Yu Minhong: Go Start Your Own Company, But Fight No Battle Unprepared

摘要: Recently, in the opening ceremony of New Oriental’s Innovation Incubator in Harbin, Mr. Yu delivered a speech and shared his recent thoughts over entrepreneurship and innovation.

(Chinese Version)

Editor’s Note:

In the thriving Chinese innovation circle, Mr, Yu Minhong, founder and president of Chinese education giant New Oriental, is regarded as spirit leaders for many Chinese entrepreneurs. Recently, in the opening ceremony of New Oriental’s Innovation Incubator in Harbin, Mr. Yu delivered a speech and shared his recent thoughts over entrepreneurship and innovation.

Fight no battle unprepared

At first, Mr. Yu pointed out in the speech that China had entered the era of “mass entrepreneurship and innovation”, and that there were two major features of this new era: for one thing, Chinese entrepreneurs are becoming younger and younger; for another, starting one’s own company means not simply to conduct business, but also to link business, business model, people and the market together. 

There are lots of ways to do so: you can not only start a company entirely by your self, or with a couple of partners, but also join startup companies. What’s peculiar about starting or joining startups is that you get the opportunity to decide for yourself and make full use of your talents.

However, he doesn’t want to see young people withdraw all the savings from the bank and start their own company on impulse, because he believed that young people should accumulate enough experience before starting their own company.

Take me myself for an example, I taught Peking University students and gave cram courses for students for a couple of years before I established New Oriental.

Young people should not start your own company on impetus. Instead, they should only get into a fight when they are already well-prepared for it. Of course, you’ll have to take risks when starting your own company, but it doesn’t mean that you need to put all your eggs in one basket.

So Mr. Yu gave the following two pieces of advice to young entrepreneurs:

First of all, you should try to start your own company; secondly, you should get well-prepared before doing so.

In addition, as both an entrepreneurs and an investor, he shared his thoughts on some of the  most important qualities for an entrepreneur:

Three important qualities for entrepreneurs

First of all, data is important, of course, but the ability to convert registered users into paying users and develop sustainably is even more important for him.

Secondly, he attached high importance to entrepreneurs themselves. For him, founders of startups have to be capable and promising enough to manage their projects.

There are lots of examples where a startup failed even if it is innovative enough and its valuation already reached over 1 billion RMB or USD.

How come? In this type of companies, there’s no leader who can lead the company into the next stage. Founders who are specialized in a certain field and can’t property integrate resources, including human resources, government relationships and business model, and really manage a startup can’t lead the startup into the next stage.

Thirdly, he also attached high importance to the startup’s founding team. For him, 80% of startup teams with no clear division of work broke up at last. In addition, he found the following type of startup team work very efficiently:

A guy came up with an idea and start a company by oneself. But when he wanted to expand, he would have to find different kinds of talents to facilitate the projects. In this type of startups, there’s a core leader, and there’s clear division of work, so it’s more likely for these startups to develop sustainably and last longer.

"Startups that meet these standards, at least from my perspective, tend to be able to develop steadily and be more likely to expand and finally succeed," he said at last.

The following is the full transcript of his speech:

Hi, fellow entrepreneurs in Heilongjiang,

It has been two years since “mass entrepreneurship and innovation” was encouraged by the government, yet Chinese entrepreneurs had been establishing their own startups as early as a couple decades ago. As for me, I started my own company in the middle of this wave, because entrepreneurs such as Liu Chuanzhi started their companies a decade ago.

The economic boom and rapid development of China is closely related to entrepreneurship and innovation. Two years ago, Premier Li Keqiang first came up with the phrase “mass entrepreneurship and innovation” and demonstrated the Chinese government’s support towards innovation, which ushered in a new era for Chinese entrepreneurs.

There are two major features of this new era: For one thing, Chinese entrepreneurs are becoming younger and younger. In my generation, entrepreneurs are mainly over thirty years old. However, after lots of communication with entrepreneurs in the past two years, I came to realize that today’s entrepreneurs are generally a lot younger then my generation, most of them are just around twenty-five years old.

For another, most entrepreneurs are focused on advanced technology, especially the internet and mobile internet. Today, starting one’s own company means not simply to conduct business, but also to link business, business model, people and the market together.

At this point, I want to share with you my understanding of starting your own company from the following two aspects:

On the one hand, I think everybody should try to start his or her startup throughout the life. However, there are lots of ways to do so: you can not only start a company entirely by your self, or with a couple of partners, but also join startup companies. What’s peculiar about starting or joining startups is that you get the opportunity to decide for yourself and make full use of your talents.

On the other hand, I think you will have to be well-prepared before starting your own company or joining one. I don’t want to see young people withdraw all the savings from the bank and start their own company on impulse, because you will have to accumulate enough experience before starting your own company. Take me myself for an example, I taught Peking University students and gave cram courses for students for a couple of years before I established New Oriental.

When I established New Oriental in 1993, I’ve already accumulated three to four years of experience in training and teaching field, so it’s easier for me to succeed when I start my own company. Young people should not start your own company on impetus. Instead, they should only get into a fight when they are already well-prepared for it. Of course, you’ll have to take risks when starting your own company, but it doesn’t mean that you need to put all your eggs in one basket.

To wrap up, I have two piece of advice for you: first of all, you should try to start your own company; secondly, you should get well-prepared before doing so.

Moreover, you may wonder: what’s the most important three qualities for entrepreneurs from the aspect of investors? Well, I’ll share with you my understandings based on my own startup experience:

Above all, I am an entrepreneur. Two decades after I established New Oriental, there are already around a dozen subsidiaries under the company, and each subsidiary is like a startup project for us. Although these subsidiaries are supported by the mother company, they also have to develop just like any other startup.

Moreover, I am an investor. After new Oriental succeeded, we have to invest in lots of related companies along the industry chain. Up till now, we’ve already invested around thirty companies.

In addition, I am an independent investor. As a matter of fact, when Kaifu Lee established Innovation Works a decade ago, I was both his general partner (GP) and limited partner (LP). That is to say, I’ve already become part of the Chinese entrepreneurship and investment circle long time ago. My interaction with entreprenuers became even more frequent after I and my friend Sheng Xitai established Angel Plus.

As an entrepreneur, I have already accumulated enough experience to tell if a project is going to work not not, or how to make it work. However, I am well aware that all of my past experiences might be pure stereotypes and might not work in this rapidly changing internet industry.

As an investor, I have to make sure that every time I decide to invest in a startup, it has to be rewarding. However, different from other investors, I know what it means to start one’s own company, so I have some extra evaluation principles to tell if a startup is promising or not.

For example, I am well aware of the importance of figures such as daily active users, monthly active users and registered users. However, I know deep in my heart that all these figures can be made up. Thus, when evaluating a startup, I focus not only on the startup itself, but also on the business model behind it. If you tell me you’ve already had 10 million users, then I will ask you how will you turn them into paying users. If a startup can only convert a couple hundred out of 10 million registered users into paying users, then I will have to say that there’s something wrong with its business model.

So I might still hold some very conventional idea towards startups:

First of all, data is important, of course, but the ability to convert registered users into paying users and develop sustainably is even more important for me. For sure, people would rush to invest in companies when a business is booming. A year ago, when O2O business was on the rise, investors all rushed to invest in startup projects whose performance looked great based on the figures. However, most of these projects ran into problems later on, while start projects that attach high importance to business model not only survived, but also made it to A-round, B-round financing and so forth.

Secondly, I attach high importance to entrepreneurs themselves. As founders of startups, you have to be capable and promising enough to manage your projects, because there are lots of examples where a startup failed even if it is innovative enough and its valuation already reached over 1 billion RMB or USD.

How come? In this type of company, there’s no leader who can lead the company into the next stage. Founders who are specialized in a certain field and can’t property integrate resources, including human resources, government relationships and business model, and really manage a startup can’t lead the startup into the next stage.

This type of startups might work very well in the short term, yet in the long run, if the founder fails to manage the startup well in face of problems, they will still end up in failure. That is to say, although founder’s capability and business model are important, a startup is still not going to work without a great leader.

Thirdly, I also attach high importance to the startup’s founding team. Sometimes, a group of people might get together at a dinner and decided to start a company on impetus. There isn’t a clear division of work, or a proper cooperation and development mechanism. This kind of teams often broke up at last and ended up in failure. During the past two years, I’ve encountered lots of startups with no clear division or work, and 80% of these teams broke up at last because there isn’t a core leader, or clear division of work in the team.

At the same time, I find a type of startup team very likely to work well: a guy came up with an idea and start a company by oneself. But when he wanted to expand, he would have to find different kinds of talents to facilitate the projects. In this type of startups, there’s a core leader, and there’s clear division of work, so it’s more likely for these startups to develop sustainably and last longer.

To wrap up, a promising startup for me has to meet the following three standards: 1) Based on a proper business model (from my perspective); 2) Led by a core leader; 3) managed by a team with clear division of work. Startups that meet these standards, at least from my perspective, tend to be able to develop steadily and be more likely to expand and finally succeed.

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[The article is published and edited with authorization from the author @TMTpost-Chinese, please note source and hyperlink when reproduce.]

Translated by Levin Feng (Senior Translator at PAGE TO PAGE), working for TMTpost.

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评论(1

  • 钛AFqRTO 钛AFqRTO 2016-08-13 11:57 via android

    然而看不懂

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Oh! no

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