Assuming that internal entrepreneurial projects are all good, the most critical factor is the people. No matter how favorable the timing and geographical advantages are, without good people and teams to operate, it won't work. All things in the world are done by people, and people with different abilities and responsibilities achieve different results, so everyone values the human factor in business operations. The concept of internal entrepreneurship platforms has been prevalent in the corporate world in recent years, and we are not unfamiliar with it. For example, Wangpin Group's Lion King Plan, Handu Yishe's small group system, and Haier's internal entrepreneurship incubation model are all successful cases, but there are also unsuccessful ones, such as Huawei's 'Harbor Bay' incident. So how exactly should an internal entrepreneurship platform be built? Key Success Factors Doing anything requires the harmony of timing, geographical advantage, and human harmony. With the opening up of social resources, people's pursuit of wealth and self-fulfillment has increased, making entrepreneurship a popular path. The advocacy of 'mass entrepreneurship and innovation' has awakened many people with entrepreneurial dreams, but individual entrepreneurship is not easy, so it has prompted companies to build their own entrepreneurship platforms to retain talent for their own use while allowing individuals to realize their dreams. When building an internal entrepreneurship platform, three key factors should be considered: 1. The project must be good; 2. There must be a good general manager; 3. There must be a good team. A good project is easy to understand; a good project has a high success rate. A good project typically has good prospects, a good business model, large market potential, and no competitors, meaning it occupies the advantage of geographical advantage. Assuming that internal entrepreneurial projects are all good, the most critical factor is the people. No matter how favorable the timing and geographical advantages are, without good people and teams to operate, it won't work. All things in the world are done by people, and people with different abilities and responsibilities achieve different results, so everyone values the human factor in business operations. For example, venture capital, on the surface, invests in projects, but in reality, it invests in people. It must see whether the project has a good general manager, and also look through the general manager to see how the entrepreneurial team is. So the human factor is crucial. Finding a Good CEO To find a suitable person as CEO, you can use 'willing to do' and 'able to do' as criteria. Whoever is both 'willing' and 'able' is the right person. To measure whether a person is willing to do, you should see if they are willing to invest money, not just listen to how well they speak. Because the amount they invest determines how much they will devote, or how much confidence they have. If a person uses lack of money as an excuse not to invest, then they may not really want to do it, or they may not truly want to do it, or they may simply lack ability. A capable person, even if short of money, can always find money. Most Chinese bosses come from grassroots backgrounds and had no money, but they still found their initial startup capital because they truly wanted to do it; that is the trait of a boss. So, if they want to do it, they will definitely be willing to invest money. Whether a person is capable depends not only on their ability but also on whether they can work full-time. If a person cannot devote themselves full-time but instead straddles two boats, no matter how strong their ability, they are not suitable. Part-time work itself is a sign of lack of confidence in the job, and as the saying goes, 'You cannot serve two masters.' How can someone who lacks confidence and cannot devote all their attention do well? So, if they have ability, they must be full-time to be truly capable. No matter how good the project, if you cannot find the right person, do not do it, otherwise it is doomed to fail. Building an Excellent Team An excellent team will give the general manager wings. In simple terms, a team is when there is a leader, and a group of brothers willing to follow him through thick and thin, with cohesion. To see if a group of people is a real team, the simple method is still to look at money, to see if these brothers are willing to invest money. If a person is willing and able to be the leader, not only invests their own money but also finds capable brothers who are willing to invest and work with him, then this person and this team are usable. If you favor a person, and this person is willing to invest, but no one is willing to follow him and invest, then this person is not usable. Either this person lacks real ability or has character issues. In a company, the masses often have sharp eyes. For example, how this person treats subordinates, whether they only flatter, whether they like kickbacks, whether they are greedy for small advantages, etc., the masses see more clearly than the boss. No one wants to invest their money in someone with bad character. To build a team, you can use internal crowdfunding and equity subscription methods, allowing several people to form groups to compete. Whoever can assemble a team and raise the most money gets to do it. Of course, the team members, as partners of the CEO, must also be excellent employees of the company who can take on heavy responsibilities. This method avoids subjective preferences, uses objective criteria to help you select people, and indirectly helps you select the team. Let the leader and the brothers choose each other; if they can truly bond, they become a truly usable team. Balance in Profit Distribution Whether the interests of both parties can be balanced will directly affect the development of the internal entrepreneurship plan. When the entrepreneurial project is still small, maintaining an initial static balance is beneficial and necessary. For example, if the entrepreneurial team holds 40% equity but receives 50% or 60% of dividends, it will allow the team to focus on development without distraction. However, if the entrepreneurial team multiplies the assets by dozens or even hundreds of times, using the same ratio will cause unrest among the team, because after all, these people are working hard to earn money, and if the disparity between contribution and reward is too great, it will inevitably cause dissatisfaction. When this unrest affects the project's operations, losses become inevitable or even irreparable. Therefore, the boss should pay more attention to the dynamic balance during the project's development. At the project's inception, it is necessary to plan ahead, such as agreeing with the entrepreneurial team on at what stage the project should adjust dividends and equity, and even when the project reaches a certain stage, the identities of major and minor shareholders can be swapped. This maintains a dynamic balance of interests, which is definitely more beneficial than harmful to the project's development. The project being alive and continuously developing is the greatest wealth; your investment will always yield returns. If you are greedy and only focus on short-term gains, lose the people's support, and the project dies, it is truly a loss outweighing gain. Sharing and Balancing Operational Risks Business involves risks, and internal entrepreneurship is no different. Therefore, the company and the entrepreneurs should also do a good job of sharing and balancing risks. In reality, people often simply distribute dividends according to the proportion of capital contribution, and losses are the same, which is unreasonable. Instead, the principles of equal rights and responsibilities, and equal risks and returns, should be followed. Usually, the company will completely delegate operational authority to the entrepreneurial team, and the company does not participate in operations, at most helping the team with areas they are not professional in, such as HR, finance, and supply chain. Therefore, operational risks should be borne according to the size of authority, not according to the proportion of capital contribution. Returns should also be distributed according to the size of authority and responsibility, and one cannot only see the benefits and ignore this logic. Once risk-taking is not equal to authority and responsibility, the entrepreneurial team may harm you. The best method is for the company and the entrepreneurial team to agree in advance on a fixed amount of return, such as a minimum return not lower than bank interest income. The portion exceeding the fixed amount is then distributed according to the agreed ratio. If there is a loss and the team cannot pay this fixed return, they can use equity as collateral or defer the previous year's dividends to cover the loss. Conclusion Building an internal entrepreneurship platform, considering from the perspective of timing, geographical advantage, and human harmony, the most complex is human harmony. From selecting people, selecting teams, to balancing and controlling interests and risks during operations, these are the most difficult. But the principle remains the same: as long as you truly understand the logic and principles in these processes, you can design the most suitable internal entrepreneurship model according to the company's own characteristics, build a good platform, and create a benign and healthy business ecosystem. Source: Taishan Management Institute -END-