Back to the prime of life

Chapter 217 Add-ons
After the meeting, Lu Changge inquired further, and Xu Huiya revealed that another purpose of the Russian's trip was to make contact with JD.com.

This information is also important because it indicates that the other party is also very interested in e-commerce.

"Luman is not having much difficulty raising funds right now. In addition to the money we received from you, I also obtained a government-guaranteed bank loan. So even if there is the financial pressure brought about by the rapid expansion you mentioned, I can still take out a loan to meet the immediate needs. When I came to Beijing this time, my colleagues and I discussed it, and the consensus of the company team is that Luman is considering more than just money when it comes to raising funds again."

Xu Huiya pondered these words.

She's a seasoned businesswoman; it's not easy for asset-light internet companies to get financing from banks. Maybe it's a little easier now given the massive monetary easing during the financial crisis, but loans from domestic banks are essentially based on guarantees and collateral.

In other words, Lu Changge is not just a Taobao shop owner.

People rise by taking advantage of opportunities. With the success of his career, this ordinary college student from an ordinary county town also developed his own social network.

"What do you want?"

“Someone like Mr. Xu can provide us with resources and assistance.” Lu Changge also praised the other party, “DST has a big reputation, and accepting its investment to endorse the company is a good choice, but he seems to have very few resources, unless there are situations I am not aware of.”

Xu Huiya said, "Light fashion clothing brands are inherently incompatible with the internet. One is a traditional industry, and the other is an emerging industry. How can things be so perfect? ​​You also said that DST can endorse Lumang. Once it invests, it will attract more attention from other capital companies, and the company's valuation will naturally rise. At that time, the resources you need will be easier to obtain. You have to take things one step at a time."

Makes sense.

This woman is quite quick-witted and eloquent.

Lu Changge neither confirmed nor denied it, but simply told her, "Our company is currently optimizing its supply chain."

"Why?" Xu Huiya asked, somewhat puzzled. "Being based in the Jiangzhou garment base is one of the secrets behind Lu Mang's success."

“I was talking about optimization, not a complete overhaul.” Lu Changge said with a hint of helplessness. “I also have expectations from the authorities, and I won’t do this unless absolutely necessary. But, most people can share wealth and prosperity, but not necessarily hardship.”

This is not hard to understand. The financial crisis at the end of last year was too sudden, and everyone was having a hard time, so they agreed to lower the price.

The price reductions varied in degree, but in order to move inventory, some reductions were definitely made, and in some cases, the reductions were so large that the company barely broke even.

But now that life is better, Lu Mang is shipping out products at a rapid pace, which makes people envious...

“There’s a saying that we didn’t do any of the hard work of running a factory or doing production, but we still made all the money in the end.”

"And what about the government?"

Lu Changge shook his head. "First of all, we have a market economy, not the planned economy of the past. Even at the end of last year, the government only provided a communication and coordination platform and even provided some guarantees. But they wouldn't force companies that didn't want to cooperate with us at that time. Secondly, the leaders always think that all parties should be well and stable, and they won't blindly favor one side. As for asking me to take the initiative to find leaders... leaders aren't that easy to find. This is a business and market behavior. If I go to them, what will they say to me? Those suppliers are also local companies to them."

The situation wasn't entirely innocent. Xu Huiya, lacking experience, didn't dare to make a judgment on her own. She simply reminded them, "These leaders won't be unhappy with you because you changed the supplier, will they?"

"Look at people."

"What do you mean?"

“If I have a reason that he can understand and can’t refuse, then there’s no problem.”

"For example?"

"For example, like now, these suppliers themselves made excessive demands, and I am the passive party, so naturally it cannot be blamed on me; another example is Lu Mang's new partner... the person they sent has a higher official rank than him."

This…

Ok.

Hsu Hui-ya felt a little surprised, but also that it made sense.

"In this regard, there's really nothing I can do to help. We have very little dealing with the government."

“But there’s something you can help me with.” Lu Changge handed her a document he had brought with him. “Lu Mang is based in Jiangzhou. Not to mention other provinces, many things are difficult to handle outside of Jiangzhou. But your investments are all over the country. See if you can help us make some connections.”

"what is this?"

Lu Changge smiled and said, "Some other clothing brands have OEM factories in China. Min Xiuwen proposed an idea: Lu Mang wants to create a brand new sub-brand, and our first choice is to cooperate with the factories on the list."

"That might not be easy; it certainly won't be as price-competitive as it is now."

“Price competitiveness depends on who you are competing with. Compared to street vendors, a shirt that costs 10 yuan is considered competitive, but compared to products from factories, a shirt that costs 99 yuan is also considered competitive.”

"You're dreaming. Why would a brand-name factory accept orders with such low prices?"

Lu Changge said confidently, "As long as the shipment volume is large, it will be fine."

In fact, all plans are based on sales volume. At its peak, Vancl sold 10 shirts a day, totaling 3000 million garments a year. What couldn't be negotiated?
Shipment volume is essentially a reflection of a company's overall operating performance, which is related to the supply chain, brand building, and so on.

So why is running a business inherently risky? This interconnected positive cycle can lead to complete failure if even one link goes wrong.

The pressure on bosses that ordinary people don't understand actually comes from this: only they know that the seemingly perfect situation is actually built on the premise that no mistakes can be made in the business.

It's so hard not to make mistakes.

Hsu Hui-ya added, "I heard that Vancl is expanding its product lines recently. They are preparing to venture into women's wear, children's wear and home furnishings. At the same time, they have started to invest heavily in advertising and marketing, and are also building their own logistics on a large scale."

Your approach is the complete opposite of theirs. Their SKU count is skyrocketing, while yours is strictly controlling SKU growth. They're building warehousing bases in various cities, while yours is firmly committed to outsourcing logistics to local companies. He's expanding his product line, while you're fully investing in brand building and even creating a premium brand…

In the end, she shook her head because she couldn't say for sure whose path was right, but it seemed that Vancl was making great strides in capturing the market.

Lu Changge, on the other hand, was relaxed. His contrasting attitude proved he was on the right track…

“I explained the underlying logic when you invested in me. Chen Nian is using the internet model to mess around with the clothing industry, but the meager profits from low-priced clothing that captures the market cannot support his full-scale expansion. Right now, he is just telling the expansion story that has been commonly heard in the internet industry over the past decade, and then using the money raised to prop it up. Once the company’s growth encounters a bottleneck, then there will be trouble.”

Moreover, there are still problems with the business itself... My model may not be entirely successful, but it has built a certain brand and established a certain customer base, so no matter what happens, the business itself remains stable.

If one is truly dedicated to refining branding, service, quality, cost control, and company management, and continuously adapts to the market, maintains innovation, launches new brands, and puts in the effort for 10 or 20 years, one might just become a well-known brand.

Unfortunately, with the clamor of capital and the desire to make even bigger money and participate in more respectable industries, it's unlikely that anyone would have the patience to painstakingly work on this thing piece by piece and color by color.

Xu Huiya was just saying it casually; she's only human, and seeing Chen Nian and Vancl's madness, it's inevitable that she'd have moments of self-doubt. But there's no going back now; she'd boarded Boss Lu's pirate ship, and there was no going back. Besides, she was more concerned about his conversation with Ivanovich.

That chatter...

"Changge, we've known each other for so long. I had no idea you'd caused such a stir in America." Her tone was ambiguous.

Lu Changge quickly clarified, "I didn't hide it from you. Chatter has over a million users in the US, and it even made the news. You know that."

"But I didn't know that many venture capital firms were paying attention to you!"

"That has a hidden worry..."

Hsu Hui-ya crossed her arms and said, "Hey, that's not fair. What worries? Even DST came all the way to China to find you."

Well, she gave a real-life demonstration of what it means for venture capital firms to endorse a company... In the investment world, there really is such a system. We can't really say what's good or bad, but if a big shot has jumped in, it must be pretty good.

"Honestly, do you want to accept those tens of millions of US dollars? You've become a bit of a legend now. All the things that have happened to you are connected. The commotion abroad has also benefited the country."

Lu Changge didn't answer, because he couldn't answer.

When Pulsego and Chatter signed the equity pledge agreement, many things were clearly stated. Chatter had a great deal of independence. Even considering the traditional Chinese customs of interpersonal relationships, Shen Mo and Chi Yongsheng would consult with him on important matters, but he couldn't completely disregard Chatter's independence.

Especially when it comes to big things like financing.

According to the original share pledge agreement, PulseGo controlled 70% of Chatter's shares through the share pledge agreement. Of the remaining 30%, Shen Mo held 25% and Chi Yongsheng held 5%.

Shen Mo invested one million US dollars, which is equivalent to a typical angel round of financing, and the amount is very large. Many companies can only get 20 or 50 in their angel round.

Thanks to this money, Chatter has been operating to this day.

Now that new shareholders are being introduced, whether it's 10% or 20%, the addition of new shareholders will dilute everyone's shareholding, so they should all know about this beforehand.

As for Luman, according to Ivanovich, it was just an add-on; once the main business was settled, the extra few dollars for the side matters were really no big deal.

Ivanovic wouldn't care too much about this, and Lu Changge wouldn't be too concerned about saving face for the sake of cooperation between the two parties.

So after returning to the hotel, he still held an emergency conference call.

Li Ming and Min Xiuwen were then free to do as they pleased.

They were present throughout the conversation with Ivanovich, and after listening to it, they realized that Ruman was such a character... and for a moment they didn't know what to say.

Feeling great? Not really, since it has nothing to do with them.

Feeling frustrated? Not at all. After all, Lu Changge is a powerful boss. They are all friends, and following him won't lead to a bad life.

Since Lu Changge was in a meeting, the two of them didn't want to stay in the room, so they went to the hotel lobby, each got a cup of coffee, and chatted there.

Min Xiuwen mainly called Li Ming out because he was new to Lu Mang Company and wanted to ask more questions and learn more. Of course, he could also tell that Li Ming seemed a bit listless, so he said, "Is he like that Miss Xu, having suffered some kind of shock?"

Li Ming, with his legs crossed, slumped weakly. "A little bit. Lao Lu and I were roommates. When we first entered university, we were nobody. Later, we joined this company, and it grew bigger and bigger. I felt quite accomplished and confident. But hearing this today..."

"These kinds of things, you just have to get used to them. Have you ever heard the saying that, in terms of annual salary, people who earn a million a year are actually more miserable than those who earn 100,000, 300,000, 5 million, or 10 million a year? Of course, I'm just giving a general idea, but you get the gist."

Li Ming asked in confusion, "Shouldn't it be that the less you earn, the more painful it is? This pain index is even a curve!"

"I used to think the same way as you, but after listening to others and seeing things for myself, I realized there's some truth to it. Do you know why?"

"Tell me."

Min Xiuwen has a lot of work experience and is very knowledgeable. "People who earn little money are definitely miserable, that's for sure. Those who are carefree and independent even without money are like hermits, incomparable to ordinary people. But most people who earn little money haven't broadened their horizons and can't access higher levels of knowledge."

But a million-dollar annual salary is different. This group considers themselves quite capable, and most of them carry the pride of successful people. The awkward part is that this salary begins to expose them to truly wealthy people. The problem is, compared to those people, they suddenly realize that a year's hard work is nothing more than someone else's single karaoke session. Once they experience that kind of shock, it's incredibly painful.

Li Ming pondered it carefully and found it somewhat interesting. "This is equivalent to making a great person realize their own insignificance. This is much more difficult than an insignificant person accepting their insignificance."

"That's roughly the idea. But the reason I'm telling you this is to say that people shouldn't compare themselves to others; comparisons are endless. The key is to do what you love, and at the same time, you can earn a decent income. Whether you believe it or not, these are actually the happiest people in this society."

“That makes sense,” Li Ming chuckled. “I can see that, Brother Min, you know more than I do. I’ll learn a lot from you in the future. We’ve been following Lao Lu for a while now, but we’re still lacking in real skills.”

Li Ming has some social skills, and whether what he said was true or false, Min Xiuwen felt very pleased to hear it.

Just as the two were chatting happily, someone suddenly called out Li Ming's name.

Li Ming turned around in surprise, "Oh my, Chairman Han, what are you doing here?!"

Han Jiayi was slightly embarrassed. They'd already graduated, yet he was still calling her "President Han." "What a coincidence. I'm here to see Lu Changge. Did he come with you?"

"Yes, yes, yes. No, I heard you were in Shanghai? How come I saw you in Beijing? Come on, have a seat."

"I was originally in Shanghai, but the company later transferred me to the Beijing headquarters. Where is Lu Changge now?"

She doesn't want to do it yet.

Li Ming thought Lu Changge was probably too busy to remember. "He's upstairs having an urgent conference call. What time did you arrange to meet him?"

"Three o'clock."

"You've arrived early, so wait a bit. You'll probably be down as soon as it's over." He glanced at the time; there were still fifteen minutes left. As he spoke, he didn't forget to explain for his good friend, "Old Lu has been busy all day. He had a phone call early this morning, then met with investors, and after that, he still had to discuss things with people in the company. This is a big deal, not a small matter. If things don't go well, you'll have to wait. I'm waiting here too. Come and sit down; I'll get you a coffee."

"Okay, thank you." Han Jiayi nodded blankly, but basically believed it. "Lumang is raising funds again."

Li Ming smiled wryly, "We were just talking about this... We all came to Beijing to help Lu Mang raise funds, but the main company is interested in another one of his companies, so we've just become extras. Sigh."

Han Jiayi was shocked, because Lu Mang was already a well-known name in the e-commerce industry, so how could it have become just a small addition now?

(End of this chapter)