My Road to Entrepreneurship
I am Lance, the CEO of MAI. Today I will share some of my entrepreneurial experience with you.
1. Why do I Start a Business?
I have been starting a business since I returned to China (2015). People always ask me these questions. Why do I start a business? Why do I star a business all the time? Why do I still start a business? This is from the time I went to school in the United States. I learned a lot in the United States. I think that only entrepreneurship can maximize the value of this knowledge, so I decided to start a business. Unlike many people, what I care most about is not whether entrepreneurship can make money, but the growth experience that entrepreneurship can bring to me.
2. Probability Right
My professor told me a concept called probability right. Probability right is the right to choose different probabilistic events. If you want to have self-fulfillment instead of having a stable life, you need to do the following two things.
First, the small probability event. It is something that cannot be done even if the cost is very small. For example, looking for a fixed salary of fixed jobs, making money by buying lottery tickets and so on, these actions can not lead the success of self-fulfillment.
Second, if an event is determined to increase the probability of success, even if it seems that the cost is high and the benefits are ambiguous, it should be done. For example, we have always advocated entrepreneurship, as Prime Minister Li Keqiang said, “Mass entrepreneurship and innovation “
Many people are talking about “poor thinking” and “rich thinking”. In fact, the essence is the grasp of the probability right.
But recently, there is a controversial topic that everyone is saying that the probability of success is very small, such as entrepreneurship. But if we compare it with gambling, why should gambling not be done, and entrepreneurship should be encouraged? Because there is no win for a long time for gambling, but as long as the business continues, the chances of success will increase.
In order to confirm my point of view, I will analyze the difference between gambling and entrepreneurship.
3. Gambling Probability
First of all, let me tell you about gambling. Maybe we will win some money once and twice, but if we keep gambling, the final result must be loss. Usually, we use the implicit rules of the casino to explain this phenomenon, such as cheating, doing the mark. But these are the tricks of the low-level casinos. However, winning and losing in big caisson is a probabilistic event, and all the means of the big casino are open. Then you must be wondering how do big casinos make money? The mystery is in the rules of the gambling. So, let’s talk about several common ways of playing digital games in casinos.
1) Law of Large Numbers
The first means is to repeat the small gaps and eventually accumulate into a huge number. For example, if you play the game of guessing coins with the banker, both of you don’t cheat, the probability of winning is 50%. But sometimes the banker will say to you, “Congratulations, if you win, can you give me some tips, just give me 2% of the money you win.” At this time, you might think that 2% is very small, because if I win, I can earn 100% of the money. At this time, the “Law of Large Numbers” works. If you win, no matter how much you bet, the banker will win 2%. The more you bet, the more the banker will earn.
After understanding this rule, you may think that just refuse to give the banker a 2% tips. But you will still lose in the end. Why?
2) Hiding Probability
If you play the game of guessing coins with the banker, on the surface, the probability of everyone to lose is 50%. But this 50% is the surface probability. In addition, there are hidden probabilities. And where are they? They are hidden in the size of the stake on both sides. For example, if I have 50 CYN and you have 100CYN, so your probability of winning is much bigger than me. Because you only have to win me 50 CYN then I have no change to win back my money. On the contrary, if I want to win the game, I have to win 100 CYN. In terms of funding, a small casino can’t compare with a big casino. In the end, the big casino will win all your money, but you can’t win all the money of the casino. This is the second means of playing digital games.
3) Luck and Probability
Next we will talk about the third means. Suppose you have 100 CYN to bet. The rule of the game is that if you lose, you will lose the money. If you win, the amount of your money will double. So how much is it best for you to bet every time? Usually, people will choose these two ways. First, people will take the risk of all-in for 100 CYN at one time. If they lose, they have to stop the bet. Second, some people will bet 1 CYN each time. If they win, they will only win 1 CYN each time. We can see that the risk of the first way is very big but with great incomes. However, the risk of the second way is very small but with small incomes. Is there a more suitable method of betting? According to mathematical statistics, a 25% of the bet amount is the most average way of profit and risk. But some gamblers do not know it and they don’t care. Every decision they make is based on their own feelings. If you have learned the probability, you know that every gambling is an independent event that does not affect each other. It has nothing to do with the last game. The casino has always understood this truth. If the banker make a bet, he will enforce the 25% ratio strictly. In the same gambling, you are playing with your luck, and the banker is playing with the probability!
4. The Probability of Entrepreneurship is Different from the Probability of Gambling
Gambling and entrepreneurship are probabilistic events. Why do the probability of success of entrepreneurship will increase? Suppose I started a business 100 times and succeeded once, and what is the probability of success in entrepreneurship? The answer is 1%, which means the failure rate is 99%. But according to the most basic mathematical rules, this probability of failure will decrease with the number of times. The probability of a failure is 99%, and the probability of 100 failures is (99%)100 , which is about 37%. That means the probability of losing 100 times of entrepreneurship consecutively is only 37%. Conversely, the probability of success at least once is 63%, which is already higher than 50%. Therefore, entrepreneurship can be done continuously. This is why I have been doing entrepreneurship.
1) Choose Probability instead of Luck
The calculation methods of probability can also be used in gambling. But if you win a gamble once, you can’t get back all your money, but in entrepreneurship, you can. In a gambling, the more you bet, the more you lose. However, as long as the business is successful, it may have a return of ten million times. One success can offset all the failures you made before.
2) The Entrepreneurship and Investment with Mainstream
I am doing the blockchain project now, which is the result of the accumulation of experience in various projects I made before, rather than a spur of the moment. There is also a very important factor in entrepreneurship. Why Xiaomi and Windows can be popular, because they are going with the mainstream. Everyone knows that starting a business and investing in mainstream will increase the probability of success. This is why we are now entering the blockchain field.
3) My First Entrepreneurship
The first thing I did after I returned to China was to open a bakery. I invested a lot in it. At that time, the Korean style was very popular, so my store had Korean style, Korean taste, and the materials are imported from South Korea. This is my logic of investment. The store was very profitable at that time, although the first few days were losing money.
4) Motivation for Transformation
After the first successful entrepreneurship, I felt that opening a small shop in a small place was very limited. I wanted to do some national things. The entrepreneurship in my mind is to make a company in which my project can compete with similar projects across the country and even around the world. So I started my internet business. The experience of Internet entrepreneurship made me aware of the Internet thinking and the thinking combined with the entity, which I have not studied and thought before. Since March 2015, I have been working on the related work of internet. During this time, if I was working in an internet company but not entrepreneurship, I believe what I have learned is definitely not what I learned through entrepreneurship. Because the real operation of a project, and the thinking and idea of implementing a project is completely different.
5. My Faith of Entrepreneurship
When I decided to star a business of mobile Internet, my family supported me to do that. Although they know that I will encounter a lot of difficulties, they still support me. Because my family has started a business before, they knew that only when I have experience it, can I understand where have difficulties and how can I solve it. If I don’t encounter so many problems, it is not really a entrepreneurship for me. Some people are worried that many reports are about young people starting a business and then fleeing with a lot of financing money. The reason is that they have gotten a lot of money from the beginning and have been bragged very much. There are many 90s generation entrepreneurs around me. Some of them have experienced many difficulties, they are poor and unable to obtain financing. They have to borrow money from relatives and friends, but they have never given up and worked step by step. If I suddenly have tens of millions of investments, I will not care at all. Because the money is what we need to get through the difficulties of starting a business.
A lot of media reports about me will not involve my financing experience. Because I don’t want to highlight how much I got, and avoid making everyone feel that we set up a company just for financing or to get a high valuation on the market.
6. Valuation Bubble
What is the high valuation? It is a bubble. If you can’t really help the business environment, you will stay on the valuation all the time. If a project’s Price/Earnings can reach hundreds of times, don’t you think there is a problem? Such a high PE is completely unreasonable.
7. Persistence of MAI
Regarding my media reports, there is no valuation around them. The information about me on the Internet is not valuation-oriented. For the MAI project, our investors invest me because of my working style and philosophy. My original intention was to get things done and to implement what I have said before. I prefer to implement it first and improve it after that. This is also the reason why I can bring confidence to investors in this impetuous market.
8. Core Value of MAI
Many people are wondering why I don’t do more publicity. Because I think it is just a means of setting up, the real core is to be strong enough. I admire Steve Jobs, because he really lets the product “talk” instead of doing a lot of publicity. So what we are doing now is to do the product well and put the project to the ground. This is what we have to do in the cold winter. This is what MAI team is doing.
9. Conclusion
If you are interested in entrepreneurship, I will continue to talk about some of my entrepreneurial experiences and insights next time, such as how to make products from 0 to 1. Thank you.
MAI Telegram (English): https://t.me/MaiEN8888
MAI Telegram (Chinese): https://t.me/MAI888888
MAI Twitter: https://twitter.com/MaiPublicChain
MAI Reddit: https://new.reddit.com/user/MAI_AI
MAI Facebook: https://www.facebook.com/MaiPublicChain/
