---
title: "Wang Baobao, Yungeng Wuzuo, Liumang Yike... A 10,000-Word Analysis of the Rise of Internet-Famous Food Brands from Zero to One"
description: "From the turbulent 2019 to the unstable 2020, the food industry, with its strong anti-cyclical attributes, has become a hot spot for capital investment. Brands like Wang Baobao, Yuanqi Forest, Xiaoxian Dun, and Renyang Yitou Niu have become sought-after internet-famous enterprises. As a boutique investment bank focused on the food industry, 30,000 Capital has deeply participated in the entire process from 0 to 1 for multiple food brands, including Wang Baobao, Yungeng Wuzuo, Shuimangmang, Mike Rice Wine, and Liumang Yike, not only assisting with financing but also participating in strategic sorting, talent recruitment, and channel docking."
author: "黄鹤"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2020-07-22"
language: "en"
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# Wang Baobao, Yungeng Wuzuo, Liumang Yike... A 10,000-Word Analysis of the Rise of Internet-Famous Food Brands from Zero to One

> From the turbulent 2019 to the unstable 2020, the food industry, with its strong anti-cyclical attributes, has become a hot spot for capital investment. Brands like Wang Baobao, Yuanqi Forest, Xiaoxian Dun, and Renyang Yitou Niu have become sought-after internet-famous enterprises. As a boutique investment bank focused on the food industry, 30,000 Capital has deeply participated in the entire process from 0 to 1 for multiple food brands, including Wang Baobao, Yungeng Wuzuo, Shuimangmang, Mike Rice Wine, and Liumang Yike, not only assisting with financing but also participating in strategic sorting, talent recruitment, and channel docking.

**Click to read the original text for details**
**From the stormy 2019 to the turbulent 2020, against the backdrop of no clear trends, the food industry, with its strong anti-cyclical attributes, has become a hot spot for capital attention. Brands like Wang Baobao, Yuanqi Forest, Xiaoxian Dun, and Renyang Yitou Niu have become sought-after internet-famous enterprises.**
**As a boutique investment bank focused on the food industry, 30,000 Capital has deeply participated in the entire process from 0 to 1 for multiple food brands, including Wang Baobao, Yungeng Wuzuo, Shuimangmang, Mike Rice Wine, and Liumang Yike. We have not only assisted with financing but also participated in strategic sorting, talent recruitment, channel docking, and other aspects. Today, I am fortunate to analyze the secrets of the rise of these internet-famous food brands from the perspective of a participant.**
In the just-concluded 618 shopping festival, Wang Baobao, established only two years ago, has already surpassed foreign brands like Quaker and Calbee online, becoming the absolute number one in online oatmeal. Yungeng Wuzuo has also become the number one brown sugar brand on Tmall in terms of sales since last year's Double 11, and the gap with the second place is widening. Liumang Yike, which started from WeChat private domain traffic, has become the number one online durian pastry brand with monthly sales exceeding 10 million. Shuimangmang mango juice, targeting lower-tier markets, is rapidly expanding, seizing market share from traditional gift drinks like Six Walnuts and Hawthorn Tree...
At the same time, in the cold capital market, internet-famous food has become a new trend: Source Code Capital, Vertex Ventures, and Black Ant Capital invested in Wang Baobao; Changling Capital invested in Yungeng Wuzuo; Plum Ventures invested in Shuimangmang; Yunji invested in Liumang Yike...
Why are internet-famous food brands sought after by the capital market? What is the core secret to their rapid rise? Can they transform from internet-famous to long-lasting? As the exclusive financial advisor for the above brands, 30,000 Capital has deeply participated in financing, strategic sorting, talent recruitment, post-investment, and other aspects. This article will analyze the secrets of the rise of internet-famous brands from 0 to 1 from three aspects, from the perspective of a participant:
> **1. The Five Forces Model for the Rise of Internet-Famous Food:
> Users, Categories, Companies, Teams, and Founders;
> 2. Three Key Methodologies for Food Entrepreneurship: Lean Startup, Positioning, and the Yang Triangle for Organizational Growth;
> 3. Outlook on Transforming Internet-Famous Food into Long-Lasting Brands.**
**-01-
The Five Forces Model for Food Entrepreneurship**
Unlike the creation of something from nothing in mobile internet entrepreneurship, food, as a traditional livelihood industry with a market of 13 trillion yuan (including food, beverages, tobacco, and tea), like FMCG, has always been a track where the strong get stronger. For new companies and new brands to break through, certain elements must change, and the source of change is the shift in user demand.
> Changes in user demand bring opportunities for category differentiation;
> Some of the 4Ps in the new category change, and new companies master them in batches;
> The team's core capabilities match the changing elements extremely well.
This is what we call the three-step process for the rise of internet-famous food.
**1. Users**
We need to identify whether user demand is short-term, for a minority, or long-term, for the majority. Stable and upward demand is a long snow slope, and only a long snow slope can roll out a big snowball. The matcha trend from two years ago, the avocado trend from last year, and this year's white peach oolong are all imported internet-famous flavors. Starting a business along these directions is easy to become "outdated."
So, what are the long-term needs of users?
I believe that addictiveness, new domestic products, healthiness, and convenience are four demands that will remain stable and upward for at least 20 years. Stable and upward user demand is the biggest dividend for enterprise development.
Ye Maozhong's "Conflict" repeatedly mentions the left and right brain. People have both sensibility and rationality, with greed, anger, and ignorance, as well as truth, goodness, and beauty. Marketing is about insight into the underlying conflicts in users' minds, resolving conflicts, and creating conflicts.
**1) Addictiveness**
Nowadays, the term "private domain traffic" is popular, but traffic changes every year, and channels change every five years. They change too fast. However, addictiveness is the best private domain traffic that can transcend cycles because the seven deadly sins of human nature are hard to overcome. The world's largest food groups: Nestlé, Budweiser, Coca-Cola... their pillar products all have addictiveness.
Who is the largest food company in China? China Tobacco, with a net profit of 1,114.5 billion yuan in 2017 and remitting over one trillion yuan to the treasury. What does one trillion mean? In 2017, China's total fiscal revenue was only 17 trillion yuan, and the total profit of other Chinese food enterprises is probably no more than that. China Tobacco is not listed. Who is the top listed food company? Kweichow Moutai, also the number one stock on the A-share market, with a market value of 1.8 trillion yuan. Isn't that also addictive?
If you are interested, you can read the book "A History of the World in 6 Glasses." Beer, wine, spirits, coffee, tea, and cola—these six addictive common beverages have far exceeded their physical attributes. In the course of thousands of years of human civilization, they have served as currency, been used in religious rituals, symbolized party political stances, and even triggered wars. This is what we call a super category.
**2) New Domestic Products**
Do you have a feeling that the local delicacies of your childhood leave an indelible taste memory? This taste memory, placed against the backdrop of China's rise, gives many local categories the opportunity to become national or even global categories. After World War I, Britain exported gentleman culture and the afternoon tea consumption habits of Lipton and Twinings. After World War II, the United States exported Hollywood and Grammy pop culture to the world, along with a large number of FMCG brands such as Coca-Cola, McDonald's, and Starbucks. Even in Korean dramas, there is soju with barbecue, and in Japanese dramas, Suntory with Japanese cuisine.
The rise of a great power will inevitably be accompanied by cultural export, and it will also export its lifestyle and consumer goods. **Therefore, I am particularly optimistic about Chinese symbols like brown sugar, rice wine, and hot pot becoming globally popular lifestyles.**
**3) Healthiness**
When the right brain wants to indulge in life, the left brain calms people down: eat something healthy for yourself. Low sugar, low calorie, and low fat have become popular lifestyles. But I see many extreme health food startups struggling because health is relative and comparative. Moreover, users must feel it is healthy to drive decisions; founders cannot just be self-satisfied.
In most people's cognition, white meat is lower in fat than red meat, and deep-sea fish is higher in protein than freshwater fish. But do users necessarily think "plant-based meat" is healthier? Maybe just the word "plant-based" is unacceptable to most Chinese people. **Perception is greater than fact; this is the truth of consumer decision-making.**
**4) Convenience**
Whether due to human laziness or the acceleration of life and work pace, and the increase in single people, more convenient food is on a long-term upward trend.
I think convenience has three meanings:
**Easy to obtain:** New retail that penetrates the capillaries of communities and increasingly developed cold-chain logistics have greatly reduced the fulfillment costs of short-shelf-life pastries, cold-chain semi-finished products, and other categories;
**Easy to decide:** With the increase in single people, many categories originally sold by household have begun to offer small packages. For a woman to open a 750ml bottle of wine at home, even just to post on social media, the cost is too high. Hence, there are 250ml light bottles of rice wine, fruit wine, and RIO micro-drunk cans. Have you noticed that when you buy Japanese snacks through cross-border e-commerce, they are basically small packages? The evolution of Japan's four consumption eras is also very instructive for Chinese consumer goods entrepreneurship;
**Time-saving:** Self-heating pots, AB packs, semi-finished braised products, and other new convenient foods have shone during the pandemic. The popularization of new technologies such as nitrogen flushing for freshness, liquid nitrogen quick-freezing, and freeze-drying allows food to remain relatively delicious while being ready-to-eat.
**2. Category**
The superposition of the four user dividends will give birth to promising entrepreneurial categories. Only in rapidly growing categories can new brands be born. To put it simply, new food brand entrepreneurship is just one sentence: become the number one brand in a rapidly growing sub-category, and then drive the category to expand. There are many books and courses on categories in the market, so I won't elaborate here. If you are interested, you can read Zhang Yun's book "Category Strategy."
What kind of food category is a good category? I think there are three points to note:
**1) A category that users use to assist purchase decisions is a true category.** When users make decisions, they don't say they want to buy grain meal replacements, but they search for oatmeal. They don't say they want to buy braised snacks, but they search for duck necks, chicken feet, and rabbit heads. But the category should not be too segmented. Durian lovers will be obsessed with anything related to durian: durian pastry, durian cake, durian pizza, durian mooncake, durian flesh... So durian is an independent category, and there is no strong brand in China. If there is no number one in a big category, there is no need to settle for second best and position only as durian mille crepe boxes.
**2) Can it form a strong association with scenarios?** Only by forming a strong association with specific scenarios can there be high repurchase rates. White liquor, wine, and beer have produced so many listed companies and big brands. Besides addictiveness, it is also closely related to strong scenario association. White liquor is associated with gifting and banquets, wine with meals, and beer with barbecue, hot pot, and late-night snacks. At that time, it's like a switch is turned on, and consumption happens spontaneously. What a powerful category.
The core of liquor entrepreneurship is to find new scenarios. Are there such scenarios? I think women drinking alone is a huge blue ocean scenario. After China's GDP per capita exceeded $10,000, people drink not only for face and socializing but also for self-pleasure.
In Japan, 97% of alcohol consumption is sold through non-dine-in channels like convenience stores. After work, people buy a bowl of ramen at a convenience store and also pair it with a low-alcohol drink. China has the world's most mature home-delivery channels: e-commerce + food delivery + community group buying + new retail + convenience stores, which are giving rise to self-pleasure small liquor brands like Mike Rice Wine and RIO micro-drunk cans.
**3) Is there a category leader?** Entrepreneurship should pursue the essence of heroism, not the form of standing on a cardboard box and giving an impassioned speech to eighteen arhats. **What is the essence of heroism? Winning.** Yes, it's the win in win or lose. Winners write romantic stories; losers become accidents. How to ensure a winning chance? Pick the soft persimmons to squeeze.
The white liquor industry in China is 600 billion yuan. Jiang Xiaobai has done an excellent job, with a sufficiently excellent and hardworking team, and was lucky enough to catch the Weibo dividend. But in 2019, its revenue was only 3 billion yuan, less than a fraction of the "Maotai, Wuliangye, Jiannanchun" trio, and profits were even further behind.
Although rice wine and fruit wine are markets of only a few billion yuan, Tmall shows a monthly growth of 20%. Last year, Tmall's GMV was 420 million yuan, and this year it is around 1.32 billion yuan. There is no leading brand. The over 900 million yuan increment on Tmall plus the several billion yuan offline increment is a friendlier market for new brands. It is highly likely that a new brand with annual revenue exceeding 2 billion yuan will emerge. Unlike Jiang Xiaobai's position in the white liquor industry, this new brand has the opportunity to become an oligopoly in fruit wine and rice wine, monopolizing market share and profits. (RIO cocktails account for over 70% of China's cocktail market share)
**3. Company**
Users have needs, and categories have dividends. What kind of company can seize such dividends? I think it is **a company that is strong in external marketing management and internally organizes people, finances, and materials more efficiently.**
For marketing management, I think the most instructive for entrepreneurship is Philip Kotler's "Marketing Management," where the classic 4P theory is still very effective. As for 4C, 4R, and even the 4S and 4V invented by Chinese, they all seem a bit forced. I'm afraid the 26 letters of the English alphabet won't be enough.
**Product and pricing constitute complete product power, while channel and promotion together form sales power.** Currently, there is much discussion about advertising, live streaming, and traffic related to sales. Are they important? Of course, but they are important and urgent matters. While you are looking for Li Jiaqi and Viya, others are too. While you are investing in Douyin information flow ads, others can too. Product and pricing are important but not urgent. If you pay attention to them and others don't, in the long run, they become the biggest moat. Because **product is content, and product is communication.**
**1) Product**
Food products consist of two parts: the contents and the outer packaging. In today's world where food contents are extremely abundant, users do not buy the product itself but the benefits behind it, or the unique value proposition. For example, Wang Baobao's "delicious and not fattening," Mike Rice Wine's "tipsy pleasure," and Shuimangmang's "face-saving gift in lower-tier channels."
Outer packaging is the investment with the highest ROI. Many brands are willing to spend millions monthly on advertising but are reluctant to spend a million on packaging upgrades. This is actually short-sighted. Yungeng Wuzuo's two packaging upgrades took it from an ordinary Yunnan local specialty to an FMCG with positioning, scales, and trust marks, and then to a name change to Bengong Huanxi, associated with the super symbol of the Tang Dynasty beauty, achieving a leap in product and company development.
Hua & Hua often says that super symbols are super creativity, which is particularly worth referencing. **If food can be associated with super symbols in the cultural matrix, it can have powerful vitality that transcends cycles.** Another food project of 30,000 Capital, Mike Rice Wine, is also exploring its own super symbol.
Rice wine is one of the world's three ancient brewing wines originating in China. Wu Song drank rice wine before his famous "three bowls to cross the ridge." Mature wine and beverage categories like wine, whiskey, white liquor, beer, cola, and Yakult all have fixed bottle shapes, but rice wine does not. Many domestic brands use the transparent long bottle of ice wine, which looks good but is not durable and lacks differentiated memory points. Although Mike's bottle texture still needs improvement, using a differentiated bottle shape (chubby rice-white bottle) as a super symbol to redefine the category is the right direction.
**2) Pricing**
Pricing is severely neglected in China and is often handled simply and crudely. Most use traditional cost-plus-margin pricing, but in the United States, there are already specialized pricing research companies providing FMCG pricing services. Struggling to get into Lao Luo's live stream might bring in a million in revenue, but a good pricing strategy can exponentially amplify effects across all channels.
What is a good food pricing? Except for a few luxury-like food categories that carry display value, such as high-end liquor, bird's nest, and tobacco, where the more expensive, the better they sell, most food pricing should make users feel it's worth it.
Wang Baobao adjusted its price from 52 yuan per bag to 59.9 yuan in July 2019, offering a 5-yuan coupon, and the conversion rate increased by 30%. Yungeng Wuzuo changed its 69-yuan pack of 16 pieces to 34.9 yuan for 8 pieces in October 2019, and the store conversion rate increased from 6.5% to 11%. Both price adjustments were actually price increases, but conversion rates and average order values increased because users felt it was cheaper.
**3) Channel**
There is a popular argument that channel dividends have disappeared, but I think **channel dividends have always been there; it's just whether it's your channel dividend or not.** Every product has its optimal channel.
We have a project called "Shuimangmang," which focuses on selling triangular bottle mango juice in lower-tier markets. When I went to Yongcheng County, Henan, for due diligence, every household was buying boxes by car for gifting. A county's annual shipment was 5 million yuan, with less than 500,000 yuan in expenses. This ROI is incomparable to e-commerce channels. Six Walnuts and JDB were sold county by county to achieve annual revenues of tens of billions. Shuimangmang is precisely seizing their business.
"Mike Rice Wine" is also a 3-year-old new brand. In Shanghai's Hema Fresh and Dingdong Maicai, its sales velocity is already the number one among all low-alcohol drinks, surpassing RIO, which has been deeply cultivated for years. Because Hema has already filtered users for Mike, the users in Hema's residential areas are extremely precise and match the home-delivery scenario very well.
"Saturnbird" treats Tmall as a Focus Media for saturation advertising. It not only sells goods but also plants seeds and advertises. Its traffic sources on Tmall include paid traffic like Zhizhuan Tao, Pinxiaobao, and also social traffic rarely seen in other brands, such as Hand Tao Yangtao Show, Hand Tao Wangxin, and Hand Tao Weitao. It really uses Tmall to the extreme.
**4) Promotion**
"Where is the traffic dividend? What are you investing in recently?" This has become the standard greeting among food entrepreneurs, right?
Is advertising important? Should we do live streaming? I look at this from three dimensions:
Should we do it? If there is cheap traffic, of course, we should do it. Don't conflict with revenue. But only after the first three Ps—product, pricing, and channel—are done well. Otherwise, the traffic will come and you won't be able to handle it. I have always felt that doing the first three Ps well is the duty of food people. Traffic has an element of talent and luck. If there is no traffic dividend, don't you start a business? If not, take it slow;
How to do it? **Advertising is like flying a plane on a runway. Most of the time, you need to glide to accumulate speed. Once you decide to do it, you must accelerate hard, at least forming a saturation attack on a local channel or local area.** For example, Wang Baobao's saturation advertising on Weibo in 2018, Yungeng Wuzuo's WeChat official account advertising in 2018, and Shuimangmang's tasting in lower-tier markets. If a user sees you six times, they will likely remember you and think you are a brand;
Is there still a dividend? This 618, everyone should have felt that the traffic dividend for food live streaming has basically disappeared, especially for celebrity live streaming. The more you broadcast, the more you lose. A 300,000-yuan slot fee can't even bring in 300,000 yuan in revenue. Live streaming will become a regular sales channel for food brands, but it is no longer a relative advantage. Brands need to explore more ways to play, such as secondary information flow distribution from live streaming.
To summarize, regarding the marketing 4Ps mentioned above—product, pricing, channel, and promotion—if a new company can master one in batches, it has a chance to stand out. But to stay stable, product power must be excellent. Moreover, new opportunities and growth are not necessarily mastered by new companies. For example, dairy, bottled water, craft beer, convenience food, white liquor, and condiments are also rapidly growing categories, but the 4Ps haven't changed much, so most of the growth goes to big companies.
Looking at the annualized return over 10 years, I think investing in a condiment startup is not as good as buying Haitian stock, investing in an early dairy company is not as good as buying Yili stock, and investing in an early convenience food company is not as good as buying Yihai stock. You might argue that Renyang Yitou Niu and Zihaiguo are doing well, right? But if you look closely, are these two companies grassroots startups? I am quite familiar with Lao Sun of Renyang Yitou Niu. I think their management level is stronger than many second-rate listed food companies.
**5) People, Finances, and Materials**
People are the most important product of an enterprise. The team and founder will be discussed later, so I won't elaborate here. Finances are not just financing ability. **User data assets are more important than money.** When I went to Heytea for learning and exchange, Heytea's CTO told me they have hundreds of programmers. These hundreds of programmers have built Heytea's powerful data middle platform. Are you now used to ordering through Heytea's mini-program? This one action saves Heytea a lot of "traffic tax" to Meituan and Ele.me. Some of our projects are already recruiting BI personnel to build middle platform capabilities.
The maturity of China's food supply chain is far behind the cosmetics, skincare, and apparel industries. Therefore, in many categories, multiple brands share the same OEM factory, such as milkshakes and coffee liquid. There is an inverted profit structure between production and brand sides.
Our project called "Weichu" also saw this "selling water" opportunity. China's restaurant chain "gold diggers" are endless. The restaurant signs on a street change every year, but behind this, the commercial kitchenware market of over 100 billion yuan has no giant.
Weichu started with a "repair to sell" approach, doing commercial integrated kitchenware and back-of-house line planning. In 2018, it received investment from Haidilao and has served dozens of leading restaurant chains, including Haidilao, Xibei, Yunhaiyao, Xishaoye, Haidao Shrimp Rice, and Hongzhuangyuan.
**4. Team**
The food industry was once a traditional industry with older practitioners, but in recent years, there has been a clear talent migration. More and more excellent talents are starting to cross borders for dimensionality reduction attacks: Wang Baobao's two founders were originally beauty industry practitioners, using Perfect Diary's tactics to make oatmeal; Yungeng Wuzuo's two founders are Peking University classmates with rich FMCG experience at Nestlé and Unilever; Forest Prophet is a second-generation food entrepreneur plus a well-known consulting firm executive; Mike's founder ran a consulting firm before starting the business, serving well-known liquor companies like Kuijishan, Jinfeng Wine, and COFCO Great Wall for 10 years; Shuimangmang's founder comes from the "Whampoa Military Academy" of the liquor industry, Jinliufu, and was a colleague of Tao Shiquan of Jiang Xiaobai at Jinliufu, and also the general agent for Jiang Xiaobai in Henan Province, using white liquor channel tactics to do beverages.
**In early-stage companies, there is no time to cultivate people. Recruiting excellent people is key, and unsuitable ones should be quickly eliminated.** So, what kind of people are excellent? Most founders still consider capability matching: can past experience and resources be used? I think this method is okay for recruiting basic employees, but the best people are often "a gentleman is not a vessel."
30,000 Capital has four standards for recruitment:
**1) Similar temperament**
Alibaba calls it the "smell officer." We have an emotional scoring item: on a deserted sea, there is a lone boat. Am I willing to turn my back to the other person? Only with similar temperament can there be absolute trust and unreservedness.
**2) Can we help them achieve?**
Everyone has different needs at different life stages. During interviews, we need to clarify. Don't paint a big pie and fool them into staying for a month before leaving. Is the first need to make quick money? A glamorous title? A stable job? Or growth? I think the core benefit most food startups can provide is growth. In our interviews, we also have a routine question: Now there are four offers in front of you: Sequoia Capital, Alibaba Strategic Investment, China Renaissance, and 30,000 Capital's investment director. Which one would you choose and why?
**3) Capability matching**
Early-stage companies are best to recruit people who have seen pigs run and eaten pork. But capabilities are dynamic. Rapid learning and rapid growth are the most important abilities for an early team.
**4) Timing**
Timing is also important. Some people are brought in to fight battles, while others are suitable for icing on the cake. If an early-stage company brings in a team-building expert right away, they won't have a place to use their skills.
**5. Founder**
Judging people is particularly subjective, and there is no fixed method. Based on current cognition, we think people with the following traits have a higher probability of success in food entrepreneurship:
**1) Empty cup mentality**
Fu Sheng said that 90% of entrepreneurs never know what they don't know in their lifetime. I think the ratio should be 99%. **Weakness and ignorance are not obstacles to success; arrogance is.** An empty cup mentality is the foundation for rapid learning and growth. If you don't think last month's you was stupid, it means you haven't grown this month. If you don't think last year's you was stupid, you have probably stayed in place this year.
**2) Focus**
In a place as small as a needle tip, be ten times better than others to achieve concentration of effort and profit. **Focus is a strategic capability.** Only when you see clearly can you be determined and dare to focus.
**3) Sense of rhythm**
Know when to act and when not to. When to be fast, when to be slow, when to keep bullets, and when to go all in. This is the art of decision-making and the biggest difference between entrepreneurs and professional managers. Entrepreneurs must dare to make decisions. The Art of War says **win first and then fight. Don't pursue "a hundred battles, a hundred victories." Accumulate and then release. It's best to win without fighting.** Because those skilled in war often have no reputation for wisdom or merit for courage.
To summarize, users, categories, companies, teams, and founders are the methods 30,000 Capital uses to find projects: **a good category that is growing rapidly without giants, a new brand with a good name, and a founder with strong abilities have a high probability of standing out.**
But entrepreneurship is not about following a map. It's impossible to start when everything is ready. **In early-stage companies, the most important thing is still the founder.** A strong founder has the courage to change a bad name, find the optimal channel, and even expand the category:
Xiaoyu took Yungeng Wuzuo from brown sugar to the broader Bengong Huanxi nourishing market. Liumang Yike's founder, Lao San, dared to take out a loan to build the factory first, make the product well, and then generate revenue, because China has no good durian food OEM factory. Now monthly revenue exceeds 10 million. Mike Rice Wine has been around for four years, slowly enduring from a niche category with no attention to a rapid growth period.
Entrepreneurial spirit is the biggest asset of every enterprise. Wars end when one side loses the will to fight. Food is a slow industry, and it cannot always be smooth sailing. Staying on the battlefield gives you a chance to turn the tables.
**-02-
Three Methodologies for Food Entrepreneurship**
Is there a methodology for food entrepreneurship? Frankly, no! Methodology is summarized by successful companies using induction, but entrepreneurship is deduction. Especially in today's world full of black swans, if you insist on being rigid, you are tying your own hands. Every project of 30,000 Capital is vastly different from its first day. Luckin Coffee's planned entrepreneurship of listing in 600 days cannot be replicated, and even if you think of the beginning, you can't think of the ending.
So, what's the use of learning methodology? Having cognition in mind, acting without panic, and preventing being deceived. Knowing and using are two different things. Having a full arsenal allows you to aim effectively at critical moments. I think food entrepreneurship has three key methodologies along the timeline: **lean startup from 0 to 1, positioning from 1 to 10, and the Yang Triangle for organizational capability from 10 to N.**
**1. Lean Startup**
The process from 0 to 1 focuses on MVP validation. For food, it often means whether the new product can meet the core pain points of users. Lean startup is the most common methodology in the internet industry. This process requires shielding noise and exploring real user needs and effective solutions. What is noise? A new brand has monthly revenue of 2 million yuan, with 1.5 million from a single live stream by Li Jiaqi, and no repurchase. They mistakenly think their product is good and raise funds for large-scale advertising. This is typical noise interference because users buy Li Jiaqi, not you. **In the lean startup process, it is not advisable to do too much advertising or use too many acquaintance resources. Too many variables make it impossible to distinguish whether the product is truly needed.**
**2. Positioning**
After exploring user pain points and core products, positioning begins to play a role. There are many followers of positioning in the food circle. Among new brands, Xiaoxian Dun uses it best. I won't show off here. I'll directly share the post by Xiaoxian Dun's founder Miao Shu at the 30,000 Food Study Club. It's full of dry goods.
Here, I want to remind you of two common positioning mistakes:
Positioning is just shouting slogans. "I am the number one in XXX category, the pioneer of XXX category" (of course, the new advertising law no longer allows this). Even if the slogan is accurate, it only finds the positioning, but what's more critical is the fit, that is, solving the "how to prove it";
Positioning can be figured out by consulting firms or the founder alone. **For positioning strategy to land, you must build the organization, adjust incentives, and do training according to the strategy.** Last time I went to Xiaoxian Dun, they were doing positioning training during lunch break. Everyone learns with one heart, and everyone must know positioning. It's useless for the founder to be self-satisfied alone.
**3. The Yang Triangle for Organizational Capability**
An enterprise has two products. Oatmeal, brown sugar, rice wine, and mango juice are products, but the enterprise itself is also a product. Mission, vision, values, organization, talent, and KPIs are all part of this product. After achieving the number one in the category through positioning, organizational capability becomes crucial for further growth.
There are many methodologies for organizational capability. I think the Yang Triangle is practical and easy to use. In addition to financing, post-investment organizational capability empowerment is also our top priority at 30,000 Capital. Our other partner, Xu Shandan, founder of Lagou.com, is an organizational capability expert. He can elaborate on this topic later.
**-03-
From Internet-Famous to Long-Lasting**
"Internet-famous" seems to have become a derogatory term, but I think being internet-famous is a necessary path for these food brands to grow from small to large. When Coca-Cola was invented by Candler in 1886, it was a magical potion everyone scrambled for. When Momofuku Ando invented the first pack of Nissin instant noodles in 1958, it was also hard to get. How to go from internet-famous to long-lasting is a new challenge commonly faced by internet-famous food entrepreneurs.
**1. What do enduring enterprises look like?**
To understand what enduring means, we can look at enduring food companies: Nestlé, Kraft, Budweiser, Mars. They are all friends of time: core categories contribute profits for a long time (in Li Ka-shing's words, even if the sky falls, there is still one that makes money); and friends of space: after selling well in the Americas, they sell in Europe, and after Europe, Asia. Simply put, **sell to everyone, sell for a long time.**
It's hard to find century-old shops in China, so let's look at the best-performing companies today. My first job was at Huawei. Now, the 30,000 Capital I founded has cooperated with Haidilao on two projects, and we are also familiar with Alibaba people. I found that these three companies have a common point: they play the iron triangle of making money, distributing money, and values very well.
Enterprises that only know how to make money and generate revenue cannot last long. Distributing money well is a real skill and tests human nature. Values are useless in normal times, but when facing tough choices and dark moments, the value of values is revealed: Should we cut off a channel that contributes 30% of revenue for price chaos? Should we follow if competitors start a price war? Should we fire a top-performing employee for taking kickbacks? These moments require values as the decision standard. To become a century-old shop, you will face these moments countless times.
**2. The Role Transformation of the Founder**
Zhu Xiaocong, CEO of Weihai, a human resources service company under Haidilao, once shared about organizational capability at the 30,000 Food Study Club. He mentioned three stages of things, people, and organization, which I deeply agree with:
**1) From 0 to 1, things > people > organization. The founder's key is to create a hit product;
2) From 1 to 10, people > things > organization. The founder's first priority is to recruit NB people to jointly lock down the category;
3) From 10 to N, organization > people > things. Building an efficient organization that produces talent is the most important.**
As a company grows from small to large, the company's focus changes, and the founder must complete countless role transformations, from chief product officer to chief human resources officer to chief organization officer.
**Enterprise success = strategy × organizational capability.** Strategic leadership has a time window. The biggest moat is that I tell you my strategy, and you still can't replicate it. This is organizational capability. Listed food companies clearly write their strategies in their financial reports, and you still can't imitate them. In the end, enterprise competition is the competition of organizational capability. Internet-famous food companies need to hone this. So far, most are growing rapidly driven by dividends and have not encountered strong opponents. Founders need to lead the team to fight hard battles.
**3. Original Aspiration**
The word "original aspiration" sounds a bit vague, but returning to the philosophical level, a food brand is ultimately a reflection of the founder's cognition and experience. Running a food enterprise also requires answering the ultimate three questions of philosophy: Who am I? Where do I come from? Where am I going?
The essence of running a business is to reduce social transaction costs. If the process of growing continuously increases entropy and thus increases transaction costs, the demise of the enterprise is inevitable after reaching a critical point. **Building a brand is to solve a certain social problem and reduce users' decision costs.** If the social problem cannot be solved, or the brand becomes blurred and increases users' decision costs, the demise of the brand is also inevitable.
Hold the bottom line of food safety and the original aspiration of building a brand. Even if there are difficulties along the way, you will have more resilience of "after a thousand blows, still strong, regardless of the wind from east, west, north, or south." Founders with strong mental power will always have the surprise of "when the mountains and rivers are doubtful and there is no way, a new village appears in the dark."
**Final Words:**
Despite the impact of the pandemic, I still think Chinese food entrepreneurs are experiencing the best era. Everyone is enjoying the triple super dividends given by the times and the country:
**The national dividend of China's rise.** This is the biggest and most lasting dividend. A great power will definitely export its lifestyle and consumer goods, and will definitely give birth to globally renowned super brands. This can be referenced to the United States after World War II;
**The dividend of infrastructure.** China has the world's most mature e-commerce platforms, the most imaginative new retail models, the most colorful social traffic platforms, and a rapidly advancing logistics system. The tools are all ready; it just depends on how you play;
**A large number of category gaps.** Unlike the mobile internet industry, many rapidly growing food categories do not yet have leading brands.
**Follow the trend, do not change your original aspiration. On the road of food entrepreneurship, three gives birth to all things. I am honored to witness it with you!**
Source: 30,000 Food Study Club (ID: sanwanshipin) Author: Huang He


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