Welcome, friends of time. Looking at me forty years ago, not much has changed. Those who have had a rough time are called friends of time; when you haven't done something, there's a faint sadness, often at such moments. Many years ago, after a breakup, I took a cable car at Fragrant Hills. I was alone, and halfway up, a fierce wind blew. I felt my life was thrown there, and I vowed that if I got down safely, I'd be a better person, free from vulgar interests. Of course, it didn't work out; after getting down, I was the same as before. Our lives need special moments like that cable car ride after a breakup. All animals have three emotions; humans add love, hate, and sorrow. Love is not pleasure, fear, or anger; it must involve a time scale. Without a time scale, humans cannot love or hate. The deeper the dimension of time is explored, the more brilliant the glory of human nature becomes. Many things happened in 2015, many forgotten. No one makes top ten news lists now because everyone's focus is different. Some focus on Uniqlo, some on the economy, some on when Apple will cut prices. As a media person, don't think diversity is a fact that automatically presents itself; the more diverse, the more distorted the world appears. In the past, Chinese media discourse was more controlled by technology, with internet companies dominating headlines. They occupied much of our discourse, but did they give us the real world? Not necessarily. Last year, Dong Mingzhu gave shareholders over 10 billion yuan, and no one knew, but when Liu Qiangdong had a child, the whole country knew. Wang Jianlin's capital went overseas aggressively last year, no one knew, but his son's Weibo post was known to all. In the auto industry, the most talked-about person was Jia Yueting, who wanted to make super cars, but who really paid attention to the top 500 auto companies? It was Li Shufu of Geely. The most sensational news is not necessarily the truth of the world. In 2015, I vowed to give a 20-year speech. Although I can't give the most authentic year, I'll lift the surface and see the deepest essence. That's my effort. Thanks to friends of time for coming. We are all in an information hive; the more information, the less we get. When I was in media, I had a insight: several reporters interviewing an entrepreneur should challenge him, ask embarrassing questions. I never believed that. I always believed entrepreneurs are precious assets of this era. Challenging him, making him tongue-tied, what glory is there? I communicated with leaders; I don't want to stand opposite entrepreneurs, but behind them, helping my users re-present the world they see. That's the most valuable information development in media. In 2015, though I talked about the ups and downs of the Chinese business world, I never cared about winning or losing. They are building a great commercial civilization, different from past civilizations. In 2015, professionals and businesspeople made a little effort, which will be projected onto the sky. What did the performances of big names on stage in 2015 leave for the commercial civilization of this era?

I'll discuss seven topics:

Internet Panic

The internet, like a ghost, has wandered across China for many years. In 2015, internet panic reached a peak. Many entrepreneurs were willing to invest all their assets to transform. I think it became irrational. Many say Ma Yun is too bad, destroying offline business. Do people have common sense? Our online business accounts for less than 5% of all business. Can 5% destroy 95%? Even I, a liberal arts student, don't agree. In fact, friends from commercial real estate tell us that the reason offline business hasn't been smooth in recent years is simple: the four trillion stimulus a few years ago. I said Tencent made over 20 billion last year; my friend said that's less than our company. He works for China Tobacco, which made over 170 billion last year. Even if we all say China Mobile is declining, it still has over 10 million in profit. Is the internet panic we perceive a fact? This reminds me of a childhood thing. I started school at five. My deskmate was big and always bullied me, but I never feared him. What I couldn't stand was him saying he'd beat me after class. Internet panic is like that big guy, giving us three words: you wait. Many business friends have this feeling: it makes us wait. How to view the internet panic of 2015? Use biological thinking to understand business. The opposite of biology is mechanics. Biology brings time into thinking; it doesn't draw a blueprint or communicate, but returns to the flow of time, like a small worm, finding the best strategy at each point in time. If we understand "transformation" this way, our angles and conclusions will differ. A cat sees a dog and thinks it's great, but can't become one. Wanting to change is because the cat is foolish and makes God's job hard. When a cat envies a dog, is the dog really that comfortable? This isn't about who is the dog, but a metaphor. Robin Li's Baidu ranks first in BAT. Last year, he said he saw 50 billion cash in Baidu's account and was willing to spend 20 billion on O2O, shaking the market. As a media person, let me share some gossip. JD's PR wanted media to put JD first, calling it JAT. Ping An said, can it be PAT? Some guessed it would become ATM, where M could be Xiaomi or Meituan, who knows. Although Baidu is a behemoth, many covet its position. Ma Yun's Double 11 sales reached 97.2 billion this year. I heard media rumors: one day Ma Yun spoke internally, saying our company and business are excellent. Internet companies want our business. If Baidu wanted to swap, we wouldn't, but if Ma Huateng wanted to swap, I'd think about it. Ma Huateng has already got a ticket to mobile internet. Even Ma Yun, as strong as he is, has fear of the unknown future. It seems Ma Huateng is at the top of the food chain, but does he have no fear? In an internal speech, he said every year he feels like he's about to die. At the recent Wuzhen conference, he was deeply worried about what species would replace WeChat. Zuckerberg is very successful, buying WhatsApp for $19 billion. Another Chinese company was also bidding. The Chinese company offered $3 billion, thinking it was high, but Zuckerberg bid so much. Was it worth it? If WhatsApp weren't to replace Facebook, this wasn't an acquisition but an escape. I've shared some simple gossip. Every internet entrepreneur knows this is torment. "The Hard Thing About Hard Things" says: I sleep like a baby, waking up crying every two hours. That's my state. One day I feel I own the world, the next I feel the world is leaving me. Entrepreneurs understand what we're doing. In the arena of time, is the dog always victorious? Let me give a profound example. Darwin, in his later years, had written "On the Origin of Species," but was tormented by the peacock's tail. He couldn't understand why peacocks have such tails, which are unsuitable for survival of the fittest. Why would a peacock grow a tail that's not good for foraging and consumes energy? He later thought it might be the female peacock. Perhaps there were peacocks without tails, but no female would mate with them, so they went extinct. Once time is brought in, where are the dinosaurs of the Jurassic? The most primitive single-celled bacteria, cockroaches, are still alive. Is internet panic worth panicking about? Another factor in Chinese internet panic is reluctance to leave a warm system. A friend from New York said New York newspapers are also closing, but media people don't have the doomsday atmosphere like in China. Why? For American media people, it's fine. The dissolution of any organization is not the failure of practitioners, but the failure of the organization. What transformation? Just disband. Humans have created other ways to integrate resources, and new media companies offer higher salaries and stock options. People run and sing. What transformation is needed? Everyone talks about the difficulty of transformation, but it's exaggerated. How can the difficulty of transformation in 2015 compare to that of earlier entrepreneurs? I always keep a photo of Liu Chuanzhi's earliest office on my computer. If you say it's hard, look at that photo. A professor gave me a metaphor: this country, you look at it and are confused. What is it? It's a bicycle, a motorcycle, and a rocket, because these 30 years have evolved bit by bit. The bicycle pushed by Deng Xiaoping evolved slowly. No one wanted to become something specific; just walk step by step, and it became a chimera. Many people are pessimistic about China. So what? Running a marathon with an IV drip, so what? Thinking about today's business with biological thinking gives different conclusions. I'll give a conclusion: no need to transform, just grow. I'll make a prediction on my show: China's economy will be better than everyone thinks. I'll say something off the cuff: a company like ours, only three years old, can hold an event at the Water Cube without knowing any government officials. Would we have dared to think that five or ten years ago? This soil is too fertile; everything is growing.

Capital Winter

In the second half of this year, this term was coined. Everyone talks about capital winter. In the first half, they talked about the startup wave; in the second half, it got a bit colder, and capital winter arrived. It's said there are 9,000 tech companies, meaning 9,000 CEOs. Many say I have a brilliant idea but lack a programmer. China now has 640,000 internet startups registered with Baidu, paying Baidu 1.92 billion annually. How many internet entrepreneurship education companies are there in China? 1.6 million. The Great Steel Smelting campaign had only a million. He said he guarantees this is true. That's the startup wave. In a small field, everyone feels opportunity. Liu Qiangdong once shared internally that entrepreneurship has become so crazy that you can start a business even if your business isn't going well. A company was about to collapse, but didn't want to pay severance, so it paid 1.7 million for employees to start a business, keeping 70% of shares. A few months later, the brothers told the boss they'd raised funding with a valuation of $200 million. How many times did his shares multiply? What did they do? Used car sales, but by Series B, they'd only sold two cars, and those were bought by internal employees. He opened a garage. A year ago, on a cold, windy night, a man in a black trench coat and sunglasses came in, saying he was an investor, the project was too small, he needed to invest in a 100 million project. Someone stepped forward, they negotiated, and left. He thought everyone was crazy. One day, a young man came to me, saying he wanted to change the world and needed my help. Then he took out an ear pick. He said I could do planning, and Diao Ye could do marketing. I had to escort him out. Many say entrepreneurs are crazy. I say in this era, even crazy people are starting businesses. I have a deep belief: crazy people and entrepreneurs are both weather vanes of the era. In middle school, I read a book: if a country's elites are all in the military, it's likely a third-world country with frequent coups. If they're in business, it's developed. If in government, it's developing. Similarly, if a country's crazy people think they're heavenly soldiers, the country is ignorant. If an ear pick entrepreneur appears, all elites should pull out their tools and see the opportunity. Many say don't encourage college students to start businesses, saying success rate is zero. I'd ask: they're already proletarians, the cost is so low, why not try? The thing young people can waste most is time. What's the difference between going to Lijiang to idle and starting a business in Zhongguancun? Is it better to let them shiver outside a company begging for a job? Even if no college student startup succeeds, so what? The most suitable for entrepreneurship are the smart, young, and poor. This isn't important. What matters is that in 2015, media described particularly irrational, stupid investors, and then in the second half, they covered their pockets and didn't open to young people? I think money is the smartest and most responsible thing in the world. Let's talk about the 5,000-year framework. What has capital performed like over 5,000 years? By the time of Jesus, capital rose slightly, then kept falling, even to negative interest rates. In 1069, the great Prime Minister Wang Anshi reformed in the Northern Song, introducing the Green Sprouts Law, where the government lent to farmers at low interest to avoid usury, at 20% annual interest. A grandmother queuing at a bank would go crazy, but at that time it was low interest. Over 5,000 years, capital's power has been declining, not rising. We see a vague phenomenon: the more developed the economy, the less valuable capital. We hear a voice: capital winter. It's when capital prepares to feast, but encounters flies, so it puts down the food to shoo them. Next year, capital will become more humble. Many ask where this conclusion comes from. On January 1, 2016, our Logic Show will exclusively release Wang Dongyue's "The Evolution of Things." I predict it will be like "The Three-Body Problem," spreading in small circles, then exploding. This book talks on a grand scale: connecting 13.8 billion years of cosmic evolution and 10,000 years of human civilization. Human nature is the bloom of material nature; the human way is the continuation of the heavenly way. In biological evolution and cosmic evolution, this has repeated. Everything we see today is not the first time. The entrepreneurs we saw, like Liu Chuanzhi, had no capital back then. Today, capital deeply integrates into industry chains and daily operations, which is unprecedented in human history. To understand capital's essence, return to biological history. In the Cambrian era, there was a species explosion, with many species appearing, including sexual reproduction. Before sexual reproduction, there was not asexual but solitary reproduction. Why did sexual reproduction appear? Because solitary reproduction was insufficient, so differentiation and mating occurred. What role do males play in sexual reproduction? To obtain diversity. As long as there is sexual reproduction, any individual's genes are completely different from others. Organisms with sexual reproduction are more adaptable. Our genes differ from our siblings. This gave biological development more diversity. Let's not talk biology; return to business to understand why capital appears. Capital is a branch differentiated in the reproduction of valuation, then mates with entrepreneurs. This is like the Cambrian explosion 500 million years ago. The general trend of differentiation and mating remains. If you accept this metaphor, you can draw several conclusions: First, capital becomes more aggressive, more prodigal. Neil Shen often calls investees for two or three hours; if they don't accept, he asks for a reason. Capital, like all males, tends to build its own harem, buy multiple tracks, and chase more investees. Second, I attended the launch of "Miya." The founder asked the investor: You also invested in Vipshop. Which is your biological child? Every capital is building its harem. One more concubine just means one more pair of chopsticks. Third, you must become more beautiful to attract entrepreneurs' attention. In fact, in 2015, my media friends were recruited by investment firms for PR. Fourth, the combination of male and female into a community is the future model. I told Lei Kun this theory. He said, isn't that what I am? Isn't he with entrepreneurs as the front and capital as the back? Fu Sheng started a Purple Cow Fund, and we participated a bit, also taking on investor roles. Fifth, when the child grows up, it only knows its mother. Whoever holds more than 50% of a company's shares, or the biggest capital stake, has the most say. But this system is slowly changing. In the past, you could throw a handful of wheat or a property deed to take a girl away. Capital, like males, once did that, but now it's changing because entrepreneurs are investors of human resources, the female in the metaphor, and they gain more say. Capital is male. We all know Yue Fei had a mother, but have we heard of his father? The mother raises the child. This is happening in the market. Rumor has it that before Liu Qiangdong's IPO, he coerced the board, or the board had a conscience, and gave the mother who raised the child 4% of equity as a reward. No matter how much capital takes from you today, if you raise the child well, orphans and widows are not easy, you can slam the table before IPO and say capital can give it back. I'm not saying people don't follow rules. Why did Ma Yun list in the US instead of Hong Kong? To ensure institutional protection and control of the company. These days, Wang Shi's story is complex. I come from media; media tells stories. Many have different interpretations. Some say the emperor lost his kingdom because of his harem; some say the old man was pushed off the stage by new forces. But I don't see it that way. I see an entrepreneur with his long-standing knowledge, market credibility, and capital in a game. Who will win? The current institutional arrangement favors capital, but I don't believe that because capital is an ocean, not an island, not that specific force. No matter how strong Baoneng is, there are greater forces. If Wang Shi wins, it's not morality winning, but strength. What's truly respectable about Wang Shi is that he represents entrepreneurs, holders of human capital. If he defeats the barbarians at the gate through fair rules in a big game, that's good. Of course, many have different positions. What I want to say is if capital forces entrepreneurs out, that's a bad story. Jobs was driven out by capital; he was a crawler that could be crushed at any time. We need evolution toward fairness and justice. I have no personal agenda, but a prediction about human commerce. I'll bet on Wang Shi winning. The reason is that this old bird has been in business games for 30 years; what hasn't he seen? Wang Shi dares to say I don't welcome you. I believe he has preparations. This is my confidence in the older generation of entrepreneurs as a man in his 40s. If Mr. Liu Chuanzhi said something about his industry, I have no room to refuse. Today, I'm especially grateful the old man came. It's not easy today; it's a test of bladder capacity. The old man still supports the younger generation. Old Liu, I like you. Old man, we really like you. Why do we call you that? Because he asked us to. This is true success. You're not just an entrepreneur; you're our talisman. We hope to be like you one day. Capital and entrepreneurs, like the Cambrian explosion 500 million years ago, they flirt and mate. What will they do? They'll be happy, and heaven is watching.

Two Monster Stocks

The first monster stock: Feng Xin, boss of Storm Video. 40 days, 36 limit-up boards. These two numbers will be remembered. I asked him how he felt being called a monster stock. He said he didn't like it, but there was no other new word. How do people evaluate the pie falling on his head? Feng Xin had a tough few years. Although he now has VR products, he originally wanted to list on Nasdaq, then dismantled the VIE to return to A-shares, waiting three years. He said the most important thing in cards is not leaving the table. If I remember correctly, Xunlei's revenue is three times Storm's, but since becoming a monster stock, he doesn't think he's a big winner. I think of a phrase from my circle: What do I rely on to be strong? Just hanging on. At Storm's press conferences, Feng Xin says he wants to be China's first VR company? Do people believe it? I'm watching him. I think he, like me, is skeptical, but employees believe. Another monster stock: LeEco. This is the most bizarre company. Its office is outside Chaoyang Park, not near any big company. Jia Yueting was born in a poor mountain village in Shanxi, graduated from an ordinary university, then ran a computer company, i.e., typewriters and copiers. He did steel, communications equipment, then came to Beijing for video business. Many traditional bosses identify with LeEco because they're similar. What kind of company is LeEco? It does whatever makes money, even if it's just a few thousand more a month. When I see LeEco, I want to ask an old friend, dare I ask if you're still the same wife? LeEco is god-like. It never took mainstream investors' money, doesn't interact much with internet people. Jia Yueting dares to touch what others don't: politics. Marx said: the essence of man is the sum of social relations. From early online video to bicycles, TVs, phones, music, film, super cars, all the businesses internet companies drool over, he sticks his nose in. What is he? No one can define. Jia Yueting has a famous saying: This generation of internet companies will die from focus. I don't know what he thinks. At a press conference, he said: I can't find a clear picture. He said his model has never been surpassed, only imitated. I just want to say, who can imitate? I don't understand. Some say LeEco keeps making PPTs and holding press conferences. Apart from the Foreign Ministry, this company holds the most. The highest valuation was 122.9 billion. Jia Yueting's LeEco gives a bunch of big words. He said something I particularly believe: LeEco's model is globally leading; even the US doesn't have it. That's true. I'm not spending time bashing him. If you really study him, he's the first video site to hoard copyrights, the first to have self-produced dramas, the first internet company to enter the film industry. In China's modern auto industry, Jia Yueting and LeEco are also the first internet company to propose super cars. If he were an internet consulting firm, he'd be very successful; every rhythm is precise. Over the past few years, LeEco has poached people across China. What is LeEco? It looks like a fraud. Is LeEco doing things to circle money, and when money runs out, doing more things to circle more? Or is it pretending to do things to circle money, and when money isn't enough, finding another thing? I want to say, Storm Video and LeEco are new species. We can't judge them with traditional right and wrong. Let me use a metaphor. When twenty or thirty partners come to a cave and get lost, if there's enough food, they'll always think about getting out. Who will they give the food to? Possibly the most handsome, the most affable, or the one best at press conferences. This market is like the cave; capital is the one with food. Capital must find a new way out, which is to find the person in the market most likely to find a way out, and give them the food. LeEco and Storm Video are half industry, half capital. When new species appear, they don't need our approval or welcome; they just appear. Capital gives food for them to cross the frontier. This is a new existence in the market. When talking about Storm and LeEco, don't view them traditionally. Their existence will change our environment. I suggest you don't call them monster stocks. There's not much we can do. Ma Yun reminded: At first you don't see it, then you see it but don't understand, then you understand but it's too late. I suggest we observe, connect, and learn to make PPTs. New species have arrived; we must learn to accept their existence.

Views on O2O

Capital's best work in 2015 was the O2O war. It was brutal, with subsidies everywhere, even capital couldn't take it. So capital held weddings: Didi-Kuaidi, 58-Ganji, Meituan-Dianping, Ctrip-Qunar all merged. These seem good, but behind them are many tears. When I spoke in Silicon Valley, I suggested that if you have only half an hour to understand China, you must go to Wangjing SOHO, known as the universe's O2O center. At noon, people line up to scan QR codes, giving away money and gifts. Who comes? Not the internet workers the ground promoters hope for, but aunties and such. Looking across the country, what ground promotion works? The O2O war unfolded like this. After the weddings, is everything fine? I asked a senior executive at Youku: Why do you spend so much money every year fighting for copyrights? Why not merge? They said they thought the same when they acquired Tudou a few years ago, but it didn't work. Zhou Hang of Yidao said: Mergers are not the end; endless exponential evolution is the direction. Will massage and nail salons each be at peace? I don't believe it. In various battlefields, killing continues. In 2015, it's said the capital market burned over 20 billion. We should thank the investors behind. If a major war appears in 2016, will we see a merged company like: Didi-Kuaidi-58-Ganji-Meituan-Dianping-Ctrip-Qunar-Ele.me? Who wins or loses among the stars on stage? The first answer: China has, in an unprecedentedly short time, spawned social collaboration institutions. Wang Xing's new Meituan built a 30,000-person company in two or three years with capital subsidies. My classmate Lu Wenyong founded e袋洗, building a collaboration network of non-employees. Lu Wenyong says there are now 100,000 workers collaborating in various communities, and next year it will reach 500,000. The truly magnificent scene is the rise of individuals. I can open an app on my phone anytime, and there are hundreds of cars and drivers ready to serve me, various legal services ready to come to my door. In the past year or two, ordinary workers in big cities live like kings. Louis XV had only 300 chefs. This is a major victory and achievement of capitalism. If that sounds bad, call it a major victory of the market economy. Andy said America created a great industrial tradition; the US president and a street beggar drink the same Coke. O2O isn't about who wins or loses, but creating a more convenient, free life for the masses. I sold my car because I can use Didi. In 2015, the average monthly income of Beijing college students was 4,700 yuan. We met several O2O workers, all earning over 10,000 a month. My father used to say if you don't get into college, you're doomed. Actually, it's fine. If you're a top student, first in class, study abroad, become a gold-collar, then go skiing and meet your classmate serving you, who also earns a million a year. The world is like a cactus; everyone can stick out. For the first time, China's blue-collar class, under capital and subsidies, has a premium on their freedom. Foxconn workers used to work overtime day and night for wages, but now urban blue-collar workers say they won't earn more money; they want freedom. They are craftsmen with dignity. A rural migrant worker no longer has no way out, no longer just relying on the village chief's son for manual labor. As long as they don't work, but think and collaborate, they can earn much more than fresh graduates. Every generation of connection technology creates such miracles. The internet is the same; it inevitably creates a generation of dividends, but the beneficiaries may not be the connectors. For example, in agricultural society, humans collaborated closely with living plants; animal husbandry with living animals; industrial society with coal from dead animals, then oil from dead animals. The internet connects human brains. Every connection creates a generation of infrastructure. How to understand infrastructure? We often forget the concept. Like this speech at the Water Cube: without the construction of the Ming and Qing imperial city, the 2008 Olympics, and advances in audio and video, we wouldn't have this grand event today. We stand on the layered cultural structure of humanity. The connectors themselves may not profit, but after connection, magical effects occur. Looking back at history, the 19th century was Britain's century, dominating the globe. Why did it decline? The successors were the US and Russia. After trains appeared, land connections created dividends, and maritime empires began to decline. With the large-scale emergence of land connection dividends, Russia's economy suddenly boomed. The 20th century saw US and Soviet hegemony. Every connection brings dividends. Wu Xiaobo told me that 19th-century stock markets were all about trains, but did the railway tycoons make money? Who did railway connections benefit? Oil tycoons, steel tycoons, banking tycoons. They all, without exception, restructured industry costs through railway infrastructure, found new industry models and transaction entrances, and rose. When new technology appears, we must pay attention to where new connection dividends will appear. When new connections appear, use the infrastructure to find the dividends. Now internet infrastructure is built; we need to rethink dividends. Ma Yun said: This is an era of grabbing money; there's no time to dawdle with those whose thoughts are still in primitive society. I don't know if Ma Yun said that. If not, I'll claim it.

More Wonderful PPTs:

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