Just now, Zhang Lei had a super dialogue with Zhang Yong, Lu Qi and Zhuang Chenchao (full text)


In this dialogue, Zhang Lei and his friends chat and unlock 2020: how can early companies survive the death valley? The secret of going through the cycle is not to be stupid and greedy at the same time? What kind of “mob” together can create a miracle? Can chronism be a way of life?
Original title: after 90 minutes of dominating the screen, Zhang Lei had a super dialogue with Zhang Yong, Lu Qi, Zhuang Chenchao, etc
Source: touzhong.com
This is an unprecedented super dialogue.
On the evening of September 14, 2020, the “Friends of Zhang Lei”, founder and CEO of Hillhouse, was broadcast on various video platforms at the same time. Zhang Lei and his friends Zhuang Chenchao, the co-founder and partner of zebra capital, Zhang Yong, chairman of Haidilao, and Lu Qi, the founder and CEO of Qiji Chuang Tan, and he Yu, CEO of Guoyi quantum Co., Ltd., had a “thirst quenching and interesting” summit dialogue.
In this dialogue, Zhang Lei and his friends chat and unlock 2020: how can early companies survive the death valley? The secret of going through the cycle is not to be stupid and greedy at the same time? What kind of “mob” together can create a miracle? Can chronism be a way of life?
It can be said that this dialogue is very lively and meaningful, which is rare and rare in the domestic venture capital circle. Zhang Lei and his friends talk about every sentence, also full of “experience” philosophy and wisdom, thought-provoking.
“In 2020, it seems that I have already passed the cycle in the process of rapid development. Can you tell me how to find certainty among so many uncertainties
In the dialogue of “please answer 2020: Zhang Lei and his friends talk about value”, as the youngest entrepreneur of the day, he Yu, CEO of Guoyi quantum, asked questions from Zhang Lei, founder and CEO of hilltop, Zhang Yong, chairman of Haidilao, Lu Qi, founder and CEO of Qiji innovation industry, and Zhuang Chenchao, founder and partner of zebra capital, which may represent the most important issues for most young entrepreneurs The problem of heart.
Lurgi suggests that entrepreneurs should be sensitive to new trends after sudden changes in the environment, and understand the impact of non cyclical structural factors, so as to seize the real opportunities that belong to you.
Zhuang Chenchao believes that the epidemic has given entrepreneurs an opportunity to reorganize their task lists and solve those long-term important issues, which may achieve twice the result with half the effort.
Zhang Yong’s answer is the most interesting, “if an enterprise wants to go through the cycle, it can’t be greedy and stupid, and make two mistakes at the same time.”
Zhang Lei’s three suggestions are the most specific and feasible: the first thing is to ensure the safety of all employees; the second is to survive; the third is to make an inventory of what is important and urgent; and the third thing is to have a future, a poem and a long way to go while we are still enjoying the present. Make a wish list: ask yourself what you want to do the most? What is the most wanted store? What kind of talent do you want to hire? What are the most important values to adhere to?
Www.touzhong.com.cn excerpted the wonderful quotations from this dialogue at the first time
To maintain a good attitude, we mainly rely on long-term doctrine;
The black swan incident often changes the history. The core thinking points are which are determined and which are unchanged under the epidemic situation, and how long the judgment window period is;
There is only one moat in the world, that is, entrepreneurs continue to create long-term value crazily;
Long term doctrine is the core concept supporting “value”, and “changing fate with both hands” is the core value of Haidilao;
The opposite of value is “zero sum game” and “tuyere theory”;
Unusual path: Hillhouse is not only an entrepreneur but also an investor. Hillhouse capital may be renamed as “Hillhouse group”;
The magic weapon to cross the cycle is not to be greedy and stupid at the same time;
The two most important rules: 1. Stay in the game; 2. Remember the first rule.
Do what is difficult and right, not what everyone is doing;
The epidemic situation is a touchstone, but also a mirror;
As we all know, after 15 years of accumulation and hard work, Hillard, led by Zhang Lei, has become one of the largest investment institutions in Asia, with an average annual return of more than 40%. And behind this, it is from the “long-term doctrine” values that Zhang Lei constantly emphasizes but is difficult to imitate or copy.
Especially until 2020, the concept of “value investment” that Zhang Lei has always believed in and adhered to will be like an outbreak, creating scenes after scenes of investment feast for Hillhead.
According to cvsource investment data, from January to August 2020, Hillhead (including Hillhouse venture capital) invested a total of 54 projects, with a total amount of 71.221 billion yuan. The investment amount increased by 690% compared with the same period last year, which was the largest amount of investment in the same period in recent three years.
It has to be said that this may be the “value” for a long time, which is preparing to stage a “achievement war” crazily. However, in any case, the background of high-level skills has not changed, that is, to follow the first principle and to continue to pursue long-term doctrine.
The following is the full text of “Zhang Lei’s friends” dialogue, which is organized by Chinanet:
Self questioning in 2020: what have to be done in 2020?
Zhang Lei: I think 2020 is a very special year. Today we have so many old friends gathering together. Although we last met not long ago, we all feel a little bit like an afterlife and reunite after the war.
Zhang Yong: Yes, I’m the most seriously injured. I’m dying.
Zhang Lei: you are still dying. What can I tell you?
Zhang Yong: during the epidemic period, the store was closed every day, and the wages had to be paid. The company had to pay for it.
Zhang Lei: Yes, you can maintain a good mentality in the process, mainly relying on long-term doctrine.
Zhang Yong: it’s mainly about the value.

Zhang Lei: Yes, yes, yes. It’s rare for old friends to get together and chat when the epidemic comes back. Let me introduce Lu Qi, not only a veteran of the Internet industry, but also a veteran of the Internet industry. He is now doing a very meaningful thing. He wants to feed back his knowledge of science and technology to young people and teach everyone how to start a business. This is very good and meaningful. We call it compound interest to create long-term value. Next, Zhuang Chenchao introduces himself?
Zhuang Chenchao: I’m Zhuang Chenchao. I used to be a company called where to go. It was the largest travel search engine in China. Later, I merged with Ctrip. Now I’m working on convenience bee. There are about 1600 convenience stores in China. During the outbreak, Mr. Zhang said Haidilao might be the worst hit, and our convenience store was also in the rescue and relief work to a certain extent.
Zhang Yong: how do I think you should benefit?
Zhuang Chenchao: there are too many stores in our office building, although our community stores benefit.
Zhang Lei: the business model is too complicated. We don’t need to introduce Zhang Yong of Haidilao. I heard that during the epidemic period, Zhang Yong persisted well. Tell us what new products have been launched?
Zhang Yong: the new products are nothing. The main thing is that you have to survive. We just made some adjustments to the organizational structure during the epidemic.
Zhang Lei: we have one of the youngest entrepreneurs today. He Yu is only 28 years old this year. He Yu has been a continuous entrepreneur and started his business for the third time. He is a junior class of the University of science and technology of China. He started his business in the University of science and technology. Today, our generations, several start-up companies, across all ages, we get together, we talk about interesting topics. Let’s start with 2020. What are the things we have to do ourselves in this extraordinary year?
Zhuang Chenchao: in 2020, we will certainly be an earth shaking change. Because at the beginning of the year, we planned to open a large number of stores. After the outbreak of the epidemic, first of all, our stores were closed, especially our office buildings, as well as many university stores and hospital stores. All of these shops could not be opened. Only the community stores were open and gradually recovered, but the office buildings, schools and hospitals all recovered slowly. There is a very important question, that is, what is the long-term value of the convenience store, or what is the long-term value of our convenience bee. We believe that creating the long-term value of convenience stores is that we use algorithms to optimize and cover everything in the operation of convenience stores. That’s a good opportunity to take advantage of this opportunity. Because of the poor operation during the epidemic period, we can bear a relatively high risk, because the sales are not good, and there is no mistake. So we take this opportunity to make a lot of system improvement. The benefit is that our system evolution speed is greatly accelerated. We have done work that may take two years to complete this year. With the recent economic recovery, the capabilities of many of our systems have come out.
Zhang Lei: that is to say, I have done what I wanted to do for a long time and realized it ahead of time?
Zhuang Chenchao: Yes, much faster than before.
Lurgi: I’ll talk about it, too. I think it’s a bit like a reunion after a disaster. For me, first of all, I have thought a lot, especially on the core points of long-term value. I would like to share with you a few summary points: first, what changes human history is often the black swan incident, which has a small probability, but has a great impact. In addition, what I’m doing now is that in the early entrepreneurship ecology, especially for technology driven entrepreneurs, we have a business camp model. Both invest and, like co founders, help build their business together. Mainly in the zero to one, accelerate the product market matching on this link.
I have been thinking about what is unchangeable and which has short-term changes in the context of an epidemic, and there is a great deal of uncertainty. Is the uncertainty a year and a half, or two years? How big is the window. In addition, for some long-term trends that have been formed, I think the epidemic has a great acceleration, which means that we were suddenly given a big telescope. Originally, we could only see 50 km away. Now we may see things 100 km away. To be honest, there are several tracks that you can zoom in and see clearly.
Zhang Lei: take a look at Zhang Yong’s very deep eyes. He is thinking about what he wants to share with us, including whether he can learn Haidilao or how he can learn Haidilao?
Zhang Yong: my choices are forced. First of all, I didn’t want to close down, but when the epidemic came, I couldn’t help it. When the shops in Wuhan in China closed down, I said it was OK and would reopen soon. As a result, I didn’t expect Beijing, Shanghai and the whole mainland to close down. The most frightening thing is that when China gradually recovers, the epidemic situation overseas of the United States is coming again, and the stores will be closed again. Until now, stores in some countries have not returned to normal. It’s these choices that have to be done. In addition, during the epidemic period, my staff were very dense, including my previous organizational structure, which was definitely not suitable. Therefore, we had to adjust the organizational structure of the store when we closed down. In accordance with the model of the epidemic prevention headquarters, we have to command them from one area to another, which is what we have to do.
But I didn’t expect to reap some benefits by accident. At that time, it was the Chinese new year, so I called several senior executives to our home. What I didn’t expect at that time was that we had called for the Spring Festival. As a result, we didn’t have to leave when the epidemic came. We had half a year to think together, and then we found that many of the organizational structure adjustments we had done in Haidilao before were only aimed at Haidilao stores. However, the organizational structure of affiliated companies, supply chain management, or other functional departments was not very deep. Therefore, in the last few months, we should calm down to sort out the organizational structure of each department, that is, to truly implement the organizational structure of each department. We think the harvest is very good. This is what I did during the epidemic. Thank you.

Zhang Lei: I’m inspired by what you said. For me, what I have to do is that I finally have time to finish this book. I’ve been holding back for so many years. I started to draft and write books more than five years ago. I don’t have time to write them. During the epidemic period, I could only stay at home. I didn’t expect to hold the books out. Of course, the speed of publishing books is not as fast as that of piracy. I have been holding back for five years and published a book. As a result, it was pirated in 48 hours, which is really fast. The key is piracy. These students are also very magical. I was @ @ in many groups. In these groups, there were people who sent electronic version of piracy. There are still several people @ I’ll say, can you sign on it and send it back? There are also pirated signature books. I said you don’t respect our intellectual property too much. Of course, all the royalties of my book will be donated to Chinese education.
The second thing I had to do, and one that inspired me a little bit, was about my daughter. Because during the epidemic, the children couldn’t go to class. Later, I learned Latin dance from a distance. My daughter had a partner to learn Latin dance. I followed my daughter to learn Latin dance, that is, we both studied distance together. Now, four times a week, I can do vertical chopping if I continue to practice like this. This is also a great inspiration. What I said when I chatted with my daughter was that many times I was forcing you to make a good choice of behavior. When you make this choice, you can actually realize that this good choice makes you very comfortable. I feel like I’m all through now and my muscles are pulled apart.
How to understand “value”? Through the valley of death, chronism is the core concept supporting “value”
He Yu: indeed, I think the epidemic has prompted us to do a lot of things. Just like Newton, the founder of our physics industry, one of his most valuable inventions in his life was made during the epidemic in Britain at that time. Mr. Zhang wrote the book value during the epidemic period. I have a question to ask you: Why did you choose the name value instead of another name?
Zhang Lei: for me, I think the word value has many meanings. I think the word value investment is called rotten, or shallow, or thin, or old. The old definition of value investment was to look for the moat. Find a unique secret, never change, no matter what IP intellectual property rights, channels, brands, etc., wish to finish this one, do not have to do anything else, directly charge Monopoly money. If so, I am against the static value investment theory. I think there is only one moat in the world, and this moat is whether you can continuously and madly create long-term value.
Why is Zhang Yong’s Haidilao valuable? Not only is it because he has brought his team. During the epidemic period, they all went to polish together, thinking about how to continuously create value. This is the first point. I think the core of value is to create value.
Second, I think it means that the core of value can still be viewed from a long-term perspective. Why do I say that in the end, this is the victory of a kind of long-term doctrine. If you don’t need to look at the long-term view, if you only look at the events of a quarter, a year or even a few years, many of your decisions will change. When you lengthen for a long time, a lot of things you want to understand. In the end, long-term doctrine is the core idea that supports value.
All of you here today are veterans and veterans of long-term doctrine. I believe we all have this feeling.
Lurgi: let me share my understanding of value. Similar to Mr. Zhang, value is the ability to continuously meet human needs. Then, different industries may have different value points. The business I’m doing now is to meet the needs of start-up companies with early ecology. For early entrepreneurs, we think there are two major needs. The first is to survive, and the second is to meet them to accelerate the speed of product and market matching. This era is actually the most uncertain. According to our systematic analysis and research, the only way to improve the success probability is to increase the iteration speed.
Zhang Lei: Yes, very good. We all talked about value creation just now, but we should look at it in stages. From zero to one, I recently used a word called “crossing the valley of death”. This is a matter that should be discussed in depth.
Zhuang Chenchao: I think value for me is to create the largest user experience with the lowest cost. If it’s to C, for example, I used to travel, it’s not about air tickets and hotel products, which are cheap, multi choice, fast and easy to pay. Now I do convenience stores. I think it’s worth a lot, especially for user experience. It’s not a single point. It’s a curve. It involves several aspects. At any time point, this may be the biggest pain point in this industry, but your pain point is likely to be solved by other enterprises and even by some external ecological environment. Does that mean that the industry is over? In fact, it’s not. Its pain point will turn to the next one that may not be the pain point. For example, the convenience store industry is actually in every convenience store. It is also mentioned in the general book that it is a fast food, a cigarette store, a grocery store, a coffee shop, and all aspects of life services. In fact, there are many differences between China and Japan. Many life services have been canceled by online. Then people will say whether this convenience store has no value. In fact, it is just the opposite. For example, China’s convenience stores offer cheap and high-quality breakfast and lunch, but they create a huge opportunity, because when some pain points are solved, others become more painful.
The second is what value you can create. The value created by a single consumer is multiplied by the number of service consumers and how many consumers you can serve. The current situation is that there are some high-quality convenience store services in big cities. However, due to their low cost, they are rigid. Because they are managed by people from one level to another, they can not adapt to the diversity of China. Therefore, many convenience stores can only open more than 1000 stores for many years, and the service consumers are limited to one million.

Then our idea is to use an algorithm. For example, there are many convenience store companies entering a city. It needs a brand-new organization of goods. All kinds of frameworks need to be provided. Then we have a headquarters and command the whole country with the system, and the clerks don’t need to know all the inspection work and order arrangement. How easy is it? It’s all through app. It’s just like playing a game, and then it’s solved by doing it according to the instructions. In the middle, all the complicated business calculations are completed by the system, so that we can greatly reduce the cost and maintain a relatively high quality in the high-speed penetration. I think this is the biggest value pain point in the convenience store industry at present. If this pain point is solved, I believe there may be new pain points. Therefore, it is just like what general manager Zhang said in his book that continuous creation of value is the only moat. Because when you solve this problem, in fact, it not only creates great enterprise value, but also creates a new platform for the society.
Zhang Lei: Yes, it’s very interesting for you to say that wearing the coat of convenience store is actually an artificial intelligence brain behind it, just as Tesla is an artificial intelligence in the shell of a car. The truth is the same. Only in this way can we really achieve the scale and create a new business model. It becomes a platform of its own.
Zhang Yong: our values I still firmly believe that both hands can change destiny. This is a value that we recognize. But I don’t think it’s easy to change fate with both hands. So I think if we can cultivate a kind of prosperity and future that everyone can create by virtue of their labor in Haidilao, I think this is what we should strive for. Ma Yun once drew a picture. He drew a triangle with a wave in the middle. The top of the triangle is mission, vision and values. Below the triangle, he writes about organization, people, KPI and corporate culture. He said that the wave is the sea, the triangle is the iceberg, and the sea level on the iceberg is something that everyone can see. This is not surprising. But if you want to support the mission, vision and values above the iceberg, it is the organizations below that determine how long you support, that is, the bottom must be strong. So I think for this value, what kind of organization, people, KPI, and corporate culture are, and what kind of model it is, of course, what kind of mission, aspiration and values support you, which is what we think is meaningful.
How to stick to the original intention of starting a business? Find value and create value, entrepreneurship is always on the way
Zhang Lei: very good value. It seems to me that no matter what form we use, we have found a way to create value that is more convincing to us, to ourselves and to our organization. I call it peace of mind. In fact, this is very important, because the outside world is very complex and the competition is very fierce. It is a very meaningful process for us to find the road of peace of mind. In fact, each of us started a business in different times. In which year did Zhang Yong start his business? I remember that there were only four tables in Jianyang.
Zhang Yong: I started my business in 1994.
Zhang Lei: you were in 1994. Zhuang Chenchao and I started our business in 2005. How old were you then?
Zhuang Chenchao: I was 29 years old.
Zhang Lei: I started my business at 29 years old. I was 33 years old when I founded Hillhead in 2005. When was he Yu founded Guoyi quantum?
He Yu: it was 2016. Before that, I also made a lot of preparations for the establishment of Guoyi quantum. Guoyi quantum is the third company I founded. I was not an adult when I founded the first company.
Zhang Lei: on the contrary, Lu Qi is our youngest entrepreneur. He started his business in 2018.
Lu Qi: in 2018, it was 57 years old.
Zhang Lei: we are all starting businesses at different ages and at different times. Can you share with us the original intention of everyone to start a business at that time and what supported you to go forward?
He Yu: because I’m a junior class at HKUST, I went to college earlier. When I was still a freshman, I was not an adult at that time, and I heard a report from my tutor academician Du Jiangfeng. At that time, he said to revitalize the country’s science industry. He told two stories at that time. One story was about buying an instrument. At that time, he was not an academician. A foreign instrument company quoted a price of six million yuan. When he managed to get the money together, he went abroad to buy it, and then the other party raised the price to 10 million yuan. The second story tells us that our instrument broke down, and it took us half a year to actually repair it. At that time, after listening to this report, I felt like I was hit. I couldn’t sleep that night. I found Mr. Du the next day. I said that I must do it. Because Chinese researchers or researchers from the third world account for the vast majority of global scientific research workers. If we can improve the efficiency of this part of scientific research workers, it is also to serve the global scientific research.
Zhang Lei: This is a very simple dream.
He Yu: it is to create value by facing the needs of scientists, which is also what we talk about in this book. Now that we have sold our equipment abroad, the scientists abroad are also thanking us. Because of the emergence of a troublemaker like us, services in this field are getting better and better all over the world.

Zhang Lei: only when there is competition can progress be made. Otherwise, it will be monopolized. No one will give you good service and no one will give you better products. Can we promote the core of value? First of all, I think that you can’t think about problems with the thinking of zero sum game. It’s a positive sum game. When you appear as a competitor, people are also very happy to stimulate everyone’s innovation, so that everyone can do better. So I think the opposite of value is, I think we should first counter two things: first, anti zero sum game. In his eyes, everyone is just a competitor. To some extent, this kind of opponent is to promote your progress; what’s the second one? It’s the counter tuyere. Everything should follow the tuyere theory. I don’t know what value is. Value is not what we have to know. First of all, it is not a zero sum game, not a game thinking, not a tuyere theory. I think the first three are not, then we can say what value is.
He Yu: then my tutor lent me a 14 square meter office, and I started to be the first company in that office, because the industrialization of our whole laboratory was not mature at that time, we built the first company in a small office, and then we also made the second company, which led to the present Guoyi quantum.
Zhang Lei: Zhang Yong brought his soul to 1994, and the four tables can be clearly seen.
Zhang Yong: at the beginning of my career, I wanted to have a house of my own when I got married, so I set up such a hot pot shop with four tables.
Zhang Lei: Did anyone tell you at that time that it was a whimsical idea. In 1994, you dare to start a business.
Zhang Yong: at that time, I didn’t know what entrepreneurship was. I knew that I could earn some money as an individual. I didn’t expect to make money in business. At that time, I felt very happy when I worked for tens or 100 yuan a month. Later, I found that you could earn 200 yuan a night by setting up a spicy hot pot. The difference was so great that the house was quickly bought. But I fell into a strange circle, because I bought a house, but the lobby manager or chef around me could not buy it. I have to buy a house with all the money I have earned, which makes me feel guilty, so I can’t help it. In order to let them buy a house, I have to open another store and let him be the manager. In this way, he will be allocated more? This is my idea, also called sense of responsibility. But I didn’t expect to walk into this dead end, because there will always be people who can’t afford to buy a house. Only one store manager can afford a house. I can’t tell the guests that you are welcome to eat in our house, and all our employees want to buy a house. If you say that to the guests, the guests are still very angry, and they are not coming, so there is no way. I have to keep driving, keep driving, just like this all the way. It is also consistent with our staff’s pursuit of a better life.
Zhang Lei: I think this original dream of yours is also amazing. It is to buy a house for yourself first, and then buy a house for each colleague. I think although this is very simple, but in the end it is still this sentence, the yearning for a better life is a person’s nature.
Zhang Lei: we first invested in CC (Zhuang Chenchao), because we were conquered after seeing more in the crowd. We listened to him more. CC tells us that all business models are analyzed logically with mathematics. Later, the wife who knew CC knew that CC even found a girlfriend was calculated by business logic. How many dates did CC have, when the success rate was the highest, and after that, the success rate dropped sharply. Therefore, we must close down at that point and do things well. Mathematical logic to start a business so carefully, share with us, is the value creation mainly mathematics?
Zhuang Chenchao: I think value creation is to let consumers have perception first. But how to realize this value, meticulous mathematics can make lower cost, more variety or higher quality to realize this value. I started to want to be a convenience bee in 2016. I talked to Mr. Zhang a lot at that time, because Zhang was always a retail expert and said that convenience stores were a form worth seeing. Another interesting point is that my office is in the west of Zhongguancun. The income of the West District of ZhongGuanCun is very high, which is basically the income level of Manhattan. However, all the places for eating around are the level of the urban-rural fringe. At that time, when we had dinner, we often told the boss to put less waste oil today. At that time, we felt that China’s economy was so developed that the food hygiene problems of retail service industry and catering service industry had not been completely solved. In fact, the original intention of starting a business at that time was very simple. That is to say, I felt that whether money or not, eating clean and high quality was the most basic needs of people. I believe that all the people who open restaurants are good people. Why can’t they do it? In fact, the fundamental problem is that the efficiency is not enough. Because the efficiency is not enough, they can not provide high-quality and service with high-quality production process. So how to improve efficiency, the core is the algorithm. Because the algorithm can control the whole efficiency, suppress all waste, and then provide key commodities at the critical time, without waste at all. In this way, we can not only not affect the cost, but also provide high-quality food, solve food hygiene, provide delicious food, and can penetrate the whole country. I think this is the original intention.
Zhang Lei: so first of all, we need to find out the value and find out where the value chain is. Then we can figure out and create value by ourselves. However, a lot of mathematics and AI elements are used in the process of value creation.

Lu Qi: my business may be quite special. When I established my present business, I was already 57 years old. Let me talk about my original intention. Because I have been engaged in technology product business for decades. First, I want to find a job. I can do another job that I can do for ten or fifteen years. In addition, in a long-term perspective, what is the most likely value creation? Through my own analysis, I think from a macro and historical point of view, China is likely to become the world’s largest innovation ecology, because all the core elements are in place, talent, technology, market, capital, these four core elements are basically in place Yes. My personal idea is that innovation is always the biggest source of driving the progress of human society, and technology is the biggest driving factor of innovation. If based on such a theory, how to establish an institution that can not only invest but also help entrepreneurs from zero to one, in this way, it can support entrepreneurs for a long time. So my original intention of starting a business was mainly to go in this direction. For a long time, I tend to pursue the source of value. For me, in the early ecology, it was actually two kinds of core, good entrepreneurs and commercialized technologies. So this is my initial intention of starting a business, although I was very old when I started my business.
Zhang Lei: always on the road, every step counts.
Lu Qi: Yes, there is another advantage of starting at my age. I can do it together with two people, that is, I can do it with my wife.
Zhuang Chenchao: Mr. Zhang, you started your business in 2005. I remember when I went back to China, a large number of mainstream funds were Chinese people cooperating with overseas large funds, and then used the brands of big funds. At that time, it was rare for them to create an independent brand. What was your original intention of starting a business and how did you think about it?
Zhang Lei: This is also very interesting. We have also thought that if we are just an investment institution, it is easier and better to cooperate with an overseas fund to be a branch of China or a mode of cooperation in China. Of course, the book says that it is unusual. The main reason is that we think Hillhead is an entrepreneur, but it happens to be an investor. We are entrepreneurs who happen to be investors。 So from this point of view, why should I leave myself enough flexibility and space? Because I think I am an entrepreneur, I think the name of Hillhouse capital can be changed. From our original intention, I think we should call Hillhouse venture group, and we can start a business together.
How to find “certainty” in uncertainty through cycle?
He Yu: as the youngest person in this room, I seem to have passed through the cycle in the year of 2020. Then I’ll sell my youth with my youth and ask a question: how can I go through the cycle? You are all predecessors who have really gone through the cycle. Can you tell me how to find certainty among so many uncertainties?
Zhang Yong: I want to ask, Xiaohe, do you mean to live long enough?
He Yu: Yes.
Zhang Lei: not only live a long life, but also live a good life, live in the waves, big waves hit the boat still does not overturn.
Zhang Yong: I think entrepreneurs, like most people, have many shortcomings. I think there are two shortcomings that entrepreneurs are most likely to make. One is greed. To be an entrepreneur, you must have achieved some success. These successes will make you more greedy, and sometimes we will package this greed as an ideal. But you have to distinguish whether you really have ideals or you are packaging yourself. Of course, if you are not greedy at all, it seems that there is a problem in being an entrepreneur. If you plant only one acre of land, you will go home after planting. So I think entrepreneurs can be a bit greedy.
But there is another mistake we are prone to make, which is stupidity. Because we all think that you are very good, which will make us make some very stupid decisions. We feel that our words are right, our process system is correct, and we think that our employees should work so hard. But it’s really funny. Why do you want people to work so hard? If your business is big enough, it doesn’t matter if you are stupid, because when you are big enough, scale can help you cover up your stupidity.
So I think if an enterprise wants to collapse and can’t go through this cycle, it must make two mistakes at the same time, greedy and stupid. Greedy and stupid. Of course, you can disagree.
Zhang Lei: so what you mean is that the magic weapon of going through the cycle is not to be greedy and stupid at the same time. You can allow the same.
Zhang Yong: you can make the same mistake, you can be greedy, but you can’t be stupid; but don’t be greedy for stupidity, and you can go through the cycle.
Let me talk about the cycle. I personally think that cycle is to understand. Let me give you an example. Many listed companies whose quarterly performance is not good will be interpreted as seasonal factors. But we’ve never seen a company do well in a quarter, and it comes down to quarterly factors. We are investing in this industry. The capital market is cyclical. For example, when you have a lot of capital, as an entrepreneur, you have to ask whether it really represents your progress, and your competitors may be better than you in financing. However, when the capital is tight, it may not be a bad thing, because everyone is tight, and you have more value when you get money. This is the first point I want to make. We should treat cycles correctly.

Another point is how to deal with mutation. This epidemic is a mutation, which accelerates two aspects: the first is the rapid development of habits. In the industry of consumer innovation, it is very difficult to change old habits and develop new ones. Under the epidemic situation, many habits are formed quickly. In addition, the concept of acceptance is accepted. The epidemic situation makes things that might have been accepted in five years quickly: for example, online office is widely accepted. In this case, you must fully prepare for many uncertain factors, such as cash flow, such as how to operate stably. On this basis, you should bravely seize the opportunities provided by acceleration.
On the other hand, we need to be sensitive to new trends that will open up in the next new long term after the mutation. For example, the long-term opportunities for medical testing, immunization and other industries after the outbreak. Therefore, I think entrepreneurship also needs to grasp itself more systematically. On the one hand, it should not be bumped by sudden changes, and at the same time, it should understand the non cyclical structural impact, so as to seize the real opportunities that belong to you.
Zhuang Chenchao: I have experienced several crisis moments in my enterprise. In normal times, we all rank tasks. Priority is urgent and important, and those that are important or not will be put back. Some things are very important in essence, but they may be in your queue for two or three years. I think this year provides an opportunity to release them, and resources need to be adjusted accordingly. If you solve these important things, your ability may be doubled. If you go back to do those important and urgent things, you may get twice the result with half the effort.
Therefore, there is a good task list. We need to constantly evaluate and adjust this list according to the new market situation. I think this method can help you overcome the crisis more quantitatively.
Zhang Lei: I think of an event at the beginning of this year. It should be February. When the epidemic was still quite serious, a CEO called me. He was a very responsible person. He said that the situation was not right. He said that we should maintain cash flow. He told me that you didn’t tell us two rules: first, rule No. 1, stay in the game forever; second, remember the first rule. Then I decided to propose to the board of directors that all employees’ year-end bonus, which was originally planned to be paid after the end of the year, should not be paid. Our management should take the lead in reducing salary, and everyone should be reduced by 30%.
My first reaction, to be honest, as a shareholder is quite moved, after all, he still thinks about everyone’s interests. But my second reaction is that it’s not right. If you do, you lose your integrity. You are very hard, the shareholders are very hard, but your employees are more difficult, they have worked hard in the past year, you should be honest with them. Then I asked him, why are you going to do this? Because other competitors do it, he said. I said, that’s not right. You have to do the hard and right thing, not what everyone else does.
At the end of February, we held an online CEO Conference on zoom. I would like to tell you that the first thing is to ensure the safety of all employees; the second is to survive and check what is important and what is urgent; and the third thing is to have a future, poetry and distance at the same time. You can make a wish list: ask yourself what you want to do most, what stores you want to buy, what talents you want to hire, and what values do you want to stick to? I said that values are what you said, that is to be honest with your employees. I also use this example to tell you that the top management team can voluntarily reduce the salary, but none of the employees can be reduced. Later, even the senior management team won’t let them reduce their salary. Last year’s year-end bonus can’t be less than one point. If others don’t do it, you will be the most competitive. As long as you do it for the long term, do the hard and right thing. To tell you the truth, in the 15 years since I founded Hillhead, the busiest years include the financial crisis in 2008, 2017 and 2018, and this year. Emergency investment has made a lot of money.
Why do things turn out like this? Because the crisis is really a touchstone and a mirror, which can show where your heart is, where your values are and where you are firm. There must be something wrong with people who boil everything down to crisis. At this time, you have to do something difficult and right. After the crisis, your employees have confidence in you and feel that you have persevered in the process. So I say it’s really the best stress test to see if you can really stick to your values.
How to choose a companion? The principle of choosing the same traveler: both “fast” and “far”
He Yu: in the crisis, I think this is the great pattern maker. It is said that entrepreneurship is a lonely journey. If we want to go fast, we should go alone. If we want to go long, it must be a group of people. Therefore, it is particularly important for us to travel together. For example, how did you choose partners in the beginning?
Zhang Yong: there is a saying in Zhang Lei’s book, “where the pattern of prosperity and decline is in the pattern, even if the pattern is large, it will be far away, and if the pattern is small, it will be blocked even though it is close.”. It’s very important to choose a partner pattern. I choose to look at three points. First, do you love this enterprise? Second, whether you have insight into human nature; third, whether your business is proficient.
There is no love for no reason in this world. If you want employees to love Haidilao, Haidilao must love him first. So I’m sure that I choose people from the old employees. After years of Haidilao’s treatment for you and how you treat Haidilao, you can see whether you love this enterprise from these details. I think this is the first thing for me to choose partners, which is more important than any other quality.
Second, we must have insight into human nature. To be a good business leader, you should at least have insight into human nature, what employees think, what they need, what they will need in the future, and how we can meet these needs. In the process of choosing partners, it is a barrier that I can’t get around. The third one is very simple. The business is very skilled. What is the tripe and how to put the beef in the restaurant? Can’t you not be clear about it?
Those who meet these three standards are already partners with a very high pattern.

Zhuang Chenchao: all start-ups are looking for 3F, family, friends and fool. Only a fool will believe it. Because the cake is too big for most people to eat. (laughter) it’s hard for strangers to be the real core partner, so they must be acquaintances. My first two partners were friends of many years. Long term relationships let me know what they care about, so that I can know their value orientation. Some people are more concerned about how much money they may take this year, while others may care about how much money you can get in three or five years. However, this venture, especially the initial one, may not be timely at all. It may be ten years, maybe fifteen years, and it may have experienced a lot of efforts and finally failed, but he is enjoying the process. Therefore, the first thing is to keep a long-term view. This is a very important condition. For other items, I think it is also mentioned in value. We can carry out a list of abilities for comparison and scoring: for example, whether he has profound industry insight, dedicated executive power, strong empathy, and the long-term philosophy just mentioned, my partners must surpass me in at least one of them, and significantly surpass me, so that we can form a stronger one A larger entrepreneurial team.
Lu Qi: starting a business is a long-term, very difficult process, often a life-threatening process, so it is very important to choose the same person. The core of entrepreneurship is two, which should go fast and go far. I will choose this person. Of course, knowing is the best way. Sometimes I can’t find someone to know. But the background investigation must be very detailed. This person’s original intention, what is his motivation, especially the family’s economic situation, should have a certain understanding. Otherwise, because we have a long-term return, if he needs a short-term life, it is not suitable, So the first thing is to understand the motivation, whether it is a match or not.
In addition, I require the ability to complement each other. This person’s learning motivation and iterative ability must be very strong. In our line of work, the speed of iteration is actually the speed of progress. If we want to go far, I think it is the recognition of values, which is very important. Otherwise, we can not go far. We are now positioning ourselves as companions. Entrepreneurs are the people who are at the forefront of changing the world. They take risks and make long-term investments. We plan to be the co founder of entrepreneurs in Qiji Chuang field, and try our best to build a community to provide entrepreneurs with more long-term company.
Zhang Lei: in this book, I wrote two sentences: choice is more important than hard work, and who we are with is more important than the distance to go. In 2005, when I was a high-altitude company, the common feature of the people I was looking for was that none of them had ever invested, and no one had done so. One of my classmates, who was originally a lawyer, turned out to be a partner of a large law firm. When I said about my “blueprint”, people said that it was really ideal, but it was not very reliable. Finally, he sent his wife to our company to help. As a result, her wife became one of our most important partners and our coo now.
Why can our so-called “mobs” go far? I think the first thing is that these people are in line with the concept of the earliest colleagues. In fact, we don’t know what we have to do. It may be “yearning for a better life” as Zhang Yong said, or for something else. But we all share a common belief that this belief must not be driven by short-term events. I think it is very important to find such people 。
Later, Hillhouse became more famous, and many excellent talents came to apply for admission. This year, we recruited 16 summer interns. As a result, 2500 people signed up and had seven rounds of interviews. In the middle, we did case study. The camera was facing you and writing materials by ourselves. We wanted to peel off three layers of skin. Later, I said that I was particularly vigilant against recruiting people who were No.1 in all aspects. This sentence has been diss on the Internet for a long time. We all said that you are a person who can stand up and speak without backache. If you succeed, you will be alert to our No.1. Why I say this is also related to the question of “who are you with?”. Many people don’t think clearly about where to go and which direction to go. They just want No.1. I graduated from Peking University and Tsinghua University and went to No.1 investment bank. After two or three years of working in No.1 investment bank, I went to No.1 investment agency, and then went to Hillhead. Why come to hilltop? He said something on the surface, but in fact, the reason is that he felt that “our last No.1 came to do this”. This is No.1’s habitual thinking. He will not really ask his heart, why he is excited, what he really wants to do, and what problems his passion is to solve.
Our passion is to change the ecology with investment, allocate resources to the best entrepreneurs with investment, and help the best entrepreneurs bloom with capital. If you believe in changing fate with both hands, find Zhang Yong; if you believe in changing ecology with capital, find Zhang Lei. That’s what we do. But if you believe that No.1 people go to the high altitude, then don’t come. This kind of No.1 is something we should be alert to. It is very dangerous for people who rely on inertia to move forward. They only have competitors in their eyes. Why do I want No.1 because there are No.2 and No.3 below me. When you are really the best investor, there is no competitor in their eyes. If you want to have strong empathy, you must be able to understand the whole ecology. You still have to focus on what problems you solve, how you help allocate resources to the best entrepreneurs, and how to help the best entrepreneurs bloom. That’s why I chose partners of the same trade. Now there are more than 2000 high-profile partners and more than 10 candidates. We will choose them so seriously, because we really don’t know how the business model will evolve in a few years. The iteration is too fast. When you choose the wrong person, it’s very difficult to do.

There is a saying in business schools, is it the organization that decides the strategy or the strategy determines the organization? Many people say that I have to set my strategy first, just like the “triangle” just mentioned by Zhang Yonggang. I need to set my original heart, dream and values first, and then set up an organization. In fact, most of the time, what kind of people your organization is, determines what kind of original intention, dream, values, determines your strategy, in fact, the organization determines the strategy. So go back to the root, or choose people to go with you. In fact, it determines the strategy of your company and a lot of your things. Therefore, it is not strategy that determines the organization, it is the organization that determines the strategy.
He Yu: I am four words, harmony but not sameness. “Harmony” first of all is to choose people who have long-term trust and are familiar with, that is, the people who are best to climb out of the mud pit together. In addition, I think there is nothing right or wrong in the process of starting a business. Most of the time, we have to make a decision. In fact, we should discuss things quickly, which is also the point of “harmony”. “Different” means that we must complement each other. This is a standard for me to choose partners.
In 2020, the most impressive person?
He Yu: it’s been more than half a year since 2020. Do you have the most impressive things or people? Or Zhuang always comes first.
Zhuang Chenchao: I am most impressed by the company that Zhang Lei cooperates with, Forrest (founder of sea) in Singapore. I talked to him a long time ago. At that time, he said he wanted to do e-commerce and go to Southeast Asian countries. I thought it was really difficult to deal with various countries. As a result, he did very well this year. I talked about how he does business in different countries. The national conditions of each country are different, and many of his teams are from China in the past. His empathy and ability to schedule resources are very, very strong. It is quite outstanding and outstanding for a Chinese enterprise to do this overseas, to be so local and to sink completely into the local area.
Zhang Lei: you know, there is another point, that is, his ability to learn and iterate. At that time, when we invested in him, we gave him US $250 million when he could not go to the market. At the most critical time, he took us $250 million and ran all over Southeast Asia. He said, “look, Hillhouse is such a fool. All the people who have a lot of money are here. You should join us quickly. You have made more than 800 million US dollars, which is the lifeline; the second thing is to iterate talents. Our operating partner, a GaN (GaN Jiawei), is the COO of meituan. I sent him over. Originally, I said to lend them two weeks. I said to lend it to Forrest for two weeks. Agan followed him to see what kind of offline, how to do e-commerce, how to do retail, how to do push, to help him do various models. Later, he directly brainwashed Agan, followed him for six months, and ran with them every day. The most outstanding entrepreneurs are really star sucking. Later, Agan was taken out by him and learned everything. He said you can go back. As a result, if you look at others themselves, they hatch themselves. Therefore, the most outstanding entrepreneurs have a strong ability of continuous iterative learning.
Lurgi: Mr. Gates is the most impressive one this year. There are several points in him. First, he really has a forward-looking judgment. Second, he has great courage to stand up, say the right thing and do the right thing under the distorted situation of American media. Third, he paid a lot of energy and his fund spent a lot of money on the research and development of drugs and vaccines. In today’s complex global situation, we hope that more people like Mr. Gates will have the foresight, courage and down-to-earth approach.
Zhang Lei: what impresses me most is my fitness coach. He was very interesting. Once he said, I finally understood the two characters of the pattern you said. The pattern is to have space, and you should have space to see things. As soon as I heard it, I said it was very nice. I said I had to remember it quickly. It was a very simple thing.
Zhang Yong: what impressed me this year was a little story I saw on the Internet. During the epidemic period, a teacher in a training center in a small city was promoted to a partner by his boss before the Chinese New Year. He had a good income in the local area and equity in the training center. He had a very stable life. Later, he was laid off because of the epidemic. He bought a car with a loan, so he started running with this car. He didn’t want to tell his wife because he was afraid of his wife. So every time he got out of the car and went home, he stayed downstairs for half a day. He was afraid that his wife would find out. Every day, his wife is afraid of losing his job, but he is afraid of making money. Why do I love this story? First, in the face of sudden changes, the hero is very active. Second, he didn’t give his family any trouble. Second, I think it is a very important advantage. I admire it very much, because I always bring my emotions home, and I always have a good face.
What are the interesting plans for the future?
Zhang Lei: it is said that this year is the year of black swan. In fact, there are black swans every year. This year may be a little bit black. Let’s talk about some interesting plans you have and how you can stay physically and mentally strong?
Zhuang Chenchao: we may still be iterating over the system. A few days ago, Tuan Jian asked me to draw a picture to describe the company in a few years. I drew a mobius ring. It’s a curved surface that can go on forever. If you cut it off, it can fit together infinitely. I think it’s a little bit like what we’re doing now, a coupling of the quantitative world and the physical world. The two worlds are separate worlds. They can be separated infinitely, but they don’t separate you and me.
Our goal in the future this year is to make a fully automatic business process. Many of our current processes are judged by the system, but there are still a small number of links that need to be manually involved and approved. But I hope to drive the system and the whole operation of convenience bee, including daily operation, when to open and close stores, and even how to deal with property and other things, and how to get resources, all of which are driven by data.

In other words, the convenience store is just a big Sunday, which is a periphery. What we really practice is the small Sunday, which is its system. In the future, this system will not only be a convenience store. It will really control the physical world. What happens in the physical world is completely determined by the digital world, which decides how to operate the physical world.
Lu Qi: My, I don’t know if it’s interesting, but we are trying to find out how to move the original offline activities, such as our entrepreneur community, to the line if the epidemic situation becomes normal, so as to maintain high-quality interaction and maintain the ability of epidemic prevention and control to a very high degree. This is what we want to explore; and then we want to do a road show day in November Last year, we invited more than 1200 investors to connect with our entrepreneurs to help them live better and help them to integrate into the next round. I can’t tell you more details about this year’s roadshow day, but we’d like to explore how to have a fully digital experience in a physical world.
Then I’d like to share with you how to make your mind stronger or more magnanimous. I suggest to entrepreneurs that the core should do two things. You want yourself to be free from tension and anxiety, just think more clearly and do more effectively. You must be able to survive, and then seize the opportunity that belongs to you in the implementation, because from a macro perspective, the entrepreneurial opportunity in China is quite a large innovation ecology. In the past, I often half joked and half seriously said that in the United States, there is no such thing as a beautiful group or a large number of products. It is a structural factor. The cost of human resources, the structure of society, China’s technological capacity, China’s national conditions, and the structure of talents, capital and market that we talked about earlier. On the macro level, there are more opportunities for an entrepreneur. The key is how to control them.
He Yu: we are developing one of the cheapest quantum computers in the world, with only 400000 yuan per set and two bits. We want to make it available to middle school students and even primary school students. In the process of practice, we found that the better the classical physics is, the more difficult it is to understand quantum mechanics. For example, I’ve been studying physics for 10 years, and then let me look at quantum science, and I think why can two states be superposed? What makes it relevant? How can we entangle? Children are different.
Zhang Lei: I suddenly feel the pressure of my little son. It’s not enough to learn Olympiad Mathematics. Now we have to do quantum computers.
Zhang Yong: I’m 50 years old. It seems that the plan is not so interesting. I started running last year. At first I could only run two kilometers. This morning I ran 11.75 kilometers. Run four days a week. Another interesting thing is that I started to quit drinking again. Today is the 15th day. I have given up drinking many times before. It seems that I have stopped drinking for the sixth time. I can’t remember it. I can’t stop it. Anyway, I usually go bankrupt within 10 days after the announcement. I don’t know if I can succeed this time.
He Yu: everyone is really senior. When Zhang Yong was always tossing about four tables in Jianyang, I was two years old and was playing mud in Mianyang, the city next door. So I still want to ask, what suggestions do the predecessors have for us young people?
Zhuang Chenchao: I think we can read more value.
Zhang Lei: that’s how Tuo came into being.
Zhuang Chenchao: I mean it. No matter study, work and life, many choices still need to see the long-term value. Young people may not be able to see that far, but try their best to look forward, will certainly have a great help to the choice of life.
Lu Qi: I think the core idea described in this book is in fact highly consistent with what I am doing now. After I read it, to be honest, I have recommended one for all my team members. The core is our work, and the key is to embody the value. For us, I personally, for our entire team, it is to help every entrepreneur we support as much as possible. They have a greater chance of success in starting a business, and they have greater value. They produce value, which is the value indirectly generated by our work. What we really care about is that we can help entrepreneurs. It is a more realistic reflection of the long-term pursuit of time as a friend. Therefore, this book is very directly connected to me and our team.
Zhang Lei: Zhang Yonggang just said that even he quit drinking and running. I think it’s very interesting that what spirit do you use to start a business. It’s a sportsmanship. You want to run faster, better, farther. Then a group of people together, the best is to have a sports team spirit. This is the first point.
The second is to talk about “value”. I think what I should think about is not to ask what I will get. If you continue to create long-term value crazily, you will get what you want. Sooner or later, the society will repay the people who are constantly creating value, no matter what kind of business model. Maybe wool doesn’t come from sheep, it may come from pigs. We don’t know where it comes from. But as long as you can create value continuously, it will definitely repay you. It may be that Haidilao hotpot is free in the end, and other things let you play. Finally, Zhang Yong may charge all the membership fees, which is Haidilao game fee. Haidilao eating hot pot has become a life style of game, right. As long as you have a certain length of time, you can create value.
Thirdly, I think the most essential value is actually long-term ism, which means whether you are a victory of long-term values. If you look short, it’s very difficult to do anything. If you stretch it a little bit, you will understand a lot of things. That is to say, the running water does not compete for the first, what we are fighting for is endless. It’s not so important whether you run first or not in the short term. The key is whether you can talk. Entrepreneurship is also a process of long-term practice.

Moreover, I think that the creation of value and the long-term doctrine can not only be seen as entrepreneurship, which narrows it down. I think value and chronism is a way of life and a choice of your own life philosophy. Looking for a job, finding a boyfriend or a girlfriend is all about adhering to this long-term principle. You have to ask yourself, is this a choice that makes you calm, or is it a choice that you are forced to make under the noise? If everything goes by, it must not last forever.
In the moment, you have to have poetry and distance in your heart. Finally, you have to be a long-term ruler. How to measure it? It’s not just about starting a business, it’s about the way you live and the choices you make every day. Whether I want to take the postgraduate entrance examination today, whether I should do it or not, and whether I should choose this job or not, you can use the long-term doctrine to look at all the things. Is it of long-term value to me, or is it just a short-term valuable thing?
I think to judge a real chronism is to see if you can apply it to micro decision-making every day in your life, and finally form muscle memory, muscle memory. You are naturally long-term, you will not panic. People say that they have surplus food in their hands, so they are not worried. That through the cycle is the value of the hand, the heart does not panic, so that you can get peace of mind, can feel calm. To grasp this point, in fact, all the problems ahead have been solved. How do you choose a long-term partner, who to go with, and what kind of career you start, it will become easier for you to make these choices.