Lei Jun:”What is the kingcraft of business?”

The methodology of startups in the Internet industry are essentially the same, then what is the methodology?
This article is released by iheima with the authorization of Shunwei Capital (Wechat ID: shunweicapital).
Hello, everyone. Is it snowing in your city?
Although it is snowing, but the spring is on its way. On February 17, Shunwei Capital hosted the first fraternity event “Shunfeng Tang”. The theme of this event is “Emerging Real Estate”, which brings together 23 real estate related start-ups from Shunwei and guests from 12 famous real estate companies.
In this event, there are sharings from masters, discussions on success and frustrations on the internal round table, acquaintance and communications between brothers, and thoughts and summary from Lei Jun, the founding partner of Shunwei Capital.
Let’s start with this summary!
This article is excerpted from the speech of Lei Jun, a founding partner of Shenwei Capital at Shunfeng Tang Real Estate Sharing Meeting.
Hello, everyone. Welcome to the Shunfeng Tang event hosted by Shunwei Capital. The first phase of the Shunfeng Tang is to bring together the 23 “real estate related” companies we invested in.
The first reason we host this event is that 90% of the difficulties are the frustration that all entrepreneurs have encountered; communicate with each other and you may solve it.
The second reason is that we want to organize people of the same board since the same board gives us more similar external factors as well as more opportunities for collaboration. So we hope you can work together. That’s the two reasons why we host this event.
And today, with this opportunity to share, I have been thinking this afternoon that the methodology of startups in the Internet industry are essentially the same, then what is the methodology?
That is, we want to use the way of thinking, tools and methodology of Internet to solve the problems of products and services in the real economy. Then what is the most important thing that the Internet brings to our industry? Or what is the nature of the Internet way of thinking?
Ⅰ. Focus on the User
What is the nature of the Internet way of thinking
I think there are two main points. First, it’s all about focusing on the user. That’s easy to say because the real economy said so. In fact, when traditional economy talks about user-centric, the concept is “to regard users as god”, which, however, is essentially impossible to achieve — because you cannot contact users! Nonetheless, the Internet has quantified tools to help us understand the various indicators of DAU and churn rate, and it is essentially about how to improve user experience by technology. Thanks to the Internet, we have the real opportunity to focus on the users.
And the Internet, due to its business form, actually sets a much higher value on users than you think. At this point, the first of the ten commandments and values of Google is called “Focus on the user and all else will follow.” You will have all the indicators you want, but the precondition is you are doing great user service.
The Internet company’s pursuit to ultimate user experience is unimaginable. Let me give you an example, I just talked to Liu Yang from U+ apartment about what struck him two years ago for U+? I was struck the moment when he said “To give a reposeful heart to the rovers, provide them with ‘shelter and roof, love and company’”. I actually think he solved the core psychological appeal for many wandering people today. In fact, U+ is the substantialization of the Internet community that we have made. Business model like this came through many challenges and difficulties, and all the communities did so.
What is the most important thing of community? It’s tonality and culture. U+ is actually a community, not just the real estate distribution that we’re seeing. I think their most valuable resource is the “family friends”. Therefore, U+ should genuinely turn users into fans in the premise of not losing money or making a small loss but no bankrupt. In this way, the value of the company will be demonstrated step by step. The most essential question is whether the user satisfaction can be raised to the height of becoming a fan, including whether the indicator of Net Promoter Score should be introduced, making more people understand how we can improve this. So I think the first thing the Internet is looking for is “user experience”.
Ⅱ. Focus on the User
What is the nature of the Internet way of thinking
The second thing is that when we want to ensure a better user experience, we spend a lot more on technology, products, raw materials and personnel than the traditional economy. In fact, you spend a lot more money than the real economy. And sometimes I ask what the VC is doing. Support for spending money. Sometimes we don’t even achieve the same efficiency as the real economics, because as long as you release your products and service on the Internet, all the costs will come out, and it’s very high. In order to make customers satisfied ultimately, the essence is to improve efficiency, using Internet technology, talent, methodology, thinking, including greater input. Use efficiency to reduce the final price, improve the user experience, and make users experience better cost performance. Like the 8H mattress we just mentioned, the latex mattress of such high quality but low price is called “luxuries sold at a civilian price”. How did they make it? Because the efficiency is raised. Because we spent a lot of money on R&D and system in the early stage. I think the essence of Internet plus is the two points, user experience and efficiency revolution.
Overall, for all of our Internet plus companies, the essential thing to do is to make products that are user-friendly with reasonable price. Whether your product can satisfy the core requirements of the users, or whether the service you provide has impressive cost performance is of great importance. I believe that this is the kingcraft of the whole business, and no one can say no to the good yet inexpensive service, and these things are driving our society to go forward.
Including these 23 companies, there are a number of business models that are groundbreaking in domestic service. I was confused by the “Zhuangxiaomi” service we had just heard about. But I think, in fact, everybody needs that supervision service of the real estate, because not every user can be a decorating expert. I think everyone has a sense of frustration and failure since it’s not easy to decorate the house. Some decoration failure may lead to couple fights and so on. Each of us has the right to live a happy life. But why do we have to be a decorating expert? This is what I feel incredible about.
How complicated decoration can be! So we invested in ikongjian along this industrial chain. Being not able to provide fast and convenient decoration for users is what I think is the biggest problem in this industrial chain. Later, we found that there were some problems that some people decorating their own homes need the help of supervision services. How can we work out the supervision service with the sharing economy model? Then, we invested in Zhuangxiaomi. In a word, the problems that we have not solved in our real society are far more than those of the Internet itself, and the real economy leaves a lot more space than the virtual economy. So in the last three or four years, we’ve been working through the home furnishing, and I think there are a lot of things we can do. Of course, if you want to do a good job, it is still a long-distance running taking longer time.
In a word, what I want to share is, don’t forget at any time, that we are responsible for using the Internet way of thinking to promote the progress of the whole real economy and the whole society. Our true weapons are these two, first, superior user experience; second, extraordinary efficiency. Many thanks to our entrepreneurs and all the distinguished guests. This is our first event, and I think it’s very successful. Thanks for your support.
“Shunfeng Tang” is a sharing session of vertical industry or specific topics for 150 start-ups from various sectors that Shunwei Capital invested in. We hope that our brother companies can broaden their horizons, promote cooperation and enhance communication, connection and friendship through this event.
The first event, on February 17, 2017, centered on one of the key tracks of Shunwei Capital: the emerging real estate sector. We believe that this area covering all aspects of trading platform, decoration and maintenance, leasing, home furnishing and equity investment carries innovation and future. Here, more than 20 real estate related Shunwei companies gathered in Beijing, listening to the ideas of masters and communicating the innovation thought.



Shunwei Capital was founded in 2011 by Mr. Lei Jun and Tuck Lye Koh, managing three US Dollar funds totaling 1.75 billion dollars and a renminbi fund of 1 billion yuan. The funders mainly come from sovereign wealth funds, family funds, fund of funds and university foundations and other international top investment institutions.
Shunwei Capital focuses on the Internet, mobile Internet, the high-tech industry and the transformation brought about by the integration of the Internet with other industries. We hope that through investing in companies with dreams, we can make our life better.
