There is no red ocean or blue ocean, only good and bad execution Chen Wei: Selling water and beverages may seem like a small business, but it has already produced several richest people (Zong Qinghou, Zhong Shanshan, etc.). Do you have aspirations in this regard? Tang Binsen: No. I still return to my earlier viewpoint. Six years ago, I sent an internal email saying that China does not lack good platforms, but good products. As entrepreneurs at the time, we considered that if we created another platform, consumers would not come to it. If we did O2O, that was also not lacking. It seemed like whatever we did was meaningless, so we looked for something meaningful. It was simply about doing things that we felt were meaningful. China's future does not lack platforms, highways, high-speed rail, or skyscrapers; it lacks companies that can leverage the world's best infrastructure and information superhighway to build good products. This is my thinking and conclusion. At that time, many people were doing connection-related things, but there was little truly valuable content. Entrepreneurs must have their own mission and understand what their soul is. Chen Wei: You have provided many entrepreneurs with new insights. Originally, everyone was competing to go to the blue ocean, but actually you can enter the red ocean with a completely new approach. Tang Binsen: There is no absolute blue ocean or absolute red ocean in this world. A red ocean might be a tropical rainforest, a thriving industry. A blue ocean might look like one, but in the end, it could be a desert where nothing grows. This is like Duan Yongping's saying, 'Dare to be behind others.' You should not think about finding an industry that no one has entered; that industry might not work. The fact that many people are in an industry does not mean there is a problem. What you can do is to be better than others. Of course, the premise is to always maintain a sense of awe—awe for the industry, for professionalism, and for users. Keeping a reverent heart is crucial for entrepreneurs. The core of digitalization is giving power to consumers Chen Wei: In your view, opportunities are still everywhere, and many industries are worth redoing. What is the basis for this 'redo'? Tang Binsen: The problem is whether the industry or the company has problems. Problems are opportunities; we must look at problems from a product and operation perspective. If a boss of an internet company sees that an email box only has 100 MB, wouldn't you want to make a 1 GB one? When we looked at the beverage market, we did not start from sentiment but from problems. We hoped that people could drink high-quality beverages with real content. When our products launched, many achievements and influences were based on word of mouth. Why can China's internet thrive endlessly? Why are entrepreneurs always enthusiastic? Because young people can always see hope. Alibaba, Tencent, Meituan, Pinduoduo, ByteDance... Successful companies keep emerging precisely because opportunities are everywhere, and someone with a 'problem-solving' perspective seizes them. Chen Wei: So, the core of 'redo' is not marketing, digitalization, or consumer insight, but the improvement of product and service quality. Tang Binsen: Exactly. What is true digitalization? You give the choice to users. The 'soul' of the internet is the voting and behavior of users behind digitalization. Good digitalization is when numbers help you make decisions; it is number-driven decisions, not boss-driven decisions. So the hardest part of digitalization is whether the boss can give up power, trust the numbers, and use them to make decisions. Chen Wei: This is quite fundamental: decision-making sovereignty must be transferred to users. Tang Binsen: Yes. That is the core of digitalization. They think that to digitalize, they just gather a bunch of numbers, but if the boss monopolizes the numbers without trusting them, it is meaningless. Digitalization is difficult because it involves digital thinking and decision-making. Often, digitalization fights against human subjectivity, which is hard. Chen Wei: Right, the core is to use a data-driven way of thinking. Tang Binsen: Yes. Give power to consumers, but many cannot do it. For a beverage, if you casually ask a few users to taste it and they say it's not good, why push it to the market? And then do buy-one-get-one-free or buy-two-get-one-free. That is not digitalization; it is not trusting users; it is a 'blockade' mentality. Chen Wei: If users decide, what is the role of entrepreneurship in the company? Tang Binsen: The core of entrepreneurship is user first, not boss first, resources first, relationships first, or transactions first. It is believing that creation can generate value, not that gaming creates value. The so-called 'channel is king' means they think consumers are not the most important; what matters is that the product is placed there, and consumers have to drink it. The underlying logic is not believing in creating incremental value, but emphasizing seizing the market, 'channel is king.' User first means believing that creating new things can stimulate new needs. Like Jobs constantly creating new things to stimulate user needs. The underlying difference is whether it is an infinite game or a finite game—the internet spirit believes in infinite games. Chen Wei: I see that the biggest characteristic of this generation of young entrepreneurs is returning to the essence of business: being good to users and employees. That is fundamental, right? Tang Binsen: Indeed, it is that simple. Chen Wei: Many entrepreneurs tremble before business giants. Where does Genki Forest's courage to compete head-on with giants come from? Tang Binsen: I once wrote: "We firmly believe that the world is continuous, and great companies are born in known great industries. Apple, Google, Tencent, Alibaba, Budweiser, Coca-Cola, Nestlé... Great companies are not built by creating a brand-new industry, a trade secret, or a flash of inspiration. They succeed by continuously assembling the strongest teams, persistently believing in 'user first,' building products with the highest industry standards and reputation point by point, pixel by pixel, and continuously competing with giants in industries where giants are born." That is it. That persistence and standard are continuous. (Tang Binsen) In Genki Forest, product managers have the most say Chen Wei: I feel that you differ greatly from the older generation of entrepreneurs. You place great importance on R&D, data, and marketing. Tang Binsen: The older generation was shaped by the environment. At that time, China was not about supply-side reform but demand-driven; merchants could do whatever they had, and everyone lacked everything. So it was about organizational and management capabilities. But Chinese society has changed greatly over the past 20 years. One change is that the new generation of business owners is increasingly focused purely on products. Previous bosses might have considered many issues comprehensively, but they were not purely product-oriented. Now society increasingly rewards those who purely focus on products. So in this era, low-level needs are already met; you need to create and innovate. The organizational form is different from the previous synchronized, nationwide approach. You need an innovative mindset, attract excellent talent to do innovative things, and provide effective incentives like equity. Chen Wei: Interestingly, many people focus on marketing when looking at you and entrepreneurs like Xiaoguan Tea and Heytea, but you yourselves like to talk about products. Actually, your marketing expenses account for a high proportion of your company's spending, right? Tang Binsen: Most people focus on marketing because they think it can yield immediate results. But good marketing is invisible; it is like gentle rain. If you look at our company's organizational structure and decision-making system, you can see whether we value products, marketing, or sales. In our company, product managers have the highest say; they are the ones who influence the overall situation. Chen Wei: Are there challenges in management? For example, internet-thinking people and traditional consumer industry people may have two different mindsets, and merging them is not easy. Tang Binsen: Our integration is very good. If you sincerely respect talent and treat them as partners, the team will be cohesive. It is simple. Kazuo Inamori said, 'Respect heaven and love people.' Whether you truly treat colleagues well cannot be faked. Whether the boss is genuinely good to users and the team—whether it is real or fake—may not be apparent in the first year, but within three years at most, it will be clear. Chen Wei: Time reveals a person's heart. Tang Binsen: We talk about the underlying drive of the internet spirit: extreme respect for talent from the heart. Extreme respect means our culture is equal and open; we are willing to provide sufficient incentives and equity, treating all talent as partners. For example, in Genki Forest, I am not the controlling shareholder; the shares belong to the team. Now many FMCG companies are learning internet tactics, implementing equity incentives, and attracting talent with internet company standards. More and more graduates from Tsinghua and Peking University are entering the consumer field, so I believe the industry has unlimited prospects. Believe in the opportunities of the Chinese market and base industrial layout on this Chen Wei: Coca-Cola seems to be the industry ceiling. Where do you see the main opportunities for Genki Forest? Tang Binsen: A few years ago, I said that China's per capita GDP is $10,000, while the US is $50,000, a five-fold difference. So in recent years, China's electric vehicles have risen; that is the $10,000 level. Germany and Japan can only make traditional cars, so China filled the gap in electric vehicles. After filling other gaps, like chips, the remaining gap is consumption. What is the underlying assumption for the rise of Chinese consumption? It is our belief that there are major opportunities in China's consumer industry. Chen Wei: This is a fundamental aspect. Tang Binsen: At the very beginning, our first main product was 'Ran' tea, with prominent large Chinese characters, positioned as an Eastern story. Chen Wei: Your pricing strategy is high quality with high price? What is your core product logic? Tang Binsen: Yes, high quality with high price. We say that hardworking Chinese people deserve a good beverage. The core logic is the ultimate pursuit of user experience. When making products, we do not consider cost, only whether users like it. Initially, we actually hired professionals for pricing analysis. They said that cola is about 3.5 yuan, so we could only sell at 4 yuan, with channels and terminals each taking 30% commission, and cost about 0.5 yuan. We listened, but the product we made was something we ourselves did not want to drink. At that time, we had already produced products worth 5 million yuan, and we destroyed them all. This incident made me reflect for a long time, so we changed our logic. We stopped considering cost and other factors, used the best materials possible, and made a beverage we would enjoy drinking. Based on this philosophy, Genki Forest was the first in the industry to use a sweetener very close to sugar on a large scale. This sweetener costs about 50 times more than traditional industrial sugar substitutes at the same sweetness. Chen Wei: How do you penetrate the lower-tier market with high-priced products? Tang Binsen: The essence of 'downward penetration' is that many people who previously did not enjoy good things now can. So it is not downward but upward. For example, if someone makes a car for 30,000 yuan, people think it is 'downward.' Actually, these people could not afford a car before; now you enable them to buy and experience one. So it is upward, not downward. I believe that Chinese people will all come up and enjoy a good life. -END- Source: Zhenghe Island (ID: zhenghedao) Are you 'watching' me?