneurs in the policy changing environment. The uncertainty of policy is the most vulnerable part of entrepreneurs. They can face the competition and the change of technology cycle with ease. Now everyone has foresight, judgment and choice. But the variability of policy is something that none of us can foresee. At the end of the year, I attended many industry conferences, and I found that what the industry generally talked about was that there were a lot of unexpected things this year. In fact, the so-called unexpected things were attributed to changes in macroeconomic situation and industrial policies that they could not predict. This is my suggestion.

Fred Wang: In my opinion, for entrepreneurs, no matter the market situation is good or not, they should face it. In fact, the past year is difficult, the future will be difficult too, starting a business has never been simple. I read your reflection on the "business downturn", and you said that the performance in the "downturn" is usually "boom after financing, but the results are not satisfactory". At this time, investors find that they have run of out money. Over and over again, investors have started to lose confidence and stay on the sidelines because of the lack of positive results. This kind of symptom is very common in today's bear market. Many companies do, as you say, start hibernation and slowing down. Here, combining your own experience, and the current situation, are you willing to talk about that when market is in a recession, what psychological and physical preparations should entrepreneurs have?

Hang Zhou: I have a special chapter in the book talking about the correct posture of a startup company in the downturn. In fact, as Fred said, no matter the macro change, technological change or competitive environment change, the business operation always goes up and down. And for a startup company, they are at low point at most of the time. The macro low point is also a micro low point, that is, without competitors, you may have internal team problems, without team problems, you may have money problems. Anyway, in general, startups are in trouble in a long time. Learning to have a better preparation for the downturn is often the basic skills of an entrepreneur, I think it is now very good, you do not expect to cheat silly money to solve your own problems. A company always insist on doing things that are good to customers. We have a company is someone willing to give us money to support us to start, because we have a beginner's mind, which is one kind of people, as one kind of clients to create a kind of irreplaceable unique value, and this value may be increased. Taking a taxi, for example, can you provide people with more convenient, faster, cheaper and better quality cars? This is the direction you have been making progress all the way. A startup company does not need to do too many things.

Second, to enhance your core competencies, you need to devote your limited resources to almost one thing you can do. Every startup can only have one key task at a time. Dare you give up most of things and just do one thing that's most important to you right now? What is it? If there is no money, you can go for investors. I think actually every investor wants you to success and they are all waiting for being persuaded. If you come up with a new plan to deal with the current problem and a new sense of purpose, I feel that abandoning the idea of the bubble valuations, a new condition is bound to have your investors's support, because the investor and you are already in the same boat.

"Three key points contributing to sustainable competitiveness"

Fred Wang: Sixth, there is a point in the book Re-understanding Entrepreneurship. You say that for entrepreneurs, the core meaning is not "seeing", but "seeing through". I really like the phrase "see through". In other words, a good entrepreneur must have deep thinking and insight into a new trend. It is said that you pay special attention to the new consumption field. Let's talk about how to "see through" the new consumption trend. On Wednesday, Luckin Coffee announced the completion of a $200 million series B round. In less than six months, Luckin's post-investment valuation more than doubled to $2.2bn, from $1bn in July after the A round. My colleagues told me it was even hotter than the HEYTEA craze of the past. The new consumption trend represented by Luckin Coffee and HEYTEA has become one of the hottest opportunities in the current entrepreneurship and investment market.

A few days ago, I met with Shubing Li, Founder of OkBuy, who reviewed the development of the Internet industry and summarized it as "the application relies on the induction mechanism, and e-commerce relies on the subsidy mechanism". He asserted that if blockchain can be successful, such as the chain trader, it relies on the token incentive mechanism. Still, do you think today's subsidy model will work? There are already concerns that Luckin Coffee could be the next OFO.

Hang Zhou: I have also noticed the rocketing financing speed of Luckin Coffee. I don't want to directly evaluate what will happen to it. First of all, I would like to congratulate it because it is awesome for a startup to achieve this high. China's coffee market developed rapidly, because coffee is more easily accepted by young people than tea. The average number and quantity of cups consumed in China is still dozens of times lower than the average level in the world, such as Europe, the United States, Japan and South Korea. Coffee is definitely a market with huge room for growth. In this market, we only know that there is a giant, Starbucks, of course, there are some brands like Costa, the Pacific Ocean,but there is still a big gap between these two and the Starbucks.

Fred Wang: I understand. From the development history of other countries, when the per capita GDP reaches $8,000, a profound consumption revolution will be ushered in, whether it is Japan or the Asian tigers. China's per capita GDP has exceeded $8,000 in 2016, which will be an important watershed in the consumer market. Today, both Internet giants and old traditional enterprises seem to be actively laying out their positions in the new consumer market. What do you think is new points about the so-called "new consumption"? How big will the new markets created by new consumption be?

Hang Zhou: For the volume, under the trend of the Internet, how to make use of the power of the Internet and how to enter a promising industry better, I think this is a basic foothold for me undoubtedly. All entrepreneurs in the future should think about the Internet practices, Internet mode and an important technical background of a new industry and a traditional industry. All of your products, all of your user background building is based on the Internet, and I think that's a good place to start, and I think it's doing a really good job.

Second, each industry has its own internal big "know-how". Your understanding of an industry, user needs and products, in fact, are key points often represents how far you can go in this industry. On the first point, I think it is good to start from the Internet. The second point is how much do you understand the industry. I think this is the key point of how far we can go after we enter the market. At least from now on, I haven't seen any new propositions that are particularly distinctive. I hope that they can develop. That's the second point, the insight into the industry itself.

The third is about what kind of price to pay. By directly benefiting from consumers, let consumers generate public praise to gain higher influence. This is obviously from the current implementation of the situation than the traditional advertising, brand advertising may have achieved a good effect, I think as the initial brand marketing is understandable, that can be a long-term low price? I think the essence is to see the efficiency of enterprise operation, and I hope it can do better in efficiency. But could it be? It depends on thinking of enterprise oneself. From these points of view, it is from the Internet or Internet thinking to enter an industry, the formation of industry insights and new propositions. The third is essentially how to optimize efficiency. These three points are the key to entering an industry and forming sustainable competitiveness in the industry.

I believe that all investors and entrepreneurs must be thinking a lot, to invest so much money, of course, human weaknesses, that is to say, investment does not mean their judgment must be correct, we wait and see. Of course, we have a tolerant heart for all entrepreneurs, and we all hope that they will succeed. I also believe that the coffee market in China will not be just an opportunity for Starbucks to dominate the market for a long time and everyone else will be in a small market space. Therefore, I think that the ultimate behavior of any challenge is worthy of attention. As for whether he can succeed or not, I think starting a business itself is a trial-and-error thing.

"Almost all the industries will be digitalized"

Fred Wang: Seventh question, I remember you once put forward the statement of "post-O2O era", you thought that Internet users may encounter setbacks in the first wave of offline attacks, but they will soon come back with new intelligent weapons, and the original offline service formats will be completely overturned in the future. I think this is a forward-looking view of the market, in fact, I agree. I am not so sure whether blockchain will overturn the Internet or not, because their relationship is relatively complex, not at the same dimension, and it is difficult to replace or overturn it. But I am convinced that the Internet and new technologies will further transform traditional fields. The technology focus in 2018 is summarized by the media as "HI, ABCD", H (HealthTech), I (IOT), A(AI), B(Blockchain), C(Cloud computing) and D(Big Data).

For example, in the Letter from Lei Jun to 2029: This Technology will Explode the Era, Lei always said that he believes that the era of intelligent interconnection of all things, AIoT, has come. AIoT is the deep integration of "A+I", representing the intelligent interconnection of all things. What do you think is new "intelligent weapon" of internet practitioners? Give you a choice: "HI, ABCD" which one or which ones? There is no limit to single or multiple choices.

Hang Zhou: This concept is too many, can't we understand such a complex world without a simple and abstract concept? The so-called new weapons in my view, in fact, all businesses will experience, in my mind will experience the following key words:

First of all, making all the businesses online and digitalized, regardless of the internal business operation process and the front-end user service process. After all things online, then making CM, EMP traditional truly SaaS or PaaS, which is very difficult for traditional industries to do and is basically done by Internet companies, because they directly provide the industry with new SaaS or PaaS systems, especially in online payment, face recognition, and customer management.

Second, I think what is more reliable now is efficiency improvement, I increasingly feel that AI has a great impact on efficiency improvement. If you do not have AI thinking, but people in traditional industries have, you will know what things are in the industry, and the processes and methods used to be used may be solved by AI, which is more efficient with better user experience, so I think people should have AI thinking. Of course, in terms of whether the future is IOT or not, I think there must be a lot of things are IOT, especially like the MI company now promoted. I find their newly released wifi module has been 9.9 pieces. They have a big dream, which is to push the industry to build generic networking modules at such a cost, and actually push the industry to make traditional electronics IOT. I saw their whole ambition and very sophisticated strategy.

Fred Wang: AI Thinking, next hot word. Previously, Internet Thinking and Blockchain Thinking. More specifically, in your opinion, which offline subdivision will be the first to be overturned by the so-called "intelligent weapon"?

Hang Zhou: As for my observation and thinking on the next subdivision of the field, frankly speaking, I have no conclusions of my own. I think almost all industries are to be killed, has to be digitalized. Just like the coffee we talked about, it is a good example and a good way of thinking, that is, how to quickly go into an industry through internet, and complete the entire online method after this. Now every small shop on the street, even the retail industry will be digitized, I think the factory will also be digitized too, and then layer by layer, from products, retail to production.

"I was taken by surprise when blockchain came along"

Fred Wang: Blockchain became very popular as it made fortune legends one after another since last year to early this year, and this legend has now ended. I remember you were going against the main stream and kept on reminding people to think clearly before carried away by the trend. As the market turned from bull to bear, many blockchain projects and investment institutions are working their way to get by the crypto winter. Where do you see the future of blockchain lies? In your opinion, is blockchain a real trend? For example, have you ever invested in blockchain project yourself? Or bought any type of cryptocurrency before?

Zhou Hang: This might be the most challenging question today, which in fact, gives me pressure to answer. I know 10 Questions with Fred originated from blockchain. I am a slow person in general because I only act after a lot of thinking, slow processing, and complete deciphering. I will only act after I believe in and accept it. To be honest, I was taken by surprise when blockchain came along.

I was actually one of the first bitcoin buyers in China. About two or three years ago, I follow the fashion abroad and bought bitcoin on an ATM-like machine with a few hundred US dollars. Unfortunately I can't seem to locate the bitcoin anymore, or else it would have hiked in these three years. However I did not get involved with the recent blockchain wave.

As for blockchain projects, many friends of mine chose to invest, start up in this industry. I am learning a lot from them. Although even till today, I am still unsure about blockchain being a trend. I often make the analogy of decentralization to communism in the world of a hundred years ago when conflict existed in capitalism society and communist thinking was lingering among people.

I don't think decentralization will replace centralization though. Of course, centralization has many problems that make up a long list but that doesn't make decentralization a solution. This is what troubles me. Is there no problems existing in decentralization? Does decentralization create bigger problems with it replacing centralization? From past experience and business history, as many entities progressed from scattered to centralized for higher efficiency, I do not see how decentralization would work better than centralization.

Fred Wang: The interest lies within blockchain industry doesn't lie in decentralization or centralization anymore. You have a wide range of interests, so it is impossible for you to not notice it. You are Hupan graduate and founder of Kuaidi. Have you heard of Chen Wei Xing from Fan Chen Capital intend to put taxing industry on blockchain in "VV Share" project?

Zhou Hang: Many people have witnessed VV Share. At least 50 people have came to me to suggesting a taxing blockchain project and I've been rejecting firmly very early on because I don't believe in it. Let's not even mention the cost for drivers and demand of cash pay, payment in token is just unrealistic. Technical problem is small, but is decentralized creation really more efficient than centralized system?

Will this system help users to order rides faster or lower the fare? If not, then I don't think it will beat the current platform with a centralized system. Many asks if decentralization works in markets with no mature centralized system. For example if taxing blockchain were to open in a small scale country and answered the needs for taxing. As long as there is need, a competitor with a centralized solution might be more efficient.

Fred Wang: Ideal blockchain consensus mechanism is that laborer gets reward from their work and creation. Many people have anticipations in this. I remember you've considered using blockchain technology to solve video art's propagation after being collected by museums. How is that going so far?

Zhou Hang: When a new technology arrives, we always start to think using it to solve problems that were not solved before. Video art was a thread of thinking, and was never put to action, maybe because it is not significant enough for me to invest more thinking into.

"Fights with wolf spirits do not suit me and I don't enjoy it either"

Fred Wang: I've heard of Jack Ma's famous saying: there are only lessons learned from failure and not success in Hupan University. Early last year, audience from where you've shared your failure case dissed you from being too shallow with lesson learned. What do you have to say about that?

Zhou Hang: I don't really care about it actually, because I was sharing what I've learned from my failure, not merely to tell a story. My sharing was the core and destine of my experience, which reshaped my understanding of entrepreneurship. I was talking about my understanding, not any particular event, an event that the audience might be interested to hear.

Fred Wang: Thank you for putting it this way. I totally understand what you mean by that, you might fit for smaller scale but powerful projects and this requires taste and class. There is a book called Classic that I'd like to refer to everyone. The writer Paul Fussell depicts U.S. society status system in the book. I am curious of your opinion in your own class and taste?

Zhou Hang: I've heard of a saying: a translator is a traitor. I know the book Classic but I have never read it. I don't like pretentious work. There were occasions that I got in touch with fashion industry, I felt very uneasy with people in a pretentious mode. I don't want to waste my life in that, so I've decided to never go back to those events and activities related to fashion industry.

I hope my life is calm and relaxed, not bitter. To be honest, I really wish to live relaxed and comfortably. Of course there are always occasions I treat myself too harsh, for example, I traveled on foot and lived in tents when there are other more comfortable options. But I enjoy rich and colorful experience, for that is not to pretend, but to live in realness that's faithful to my own heart and desire. I was in control to live, work and choose, which is the most valuable to me.

Fred Wang: To compete and rely on big platforms in a wolf spirit does not suit you. In China, people with class and taste might not fit for big business? Zhang Xiaolong from Tencent is an exception. The saying from Zhang: "Kind heart is far more important than wits" is one of the most tasteful sentences I've heard in recent years. However, internet war is at its peak, and war doesn't need taste.

Zhou Hang: Fights with wolf spirits do not suit me and I don't enjoy it either. But I don't agree with you on people with class and taste might not fit for big businesses, the key here is the time frame to look at this. If looking at these couple of years, or these few months even, wolf spirited entrepreneurs might be more successful. But looking over a sufficient period of time, if the focus was always to compete with others, wolf spirit, or defeating others, no great companies could be created. Great companies focus on future and users.

If you were to survive and compete, will there still be meaning to focus on your competitors after the bubble is popped? The stupidity of competing to "demolishment" with hardcore competing patterns will not be continued. I agree with you that I don't fit for this type of competition, wolf spirits and such. But I still think China has people with class and taste, with kind heart that is far more important than wits, who will do big businesses in the future. Do you think products of weixin have taste?

"Staring far into horizon while enjoying both the bitterness and happiness of entrepreneurship"

Fred Wang: The last question is going to be relaxing and easy. There is a term "Slashie" that originated from the word slash created by a columnist Marci Alboher from his book One Person/Multiple Careers: A new model for work/life success. "Slashie" corresponds to a group of people with multiple careers, a life-style with many identities. Are you one of these people? I think you seem like one of the "Slashie". Between these many identities, what's your most gain out of it? If you were to choose just one identity, what would it be?

Zhou Hang: Honestly speaking, I don't like the "slashie" tag. I think I am quite rewarded with the width of my life where I was able to meet different people from different level, to be able to accomplishment interesting things. I met quite some friends through publishing a book; earlier this year, I acquired some friends from producing a stage performance, who I had many thought-provoking conversations with that expanded my scope of vision because our understanding of things are quite different.

With that being said, I believe cross boundary or level communication is absolutely necessary for anyone stuck in a societal position, for cross boundary things are like nutrition to nourish a seed that will eventually grow into a giant tree. Being stuck at one position is like a dried up bank, the tree will not flourish without nutrition.

Personally, I like the study of economics, I don't think I am a good stage performer, or am I not the best collector or artist, but I can be an economist with a different perspective in a new angle. Liang Jian Zhang is a good role model in this sense. I also communicate with Elon Musk.

Fred Wang: A new world is beginning. Many entrepreneurs see Musk as a role model. Once you've asked him "Have you considered failure with so many crazy and unbelievable decisions?" Musk answered: "No, actually on the contrary, the possibility of failure for the things I've done is higher than success. I've decided to do the things I do not because of success but to explore the future." Musk has been proofing with reality that dreams could be wild and wilder, as long as you face it seriously. I hope we will live seriously without regrets, faithful to ourselves and to this era.

Zhou Hang: Musk has also expressed staring far into horizon while enjoying both the bitterness and happiness of entrepreneurship. I am thankful to this era because it has created us.

Fred Wang: Thank you again for being our host at this episode of 10 Questions with Fred. Thank you everyone.