A reminder: Click the blue text above to follow 'FMCG Distributor Professional Consulting' for more marketing and distributor management insights. Currently, everyone suffers from internet thinking anxiety, even Ma Huateng, who fears leaving China for Silicon Valley lest his company vanish in months. Facebook desperately wants to enter the Chinese market because American youth no longer use it; China is its last lifeline. Once the hype fades, everyone panics, having just written a book about their success or gone public, only to see their company nearly collapse. Former platforms like Lianmeng and Mimi were red-hot for a week and then forgotten. Why do we have these anxieties? Because change is too fast, yet most still think about how to sell things online. Today, I'll mainly discuss the essence of this transformation and its underlying logic. I can't guarantee correctness, as we're also stepping on watermelon rinds, sliding wherever they take us, but I promise everything I share today comes from the heart. First, let's re-understand human history. The development of human society has two threads: 'human extension' and 'cross-border collaboration.' Marshall McLuhan believed that technological development follows a clear pattern: continuous extension and replacement of human capabilities. For example, wheels and rockets extend human legs; washing machines and juicers extend hands; telephones extend ears; televisions extend eyes. That's the pattern of technological development. The so-called 'cross-border collaboration'—the biggest difference between humans and our close relatives, apes—is that humans collaborate. Collaboration leads to division of labor. Collaboration isn't apes scratching each other's backs or grooming; that's mutual help. 'Collaboration' means I catch you a rabbit, and you sew me clothes. Collaboration creates division of labor, which brings valuation and bargaining: how many rabbits do I need to exchange for how many clothes? Besides human-to-human collaboration, there's cross-species collaboration: nomadic civilization collaborates with animals like horses, cattle, and dogs; agrarian civilization collaborates with plants like wheat and rice. In industrial civilization, we collaborate with dead plant fossils (coal) via steam engines and dead animal fossils (oil) via internal combustion engines. There's a Luoji Siwei episode called 'The Box That Changed the World,' which says that containers reduced transport costs by 95%, greatly lowering global collaboration costs. Now, containers on the road mostly carry semi-finished goods; containers turned the whole world into a giant factory, changing the way the world collaborates, and thus changing the world. The internet isn't a new technology, but it allows further human extension, and collaboration methods will undergo huge changes. Even the most optimistic may underestimate the changes the internet can bring. Just like over a hundred years ago, shortly after the telephone was invented, an American mayor optimistically said that every American city would have a telephone. Now? It's predicted that the iPhone 8 will be the last generation of phones, and human telephones will disappear because with the proliferation of smart wearable devices, everything around people will become information transmission tools, so physical phones won't be needed. There was a deaf person watching others set off firecrackers, saying, 'How can a nice paper roll just scatter?' Because the deaf person's sensory world lacks a dimension, he can't understand how firecrackers are ignited. If you can't understand how the internet will change the world, you still think internet thinking means selling things on WeChat, Weibo, JD, Taobao, or Vipshop; all your actions are like the deaf person watching firecrackers. The internet brings a change in human connection. Humans are social animals; the harshest punishment is to lock someone away from all human contact. Since industrial civilization, each generation has created wealth several times the total of all previous eras. Our generation of Chinese was born with a lifetime ticket to a theme park. If you hate turmoil and excitement, being born in contemporary China is a tragedy, because in the coming years, we'll face major upheavals every few years. The three major logics of industrial society are: 'organization' collaboration creates efficiency, 'productization' scale creates efficiency, and 'centralization' communication creates efficiency. 'Organization' collaboration creates efficiency. Agrarian civilization lacked large-scale organized collaboration; people farmed and wove individually, connected through villages and clans. Ancient wars often involved thousands on the battlefield, with one side collapsing at the first touch; many decapitations and casualties came from slaughter during pursuit. Only in modern warfare did a side suffer 70% frontal casualties without collapsing—that's the change brought by organization. After industrial society, 'going to work' emerged. From national leaders to blue-collar workers, everyone goes to work; work means organization and high division of labor, and human wealth began to erupt. During reform and opening up, there was a saying, 'Science and technology are the primary productive forces.' Actually, that's unscientific. Is the rooster's crow the cause of dawn? No, the rooster crows because dawn breaks. Science and technology are the result of division and collaboration, not the cause. How people, things, and information connect and collaborate determines a society's basic form. When the basic form changes, everything else changes. Those who direct collaboration and create collaboration styles create wealth, so entrepreneurs should be rewarded. The internet's impact on company organization occurs within the organizational system. People gradually find that post-90s employees are hard to manage; KPIs and clocking in are becoming jokes. Dong Mingzhu banned phones in the office because she found employees using them during work hours to browse WeChat, shop on Taobao, and play games. But can a company without phones have a future? Marx once said that under communism, there would be no division of labor or organization. In his 1846 work 'The German Ideology,' he wrote, 'In communist society, one fishes in the morning, hunts at noon, and discusses philosophy in the evening.' People have no division of labor; under communism, from marriage to the state, all organizational forms will dissolve and disappear. According to communist doctrine, workers have no concept of nation, so boycotting Japanese goods would never happen. The communism Marx spoke of is gradually being realized today. The better-off people around us are less able to define what they do. 'Chaotic punches beat the old master'—elites who climbed to the top of their industries with great effort now face disruption from outsiders. The second and third players in every industry are suffering because they find that the leaders they've been chasing and learning from are also struggling; what's the point of catching up? They all ask themselves the three questions every Chinese security guard loves: 'Who are you? Where do you come from? Where are you going?' Diao Ye Niu Rou and Huang Taiji Jian Bing, who caused a stir in the restaurant industry, are not from the industry. The future belongs to outsiders. We now live on our phones all day, switching identities by the second, like attending endless meetings. We lurk in one group, are active in another, lead in one, and play a minor role in another. The fixed identities imposed by the industrial age are gone. Our bodies are chopped into mince by our phones. We don't read books; we can't even read long articles. The only literary works that can spread on phones now are dirty jokes, because they're short and stimulating. At meetings, post-70s sit next to leaders, post-80s sit farther away, and post-90s get angry if leaders don't sit next to them; post-90s don't even accept the concept of post-90s, believing everyone is different. Post-60s and 70s employees, due to their upbringing, have great servility and fear of the future, but post-90s employees will quit even with only 200 yuan left in their pockets. When money can't motivate people, bosses have no tricks left. Capable people leave companies because the market offers various rewards; if Tencent couldn't retain Zhang Xiaolong with enough shares to make him feel that starting his own business wouldn't be better, it couldn't keep such talent. The internet will accelerate the dissolution of future organizations. 'Productization' scale creates efficiency: Productization is materialization—turning rich human emotions and material needs into a single object, then mass-replicating it. In the material age, expressing emotions is pale; without material forms, emotions are hard to express. For example, buying a wife a bag or a diamond ring. The logic of productization assumes consumers are rational, wanting better and cheaper things, but industrial logic dug its own grave. Now we've entered an affluent society with homogeneous and abundant products; the only organ left unsatisfied is the brain. Consumers increasingly care about the experience a product brings, whether it lets them 'show off.' My partner, Teacher Wu Sheng, switched to an iPhone 6. Did he really need it? He did it to annoy me, and he succeeded—I'm envious. 'Centralization' communication creates efficiency. Our world is becoming a collection of small worlds. The retirements of Zhao Benshan and Shi Yuzhu announced the end of a 'centralized' communication era. Zhao's retirement means no more stars known from national leaders to common people. Shi's retirement means no more brands like Nao Baijin known nationwide. Mass media is struggling. Not long ago, a famous financial magazine had no ad revenue and faced pressure; the editor asked an entrepreneur friend for help, who readily offered 300,000 yuan. The editor asked what return he wanted; the friend said none. 'Then we'll run an ad for you?' 'No, no. If you run an ad, others will know and come asking me too.' What is this 300,000? It's a breakup fee. Giving money with no return means you won't dare ask again. Centralized media communication is increasingly ineffective; they're not even afraid of offending your company. CCTV's ad client numbers haven't decreased—consider it protection money—but total ad spending is falling fast, down 30-40% year-on-year. That's collapse. Although centralized structures are gone, media professionals still try, proposing 'content is king,' which is also nonsense. Just make good content? Just have good products? I admire and love 'Southern Weekly'; I paid to download its digital edition long ago, but frankly, I've never read it. Your content is good, and I admire it, but I don't have time. I only read articles forwarded by people I trust and like. The internet hasn't brought universal harmony; instead, it's made different groups more isolated. Everyone can't 'pee in the same pot.' Online debates are just emotional release; everyone feels intellectually superior and thinks others are idiots. The chance for China to establish a democratic society may be permanently lost. In primitive society, consensus was reached by fighting: if you can't beat me, you listen to me. Later, they found fighting was about numbers, so they counted heads first; whoever had more people won—that's the origin of democracy. Now the internet has split Chinese society from one big group into countless small ones; what's a big deal in your group is unknown outside. If the three fat guys hadn't sent three people to South Korea, we wouldn't have known the Asian Games were in Incheon. Think of the 1990 Beijing Asian Games: the whole nation knew, even I, a middle schooler, donated money. Do you know Lu Han? Many post-00s fans say, 'You can kill my parents, but not him.' Do you know who he is? Entrepreneurs often infer others' abilities by 'extending from oneself': think about yourself first half the night, and others the second half. Only by doing so can we improve products. But we don't know what's happening in these communities. Young people don't bother telling you; they don't want you to understand. Who's watched One Piece? If you haven't played World of Warcraft or Dota Legend, you can't understand what they're talking about. The internet is slicing people into small pieces, and the old comprehensive communication methodology is collapsing. The future society will feature free connection (from organized to free collaboration), rich connection (from productized to experiential business), and aggregated connection (from centralized to fragmented communication). Next, I'll introduce three ways of thinking to navigate the internet's predicament. I can't guarantee correctness, as we're also stepping on watermelon rinds, looking at the next step and pushing forward, going wherever we end up. The first way of thinking is 'personality thinking.' 'River' and 'mountain.' We must shift from materialized, external things back to the human level. Recently, we sold Liu Tao (kiwifruit) in Luoji Siwei's online store; we sold 10,000 boxes in a day, while Tmall sold over 800 in a week. Why the difference? Because we used Mr. Liu Chuanzhi's voice in WeChat, where he named and asked several internet influencers how to sell the kiwifruit well. The power of personality is immense. Last year, Diao Ye Niu Rou and Huang Taiji Jian Bing were very popular online; some went and found the taste average, saying they were just good at hype. 'Is product quality really important?' Is the world really like that? The truth is, in the future, only playing like Diao Ye Niu Rou and Huang Taiji will work. Luo Yonghao is making the Smartisan phone; everyone is laughing, saying he can't scale production and has quality issues. Does that matter? What if Luo Yonghao fails? It's not his first failure. He couldn't continue at New Oriental, Niubo.com was shut down, then he did Laoluo English, and now the Smartisan phone. If he fails this time, he can post a picture of himself holding a hammer facing the sea, or a photo of him working, saying, 'This time the reactionary forces extinguished us, but we'll come back!' That's enough. I once met Lao Luo and said, 'Don't sell Smartisan phones; just sell hammers, 1,000 yuan each. Your sentiment alone is worth 1,000 yuan.' Phone giants fear Smartisan not because the T1 itself will steal customers, but because suppliers might gather around Luo Yonghao to complete rapid iterations, eventually taking customers that Apple disdains and Xiaomi doesn't want. Does it matter that Huang Taiji Jian Bing isn't tasty? It might fail, but the boss, He Chang, succeeded; he started the Big Yellow Bee hotpot and has a movie coming out. Those who view He Chang with industrial thinking are pitiful. He Chang once said, 'If the pancake isn't tasty, people notice; if I make a delicious hotpot, who would know? In the future, my pancakes will be free, as long as my store has traffic and lines, someone will pay for them.' Luoji Siwei made mooncakes recently because food regulation is strict, and I don't worry about hygiene. Such products are low-end, so making mooncakes gets attention. The internet is deforming the ground under everyone's feet. For organizations to progress, they need 'forced demolition and relocation,' where the form may not change, but every brick is different. It's not just about changing strategies or tactics. I've always emphasized 'USB-style survival': 'carry information, no system, plug and play, free collaboration.' Only then can individuals and organizations collaborate freely. When I was at CCTV, each program group had voice actors; after writing scripts, we'd have them read and then edit into the program. Now we email the script to them, they record an MP3 and send it back. The best announcers now live in California. Industrial society dried up the originally sticky, wet society. All things have spirit; now we must give products a spiritual face. Luoji Siwei launched chef Li Qian; her private dishes sold out in 60 seconds. Next, we'll launch a 1.85-meter handsome CEO's private dishes. Industrial society connects people with things; internet society connects people with people. In the future, people can use their personality and talents to create value for themselves. Standard products in industrial society gained premium pricing due to information asymmetry and customer inconvenience. For example, a washing machine at Gome might be 5 yuan more expensive than the same model at Suning a few kilometers away; customers won't bother going to the other store—that's the value of 'location.' But online, switching costs are extremely low. Why did Dangdang release a new logo and direction? Because online products have no premium. I buy books on Douban, which clearly shows where each book is cheapest; I won't buy from Dangdang out of loyalty. A BV bag is handmade by one person from start to finish, with no division of labor, anti-industrial, yet it can sell at a premium. The opposite of the industrial age is 'small and beautiful.' Li Yuchun's fans want her concert tickets to be more expensive than Zhang Liangying's; Apple fans want the iPhone to be the most expensive phone. Future successful 'small and beautiful' ventures connect through people, both as interface and method. The Smartisan phone is Luo Yonghao; he exposed himself. Pan Shiyi, selling SOHO, also exposed his face. He guarantees properties with his personality; the value brought by someone with unlimited liability is greater than a limited liability company. In the industrial age, your customers don't love you; your bankruptcy doesn't matter to them. In the internet age, business requires friendship. There's a Taobao store called 'Nanshizhao' selling handmade noodles. When floods flooded their warehouse and they couldn't ship, in the industrial age you'd compensate without question, but because of friendship, many customers proactively sent money to support them, hoping to keep buying their handmade noodles. In the industrial age, you had to please everyone. In the internet age, you see Luo Yonghao and He Chang being rude online because they know, consciously or not, that making some people hate them makes others love them. He Chang of Huang Taiji once said, 'Compromising with those idiots is ingratitude to my supporters.' In the internet age, use human ways to form your tribe; as long as someone loves you, you'll achieve something. People will become the channel for future business. For example, I only read books recommended by people I trust, eat at restaurants they recommend, and buy cars they recommend. Everyone can open a micro-store; everyone can be a 'hostess,' applying makeup and dressing up just to look better. Someone pays for the connection cost. In the industrial age, human value had to flow through a big river to gather and flow. The future era is a snow mountain model: human value is the snow on the summit; the key is to accumulate snow in winter, and in spring there will be water, which can flow down in any form, not necessarily through a river. What is fan economy? What is community economy? I have no fans; I only have friends, because so-called fans must have sexual fantasies about idols. Do you think I have that? I'm like the primary school teacher who lived next door in the dormitory building; you listen to me for a minute while brushing your teeth in the morning, and once a week we sit down, cook a few dishes, drink some beer, and listen to me chat for an hour. Fan economy is 'you're awesome, we all support you'; community economy is 'we're together, he's awesome.' The second way of thinking is 'momentum thinking.' 'Tower' and 'wave.' If your company's annual meeting needed a host from Li Bingbing, Huang Xiaoming, and Huang Haibo, who would you choose? Huang Haibo, because he has 'momentum'—he's crossed boundaries, his experience is unique and attractive. Does Xi Jinping have more momentum meeting Obama for Sino-US cooperation, or eating at Qingfeng Baozi? Definitely the latter, because momentum requires crossing boundaries and attracting resources. Industrial society kept building towers. Brands are towers because foundations are solid and unchanging; with money and time, you can build a tower. In the mobile internet era, we can only make waves because there's no terrain and rapid change; we can only be like wave machines. Many Luoji Siwei actions are first and only; we'll never sell mooncakes or Liu Tao again. To make waves, you must be able to start and also suppress. When you make money the first time, suppress the urge to do it again, because the second time is industrial repetition. Luo Yonghao smashed a Siemens refrigerator once; he'll never do it again. He can only fight with Fang Zhouzi and then Wang Ziru, maintaining his warrior stance. Evergreen business is an industrial-age delusion; in the mobile internet era, there's no lasting commercial momentum, so it's better to end beautifully. Making waves is for fame, to get others to come to you; benefits come from other resources. We did Liu Tao, collaborated with big shot Liu Chuanzhi, and now several other big shots are coming to talk cooperation. On our office wall, there's a slogan: 'Rob the emperor's convoy, sleep with the emperor's mother.' As long as you have resources, you can make waves; without momentum, cross-border collaboration is hard. Coming up with a marketing idea isn't hard, but sustaining waves is. The third way of thinking is 'ecosystem thinking.' 'Clock' and 'cloud.' Someone once asked me, 'If you weren't at Luoji Siwei, how would this community continue?' I said, 'You're asking if the Luoji Siwei model would survive if I died.' Generational succession and perpetual operation are industrial-age delusions. What's the point of running a company for generations? All societies are ecosystems; being an ecosystem means not just surviving but passing on genes. Integrating your resources and letting others start businesses on your platform is a form of gene inheritance. In 1955, Karl Popper said there are two models in the world: the clock and the cloud. The clock has clear internal and external boundaries, composed of different parts, with division of labor, can be blueprinted, optimized, and replicated. Clouds are never identical, have no boundaries, are uniform inside and out, have no division of labor, cannot be replicated, and each cloud has its own value. I want to persist with Luoji Siwei for 10 years; although it's popular now, I estimate that within a year, more communities will emerge. I hope to find all talented people within the community, bring them to the platform, and support them—that's gene inheritance. All that is solid melts into air. If we use one word to replace the two threads of human development—'human extension' and 'cross-border collaboration'—it's 'connection dividend.' --------------------------------------------