The following is the speech delivered by Mr. Pang Geliang, Chief Product Officer of Shunfeng Group, at the 5th FMCG + Internet Conference hosted by New Distribution, organized and published for readers.
People who start businesses after leaving Huawei often find it hard to succeed—why? Because they are too serious, and being too serious makes consensus difficult. For example, I spent a long time writing this PPT, nearly a hundred pages, and I know I can't finish it in 30 minutes, but I don't want to disappoint your expectations, so I still want to share my 20 years of work experience and some thoughts on the Internet with you, hoping it will be helpful.
My topic today is "The Right Posture for +Internet." When I was at Huawei, I was responsible for the security field, working on security and storage in communications. Later, I started a business in Internet services. After experiencing everything from infrastructure to Internet applications, I came up with today's sharing topic: "The Right Posture for +Internet."
First, let me tell you: everything I say today is wrong. You are welcome to criticize me and collide with me. As Teacher Lin said, the world changes very fast today, and anyone's views can be overturned by new ones at any time. But from the perspective of change, any change is also a superficial phenomenon of the stage.
Therefore, philosophically speaking: let us return to the original state of things. When we talk about the Internet, what is our starting point?
When I was doing Internet business before, I served Internet clients like NetEase and Cheetah. These Internet companies are different from the sugar and wine business owners here today. One builds the Internet, the other uses the Internet. So how should we, as users of the Internet, view it?
Let's look at a concept first. There is a concept called the "pee-your-pants index," proposed by futurist Kurzweil. If we were to talk about the Internet with Emperor Kangxi today, how would you explain it clearly? I think you might not be able to explain it, and he would find it incredible.
Actually, it's the same today. Even if we say we have many new concepts—e-commerce, mobile phones, and the upcoming 5G—if we explain them to them, they might not understand, and there's a chance they'd be scared enough to pee their pants.
Even if I ask you today, many of us have heard of these concepts, but do we really know what they are? This extends to the topic I want to talk about today: When we talk about the Internet today, what are we talking about?
When I was starting a business, when we were doing things, when we explored a market opportunity, we would talk: When we talk about this opportunity, what are we talking about?
For example, today we talk about the Internet era, new distribution, new marketing—what are we talking about? First, let's talk about: What is the Internet?
The Internet is networking, just like the definition of the term today. The Internet is a way of information connection. But here we must distinguish between means and ends. If you only use it as a means to connect short videos, sorry, you won't make money. Toutiao had sales of 50 billion yuan last year and is targeting 120 billion this year. They are using the Internet to make money through fast connections. Everyone here, do you know where their money comes from? It comes from all of you. You can see that today, how much time do we spend on our phones? Four to six hours. Who gets the economic benefits generated? These Internet companies. So today, let's return to the sugar and wine industry and think: What has the Internet brought to our sugar and wine industry?
The Internet has three characteristics. First, it can solve the problem of fast connection. Second, with fast connection, what does it solve? The problem of network effects. Third, with network effects, what can it solve? Data-driven decision-making.
Have you noticed that when we look at Toutiao, the more we look, the more we like to see what we like? When we look at Taobao, you'll find that all the records we've searched, when we browse again, similar products also appear. Amazon does the same.
When we started our business, I did ad click-through rate optimization. I know what ads you like to watch. Trump's election and Brexit used such methods to influence consumer perception. I want you to agree with what I want you to agree with, because what you see is what I want you to see. This is the value generated by the three elements of today's Internet: fast connection, network effects, and data-driven decision-making.
Each of us connects from point A to point B through the Internet, creating fast connections. Because of fast connections, our business is online. Because of network effects, our content is shared. Because of the Internet network, everyone's content is media. Originally, we needed to spend money to invest in media, but today, many times, we shoot a good video and many people help us repost it, without needing to spend money on media.
Just now, President Lin mentioned the concept of group buying. The content itself is media because there are benefits, curiosity, fun, and humor. More importantly, it's data-driven decision-making. To be honest, as a technical person coming to this kind of occasion, it's hard to explain clearly what I want to do in plain language.
But one thing I want to tell you: the core of data-driven decision-making is precise recommendation. Today, on our phones, we play 4 to 6 hours a day. Your content is not what you choose; it's what I recommend to you. My talk today may not be related to work, but it might bring some changes to our lives. All my content today is based on this starting point. I have a weak utilitarian heart; I'm not here to promote myself. I hope my thoughts can help you use the Internet well in your future work and in educating your children, rather than being used by the Internet.
We all say the core of the Internet is traffic, but what is traffic? Is it water? No, it's our gaze. What's behind our gaze? Our brains. What do the brain and gaze together form? Attention. Attention is the eye, and force is the thinking ability of the big brain, together forming attention.
Simply put, the Internet brings us the ability to show off attention. In my Moments, I show off that I'm listening to a teacher's lecture and take a photo—this is showing off your attention. But technical people don't play like this. Technology can make you click on a certain website while you're using Baidu. This is called hijacking in technical terms. Many porn, gambling, and drug websites use this logic: click one and a bunch of other websites pop up. This black industry has a market space of 50 billion US dollars a year. This is the world technical people play in.
Of course, what's the logic of telling you these stories? It's that the core logic of the Internet is attention. You must remember: attention. Today, the most expensive thing we call traffic is actually the most expensive attention. But now online traffic has been divided up by BAT. Most of our attention is invested in applications related to BAT companies. In the Internet era, we say this is an era where connection is more important than ownership. Baidu doesn't produce information, but it connects people and information. Alibaba has no factories, but it connects people and factory products. Tencent doesn't raise us, but it connects people and relationships.
Today is an era where connection is more important than ownership. Why? Because attention is valuable. Connection means I can manage your attention. Since 2016, I've turned off almost all notifications on my phone. I don't allow anyone to disturb me; only I can disturb them. Why? Because traffic, or attention, is valuable.
The Internet economy is a business about attention. You must remember: today's economy must be built on this premise. Today's online connection, our behavioral data, and decision quality are like navigation apps. The reason we can abandon experience and use navigation today is that these three stages are completed.
In the Internet, the biggest variable is people. A couple of days ago, I read an article called "Designed Addiction." In this era, the things we are addicted to—I believe many of you here, how many of you must watch for half an hour before sleeping? Raise your hands and let me see. You see, there are many. Why? Addiction. This is the addiction designed in this era. So Einstein said that people are the most uncontrollable variable, capricious. Ren Zhengfei, my former boss at Huawei, also said: through continuous reform, reduce business dependence on people. In our medical world, many people say traditional Chinese medicine is quite useful. The core logic of TCM relies on people, saying which doctor is good. So their logic is people-centered experience and ability. But a TCM hospital and a TCM master are two different things. Western medicine is different: from examination to prescription to medication, there are standardized models, minimizing the human variable.
We say today's Internet economy is the attention economy. There must be a model. Whether online or offline, models exist. In this era, the biggest opponent is yourself. The delay in decision-making when facing change is extremely terrible.
Let me give you a real example. On February 23, 2018, I gave a lecture inside the company. I said that concepts like O2O and Bitcoin in this era, many seemingly hot concepts are volatile. If you accidentally fall into a volatile concept, you'll die miserably.
At that time, I said Bitcoin was a volatile economic concept. At that time, Bitcoin was 10,000 to 20,000 US dollars each. I casually said that after 183 days, it would collapse into a bubble, which was last October. I reposted an article, and at that time it had fallen more than 80%. Why did I say that? It wasn't because I predicted accurately, but because I saw the volatility of this concept.
In this era of decision-making, some people see concepts, some see patterns. Whether to find opportunities in patterns or in concepts—this is the cognitive ability we must learn in this era.
Take data, for example. When serving traditional industries, I served many new energy industries. We did many data methods to help enterprises make decisions. For example, we helped them obtain data at stores. But what can some data do?
Many people say that if you have data, you need to analyze it. But analysis is not the end; the end is optimizing our subsequent behavior. The Internet calls it recommendation. So we combined store data with the Internet, analyzed customer behavior, how to better run activities, how to better promote content, and finally deployed content delivery screens in stores, forming a closed loop of data discovery, decision-making, and empowerment.
Data itself cannot solve problems; data is just digital evidence. But many people misuse data, such as user profiling. Many people think that by drawing out the basic attributes of users, they can locate them. Many people think data profiling is: male 30-40, female 25-35. Is this called data profiling? Actually, it's not right.
The core logic of data is to let us find them and understand what they really want to do.
I come from a product background. Product people don't see crowd profiles; they see motivation profiles. Data is the surface; the motivation behind the surface is the core. You might not understand this, so let me give you two cases: Huawei phones have two series: the P series and the Mate series. When making the P series, they based it on motivation. What motivation? Those who love beauty are the P series. The Huawei P6, the phone that established Huawei's phone status, sold over 4 million units. How did they do it?
Originally, after taking a photo, people used Meitu Xiuxiu to retouch it before sharing to Moments. When Huawei people thought about this problem, they thought: people who use Meitu Xiuxiu might lack confidence. After taking a photo, they know they don't look good enough, so they retouch it and then post it to Moments. Doesn't that feel psychologically awkward? How did the Huawei P6 do it?
They embedded the Meitu Xiuxiu function into the phone. When you take a photo, it's already good. Wow, I'm so beautiful. It lets you know that using this phone makes you more confident. So after the P series found this motivation of beauty and confidence, the P6 successfully sold over 4 million units. Later, Huawei decisively cooperated with Leica. This is a product based on motivation, which cannot be drawn with simple data. It requires insight based on data.
The second is the Mate series. Its motivation is that they don't lack money; they lack time. Lei Jun has a saying: "Life and death are indifferent, just do it if you don't accept it." He talks about cost-effectiveness. Today, if I give Teacher Liu or President Lin a Xiaomi phone, they might not want it. They would think their circle is not one that pursues cost-effectiveness. The rise of the Mate series was with the Mate 7, completely based on the motivation of wealthy or business people: big screen, long battery life, and a special fingerprint function. I once visited a real estate boss who said the Mate 7's dual fingerprint function was great: I can use one for work, and my wife uses the other at home. It saves a lot of explanation costs.
So product people use data to profile, and then find motivation through profiling. Today, our wine and sugar also need to find user motivation. It's not that users buy sugar because they lack sweet things; you must find their potential motivation.
In fact, the Internet has already become the infrastructure of this era. We know the Internet can do many things, but the core point is connection. What was our original infrastructure? Water, electricity, gas. But today, you'll find that without WiFi and Internet connection, many people might feel lost in this era. When you take the team out to the mountains and there's no network, after just one day they say, "President Pang, let's go. I can't stand it. Even with good food and drink, I can't stand it. There's no network here."
What is the core technology of this era? It's network connection. You'll find that clothing, food, housing, and transportation are already controlled by the Internet. Data plus connection has become infrastructure. Have sugar and wine people thought about this? You see the development of history, from the agricultural era to the industrial era to the network connection era to the arrival of the intelligent era. Isn't every country seizing the high ground of infrastructure?
The previous generation of industry, the invention of the steam engine—didn't the US seize the high ground? In the network connection era, isn't the US still running ahead? But today, with the emergence of 5G, a new prospect and infrastructure may appear. Why would 5G become infrastructure? The applications haven't been thought of yet; it might be exaggerated. But we can imagine: if all roads within Beijing's Fifth Ring Road suddenly had 20 lanes, wouldn't the entire economic situation be greatly disrupted? When you have roads, applications may evolve.
This morning, I saw a news report: China Mobile and the PLA General Hospital completed a remote brain surgery. When I was at Huawei, we had a product called Zhizhen, deployed in two places: one in Beijing, one in Shanghai. What could it do? Face-to-face chat during meals, with video dialogue as real as real people. Why is information technology important in this era? Everyone here, whether distributors or headquarters staff, should think: Have we used these infrastructures well, or are we being used by the infrastructure? You must reflect on this.
What has the Internet brought us? It reduces human variables and uses infrastructure to transform ourselves. This "self" can be an individual or a business organization. Remember: does your organization have such a plug that can be plugged in anytime to connect to the world, users, content, products, and decisions?
Today, it's hard for traditional industries to transform. The difficulty is not the infrastructure; it's that they simply don't want to think. Because they use Toutiao and Douyin too much, they completely don't like to think. This is a terrible phenomenon. Even if I shout and call on everyone now, it may not be useful.
Today, when we do marketing for our own business, we must discuss this issue based on this infrastructure. Otherwise, we deviate from today's business form. When our infrastructure becomes 5G, VR, AR virtual reality, we still need to talk about business marketing based on this infrastructure. Why? Because users' attention is on the infrastructure. If you don't understand the infrastructure, how can you get users' attention, let alone talk about marketing?
For categories, when do users need you? For competition, why choose you? Only then can so-called product power, value perception, and channel efficiency emerge. But the premise of all this is still infrastructure.
Today, when we discuss sugar and wine matters and business, we must focus on the Internet connection between people and business. It's very simple: let this ubiquitous connection facility make consumers remember you, think of you, and buy from you on this infrastructure.
This is difficult. Everyone is playing Douyin, WeChat, Moments, and Toutiao. Are our products on them? Are our voices on them? If we only let users know you when they pass by our store, then we have deviated from the definition of using infrastructure.
Additionally, I want to emphasize: the Internet that connects everything has a biggest side effect—attention fragmentation, and investment is extremely impatient. This is an important issue in current marketing. Connection is simple; making them remember is too hard.
If I tell users 20 words, they lose patience. Users feel that watching Douyin is getting simpler. Human information development goes from writing text to drawing pictures to making movies to today's 5-second or 10-second short videos. You see, the logic of information transmission is centered on not thinking. The less thinking, the more expensive traffic becomes, which means users are increasingly difficult to influence.
If your product—I see many distributors outside displaying their products—if you can't explain it in one second, shoot a video. If the video can't explain it in 5 seconds, it's troublesome. Today, we still talk about "what do I have?" You can't say that, because users have no patience. They say, "What does it have to do with me?" You'll find that all short videos put a beautiful woman on the cover, but when you click in, the content has nothing to do with the woman. Similarly, sugar might have nothing to do with users. Think more. What is relevant to users? If you don't think, others will. This is how the world spirals forward.
Also, learn the translation ability from value to value perception. We want users to understand our products. How to understand? It's the ability to perceive. Visual, auditory, taste, smell, and touch—users identify the goodness of our products through these five senses.
Today, all marketers and product people say, "I will perfect my product." Remember: before users spend money, they haven't touched your product; before they spend money, they haven't tasted your product. Apart from word of mouth, before marketing, you must remember: users haven't used your product before spending money. How to make them feel it's good through images? That's what value perception does.
Two elements of value perception: don't make them think, and senses can perceive.
Children least like to think; when they think, they cry. So for online stories and sharing, when doing online marketing, you must do stories. Why can short videos bring goods? Because of stories. Offline, focus on experience and "photo-feel." I coined a term "photo-feel"—it's the ability to connect your store to the Internet, making content media. You must have photo-feel. Many stores like to put some novel things to make users take photos. This is also called connecting everything.
This is a Japanese tavern that placed a mannequin at the door. This is photo-feel. Business immediately improved. Is the wine in this tavern important? Is it important? Obviously not. But because of photo-feel and visual appeal, many people went in. Only after entering is there a chance for conversion. This is the value of traffic.
Philosopher Berkeley said: "To be is to be perceived." An idea exists because we are perceived. Like me today: you say I'm not handsome, and I might not be handsome, but because I speak well, have elegant posture, and a pleasant voice, and other perceivable elements are linked together, you all think I'm handsome. Because I am perceived by you. This is actually the logic of philosophy.
Why do we think this is an apple, not a pear? Because of color, size, and taste. We who sell wine, cigarettes, and sugar must make others feel this is a good piece of sugar. Why is this sugar good? It must be perceived by him. Don't ask him, don't tell him, just let him perceive. Especially for product people, we always tell the team: when users use your product, there's no professional standing next to them to explain. Users judge your product based on direct perception. We often ask users how they feel about the product, and users say, "Maybe I'm too stupid." I immediately feel the user is scolding us. When you make users think, it means you've failed.
Your viewpoint is recognized because it is perceived. So "think of it" means shifting marketing from heavy media to heavy content. In this era, content is media. There is no absolute media or content. You'll find that what trends on hot searches has nothing to do with media. It's because media quotes the content. It must be so. Content is media. In an era of connection overload, core communication relies on content. First, you must make users interested, and embed your product in that interesting content. So first, you must think to make them interested, not make them look at your product.
The core logic of short videos is: how much time passes between the first action and the second action. They also have algorithms. You can't just shoot randomly and become popular. If you follow their model, it's possible to become popular, because user decisions are like this: as long as they don't think, it's like this.
Finally, about "buy it." Let me talk about it again: "buy it" is not e-commerce. You must forget e-commerce. The Internet is not e-commerce; it's connecting all sales nodes. After serving many traditional industries, I found the biggest paradox: "Will doing e-commerce affect offline?" Actually, "buy it" is connecting all carriers of people and goods. Why is Alibaba going offline? They know it. Today, I have sufficient technical means to connect everything. When we do sugar and wine e-commerce, what's our leverage? We have stores.
My office is in Guomao. There's a company called Bianlifeng downstairs. I said Meituan's competitor might be Bianlifeng. Bianlifeng opens a store in every building and directly does food delivery. In our company, they also placed a vending cabinet. If you buy a bottle of Coke, they give you a 30-yuan food delivery coupon. This is the front-warehouse model. All actions are to connect sales nodes, not to connect e-commerce. The core is to let users get the goods they need at a lower cost. Of course, this cost is not only material cost but also time cost.
So doing e-commerce and doing stores is actually a combination, not a separation. It's just how to split the spoils. When we cooperate with car stores, it's online ordering and offline experience. After you place an order, the store calls you within ten seconds, asking whether to deliver immediately or if you'll pick it up. This is the front-warehouse model. For headquarters, how to connect everything—this is what we need to think about at the infrastructure level. We also do this in advertising: a lot of ad money is wasted. People think publicity is PR, but it's not. Baidu keywords, JD keywords, and the articles we publish—there are connections between them. You just don't know, but they can be connected.
One thing is clear: all traffic can point to sales stores, and all stores can point to online. There must be a way. If you haven't used the infrastructure well, it's your problem.
Finally, let me summarize: "remember, think of, buy"—use ubiquitous connections to achieve this. This is the new posture I'm talking about.
Finally, I want to talk about the individual and the Internet. I must reiterate: today, are you using your phone, or is the phone using you? I think Chinese people's knowledge structure is already scarce, but with the interference of attention-grabbing content from Toutiao and Tencent, it has become more fragmented and vulgar.
Children also use this. Where is China's future?
Steve Jobs said that before third grade, he never let his children use iPhone and iPad. Look at us: when a child cries, we give them a phone. This is how we educate children.
But today, remember: it's you using the phone, not the phone using you. When we use the phone, the premise is that we are actively searching for information, connecting with people, and communicating. Being used by the phone means we are watching information recommended by the Internet. Know that many connection points on the Internet are worth a few yuan each time. Every ad you click contributes to the sales of Internet applications.
This is an era of robbery. Walking by the information river often, be careful that your attention is robbed. If you don't think, others will think for you.
What I do: help traditional enterprises establish a new infrastructure of "connection, data, empowerment." Connect the information transmission and feedback between online and offline, headquarters and stores. Maybe we will fail, but one thing is certain: we Huawei people start businesses very seriously. Even if I fail, I am very serious. I always believe that the premise for anyone to buy my things is that I can help them; otherwise, I can't take their money.
This is our value. To make an enterprise strong, rely on products; to make it big, rely on organization; to make it lasting, rely on culture. Values are what I care about most. I can fail again and again, but I will not allow shaking the value of customer-centricity. I firmly believe that new concepts appearing today will not appear tomorrow, but I firmly believe that in the long river of life, those who trust me will continue to trust me. This is my sharing today. Thank you all.
Click Read Original to see more highlights of the 2019 5th FMCG + Internet Conference...
-END-