Restart life

Chapter 223 0220 [When will China's GDP reach second place?]

Dean Wu personally served as the host: "Why do you all think venture capital is so crazy this year?"

Who will speak?

The alumni looked at each other.

"Let's take turns."

"Mr. Wang is a senior, Mr. Wang, please go first."

Wang Zhidong picked up the microphone: "In China, whatever you do, you have to look at the policy environment first. By the end of last year, the shareholding reform was basically completed. The Shenzhen Stock Exchange has been establishing the SME board for nearly two years, and its subsequent effects have been fully demonstrated. The policy support for venture capital is becoming increasingly clear. All of these have put venture capital institutions at ease."

"The above describes the policy environment. There is also the industry environment. The dot-com bubble in 2000 scared global capital. After a few years of recovery, venture capital funds made almost retaliatory investments."

Wang Zhidong only gave a brief explanation, deliberately leaving the answer unfinished.

Li Guoqin continued, "The successive IPOs of Chinese companies, represented by Baidu, Shanda, and Focus Media, have allowed venture capital firms to successfully exit their investments and make a fortune. Any amount of that money taken out and reinvested would be considered crazy."

“Indeed,” Lei Ming said. “Venture capital is about making money. The hotter the investment, the easier it is to exit, and the more institutions will enter the market. Now even several domestic RMB funds have emerged.”

Wang Zhidong commented, "Domestic institutions are currently relatively conservative, mainly investing in mature companies, traditional companies, and technology companies that are about to go public. It would be great if one day domestic institutions dared to invest in early-stage technology companies."

Chen Guiliang added, "Another important reason is China's rapid economic growth and the increasing prevalence of the internet. With one-ninth of the world's internet users in China, venture capital naturally flocks here."

Everyone was very polite, and each person only spoke for a short while.

Dean Wu asked, "How long do you think this situation will last?"

“At least a year,” Wang Zhidong said.

Chen Guiliang said, "The next year will be even more insane. As more venture capital firms enter the market, the competition for projects will become even fiercer. I estimate that in the future, there will be no need for detailed due diligence, and valuations will be significantly increased, deviating from basic business logic and financial models. Many startups will die!"

"Why do so many startups fail?" Wu Minhui, who hadn't said much, asked.

Chen Guiliang said, "Venture capital firms don't follow business logic, and some entrepreneurs will definitely cater to their preferences. They do whatever projects are hot, all for the sake of quick financing, instead of focusing their energy on product and business development. When the venture capital craze subsides, these companies will not be far from death."

Wang Zhidong nodded: "That's right, a large number of similar companies will definitely emerge this year."

Li Guoqin picked up the microphone: "Therefore, if the teachers and students here want to start a business, they should focus on product and business development. Don't blindly cater to the preferences of venture capital firms. The hotter the project, the fiercer the competition, and without a core product, you will fail miserably!"

Dean Wu said to the teachers and students present, "These are pieces of advice from several alumni, and I hope everyone will take them to heart..."

After about twenty more minutes of conversation, the Q&A session with the audience began.

The first question came from a graduate student at Guanghua School of Management: "Last month, Google officially entered China, posing a huge challenge to Baidu. There have been many similar incidents in recent years, such as the competition between QQ and MSN, and between Dangdang and Amazon China. By the way, last year Cyworld entered China, putting pressure on Kaixin001 as well. How should Chinese companies respond to strong foreign competitors?"

Li Guoqin replied, "Dangdang.com has never considered Amazon a formidable competitor. Even modifying a shopping page requires approval and reporting to Amazon headquarters at multiple levels. What competitiveness can such a rigid management mechanism offer?"

Chen Guiliang laughed and said, "Saiwo.com is about the same. I heard that they even need to report to their Korean headquarters to modify website buttons. If I were to use Saiwo.com, I would rather play on QQ Space. Saiwo.com's free items are like junk, and anything slightly nice has to be bought with money. A set of virtual clothes starts at 10 yuan. If you don't recharge, all the user images on Saiwo.com look like beggars."

That being said, the number of users on Cyworld has been increasing rapidly.

Its main user group is the "Korean wave fans".

Cyworld frequently invites Korean celebrities to promote its products, which is incredibly attractive to young people who are fans of Korean culture. In the eyes of these fans, Korean celebrities are unattainable figures, and Cyworld's ability to secure their services makes it a truly prestigious website.

In addition, Cyworld also invited Li Yuchun to collaborate, which is estimated to have attracted tens of thousands of "corn" (Li Yuchun's fans) to register.

But if you don't pay, you're a dog; the experience for free users is terrible!

The graduate student pressed further: "Your views are remarkably consistent, yet MSN's market share is steadily increasing. According to data from iResearch Consulting, MSN's market share reached 23% at the end of last year. At this rate, MSN will eventually surpass QQ."

MSN's advertising campaign last year was indeed formidable, and it successfully built up its reputation and established a strong competitive advantage. Its 23% market share put immense pressure on Tencent.

Next year, there will be a song called "Siqin Gaoli's Sadness," and two lines of the lyrics vividly reflect this hierarchy of contempt: "I went on QQ to make friends, but all I found were lovers; I heard that good people often use MSN."

See? Good people are all using MSN...

The people on the stage remained silent.

As high-end users, most of them were using MSN last year. But the user experience was so poor that some people have already abandoned it.

Chen Guiliang said, "Take a look at iResearch's report next January. You'll be pleasantly surprised."

What's the surprise?
MSN's market share in China plummeted from 23% to 10% in just one year!

"Okay, I'll keep an eye on it." The graduate student didn't ask any more questions.

Another student asked, "Senior Wang, what's your opinion on Sina's foray into the blog market?"

Wang Zhidong looked somewhat displeased: "I haven't paid attention to Sina for a long time."

Chen Guiliang seized the opportunity to say, "President Wang is about to join HaiNei.com... which is also known as Kaixin.com."

The student bluntly asked Chen Guiliang, "Hainei.com's log function is similar to a blog, but it doesn't seem to get as much attention as blog posts. Does Mr. Chen think the two are in competition?"

"There's not much competition for now, since we're running an SNS website," Chen Guiliang explained in detail. "The popular posts on Renren.com are divided into two lists: one with real names and one with anonymous names. The ones with real names are celebrities, who naturally have a high level of buzz and attention. The anonymous list is for ordinary users, who represent grassroots power, and the website values ​​and strongly recommends them as well."

"In comparison, celebrities' blog posts receive a lot of attention, but ordinary users' blogs receive very little attention. Even though Sina Blog is trending towards becoming an SNS, the interactivity between its users is still too poor."

"Thank you," the student said, and sat down.

Another student stood up: "Mr. Chen, shouldn't you replace that six-lock bicycle with a BMW?"

"Hahaha!"

The whole place burst into laughter.

Even Dean Wu laughed.

Chen Guiliang's practice of putting six locks on his old bicycle has become a unique sight on the Peking University campus.

Chen Guiliang countered, "If it were a BMW, where would I park it at night? The best parking spots are farther than the walk to the classroom." Then, Chen Guiliang said to Dean Wu, "Professor Wu, I suggest the school build an underground parking garage near the dormitories."

Dean Wu said in a serious tone, "This is not my responsibility. You can write a letter to Principal Xu."

The audience laughed again.

The next person to ask a question specifically called on Chen Guiliang: "Mr. Chen, how do you balance entrepreneurship and learning?"

Chen Guiliang shook his head: "It's not balanced. When I first started my business, I had two companies and I also had to write books to earn royalties to support them. I was a freshman in college at the time, and I didn't dare to skip classes. I was so busy every day that I would fall asleep as soon as I lay down. Now I just hope I don't fail too many courses."

Another student asked, "In 2000, China's GDP ranked sixth in the world. Last year, it finally ranked fifth. How many more years do you think China needs to develop before it can rank fourth?"

"It should be soon," Li Guoqin said.

Wang Zhidong said, "I think we need to develop for another two years."

Everyone else shook their heads; they hadn't really paid much attention to this.

Chen Guiliang once again made a startling statement: "This year we can be fourth, next year third. By 2010, China's GDP should be able to rank second."

"Hahaha!"

The whole audience burst into laughter, and they laughed very loudly.

The student who asked the question said, "I think so too. I studied statistics. With China's current GDP growth rate, it will be the world's second largest economy by 2012 at the latest. I didn't expect Mr. Chen to be even more optimistic than me."

The university arranged for a live text broadcast of this alumni entrepreneurship forum on the Peking University BBS.

This conversation, once posted on the BBS, quickly sparked heated discussions among teachers and students.

"Do you think it's possible? I think it's too far-fetched. China has been poor and weak for so many years. It might be easy for China to surpass Britain and France, but Germany and Japan have very strong industrial capabilities."

"Indeed. It would be good enough if we could surpass Germany in 2010; to think we could surpass Japan is pure fantasy."

"Mr. Chen is being a bit funny this time."

"Is it difficult? Just do the math and you'll see it's very simple."

"..."

Half an hour later, someone posted the conversation on Tianya Forum.

The discussion on Peking University BBS was quite rational, but the discussion on Tianya Forum exploded instantly.

A similar post appeared on Tianya last year, with someone predicting that China's GDP would surpass that of Xiaoxingjia by 2030. It was met with widespread ridicule, not because the poster was pessimistic, but because they were mocked for being overly optimistic.

The most pessimistic view is that China's GDP will never surpass the average person's life.

"As it turns out, entrepreneurial success can also depend on luck. Chen Guiliang clearly didn't understand economics; he just got lucky and caught a trend."

"Is this some kind of patriotic slogan? Don't they know how poor China is right now?"

"He's a billionaire, he's long since escaped poverty. Just because he's rich doesn't mean all Chinese people are rich. Haha, talking about surpassing his humble beginnings by 2010. I think 2100 is just a pipe dream!"

"A bunch of illiterate people, can't you even do basic math?"

"Stop talking about GDP, what does that have to do with ordinary people? Let's settle the back wages owed to migrant workers first."

"Yesterday I went to a restaurant to eat chicken hot pot. I clearly only ordered one chicken, but I found eight chicken butts in it. I asked the owner what happened. The owner said that's how it is in China, it's normal for chicken to have a lot of butts."

"Hahaha, chicken fart! So clever!!!"

"..."

Another legendary post has been born, and for the next ten years or so, people will come back every year to criticize it.

(End of this chapter)