Click the image above for details Introduction: **Tang Binsen: Founder of Genki Forest, CEO of Zhiming Xingtong. At 22, he won a gold medal in an international programming competition and started his campus entrepreneurship with 250,000 yuan in prize money. In 2008, he promoted the game Happy Farm to more than 20 countries, influencing 500 million overseas users. In 2016, Zhiming Xingtong ranked 16th on App Annie's 2015 Top 50 Global Game Publishers, second only to Tencent and NetEase among Chinese companies. Genki Forest, which he founded, was valued at over 4 billion yuan within three years of its establishment.

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The Relationship Between Entrepreneurship and Scientific Statistics In statistics: If a person is reading on the New York subway, do you think they are more likely to be a college graduate or a high school graduate? More likely educated or uneducated? I believe most people would say educated. But the answer is actually wrong from a scientific statistical perspective. Don't forget "this is on the New York subway." Statistically, people on the New York subway are among the lowest income earners in society. Once you're on that boat, no matter how awesome you are, it doesn't matter. This was said by a Nobel laureate in economics: don't forget the base rate for anything. Bayesian theory is the core principle of probability and statistics. Its core principle is: The probability of an event = base rate * the probability of the event itself. To use a popular analogy: The probability of handsome Andy Lau finding a beautiful woman during college has little to do with his looks. If he were at Beihang University, it wouldn't matter how handsome he was, because the male-to-female ratio is 7:1. Why am I telling you this? Because I paid three years of tuition for this lesson. At the time, our startup team was quite impressive. In 2004, we went abroad to participate in programming competitions and defeated many big companies and world-class universities. We earned 250,000 yuan and thought we were awesome. Such an awesome team doing a psychological testing project would surely make money, right? In contrast, there was a group of salespeople with poor abilities and low education, but they were in the SP (service provider) industry. Which team do you think was richer? I believe everyone already has the answer: it was the SP people. In 2008, SP was the most profitable industry. So you must understand: no matter how awesome you are, if you're in a bad industry with a poor base rate, you're a fool. Remember that firmly. We are in a big trend; we can only go with the trend. No one can change it. You should think about: is the situation stronger than the person, or is the person stronger than the situation? What is the situation? Is the industry good or not? If no one has made money in this industry before, or the best company only makes a little, do you think you can come along, transform the industry, and make ten times the revenue? Do you think that's possible? That's a real mistake: thinking we can transform an industry. It's impossible. If you ask him to do psychological testing today, I don't believe he can score high. You must recognize this. Later, we had a story. After that, many people suggested we do games, but we didn't dare. Why? I thought: even if psychological testing is bad, I'm number one in China; all Chinese websites use our service. But games have so many people doing them, with fierce competition and cruelty. What opportunity is there? We had no choice; we were so poor we were about to die, so we tried games. Fortunately, we had no choice; otherwise, we would have died in the psychological testing industry. By the way, many people in investment today—I think investors have a heavy responsibility because they participate in the allocation of social resources. At that time, an investor almost invested 10 million yuan in us, thinking we were passionate young people and that the industry was promising. Now I think: thank goodness he didn't invest. If he had, China might have lost 1 billion USD in foreign exchange. We would have been ruined in the psychological testing industry, and his money would have been gone too. So I think: sometimes an investor not investing in a project can help the team see problems more clearly than investing. At that time, we didn't dare to do games, but later we tried it with a test mindset and found the effect was completely different. From then on, I knew: A good industry is different from a bad one. In a good industry, being 100th, 10th, or 20th is better than being first in a bad industry. The difference is huge. Before that, we had experienced another industry. When we were in the overseas market, we saw antivirus software. First, we saw fierce competition; second, we saw strong competitors; third, we saw a profitable market. Because we had paid heavy tuition before, my eyes lit up. I said, great, this is the industry we should be in. I told the team: let's be the 10th. This business is doing very well now. Looking back, this transformation was resolute, like Andy Lau transferring from Beihang to Beijing Film Academy, instantly finding beautiful women. So you must think clearly: Are you on the New York subway? If so, quickly switch to an airplane. This is very important.

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The Mathematical Laws of the Internet: How to Compete with Big Companies Later, when we were doing antivirus software overseas, we were always competing with big companies. At that time, we made YAC antivirus software. We had already made some noise; navigation software and antivirus software were doing well. Several big giants started doing this overseas with great momentum. Both sides tried to poach our people, with 100 times the advertising budget. Whenever they encountered our channels, they would outbid us. How do you fight this battle? I believe many startup teams here have this pain. Let me talk about another thing first. You know the biggest problem with big companies is decision-making. A person in a big company, an executive thinking at work, considers different things than the CEO. They think about the boss's KPI and company strategy. When solving problems, they often think about using big company resources, not the product. So you see, all big company executives tend to think "short-term" and not long-term. Short-term methods are asking for resources from the company and making PPTs for leaders; long-term methods are solving product problems. I recently went to Israel. That country is interesting: it's tiny and has nothing, but it makes more money than its resource-rich, oil-rich neighbors. Later, I found there's a specific term in economics called "resource curse." What does it mean? Countries with resources often have poor high-tech industries, like Russia, Brazil, and Arab countries. They make money too easily, like a big company executive who finds that the best way to boost traffic and meet the boss's KPI is to apply for a budget on Baidu, inject a stimulant, and get it done immediately. No one wants to work hard on products. Like many countries trying to develop new economies, you see the ones doing well are Finland, Japan, Israel, and South Korea—countries without resources. So I told my team: poor children learn to manage early. I'll give you 100,000 yuan to fight with. Only with 100,000 yuan can the team's creativity explode. Our team had a characteristic: when we started in 2007, we had nothing. That era didn't have today's startup conditions. Now, you have events like this where you're invited, pampered, and encouraged to exchange ideas. Back then, it was take it or leave it. An investor offered us a space and asked for some shares. We worked there, and he took 5% of our shares. Poor children learn to manage early. Whether a team or an individual, only when resources are scarce can creativity burst forth. If you have too many resources, you think everything is a money problem, solved with money, by applying for a budget from leadership. I also told my team: don't think about it. The most awesome thing about the internet is that awesome companies are not built with money. Big companies kill products with money, promotion, and resources. So you must find a way to solve problems without money. When Lei Jun was starting Xiaomi with Lin Bin, he told Lin Bin: We have no budget for marketing for Xiaomi. That's the culture of a startup company: you must build something with a "zero budget." That's our only advantage in competing with big companies. But this advantage is the core competitiveness. After this battle, those big companies stopped playing. We not only survived but also made money, and our user base was healthy.

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Don't Make the Mistake of Empiricism Let me ask you two questions. There's a good book by a Nobel laureate called "Thinking, Fast and Slow." They found that when Germany bombed Britain, some areas were bombed densely, others not. Do you think the un-bombed areas might have had German spies? Second: Israel had ten fighter squadrons that often bombed Egypt. After bombing, only one squadron survived. Do you think the surviving squadron had some successful experience? Another thing, more intuitive: Suppose you see outside a maternity hospital that last week it had ten boys and one girl. Do you think the hospital delivers more boys? These are all probability problems. If you spend a lot of time studying them, you're making an empirical error. There's no pattern here. Don't summarize a pattern every time you encounter something. That's terrible and exhausting. It's called empiricism. Humans have a cognitive flaw: they like to summarize at the drop of a hat. They want to simplify things, so they summarize. But what's the result? Why do humans have superstition? Why do some people like to burn incense and worship Buddha? Because it didn't rain last year, but it rained this year. They worship Buddha, and the next day it rains. They think it's effective. Actually, there's no necessary connection. We also made many mistakes when doing products. Many product details, like a color scheme, a layout, a typesetting, we agonized over. Because each team member has past experiences, and that experience leads to empiricism. They insist on it. That's the most可怕 thing. You must figure out which things are basic laws. What is a law? A law is something that, when you execute it, will definitely appear. Like the sun rising in the east and setting in the west. If you're doing something and going back and forth without results, you must think clearly: Is the basic law you're discussing problematic? Is the basis of your discussion problematic? You're still in a pit, not finding the true law. What is a true law? If you truly find the law, you'll see the product grow "exponentially." I remember when we were doing the psychological testing website, to prove the product was good and that we were awesome, we found a lot of data to show growth. That was self-deception. If you truly find the law, it will definitely grow quickly. When you're going back and forth without seeing obvious changes, you should think: Is your method wrong? Is your past experience leading you into a pit? You must find the feeling of rapid growth. What is the pain point of antivirus software? When we first did antivirus, we thought users cared about cloud engine, cloud scanning, and speed. I think you must spend time communicating face-to-face with users. We always think we understand users, but that's the hardest thing. What is a law? Spend time understanding users and you'll grasp the law. Once I asked a store clerk: Why do you think this antivirus software is good? He said: After scanning, if you scan again and find new viruses, that's good antivirus. Users' understanding is that simple. Don't laugh. You see, user needs are often that simple. I've asked many food delivery software users: Why do you use this delivery app? The answer: Is it the interface? The product experience? The thing you agonize over? Actually, it's one thing: speed. Some people use it because it's comprehensive. You can only discover many things by communicating with users. If you think about it alone all day, you'll have problems. I suggest you go to users, communicate more, and truly understand them. Don't think you understand customers; that's the most可怕 thing. So, when you execute something and keep getting no results, think about whether the experiences driving you are wrong; When you truly find the law, the product will show an amazing phenomenon. This is what Peter said: investment is about discovering secrets others can't see. What is a secret? It's a law that can truly be reproduced.

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What is the Biggest Cost for a Company? Finally, let me ask: What do you think is the biggest cost for a company? Looking back, our biggest cost was taking many detours—the cost of decision-making. For all companies here today, I responsibly say: In the next three years, 50% of your efforts may be in vain. Pay attention to this, and don't spend too much time bargaining with employees over salaries, negotiating rent, or agonizing over office color schemes. When we first started, we didn't have much money, so we spent a lot of energy on these things, agonizing over management details, but spent too little time on strategic thinking and timing. That's the biggest cost. Lei Jun said: Deep thinking is more important than everything else. Similarly, don't use tactical diligence to cover strategic laziness. Spend more time thinking about your direction, pay less tuition, take fewer detours. Life can be a straight line. Source: PMCAFF (ID: pmcaffcom) Author: Tang Binsen