-01- Liking to tell the truth is a very annoying thing. Lu Xun once said that if you tell someone their child will become rich, you'll get thanks; if you say they'll become an official, you'll get flattery. But if you say 'this child will die someday,' you'll get a beating. During the pandemic, we received some online requests for help from businesses. Those who ask for help at this time are the ones truly in trouble. Those who really see opportunities are too busy to bother with us consultants. Moreover, the problems are often more severe than they expected. Bosses are smart people; they always come to consulting firms with specific ideas. If the consulting firm agrees with them, they think, 'This firm has ideas and is professional.' If not, they think, 'This firm is unreliable.' A friend who is an entrepreneur put it well: when a company seeks a consulting firm, it's like looking for a 'Viagra pill'—they want to hear just one thing: 'You can do it.' 'This child will rise to power and wealth.' From my experience as a professional fortune-teller and amateur consultant, consulting is far less marketable than fortune-telling. But even if it has a market, with the end of the era of 'Tsinghua and Peking University are not as good as boldness,' these old tricks no longer work. Now it's the era of 'money made by boldness is lost by competence.' The 'Viagra pill' still sells well, but besides making you feel good when you hear it, it's useless. If you're unlucky, it can even harm your body and kidneys, making things worse.

-02- This pandemic has caused anxiety mostly among businesses directly impacted, such as certain manufacturing, catering, entertainment, education, tourism, and exhibitions. For these severely affected businesses, my basic advice is: First, consider contracting your frontlines; cut losses, clear inventory, or go into hibernation. Don't have any侥幸心理, and don't be dragged into a ditch by sunk costs. On the premise of reducing losses, look for specific opportunities; seize them if you can, or transform or switch industries if not. There's no shame in quitting if there's no opportunity; holding on will only make the hole bigger. Even Teacher Luo has gone into a 'promising industry' where you only need a mouth that can talk crosstalk to earn tens of millions in three hours. Others shouldn't feel embarrassed either. A few weeks ago, an old friend contacted me, clearly anxious. His situation was bad, and he felt he should do something, afraid of missing opportunities. We talked on the phone for over twenty minutes (my limit), then switched to WeChat, chatting off and on until late at night, discussing communities and live streaming. I repeatedly emphasized two points: 1. Regarding opportunities for his industry and his company specifically, I have too little information to know the specific points. If you're interested, we can have several rounds of discussion once we can move freely. 2. His views on communities and live streaming were still at the stage of watching the excitement, misled by many 'windfall theories' online. If you really think you can do it, first understand the basic operational logic. This 'pouring cold water' approach naturally ended on bad terms. The next day, he posted on Moments: 'Pessimists are often right, but optimists often succeed.' I have to say, since Teacher Ma retired and the success gurus like Chen and Liu were labeled frauds, the quality of China's chicken soup, pep talk, and duck blood vermicelli soup circles has declined. If you can't even be right, how can you succeed? Moreover, what does pessimism or optimism have to do with being right? If others don't agree with you, are they pessimistic? Is your reasoning weak because you're optimistic? So you can succeed? If such chicken soup can still brainwash people, I have nothing to say.

-03- What's more deceptive is the kind of chicken soup that looks somewhat professional. For example—'revenge spending.' 'Revenge' and 'spending'—strong emotional words plus beautiful expectations, stirred up by many experts and media, bring endless fantasies. Many businesses that suffered losses during the pandemic are rubbing their hands, waiting for this exciting 'moment of revenge.' Unfortunately, this moment will not come. If you prepare too much for it, or even promote it, you'll only make things worse. Knocked down by the pandemic, then stepped on by 'revenge spending.' Does this magical 'revenge spending' really exist? Why do I think it's a scam? The answer is: some industries have it, but most don't; some individuals have it, but the group doesn't. You can search all the classics of economics, marketing, and consumer behavior, and you won't find a professional concept called 'revenge spending.' Most consumption is time-sensitive; once it's past, it's gone. If you didn't visit your grandmother's house for New Year this year, you won't go twice next year. After returning home for Spring Festival, class reunions and old friend gatherings that were canceled are just canceled. Because you went out less, you might have planned to buy a winter coat, but you made do. Girls have used less makeup during this period, but they won't apply two layers before going out in the future. Impulsive consumption, spur-of-the-moment, is like 'crime of passion.' If the consumption scenario decreases, that consumption disappears. There's no 'revenge' or not; don't be so dramatic. Everyone can get by without anyone else.

-04- Some consumption isn't time-sensitive, like eating—if you don't eat, you'll starve—or medical care, daily brushing and washing, weddings, childbirth, education, real estate, etc. Such consumption either stays basically unchanged, like brushing teeth, washing face, or buying milk powder. Or it changes, but only in three ways: shift, delay, or simplify. Shift is a structural change: I originally bought in physical stores, now I buy online; traditional online stores are affected, so I buy through community e-commerce. I used to eat out often, now I eat at home more, wash more dishes, and get scolded by my wife more. Delay is a temporal change: school starting from the 16th of the first lunar month becomes April; a February wedding becomes the second half of the year; a March business dinner is postponed to April. But school still starts, and weddings still happen. You wouldn't say, 'Damn this COVID, it's so annoying, I'm not getting married, I'll stay single.' Simplify is a reduction in quantity: instead of eating out three times a week, it becomes once; instead of 20 tables at a wedding, it becomes 10. Some may be both delayed and simplified, others both simplified and shifted.

-05- From the macro impact of the pandemic, it will definitely greatly reduce people's overall consumption desire. The pandemic has become a global storm, and its impact on the economy won't be just a day or two, which will seriously affect consumer confidence. Holding onto your wallet, saving food like a squirrel, is what most normal people think. There's no revenge spending, only revenge saving and revenge earning; individuals revengefully reduce spending (except the rich), and businesses revengefully cut investment (except special industries). Because much consumption is delayed, when the pandemic is controlled and we can move freely, the original fixed consumption will manifest in a short period. For example, going out in groups for hotpot or skewers might look lively for a few days, but it's just an illusion of prosperity. Some places want to revive the economy by having leaders lead consumption, assigning consumption targets to every civil servant, and party members and league members taking the lead. This is also nonsense; its symbolic significance outweighs its actual meaning. Market demand has never been called into existence. Anything called a national essence tends to decline. Many people use this as a reason for the existence of so-called 'revenge spending.' Be careful—it's simply a scam. Pay attention! Here's the knowledge point: Kotler said long ago: Demand = Desire + Purchasing Power. If desire decreases and purchasing power decreases, demand naturally decreases, and consumption also decreases, and it will be a significant decrease. Structural changes cannot mask the reality of a substantial overall decline in consumption. A few people who are bored out of their minds might go out and buy 1,000 packs of spicy strips, but that doesn't reflect the overall market sentiment. Businesses must stay calm, especially in such extraordinary times. The changes this pandemic brings to the world, except for fewer deaths, are almost like a world war. Drinking chicken soup or getting a pep talk is not as good as pouring cold water to reduce fever and save lives.

-06- Let me share a little knowledge: Why will most businesses be in danger during this pandemic? If you know Kahneman's 'Prospect Theory,' it's easy to understand. Prospect theory tells us that people tend to avoid risk when they are gaining, but they tend to take risks when they are losing. Those who win are more inclined to avoid risk; those who have lost their shirts are more likely to bet the farm. In this pandemic, most businesses are losing, leading more decision-makers to take risks. But the market won't become warm and lovely because of their risk-taking; instead, it will shrink significantly. After the pandemic is completely over, when we look back at these failed businesses, some were killed directly by the pandemic, but most killed themselves. Teacher Liu Chunxiong has a viewpoint that I strongly agree with: 'With epidemic prevention becoming the norm, business is not about recovery, but about change.' The more changes, the more opportunities. Although the market is extremely brutal, opportunities may be unprecedented. The high growth that lasted over 40 years is definitely gone. Globalization has encountered its biggest setback since the end of the Cold War. We have also completely ended our extravagant lifestyle of over 30 years. We will enter a low-desire society for a considerable time. The biggest contribution of COVID is awakening our nation's greatest virtue—awareness of potential dangers. Like Ren Zhengfei, believe we might die tomorrow, so act actively today. Being an 'active pessimist' might be the most reliable choice. Source: Lao Miao Marketing Button (ID: yiheyingxiao) Author: Miao Qingxian