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The following is the Opportunities for entrepreneurship and innovation in the new world pattern From Lu Qi’s latest speech recommended by recordtrend.com. And this article belongs to the classification: Venture capital.
1. The new epidemic situation and the international environment are accelerating the four major trends
The first is the social foundation of digitization.
The second is the frontier of life science.
The third is sustainable new energy.
Fourth, the focus of global economic development and innovation has shifted from the west to Asia.
2. China’s achievements in the past 40 years are essentially “China + open market”, and the next stage is “China + technology”. This is a huge opportunity.
3. In the international environment, the transfer of economic centers to Asia is an accelerated historical trend. There is no doubt that this is the opportunity of our times.
4. It will take 5, 10 and 20 years for AI to enter every assembly line and factory building. Now is not the time to break out.
5. In the long run, we need to pay attention to China’s capital market, so that start-up companies can withdraw from China and have better opportunities for capital support. This trend will surely happen.
On December 19, 2020, Qi Qi, the founder and CEO of Qiji innovation circle, delivered a keynote speech “entrepreneurship and innovation opportunities under the new pattern” in Shenzhen. In his nearly 2-hour speech, Lu Qi analyzed the new pattern that the current world is forming and the four core trends that are being accelerated by history; he systematically combed the complete entrepreneurial opportunities faced by entrepreneurs, including the analysis of digital, chip, sensor, life science, aerospace and other fields which are popular for investment. In addition, he also discussed the new generation of entrepreneurs How to grasp his own opportunities, he shared a series of thinking models, including entrepreneur ability model, how to judge the opportunity, how to build barriers and how to think about business value.
Tencent technology network launched the speech.
Lu Qi: Thank you very much for your time this weekend. On behalf of the whole team of Qiji Chuang, I would like to welcome you to our entrepreneurs meeting and sharing meeting.
Before I begin, I’d like to introduce our thinking of analyzing problems: for anything worth doing, we should first understand where the driving force is, why it happened, if it happens, what direction it will take in the future, and what its structure is. Because with the structure, it is easy to see the future, and then the evolution of the development system will be formed under the structure.
With the acceleration of historical process, the world has formed a new pattern
1. The new epidemic situation and the international environment are accelerating the four major trends
First of all, the historical process is accelerating. The new epidemic is the first global epidemic in modern society. Mr. Bill Gates wrote an article that analyzed why the new outbreak has brought about a new pattern. The core of the article is to refer to the huge impact of black swan event on history. The probability of black swan event is very small, but it has a great impact on the world. Its direct impact is that several core historical trends that have been taking place have been greatly accelerated. Things that might have taken five or ten years to happen have been shortened because of the epidemic situation, and some of them are starting to happen now.
There are four accelerated long-term core trends:
The first is the social foundation of digitization. For example, with the acceleration of the epidemic, they have become the necessary infrastructure of any modern society, just like the highway and railway.
The second is the frontier of life science, which, like the national defense industry, helps people defend against natural disasters. Today, a virus like Xinguan is only a few microns in size and contains little information. But why can it have such a huge impact on the whole earth? We are rethinking the relationship between man and nature, which will promote the development of new frontiers in life science, including testing, vaccines and large-scale drug development. This series of investment will accelerate globally and bring many opportunities.
Third, sustainable new energy. The relationship between man and nature must be solved. So far, we have assumed that “nature is free”. In fact, it is not. Therefore, we must enter into a new, market-oriented and sustainable relationship, which will bring a lot of opportunities for industrial development.
Fourth, the focus of global economic development and innovation has shifted from the west to Asia.
All four of these trends are accelerating, and a new global pattern has emerged.
2. The deep and long-term driving force of historical process
So how can we analyze this new pattern and see entrepreneurial opportunities from it?
Let’s first analyze the course of human history and see what the underlying driving forces are? Here I recommend the big history theory, which is actually one of the achievements of my work at Microsoft. Mr. Gates has always recommended a series of books to me. One of the authors is David Christian. The core concept of his grand history theory is to study human history and judge the future. At the beginning, we should look at the physical world and biological world, and see what the deep structure is inside them? What are its core elements? The answer is energy and information.
The core of the development of human society is always the combination of energy and information. Any complex system will eventually be energy + information, resulting in entropy reduction. All we do is entropy reduction. This will give us a bottom level principle to judge whether something will happen, whether information is wrong, whether energy can be converted more efficiently, whether entropy is reduced or not What drives us most deeply.
Mapping it into human society, human society will always pursue knowledge and wealth. Here wealth is a broad definition accepted by all, that is, wealth is a universal ability to meet human needs and desires. Therefore, according to the theory of great history, human history is always exploring science, developing technology and developing economy.
Let me briefly talk about what science, technology and economic systems are and how they relate.
Science is a system of exploring knowledge and a system of inquiry. Its core is a set of fallible hypotheses, which are mainly used to explain natural phenomena.
Technology is different from science. It is based on science, but it will constantly self evolve. Similar to Darwin’s evolution, the evolution of technology is always developing in the direction of human needs. Therefore, the core definition of technology is: technology is a kind of ability based on scientific theory to change natural phenomena and meet human needs. This is the most generalized definition of technology.
Technology has two characteristics: first, it is programmable. We must have an information process to change natural phenomena; second, it is executable. We must have energy to change natural phenomena through physical, chemical and biological processes. So what we do today has to do with the nature of technology.
As mentioned above, technology always evolves to the place where there are many human needs. Therefore, the development of technology must be directly related to the needs of human beings. A common big misconception is that we only look at technology when we are divorced from human needs. However, technology always follows the needs of human beings. The deeper the demand is, the more active the technological development is. Therefore, it is fully in line with the economic system.
Besides science and technology, let’s look at the market. Human beings have created different stages of market economy, which is the system of wealth creation. It is closely combined with the development of science and technology. The three are always interacting with each other and developing towards the needs of mankind. However, human society is a very different system. Our development of knowledge is never-ending, always reducing entropy.
3. Information and energy are the deepest structure in the development of history
In fact, the economic behavior in the development of human history has changed little in the past few thousand years, and only in the past three or four hundred years has there been accelerated change. The core is that we have invented new systems, information and energy structures that allow us to meet more of the needs of mankind. Now we are in the third picture of the new economic system.
The first system: agricultural system, the core of which is solar energy. From the earth’s point of view, it’s a free energy source. Nuclear fusion on the sun brings energy that can produce photosynthesis. Because the energy of agriculture is the sun, its information process is relatively simple, and its output (crops) is basically realized through photosynthesis, human labor and simple tools. Therefore, in agricultural society, even if people are smart, the output will always be determined by how many acres of land and how much sunlight they can receive in a year. Looking back on the past, the history of the agricultural age is the history of land control.
The second system: the industrial age. The core of the industrial age is large-scale production and large-scale circulation. Its energy and information structure are completely different. The energy is mainly fossil energy. At the beginning, coal is transformed into energy by mechanical methods, and then oil and natural gas is transformed into electric energy, and the energy is transformed through electrical machinery and electronic equipment.
The process of information is more complex and requires higher skills. Therefore, a series of institutions of human society, including universities, were born in this period. Trained a lot of engineers, chefs, tailors, designers and so on. Comparing the two curves of agricultural era and industrial age (red and green curve above), we can find that the S curve in agricultural era is very flat (red curve), and the output is limited, while the industrial age (green curve) is much faster.
The third blue curve represents the fastest and most exciting era we are in today. We can call it the new economy. It’s an information age, and what triggered it? The answer is that in the middle of last century, we invented the general-purpose computer, which allows us to obtain information on a large scale, design, simulate, predict, do automation and so on. Therefore, the core of wealth creation in this era is to rapidly combine resources to create wealth through digitization, new energy and application of new technologies.
Looking back 20 years, the companies with high listed value in the world at that time were mainly manufacturing and energy companies, while the companies with high market value at present were all digital driven companies. The core is that digitalization can meet people’s needs with a part of energy in a very short time through large-scale resource combination, thus greatly accelerating the speed of wealth creation.
In any era, it has a mainstream. In our era, the mainstream is the ability to digitize, coupled with new energy, new technology and people’s innovation ability. In this way, learning skills in universities is not enough. The core is to create value through sensitive observation of demand and rapid restructuring of resources, so this is what we need to pay attention to in this era.
4. A new generation of research-based start-ups represented by deepmind and openai are emerging
What I just talked about is the core driving force and deep structure of the historical process. Next, I will talk about the third level factors. The so-called system is often formed in the process of development.
(1) Development of science and technology
First of all, how did science develop? In fact, science began very early. Aristotle and Archimedes were studying science in ancient Greece, but there was no systematic development.
The real systematic development of science was in the Renaissance, when there was social demand in Florence. Enough demand caused a group of people with enough density to start doing experiments and establish universities. Engineers emerged as a profession.
Over the next two or three hundred years of history, scientific methodology was formed. Basic science, especially the foundation established by Newton and other scientists, made the development of science and technology in the West began to spread and use on a large scale.
The third stage is “University + Research Laboratory” driven by the government. This large-scale development model of science and technology began in the United States after the end of World War II in the last century. We recommend a science the endlesfrontier, written by Vannevar Bush. At that time, President Roosevelt asked him to write a plan about how the United States would stay ahead after World War II. The core concept he put forward is “the State supports research universities and national laboratories”. The key is national investment, but let scientists drive independently. This has opened up the promotion of large-scale mainstream science and technology, especially the development of engineering technology and talents.
It is emphasized here that the controversial point in 1944-1945 is whether the research content is decided by the scientists themselves or by the government, and the final choice is made by the scientists themselves. This system continues to this day, the effect is very good, but also needs to evolve.
Today, in addition to “national support for research universities and national laboratories”, large enterprises are making some compensations. Big enterprises such as Google and Alibaba have begun to do a lot of scientific research, but mainly applied research.
In addition, we would suggest that you should pay attention to one point: there is a wave of young long-term mission driven research-based start-ups, such as deepmind, openai, SpaceX, which are all started by small companies, but they have long-term and grand missions, and they go faster than big companies.
So, if we think about it carefully, who is really driving the AI frontier? The answer is that there are some big companies, there are also some universities and research institutions, but the fastest running companies are research-based start-ups such as deepmind and openai.
Deepmind may be known to all recently that alphafold has made a great breakthrough in protein folding, openai’s gpt3 has also brought a great impact on innovation, and SpaceX’s contribution to the development of aerospace are all the new emerging systems in the formation.
At the same time, digital technology and interdisciplinary are greatly accelerating the development of science and technology, such as information science, life science and material science. We live in a very exciting time, and if we look at every field of science, they are developing at a high speed.
(2) Science and technology and market
Here I’ll talk about the importance of the market. In a sense, the market is a big optimizer. If anything can be done in the market, it can go faster and have a wider impact. At the heart of the market is that it turns what everyone does for personal purposes into something useful to others.
There are often very good signals in the market to judge whether a certain technology has vitality and whether it can meet the needs of many people. However, there is a missing link in the market, which assumes that “nature is free”, which is what we need to do all over the world, including China, which has also put forward the goal of carbon neutrality by 2060. As a result, many people predict that one of the biggest industries in the next decade will be energy and environmental sustainability, such as carbon neutrality and marketization of ESG.
At the same time, the ability of digitization is driving the rapid development of the market. For example, data has been listed as the core production factor by the state. Many start-up companies are starting to capitalize data, which will further drive the development of digital economy. So the market is a very large system, constantly evolving and growing.
(3) Open source development is a better way of development
As for open source development, we all believe that open source development is more and more mainstream and superior development method for technology. In the past 30 or 40 years, the development of IT industry cannot do without open source software, and the future development of artificial intelligence can not do without open source data. Today, the development of chips in China and the world is inseparable from the open source chip system, so is the life science. Open source is not only a market, but also an organizational form of community and market. We think that open source is a development system worthy of attention.
(4) Early entrepreneurial ecology is the link between science and technology and market
Finally, let’s talk about the theme of our exchange today – early entrepreneurial ecology. If you want to look back at history from the future, which link is the most needed? The answer is the early entrepreneurial ecology. Because the early entrepreneurial ecology is the core link between science and technology and market economy.
Today’s VC model only has a history of more than 60 years, so it needs further development, so as to make the capital market better serve entrepreneurs. At the same time, we firmly believe that community is an important part.
5. The theme of the new era: “China + technology” is the biggest market opportunity
What is its main theme in the new pattern accelerated by history? We believe that there is no doubt that it is “China + technology”. China’s economic development in the past 40 years has made very proud achievements. It is essentially “China + open market”, and the next stage is “China + technology”. In history, this is a huge market opportunity and development opportunity.
First of all, the foundation of our innovation system is basically in place. We have enough talents, capital, technology and a market of sufficient scale, including the double cycle that we are talking about. But technology will become a major driving force, so we must build our own core technology and ecology on a large scale under the new global pattern. Some technologies and ecology take five or ten years, but there is a lot of demand.
Throughout history, the driving force of innovation speed is that the city should have enough intensive talents, entrepreneurial opportunities and market opportunities, as well as supply chain, flow, equipment and other supporting facilities. In China, metropolises such as Beijing, Shanghai, Shenzhen and Nanjing have the opportunity to provide an ultra-high density of innovation environment.
At the same time, China’s macro factors are the most abundant compared with all the global markets, because China is a country with the most structural factors. The first factor is consumption upgrading. Generally speaking, consumption can stimulate the economy. In addition, China’s urbanization still has several decades to go. At the same time, China’s population is still increasing. The fourth point is the diversified structure. When I worked in the United States, I didn’t know much about it. Only in China can I realize the opportunities it brings.
Why can China grow pinduoduo and meituan, but not the United States? At present, the global innovation system is basically based on the United States, but the United States is not an ideal target country for innovation, because the United States is industrialized, and agriculture has also been industrialized, which leads to very expensive labor and some innovation can not grow.
China is the only country with large-scale technology, Internet companies, developers and design capabilities other than the United States, not in Europe or elsewhere. At the same time, China has a number of economic forms such as the first line, second line and third line. If we combine China’s high-density innovation capability with the ladder economy, the results of our innovation and growth will be very rich and suitable for spillover to other countries in the world, because Southeast Asia and Latin America are closer to our national conditions, for example, their agriculture is not fully industrialized.
I would like to emphasize that in the international environment, the transfer of economic centers to Asia is an accelerated historical trend. There is no doubt that this is the opportunity of our times.
At the same time, China’s entrepreneurial team has strong regional and global spillover capacity, so we are in a very special and good environment. The key is how to seize specific entrepreneurial opportunities under this pattern?
Opportunities for entrepreneurship and innovation brought by the new pattern
1. The essence of entrepreneurship is to create products with technology, explore the market with products, and meet people’s needs
In any historical environment, the core of entrepreneurship is always unchanged, that is, excellent entrepreneurs create products with technology, explore the market with products, meet people’s needs, and create commercial value and social value.
Entrepreneurs need to judge the three elements of technology, product and market at the same time. Only when the technology is realizable, the demand is real, and the market can form profits, can the probability of entrepreneurial success be the highest.
First of all, the first circle is technology. Technology is relatively easy to judge. Each core technology follows its own development rules and trends. Except for a few accidental cases, such as a magical scientist suddenly discovering something breakthrough, in most cases, technology is basically developing steadily, which is a long-term process. Therefore, entrepreneurs can judge the status of a technology today and the possible development status in five years.
We should pay attention to the judgment of the inflection point of technology development, that is, the time point when a certain technology changes from early exploration to commercialization, which is difficult. For example, quantum computing and brain computer interface technology are still in their early stage, but they may be close to practical stage.
The second circle is demand, which may be the most difficult factor to judge. Although its basic structure is stable, including group needs and individual needs, we can also analyze the structure of human needs. But the most difficult part is to judge the current demand and the potential demand in the future.
For example, when the first apple mobile phone was born in 2007, the phone couldn’t get through. It’s not clear what needs it meets? And Tesla, what new needs is it meeting? We can’t describe it exactly.
The third circle is the market, which is relatively stable. We can refer to some structural factors, such as industrial chain, upstream and downstream, capital market, supply and demand, circulation end, etc. We also need to look at the market environment, including policy environment, international environment, domestic environment, etc. based on the judgment of such a large environment, we can systematically observe where the opportunity is.
Next, we will make a more in-depth analysis of technology, demand and market.
2. The frontier of digital, new energy and new technology accelerating development
In terms of technology, first of all, the mainstream technology driving factor of our times is digital technology. The development of digital technology has rules to follow. It is basically driven by the platform and extended by the depth and breadth of digitization. Basically, there will be a new platform every 12 years or so.
We have experienced the era of PC and PC Internet. Today we are in the era of mobile Internet and cloud. The next stage will be the era of artificial intelligence / edge computing and 5g, followed by Ar and VR. Brain computer interface, quantum computing, blockchain and other new frontiers.
The structure of digital platform is divided into foreground and background. The foreground is the ability of interaction between people and digital platform. The background is the scale of overall calculation, including the density of information, the total amount of information, and the area that information transmission can cover.
Artificial intelligence and quantum computing may be the two biggest historical breakthroughs we can see. The core of artificial intelligence is a new computing system. It can integrate the physical world with the digital world, and any industry will be changed. This is why so many countries in the world are devoting themselves to artificial intelligence. Quantum computing is a breakthrough in greater computing power.
Technology driven innovation is a combination of digital and other technological frontiers.
The first frontier of technological innovation is new energy. As we mentioned earlier, fossil energy has made the relationship between human and nature close to an unsustainable state, so the regeneration of energy is very core. So the new battery, including the next generation of hydrogen energy, will be a series of opportunities for innovation.
You don’t realize Tesla’s mission, but it’s very clear. It’s an energy company, and cars are just the first application. Today, you can feel that this is a technology driven equipment company with “energy company + software can be updated”. The market space and market value in the future are very large. There are also a number of Companies in China that have such opportunities. Of course, there are also new forms of energy. In the long run, we hope to achieve controllable nuclear fusion, because it is the most cost-effective, and science and technology are also moving in this direction. There is also a core to do is carbon capture and storage after carbon capture. Its industrialization deserves the attention of every entrepreneur, and there is a great opportunity in the global scope.
The new life sciences are also very exciting. Because over the past 100 years, the development of science and technology has made us know a lot about the physical world, but not enough about ourselves. This will change soon. Because of the rapid formation of digital and data fusion, computational driven synthetic biology, drug discovery and protein synthesis, and the continuous development of our digital observation system including perception, low temperature electron microscopy and mass spectrometry, a series of new therapeutic methods will be born, including gene therapy, immunotherapy, regenerative medicine, nanodrugs, proton chemotherapy and so on Quasi medical treatment. In the next 10-20 years, it will be a very promising track for innovation and commercialization.
Similar changes will occur in materials science. Materials science is basically to study the structure of atoms and molecules. What kind of tools and technologies can be used to build the structures we want, and what characteristics of these structures can be used for building or wearing, etc. These also begin to develop rapidly, and will enter a discipline driven by long-term data and calculation.
Another very large area is space, including interstellar exploration, aerospace industry, new generation communication, earth perception system, digital earth environment, etc. Our understanding of the earth and the environment is relatively limited, but these will soon change. Through technological and commercial development and entrepreneurship, we can make the whole earth computable in the next 5-20 years. Many applications can be pushed forward systematically.
3. The development trend of AI commercialization and innovation
Next, we will be specific about the biggest driving force of this era: the development of AI.
The development of any technology will always depend on the path in history. AI will mainly develop in the AI era of cloud and mobile ecology.
The progress of digitization is driven by platforms. At the beginning of any new platform, early start-up companies and large companies are basically engaged in the development of basic technologies. Today, many AI startups are developing basic technologies, including chips, sensors, etc.
At the same time, there will be early application development. When there are enough applications and sufficient foundation, there will be an outbreak. At this time, the platform will develop and the ecology will develop (business model and platform will form Ecology), which will drive more industrial development in the ecological environment.
(1) Mobile and cloud Era
I’m going to talk about the cloud and mobile age, because it’s a very active innovation frontier of digital technology, and many start-ups can do it here.
First of all, let’s talk about the core point of the cloud and mobile era: its foreground and background. What kind of ability does the combination of the two give us so that we can digitize things that can’t be digitized before.
In the era of mobile and cloud, the core of the front desk is finger touch, camera and positioning. As I said before, the first apple mobile phone came out in 2007. I was one of the first wave to buy it. At that time, only at & T could be used. The phone was basically unable to work. There were only six fixed applications. But we were still excited because it opened a new era – touch of fingers and screen. Fingers can really be used Getting started is a defining experience.
So Apple has ushered in an era where we can put computing in our pockets and it can follow us 24 hours a day. Apple is essentially a company that interacts with a finger and a screen, and with that it can be the world’s largest. Because in any digital era, its start is the interaction between people and the digital world. For example, Microsoft is essentially a mouse and keyboard company. Enterprise information management, information circulation and enterprise process can be done. Microsoft is also a great company.
From the perspective of development direction, it is a trend to increase the interaction ability. For example, Apple has put lidar in its pocket now. The interactive perception ability will certainly extend on mobile phones, because lidar can do things that cameras can’t do.
Take a look at the background of mobile and cloud era. The background is the data center. It’s mainly Google driven, and it’s been great in history, and its defining ability is to build a big warehouse into a computer. Today, we are all moving towards the original cloud, which is a more superior computing system. As I mentioned earlier, the foundation of digitalization in each country is cloud based services, so mobile is a very important era. Although AI is very popular, mobile is still an ecology with a lot of space for innovation.
(2) The era of artificial intelligence
The era of artificial intelligence that we see today started with Hinton’s breakthrough in deep learning in 2006. In essence, deep learning is a new computing system. It can shoot the information of the physical world and nature into an overlapping vector space. Through deep learning, we can quickly extract its important features, and use these features to solve the problems we want to solve, that is, express quickly, acquire knowledge quickly, and solve people’s needs quickly. This is a very important breakthrough.
In the era of artificial intelligence, its foreground is that sensors and actuators of all modes can be turned on. Today’s innovation focuses on many aspects of sensors, such as cameras, thermal imaging, millimeter wave radar, lidar, etc. Based on this, many forms of interaction have been opened. Dialogue interaction, visual interaction, tactile feedback interaction, and the interaction that all people can do will be fully opened in the era of artificial intelligence.
In retrospect, what Apple has done is to do a good job of finger interaction. So, imagine what we can do in the era of artificial intelligence. Nowadays, many devices, such as smart speakers, IOT devices, autonomous vehicles, robots, embedded industrial devices, are in the early stage. In the future, a large industry can be formed, which requires patient entrepreneurs to polish.
In the background of artificial intelligence, intelligent cloud, intelligent edge computing, 5g intelligent network, chip, etc. all these have to be done again. In fact, from the historical window of time, China’s self built chip ecology is just right. The architectures of X86 and arm need to be changed. Today’s so-called heterogeneous computing is the real mainstream computing in the future, so the whole chip will be redone. If you want to make chips, there are many opportunities. Of course, there are more opportunities for chips in China.
In addition, there are also system underlying software, development tools, and a new generation of data management system. These very important innovations will also develop. So there are a lot of opportunities for startups here.
In the future, artificial intelligence ecology needs a platform. We need a definable experience and a defining ability. This is still early. At present, we have not seen a corresponding platform, but it is only a matter of time. What are the possible defining experiences? We believe that a car that can be really driven on the road, a fully intelligent school, an automated hospital, a complete family intelligent robot, and a complete process of drug development in vitro in life science are all defined experiences or capabilities, because they can be extended, and industrial students can be formed through business models State. Therefore, the future of artificial intelligence era can produce a lot of ecology, and all of them are great industrial ecology.
In terms of background capability, it is still in the early stage of development. As mentioned above, deep learning and intelligent cloud will be mentioned. In the future, platforms with extensible capabilities, such as video native platform, will be born. Or it’s a platform for big models to increase computing power.
The scope of digitization, the scope of AI digitization is to connect the physical world with the digital world. Most environments can be transformed from digital twins to digital primitives. A car and a room can be digitized. Of course, digital twinning is also very important, can do analog analysis and so on, but digital primitiveness is an important opportunity in the future and in the long term. At the same time, artificial intelligence also has many applications in C terminal, such as live broadcast, video and so on.
(3) More advanced digitization after artificial intelligence
Let’s talk about the more cutting-edge digitization that we can see after artificial intelligence. The interaction methods include AR and VR, and the most important is the brain computer interface. Finally, the interaction between human and computing system may be brain machine, and the other side can directly know what I am thinking. Although brain computer interface technology is still some time away from commercialization, there are also many start-up companies, and more and more projects can be commercialized.
There is also quantum computing, the ability to define in quantum computing, which can be said to be quantum superiority and quantum hegemony. What Pan Jianwei’s team is doing is a special quantum computer, which is a physical task of Gaussian boson sampling, which can prove that it has great advantages over traditional computers. Quantum computer, blockchain development, quantum superiority, Ethereum, etc. These are the defining capabilities that can open a very large commercial track in the future.
4. AI and frontier digital entrepreneurship and innovation
Let’s talk about entrepreneurship in the AI era.
The first step is based on the current pioneering technology. For example, chips contain not only GPUs, FPGAs, ASIC, etc., but also a lot of CPUs, especially the M1 made by Apple recently, including the so-called chiplet existing in the chip industry. Today, Intel, qcomm and AMD can’t meet the needs of customers. More and more people are using chiplet and common substrateto do it. However, Apple has not been able to do M1 by itself. In the past, everyone said that CPU was enough to let Intel do it, but now CPU is also subversive innovation.
GPU, ASIC and FPGA will not be discussed in depth, especially the modular integration and silicon optical combination. Here we will emphasize the electron and photon. In the past, our digitization was basically electronic, and computing was all electronic. Now, the trend is obvious. Photons will become the leading role. Today, good sensors are basically based on light. There are more and more silicon and light. There are a lot of development opportunities at the bottom.
Let me talk about vertical industries. Because the track that the entrepreneurial team enters is the track of vertical industry, so AI entrepreneurs need to pay attention to the industry ecology.
Today, the penetration of AI technology is not enough to break out. It will take five or even ten years or more. Looking back on history, today’s digital main circuit broke out relying on Microsoft and Intel to send PCs to every family and let mobile phones enter everyone’s pocket in 30 or 40 years. It will take 5 years, 10 years and 20 years for AI to enter every assembly line and factory building, so this is not the time to break out, but it is still worth us to pry. However, we should be well prepared to solve a series of challenges such as long development cycle, high sales cost and impatient venture capital
In addition, it is easier to do AI entrepreneurship in the cloud and mobile track, because its iteration cycle is very fast, there are channels, and it is completely digital. AI is used to do SaaS, product innovation, content recommendation, video understanding, live broadcast, automation, etc., so this section basically summarizes the new areas of AI entrepreneurship mentioned above.
5. C end demand analysis under the new pattern
What I said above is all about technology. It is relatively easy to judge technology, but it is more difficult to judge requirements. However, there are some structured work to be done in requirement judgment.
First of all, let’s take a look at the C-terminal. In essence, you can divide people and people into 24 hours a day. Then you can have a table of what the elderly, middle-aged people and children do, what their needs are, and how we can cut in if we start a business.
There are also some structural rules to follow, such as Maslow’s hierarchy of needs theory. Here I would like to recommend the idea that users will never be satisfied. This is what Amazon founder Bezos wrote to investors. This also explains why companies like zoom can successfully do it today, especially in the environment where there are already many video conferencing software, because this is a demand that has not been met.
In the past, we also had this perception when investing in YC. If there are entrepreneurs constantly pouring into a track, it is very likely that this demand has not been met. Don’t stop because there are products in a certain track, because users will never be satisfied.
Of course, there are many opportunities for acceleration in the new pattern. Here I would like to talk about a few.
First, communication is a constant demand of human beings. The era of video first has arrived, especially asynchronous real-time. In the past, video communication can not go to the mainstream because it is synchronous, and the cost of human cooperation is too high. If the video can achieve asynchronous communication, this will be a great change.
The second is social networking. We will always be optimistic about the social networking of the new generation, because social networking is generational. Today’s mainstream social networking, young people will not use it, and the next generation will not. In addition, the content is also iterating, such as from text images to videos, so social networking will always have opportunities.
The third is entertainment, especially content recommendation, video, live broadcast and games, which we have been optimistic about for a long time, because in the long run, people’s increasing demand is to kill time, and the new generation of digital tools and processes can more effectively produce good entertainment content, so this is a very good business opportunity.
Fourth, consumption will drive a lot of so-called new consumption in China.
Finally, it includes education and health care. In China, the demand for these two points is far greater than the supply. The opportunity itself is to better meet the needs of education with technology or new methods. Therefore, we will suggest that entrepreneurs do similar analysis with a systematic method, and then see what opportunities are available for acceleration under the new pattern.
6. B end demand analysis under the new pattern
The demand analysis of B end is different. First of all, big B and small B are very different. In the United States, no enterprise can serve both big B and small B. Because the product culture is different, the demand is also different. But the core demand of any enterprise is the same, that is to reduce costs and improve output. It needs digitalization, automation and informatization, which can be used in production, sales, customer management, staff management, supply chain, capital management and so on.
The informatization and automation of big B enterprises is the intelligence of enterprises in the longer term. It is a very mainstream track, and the core problem is sales. There are more challenges in China, but the demand is obvious.
The strongest rigid demand of small B is always to obtain customers, which is relatively less for cash flow demand, financial management, marketing management and business process automation.
We are very optimistic about the automation and intellectualization of enterprises, because automation can be started after digitization to a certain extent, which is equivalent to building the first floor and building the second floor. This takes time, but at present, there are more and more opportunities for automation. The circulation among enterprises, including industrial Internet, supply chain, digitization and management, is a very good opportunity.
Let’s talk about agriculture. Agriculture is basically not digitized, because computers, mice and keyboards can’t digitize agriculture. It can only digitize office equipment, even mobile phones can’t. Agricultural digitization requires more sensors buried in the ground. Therefore, agriculture is very special. It is done together with digitalization, informatization and intellectualization, so agricultural start-up companies have the opportunity to create high value.
Finally, a big demand point in China is the digital infrastructure of enterprises, including the original services and facilities of the basic cloud, low code and no code, open source development, etc. This is a long-term track that we are very optimistic about in Qiji creative industry. Especially in the Chinese environment, there are a lot of demands and opportunities.
7. Changes in market environment under the new pattern
We have talked about the technical judgment and the demand judgment. Let’s talk about how to judge the market structure.
In the market structure, it is needless to say that China’s demand has been going up. In terms of supply, the service industry, manufacturing industry, especially the service industry, deserve our attention. In terms of circulation, the flow of logistics, people and information will naturally accelerate.
In terms of population, the two child policy and the aging population will increase China’s population, so China’s economic growth is also a driving factor that can not be ignored.
In terms of capital, there will be great uncertainty in the global capital environment in the short term, because the epidemic situation causes a lot of QE water release, and the capital market needs to be supported by the real economy when the water is discharged. However, in the long run, we need to pay attention to China’s capital market, so that start-up companies can retreat at home and have better opportunities for capital support. This trend is bound to happen.
Grasp the opportunities that belong to entrepreneurs
The first part analyzes the historical development process, as well as the macro entrepreneurial opportunities in China. Next, we will share how entrepreneurs grasp these opportunities. Our suggestion is to answer five questions first: what do you decide to do? Why is it worth it? Why now is a good time to enter? How to do it well? Why are we the team that can do it well?
1. How do entrepreneurs decide what to do (choose direction)
Decide what to do first. We should make a comprehensive judgment from the three aspects of demand, technology and market. Only the intersection of the three is a good direction for entrepreneurship.
We suggest that you establish a system to help you make such a choice. The first step is to observe and realize it through reading and communication. For example, if you are interested in live broadcast, you can read all articles related to live broadcast. People related to live broadcast should communicate as much as possible to obtain information related to live broadcast. The second step is to think. The core work of thinking is to sort out the information and make a judgment on the future. For example, what kind of new enterprises are needed in the industry after two years? What kind of business model should it be? After judging the future, we need to set up a proposition. Generally, the proposition is “I can make XX products and use XX” To establish a XX like start-up company. The third step is to test the proposition as soon as possible, do industry research, and interview people in the industry. In this way, you can test your hypothesis as soon as possible and iterate your ideas.
Most entrepreneurs often spend half a year or even two years doing these things. Good entrepreneurs tend to think deeply and look far away, have unique views on the future, and have done a lot of verification before starting.
I would like to add a point here: in the early stage of entrepreneurship, we can not think very clearly. If you don’t have a chance to start a business online, it’s very likely that you will miss out on any video sharing. Therefore, the key is to have the courage to take the first step.
How to take the first step? The core is to build an MVP (minimum viable product), which is the smallest product you can try.
With MVP, you need to run quickly and iterate quickly, which is the only way to improve the success probability of entrepreneurship. Because the visibility of early start-ups is very low. Just as you open the door every day, the visibility is only two meters. If you go in this direction, whether it is a steep slope or a cliff, a bridge or a level road, you can’t know. The only way to improve the success rate is to try quickly.
However, sometimes, when you try to reach a certain stage, you may find that the original destination is not suitable and needs to be changed. In this case, we would strongly recommend that if you have enough information to verify that the original direction is not going to work, there is no need to continue to run into the wall. It also takes courage to change direction.
Many companies have the experience of changing direction. We have seen many cases in YC, and some even changed direction several times in three months. So deciding what to do is a dynamic process of continuous iteration.
2. How do entrepreneurs make sure that the projects they do have high value
When we decide what direction to start a business, we still need to understand: why do we have great business value? We strongly suggest that every entrepreneur should devote himself to value analysis, which includes at least the following points:
(1) Analyze business categories.
Business category analysis is not market analysis. Market is determined by demand. Commercial category is a new track determined by supply, called category. You need to do a scale and growth rate analysis. One of the most important indicators of growth rate is CAGR. We will suggest that entrepreneurs choose a track with an annual compound growth rate of at least 30%, preferably 50%. On the other hand, if you find a track with an annual growth rate of less than 10%, no matter how big you do, the valuation will not be very high.
In addition to the high growth rate, the track volume also needs to be relatively large, such as cloud and e-commerce. They are all huge tracks, and the enterprises in sub circuits can do a lot, such as pinduoduo.
(2) Analytical ceiling (TAM)
We have a simple formula for estimating the ceiling:
P (value in use) x Q (scale of use)
Among them, the use scale (q) is “how many users / businesses will use your product”; while the use value (P) is “the user uses your product and does not use it”, “the value of your product compared with the substitute”. The comparison result should be how much the cost has been reduced or how much the output has increased. Calculate the product of P and Q to estimate the overall ceiling of the track.
(3) Analyze the possibility of obtaining value
Many entrepreneurs may not realize that creating value and gaining value are actually two things. In history, many start-ups have created value and customers are willing to use their products, but they can’t receive money and the company can’t survive. In order to avoid this problem, the core needs to analyze what the payment model is, what is the sales model, and whether there are enough channels to sell to customers. In history, many companies failed because their products could not be sold, or the cost of sales in the market was much higher than the commercial value obtained.
For example, in the United States, if startups serve small and medium-sized enterprises, there are only four channels in history, namely, telephone channels (telephone companies will sell telephone brochures), newspapers, Google and Facebook. The first two channels are no longer the main sales channels today.
Channel is very important, because if there is no channel, the product will not be sold. If the channel cost is too high, the start-up company will live very hard.
For example, there is a company in Australia called atlas, which is SaaS for software enterprises. They realized from the beginning that “to” Most of the bankruptcy of company B is due to the high cost of sales, so they decided early on that they had to sell their own products and never hire full-time sales. In the end, they did, and the company went public a few years ago.
Another concern is the value chain structure, especially gross profit. Because gross profit is sales minus cost, only by doing well in innovation can start-ups obtain higher gross profit, and with higher gross profit, they will have more budget to do marketing and marketing.
In addition to the above analysis of business category, ceiling and the possibility of obtaining value, entrepreneurs also need to think clearly about the potential business value of the company. We make a metaphor to compare the value of a company at different stages with the concepts of “in the bowl”, “in the pot” and “in the field”
In the bowl: it is to use today’s products to sell according to the channels that can be reached in today’s market. Assuming 10% of the market share, we can calculate how much revenue we can get and how much revenue we can get in the next five years;
In the pot: products that can be extended from today’s products, such as Huawei’s mobile phones and computers; another extension is to use the same basic products to occupy adjacent markets, such as selling them from India to Pakistan. The income generated by these methods is the value of the “pot”;
Tani’s: it’s often based on your long-term core abilities, spilling over to new tracks. Google is such a company. Its core competence is a large-scale computing system driven by machine learning. Its first business is search, and the second business seems to be autonomous driving. Autopilot itself is a large-scale computing system driven by machine learning.
In particular, we need to make clear the information about the development of the digital enterprise, especially how to plan the high value industry. Because most investment institutions will ask: can you be a unicorn in five years? In general, unicorn’s simple path is to achieve annual revenue of 100 million U.S. dollars, so when you have a clear plan for the company’s development path, you can also determine the business value of this matter.
3. How do entrepreneurs judge the entry time
In the United States, there is an entrepreneur named Bill Gross. He has done a lot of data analysis to study the elements of entrepreneurial success. The conclusion is that the first factor of entrepreneurial success is timing, that is, when to enter the market. For this, we can look at the chart below, which describes the curve that any technology driven startup will experience.
In the early stage, they are innovators. They are tasters. No matter how bad the product is, he can use it. Therefore, there are several users in the early stage, so the signal value is not necessarily important.
The second part is called visionary people. They are often enterprise executives who have their own ideas for the future. They hope to find new technological capabilities to help them realize their vision for the future. They are not sensitive to the price and have a high risk-taking ability. These people are more important
The third wave is the early adopters. These people are more open to technology and are always willing to use new technology products. However, they are generally pragmatic and will carry the performance in the enterprise. The core judgment of whether they adopt new technology products is: whether competitors use them or not, colleagues use them. So this wave of people went together. They are the key to the success of technology products.
There is a gap between visionary people and early adopters. This is what we often call the “gap”. Most of the enterprise innovation in history died in the gap, so the timing is very important.
Another reference method for judging timing is to look at the Gartner technology maturity curve. After the birth of each new generation of technology, the whole society will pay special attention to it, and the media will also report a lot. But once we start to use it, we will find that the experience is not qualified and the price is still very expensive. As a result, society will enter a period of decline, just like the field of artificial intelligence today. However, when singing is bad, it is often the best time to enter.
Jobs once said that it is easier to judge the direction, but it is often difficult to judge the timing. Take apple as an example, apple is never the first to make mobile phone, watch, tablet computer, but Apple chose to enter the market after the bubble burst and the market has been educated.
In addition, we find that more and more entrepreneurs, such as those engaged in brain computer interface and quantum computing, even though they know that it is too early to enter the market, they will choose to enter early in order to avoid entering the Red Sea in the future. What needs to be reminded is that such entrepreneurs need to build their own long-term hematopoietic capacity, so that the company can live as long as possible.
4. How do entrepreneurs build their ability and build barriers
Here’s how to build barriers. Entrepreneurs are often asked by investors: what kind of ability can you form barriers? What will you do if big factories come in to compete? Every entrepreneur needs to think about this issue. We summarize several common barriers:
Network effect: simply put, the more users, the better the product. Social networking is a typical example. It can often form a winner take all market, but in the long run, it is the dominant one.
Strong scale effect: most enterprises have scale effect, but some have strong scale effect. For example, enterprises with a lot of data accumulation can form great barriers.
Special capabilities, especially technology driven entrepreneurs, can form barriers through patents.
Market position advantage: in particular, 2b enterprises are difficult to sell, but it is also difficult to come out after successful sales. Because of the high switching cost of customers, you can’t get out as long as you go in, which can become a barrier. For example, once a customer uses your SaaS, he needs to change the workflow and many other things, so he won’t buy it easily, but he won’t change it easily.
Sometimes barriers are special resources and special relationships, and sometimes they are first mover advantages. Even if the competitors know how to do it, it will take at least two years to reach the level they are today. The long-term barrier is brand, but it takes a long time for start-ups to form.
5. How can entrepreneurs build a competent team
After describing clearly what to do, why it is valuable, why it is a good time to enter the market and how to build barriers, entrepreneurs are often asked by investors: why can your team do this well. The early start-up team must be able to answer this question.
The figure below is a thinking model. The core of the circle on the left is the founder team. We think that whether an enterprise can go far is essentially determined by the founding team. The founder team has several competencies that are particularly important:
The first is the ability to judge the future. We must have a long view of the future and have unique opinions.
The second is the ability to communicate. Early communication is particularly important. Thinking clearly and clearly is a very core early ability, because early access to resources, such as financing, hiring, strategic cooperation, etc., depends on communication skills.
The third is action oriented and problem-solving ability. Start up companies are solving new problems every day. Quick solution is the core. No problem should last more than a week. Big problems can always be broken down into sub problems.
The fourth problem is that there is no internal driving force for wealth to continue in the long run, or there is no internal driving force for wealth to go on.
With the core capability, the founder team can continuously absorb new talents, meet customers and users, and reach the market in the future. After having the core capability, we can also establish the ability of technology research and development, product development, and the ability to meet the needs of users with products in rapid iteration. For hardware products, including supply chain management and channel capabilities, we also need corresponding operational capabilities for online products.
In addition, we also need to have the ability to reach users, including growth, sales, channels, and all capabilities. Finally, we need to reach users. Moreover, we have to charge fees to make profits and get high gross profits. Only in this way can we get through.
Therefore, why the founding team can do a good job in this matter is to start from the founder’s own ability, judge the future, constantly communicate, introduce new talents, build these abilities, and constantly touch the value in the bowl, in the pot and in the field.
Why does the valuation of startups go up? The reason why round a has doubled its turn to round B is that these capabilities have been improved and the risks have been reduced. When the company enters the secondary market after listing, the risk will be lower, and analysts can budget the next quarter’s revenue.
The two most important things to start an early business are to find a product market match and live longer
Now I’d like to introduce the Qiji innovation industry. Qiji core hopes to communicate with each entrepreneurial team through the community, so as to help entrepreneurs seize the opportunity. We started from YC China. We are standing on the shoulders of giants, and we have thoroughly localized the very unique early start-up company accelerated mode that YC has been fully verified in the United States and the world in the past 15 years.
Our mission is to drive innovation at the source to the greatest extent. Our work at this stage is mainly to accelerate early start-ups, especially technology driven start-ups. Our core approach is to help entrepreneurs solve problems together like co founders. We focus on two points to accelerate product market matching and live longer. Our values are founder first, and the most important thing is to serve the founders well. Our vision is to build a prosperous entrepreneur community.
Our entrepreneurial camp is to solve problems with entrepreneurs. Our team is quite special. Our team has done product, technology development and sales in the early stage. We help everyone to do it together. At the same time, we also invite successful entrepreneurs to share with you behind closed doors, as well as training on the necessary contents of early entrepreneurship, such as enterprise sales, financing, growth, etc.
One of the biggest things we do is roadshow day to help the entrepreneurial team finance. After each roadshow is completed, the task of each entrepreneurial team is to take 200 investor business cards, talk about 50 to 60 companies, and finally select 5 to 6. On the roadshow day, each entrepreneurial team talks for three minutes, but it’s not easy to make it clear in three minutes. We solve problems through high-intensity cooperation in the entrepreneurial camp to help each entrepreneurial team make it clear in three minutes. In the future, we will accompany each entrepreneurial team for a long time through community and service, which is the value we bring to the start-up company.
We do two core things in the entrepreneurial camp:
1. How can entrepreneurs find product market match faster
The first thing is to help each entrepreneurial team find the product market matching (PMF) faster. In the early stage of entrepreneurship, this is the most uncertain, the highest risk, but the highest value promotion link.
It is a structural threshold to find product market matching, and it is more and more difficult to pass. Because starting a business is a good idea, invent a technology, use this technology to develop products, and after development, enter the market. However, with the popularization of education and the development of technology, there are more and more good ideas, more and more good inventions, and the development of technology and products is also faster and faster. However, everyone has only 24 hours a day, and you will be stuck here (the center of the picture above, PMF). If you want to find a match between the product market and the market, the market you want to enter is an increasingly crowded track.
The only thing you can do is move everything forward. If you have a good idea, don’t wait for the product to come out to verify it. Do industry research and find people to communicate. If there is a new technology, don’t rush to develop a product first. Go to see what this technology can do, first find verification and find information.
The core is to use the lowest time and opportunity cost in advance to verify whether this thing is worth doing. What can really improve the success probability is iteration and reduce the cost of trial and error.
Here are two important points to tell you:
First, what is a real PMF? There is an investor in the United States named Marc Andreessen, who was a major inventor of the PC Internet. He said that the real PMF has several characteristics: first, it has a good market and can make money; second, the supply of products is in short supply; third, competitors start to rush in.
So the core verification is: first, whether you can make money, find data and case verification as much as possible, and second, start to meet the needs of customers. For example, the original user took an hour, but now it only takes five minutes. What was not met before or was not satisfied before is now satisfied. Third, we must see the growth. If we can’t see the growth, it may be that your product is not well done, or the market is not right, or the demand is fake.
Therefore, real product market matching must pay attention to these, and then be action oriented, and constantly solve problems. This is what we and the entrepreneurial team do in the entrepreneurial process.
2. How can entrepreneurs live better
The second thing we do in the startup camp is to help entrepreneurs live longer.
This is the case for any enterprise. In the early stage, it basically depends on financing, and in the early stage, it depends on people. The core is to understand the financing outline, that is, the five points (what / why / how / why US / why now) mentioned just now, plus the progress, you should make clear and communicate with investors clearly, for example, why do you want this money? How to use the money? With this money, how can the company move to the next stage. In addition to financing hematopoiesis, sometimes we have to build hematopoietic capacity, or other capabilities.
We suggest that financial management and control must be strict, maintain a long enough survival time, be fully prepared to deal with uncertainty.
Finally, let’s talk about our mission of creating a world of extraordinary achievements. Our core vision is not only to do a good job in each phase of the entrepreneurial camp, but also to do a good job in the entrepreneurial community, because the entrepreneurial camp is only three months old. We hope to bring great help to start-up companies, but it is difficult to start a business. It often takes a long-term multi-dimensional company. We think that the best way is to help each entrepreneurial team through community and open methods.
We often talk about our own interests and our own people. An entrepreneurial project must benefit others and be of value to customers. At the same time, entrepreneurship must reach its own goals. This is the dream that I want to pursue. A good entrepreneurial project must be upright, create real long-term value, and be extraordinary and different from others. This tagline represents our spirit. We hope more entrepreneurs can join us to build a prosperous community.
From: Tencent technology read more: 36kr: 2014.06.30-2014.07.06 briefing on investment and financing next stop Europe: insight and guide for Chinese enterprises to Europe (download attached) CSCI: investment opportunities of digital revolution (download attached) data summary of global Unicorn 500 in 2020 Q3 investment and financing report of China’s new economy in 2020 (download attached) mob Research Institute: 2020 Chinese lottery Guide (attached download) lufax listing prospectus and brief data car rental companies meet IPO prospectus and brief data 2020 global risk report: banking self subversion just in time (attached download) mid-term review of China mainland and Hong Kong 2020: IPO and other capital market development Trend (download) BAIC Industrial Investment & Qingke Research Center: CVC Investment Research Report in the field of Pan automobile and large travel in 2019 (attached and downloaded) Wudaokou & Fortune 50 forum of Tsinghua University: Research Report on China’s asset management business supervision (attached download) IPO prospectus and simple data protection innovation and promotion of imitation: policy suggestions for establishing drug patent protection system in China
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