English articles

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This book excerpt uses Peter Thiel and PayPal to explain escape velocity: start fast enough and you can leave rivals far behind. Either enter an emerging field without competitors or move so decisively that they cannot catch up. The goal is not merely to defeat competitors but to escape competition. Early PayPal paid users directly: refer a friend and both received US$10. That demonstrated easy transfers while acquiring customers more cheaply and directly than advertising. Before it had a complete business model, Thiel chose scale first and monetization later, burning more than US$10 million a month. Starting with 24 users, PayPal grew 7% daily and passed a million within three months through compounding. Reid Hoffman explains why large companies are often less dangerous rivals: an eBay error could anger millions and attract regulators, making it hesitant. Its payment system took over a year to launch. In 2002, eBay acquired PayPal for US$1.5 billion. Robin's caution: a larger ambition can justify delaying profit, but not evading the question forever. Explain how the company will eventually earn money so investors will accept the risk, wait, and ultimately earn substantial returns.

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Dedao Headlines remembers mathematician and investor James Simons, who died on May 10, 2024, aged 86. Robin notes that quantitative investing differs greatly from venture capital, yet its lessons can apply to entrepreneurship. Simons graduated in mathematics from MIT at twenty, earned a Berkeley doctorate at twenty-three, and received the highest honor in mathematical geometry at thirty-seven. He saw himself first as a mathematician: markets were a giant mathematical problem, with money the reward for solving it. According to the account, Renaissance Technologies' Medallion Fund returned an annualized 66% over thirty years after its 1988 launch, or 39% after fees, outperforming Buffett and Soros. Employees signed lifetime confidentiality agreements, and recruits were mathematicians, physicists, and computer scientists rather than conventional Wall Street financiers. Its explanation of high-frequency quantitative trading uses soccer: the final result is uncertain, but intermediate winning probabilities are comparatively determinate. It claims shorter forecast horizons improve accuracy and cites one trade per one sixty-four-millionth of a second, possible only through computers and algorithms. The lesson is to upgrade an intuitive system into an algorithmic one, breaking enormous uncertainty into many intermediate certainties. Robin applies this to founders: accumulate small wins by dividing an ambitious goal into milestones and steadily approaching them.

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Amazon's 2006 shareholder letter discusses incubating new businesses: expected returns on capital, potential scale, and differentiation that matters to customers. It uses the Joyo acquisition, FBA, and AWS as examples and explains why large companies need patience to nurture small seeds. The original English letter describes a fulfillment network of 12 million square feet, FBA storage at US$0.45 per cubic foot per month, and a community of more than 240,000 developers. The collected Chinese translation differs in units and headcount; see the source and verification note. The letter says even fast-growing new businesses often need three to seven years to become meaningful to the company as a whole. These are the experiences and strategies of that period, not current pricing or policy.

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Fan Deng responds to a nanomaterials startup team: inventors face considerable entrepreneurial risk because they can love their invention more than the social problem the invention should solve. When difficulties arise, they seek to spread the invention everywhere rather than find the best solution, refusing to give up even after reaching a dead end. His example is an automatic car-cover device developed over ten years, whose creator sought investment at a valuation of 100 million. Fan declined for four reasons: assumed demand was unsupported; covering cars was infrequent; a rooftop device could be stolen; and carrying it in the trunk added weight and fuel consumption, undermining value. Real inventors begin with problems. Edison did not invent the light bulb, but his team found a suitable filament. Jobs did not invent the smartphone, but “redefined” it. Where Nokia insisted that computer functions required a computer keyboard, Jobs reportedly demanded one-button simplicity. The excerpt attributes to Bezos, via Allen Zhang, the question of whether innovation serves people or merely displays cleverness: will you show intelligence at any cost, or choose kindness? Inventions designed to demonstrate a founder's ingenuity rather than address a real problem will, in most cases, fail.

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Robin opens by observing that it is again time for presidential candidates’ advisers to study seriously and develop policy proposals. He believes: “Encourage innovation, increase investment, and save Taiwan.” The following excerpts cover six chapters of 創新經濟學. First, highly skilled immigrants make outstanding contributions to innovation. Nearly a quarter of U.S. patents have at least one inventor with foreign citizenship. H-1B visas respond to market demand but weaken workers’ bargaining power and ability to become entrepreneurs, while Canada and Australia actively recruit through points-based systems. Second, the division of innovative labor is changing: universities conduct a growing share of research, while research within corporate R&D has fallen from over 35% in the late 1950s to below 20%. Commercialization relies on university technology licensing under the Bayh–Dole Act and technology-oriented startups, but the corporate-laboratory era has lost ground. Third, pharmaceutical innovation involves both push policies, such as NIH-funded research, and pull policies, such as patents, with persistent concerns about patent evergreening. Fourth, incumbents innovate most effectively when they combine existing advantages with competitive pressure; an inverted-U relationship does not justify permissive horizontal-merger policy. Fifth, fewer than 5% of local economic-policy programs have credible evaluations, and fewer than 0.5% have demonstrated positive policy effects, highlighting the need for prospective randomized experiments. Sixth, innovation opportunities are highly unequal across regions. Policy might encourage innovations that expand opportunity in disadvantaged places rather than strengthen those places’ own innovative capacity. All chapter figures are drawn from the research cited in the book.

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Robin’s opening question is what kind of education we need in the AI era. Having raised related educational issues over the preceding few days, he turns to Wan Weigang’s perspective. Wan argues that traditional education takes a top-down approach: schools, teachers, and parents hold the initiative. Once likened to a gardener cultivating plants, it now has a more precise analogy—training AI. Defining the learning scope in advance, feeding in materials labeled right or wrong, and assessing the results is supervised learning. Yet students taught this way fall short even of GPT, which uses self-supervised learning, discovers patterns for itself, and is designed to know things its teachers do not. Traditional education and AI share three shortcomings that innovators do not: rewards depend on administrators’ approval, whereas innovators gain recognition from society and consumers, without fixed standards, and may even define what society considers good; mistakes and shoring up weaknesses receive great attention, whereas innovators need exceptional strengths; and new things outside the defined scope attract little interest, whereas innovators pursue novelty because it may confer a competitive advantage. The biggest problem with AI-style education is students’ lack of autonomy. A machine’s great advantage is its inherent passivity; a defining human difference is the desire to take the initiative. The conclusion: in an age with AI, we must think carefully about nurturing a person rather than training one. Creative people can be nurtured but cannot be controlled. To hope for unexpected good, we must tolerate unexpected “bad”—things we did not want them to do. AI can be controlled; with talented people, we must learn to tolerate their independence.

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These book excerpts explain the central idea behind a “small and beautiful” business: profitability first. Rather than pursuing expansion single-mindedly, do everything possible to become profitable. The author was Pinterest’s second employee. In 2011, he left before cashing out his equity to launch Gumroad, a platform for creators to sell their work online. It attracted more than 50,000 visitors on its first day, then raised over US$8 million from prominent Silicon Valley investors and recruited dozens of employees from internet giants in pursuit of a unicorn dream. Once the funding ran out, growth stalled. Nine months of fundraising attempts failed, forcing him to lay off most employees. After moving to a quiet small city, friends helped him recognize that Gumroad had actually remained profitable and was appropriately sized for its target market. Thousands of creators used it to sell courses, ebooks, and software to supplement their incomes. It might have been a poor investment for Silicon Valley investors, but it was a valuable platform for its customers. He realized that many businesses raise substantial venture funding early because they have not found a sustainable profit model, falling into a cycle of pursuing size for its own sake. Entrepreneurship is like sailing: relying entirely on fundraising is like jumping into the sea, treading water, and waiting for a lifeboat. The sustainable approach is to build your own boat—profitability. Robin urges Taiwanese startups to establish that their business models can generate profits before expanding. As in the Buffett view he had shared, making money is the only way to develop sustainably.

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Building on the three requirements for a good fundraising story—engaging, credible, and concise—this post explains its structure. The most suitable framework is the familiar confrontation between a hero and a villain, followed by a happy ending. That may sound overly simple, but its simplicity is precisely its fundamental strength. In an entrepreneurial story, the villain is not a particular person but a real problem: hunger, ignorance, disease, waste, inefficiency, or a poor customer experience. A business idea without a clearly defined villain cannot raise funding, because it does not solve a real problem. Google’s villain is the lack of ways to access information, its hero is its search algorithm, and its happy ending is the business empire built through tens of billions of searches. Uber’s villain is being unable to find a ride; its happy ending is a ride for everyone and income from otherwise idle vehicles. Great business stories, however, are never pure fiction. The next step is to substantiate the plot with examples and factual research. First, bring the villain vividly to life: an office worker leaving at 9 p.m., exhausted by clients and a boss, with no dinner arranged. Then introduce the hero—a food-delivery website—and explain just as thoroughly why it can win, whether through breakthrough technology or service innovation. A happy ending requires a reasonable market forecast: the market share to be gained, how long that will take, how much it will cost, how much will be earned, and the basis for every projection.

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Zhang Xiaoyu’s case course tells the story of Orange Hotel. It may not be a success story about working with capital, but it is a very real one. After selling the company, founder Wu Hai wrote that he felt like a “surrogate mother”: he had devoted his life and youth to nurturing a child, only to realize, when the final strategic investor Huazhu took Orange over from its investors, that capital might be the child’s real mother. The account has three stages. First, capital enabled rapid expansion. Orange had only 25 hotels when Carlyle came in during 2012, but more than 200 before Huazhu acquired it. Expansion exposed the disadvantages of unfamiliar local markets, however, and the company moved from insisting on directly operated hotels to franchising and reliance on partners with local resources. Wu’s original commitments gradually changed. Second came the investors’ exit. In late 2016, Carlyle sought to exit, not simply to make a quick profit: its fund had only three years left, while preparing for a domestic listing would take a year and regulatory approval was highly uncertain. Wu knew Carlyle would not force a sale if he firmly opposed it, but said he should respect investors’ wishes and fulfill his role as a surrogate mother. In February 2017, Huazhu acquired Orange Hotel outright for RMB3.65 billion. Third is Wu’s character. When valuation negotiations with Carlyle stalled, he pledged all his options under a performance-based agreement: if the business performed poorly, all the options would go to Carlyle. He wanted to protect the share value held by early investors and his team. Each of his three ventures ended in a sale. He may not have been the greatest entrepreneur, but his loyalty and authenticity offer something to learn from.

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Robin’s commentary begins: when a problem arises, solve it. KKT’s auction was suspended because there were insufficient qualifying lots, and the offering would switch to bookbuilding and allocation. The central issue was how to assign a reasonable value to companies such as KKT. Robin proposed revisiting the introduction of a cornerstone-investor framework: an IPO allocation mechanism for potentially promising startups whose valuation models are unfamiliar to the market. The issue had already been discussed in 2018. Then Financial Supervisory Commission Chair Ku Li-hsiung said the Taiwan Stock Exchange had been asked to collect international examples and study bringing in cornerstone investors before an IPO, within specified ownership proportions and price ranges, to strengthen a company’s investment value and stabilize its share price after listing. Discussions later stopped after GGR listed in the United States; supporting regulations and allocation fairness still needed work. The 2018 report discussed several related issues. Removing the profitability requirement for converting privately placed securities into publicly offered securities after three years could revive problems involving cheap allocations to selected investors and arbitrage opportunities. Unequal voting rights could undermine governance in a market where retail investors accounted for more than 60%. The exchange president had visited Gogoro to understand its needs: its large capital base made an auction unsuitable, and an IPO would require cornerstone investors to subscribe for a large amount. The securities dealers association suggested exempting IPOs of at least NT$2 billion from priority use of auctions, allowing cornerstone investors to subscribe for 40–60%, excluding company insiders and related parties, and imposing a six-month to one-year lock-up.

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Before discussing equity incentives, one distinction must be clear: incentives are primarily about encouraging future value creation, not recognizing past contributions. Recognition of past contributions is a reward; the two must not be confused. Many companies allocate shares by employees’ current tenure and positions, only to achieve the opposite of what they intended. Everyone feels they are the most capable person in the department, have contributed the most, or have served the longest. The allocation leaves everyone dissatisfied and unconvinced of others’ entitlement, intensifying internal conflict instead of motivating people. Worse, recipients may regard the shares as something they were owed all along: withholding them was a debt, so returning them deserves no thanks. For the founder, it becomes a double loss. Authority has been delegated, equity distributed, and benefits shared, yet the internal climate changes. Rules are the surface; human nature is the foundation. Using the logic of equity rewards to design equity incentives often marks the turning point toward a company’s decline. The right approach is a plan suited to the business’s own development, rather than a rigidly copied template. A mechanism focused on the future, shared benefits, and shared risks can unite founders, senior managers, and frontline employees in expanding the value of the business together.

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On October 12, 2020, SoftBank’s Vision Fund disclosed plans to establish a SPAC, or special purpose acquisition company, within two weeks. Unlike acquiring an existing listed shell, a SPAC raises money from investors to create a new shell company. Its leaders then acquire an unlisted business, effectively bringing that business to the public market. Vision Fund CEO Rajeev Misra said the SPAC would give portfolio companies a route to listing amid high market uncertainty. It would target growth companies in later funding rounds, with capital coming partly from the Vision Fund and partly from market investors. The backdrop was the popularity of SPACs in 2020. Bloomberg Businessweek reported that SPACs had raised US$41 billion that year, more than in the preceding ten years combined, and accounted for 40% of U.S. IPOs. The Verge suggested that uncertainty in the stock market was a reason: traditional IPOs could be priced too high or too low, with increasingly unpredictable market reactions. SPACs reduced that risk to some extent by providing a predictable valuation range. Companies seeking a listing could avoid an IPO roadshow and dealings with numerous institutional investors, negotiating instead with the SPAC’s controlling party. A listing could be completed in as little as a few weeks. These are reports and claims from October 2020.

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Robin reflects on a recent conversation with the head of a listed company. If the tariff gap between China and Southeast Asian countries is 20–30%—with Vietnam, Thailand, Malaysia, and Indonesia at roughly 19–20%, and China at 40–50%—manufacturing in China can still offer substantial advantages. One key factor is supply-chain completeness. Consider a screw: when equipment breaks in Vietnam, a replacement part might take more than a day to arrive before production can restart. In China, a replacement might arrive in five or ten minutes. That small example extends to equipment maintenance, components, consumables, raw and auxiliary materials, suppliers’ around-the-clock responsiveness, and their eagerness to win an order. Decades of accumulated supply-chain capabilities have continually raised the bar in China. Although Southeast Asia has been rising, its role remains concentrated in labor-intensive production and final assembly. Building a complete chain from materials to equipment could take another decade or more. Instead, manufacturers can import Chinese automation equipment and materials, assemble products locally, and sell them abroad—hence the discussion of disguising products’ country of origin. The post closes with Taiwan: its semiconductor supply chain has gradually developed, helped by the industry’s “sacred mountain” cultivating domestic equipment, consumables, and fab-facility capabilities. The most advanced lithography and etching equipment may still be some way off, but a complete supply-chain system provides a relative competitive advantage that can lessen tariff impacts.

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Fengtouquan draws a lesson from UNIQLO. Founded in 1984, the company grew fastest between 1990 and 2010, precisely Japan’s economically weak “lost two decades.” Overall GDP barely grew and even declined slightly, while the apparel industry shrank by 50%. Yet UNIQLO, relying on Japan’s domestic market, increased revenue from ¥5.2 billion in 1990 to ¥814.8 billion in 2010—more than 150-fold—and profit grew 1,500-fold. Only after 2010 did international expansion become the main growth driver. The lesson is that the macroeconomy certainly has problems of its own, but the development of individual companies is not necessarily so tightly bound to it. That can give investors considerable confidence. Robin’s view: even during a macroeconomic downturn, individual breakout businesses still have opportunities. During twenty years of constrained consumption in Japan, UNIQLO seized the opportunities of its time and emerged as an exceptional performer, making Tadashi Yanai Japan’s richest person.

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Robin argues that income polarization in Taiwan will become increasingly pronounced. In the future, 50–70% of people may pay no income tax, while the top 30%, or even the top 5% or 10%, could support the entire income-tax contribution. Fewer taxpayers would not necessarily mean declining revenue: the top 30% remain on a high-growth trajectory, earning more and therefore paying more. Even as taxpayer numbers shrink, collections can exceed government budget estimates, with most of the contribution coming from a small group at the top. The post gives this distribution: 0.13% of people pay 17.47% of income tax; 0.85% pay 41.19%; 2.79% pay 60.75%; and 7.66% pay 77.21%. A small group, around 10% of Taiwan’s population, benefits from globalization, AI development, and U.S.–China confrontation. They earn “Global Pay” and can expect further income growth. A much larger group earns “Local Pay,” primarily in domestic services or traditional industries competing intensely with China. Their income growth may be limited, stagnant, or even persistently negative. As high earners drive inflation and increases in goods and housing prices, Robin argues that government needs tax and subsidy measures to support disadvantaged groups left behind by globalization and AI. They may feel disconnected from the past decade’s economic growth while experiencing its inflation keenly, creating a sense of relative deprivation.

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This book-excerpt-style compilation argues that capitalists’ investment is the primary driver of economic growth and the source of their power. Capitalism does not fear powerful capitalists; it fears capitalists who will not invest. Holding money simply to feel secure lets society down. Government’s most important role is to encourage them to invest. The tension between investing and reluctance to invest recurs throughout history, with confidence as the decisive variable. If capital is prosperity’s economic fuel, confidence is its emotional fuel. Economic growth is always about flesh-and-blood people, rather than an automatic mechanism. Historical experience, the compilation argues, does not support the idea that leaving markets alone will automatically allow entrepreneurs to make the economy thrive. Capitalists often prefer to hold their money, requiring government action—not coercion, but measures such as fiscal or monetary policy. Robin’s view: investment drives national economic growth, and venture capital is at the forefront of investment that advances innovation and change. The state should act more proactively to channel capital into venture investment and make it an important force in the country’s future.

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Robin recalls a story from his underwriting days. After filing an IPO application, he wanted to pray for a smooth review and told his supervisor he would visit Xingtian Temple to pray to Guan Gong, the martial god of wealth. His supervisor warned him against it: Guan Gong embodies righteousness and vanquishes demons, so a company as questionable as this one would surely be struck down. He suggested another temple instead, claiming it was so efficacious that spiritually sensitive visitors could feel a blessing of sacred light and see a deity manifest. Robin joked that this could qualify as a top secret of Taiwan’s capital-markets industry. He offered a clue: a famous temple in southwestern Taipei with nearly 50,000 Google reviews, apparently the highest number among the city’s temples. After moving into venture capital, he discussed investment-related prayers with a senior acquaintance, who recommended a nearby Earth God temple rather than a major temple. Each neighborhood has its own, much like a neighborhood chief with a designated jurisdiction.

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Robin observes that Taiwan’s exports have boomed while domestic demand has remained weak over the past three to five years, rapidly widening the wealth gap. Over the preceding five years, the world experienced a once-in-a-century pandemic, an AI boom, and U.S.–China confrontation. He argues that Taiwan ranks among the top three beneficiaries: the pandemic drove demand for electronics used remotely; AI generated overwhelming orders for semiconductors and servers, outpacing factory expansion; and U.S.–China tensions shifted electronics orders from China to Taiwan. Export-related technology stocks, including semiconductors, servers, and components such as thermal-management products, surged, and people in those industries earned handsomely. Domestic demand faced pressure from weak tourism, labor shortages and rising wages, and inflation including higher utility costs. Traditional manufacturers such as machinery companies also faced intense competition. A minority riding these trends saw incomes soar and pushed up housing and goods prices, while the majority outside them faced greater economic pressure. Robin adds that declining birth rates are, in his personal view, the larger and more irreversible crisis.

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Robin shares statistics identified as being from November 2024. After the Taiwan Stock Exchange’s market capitalization exceeded 90 trillion, its listed companies’ combined value had reached eighth or ninth globally, roughly equal to Germany’s stock market. The comparison gives Germany’s GDP as about US$4.31 trillion, with 85 million people and US$52,000 per person, and Taiwan’s GDP as about US$930 billion, with 23 million people and US$41,000 per person. Germany’s GDP was 4.6 times Taiwan’s, but their stock-market values were already comparable, even excluding Taiwan’s Taipei Exchange. Returning to an Economist article, Robin argues that Taiwan benefited from the preceding five years’ AI boom: outside the United States, its increase in stock-market capitalization was second only to that of Nasdaq, the market at the origin of the AI boom. In that sense, he considers it reasonable to call Taiwan the greatest beneficiary outside the United States, while noting that the gains were concentrated in its core competitive strengths.

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Robin traces Taiwan’s electronics-industry family tree. Beyond the companies descended from two networks—one including 三愛電子 (San’ai Electronics), the Kinpo–Compal group, Inventec, and Quanta; the other including Acer, ASUS, Wistron, Pegatron, and BenQ—there are Hon Hai, Lite-On, Delta Electronics, Advantech, and others. Lite-On was the first electronics stock to list. Semiconductors and electronics together once accounted for more than 70% of Taiwan’s stock-market capitalization. As these companies expanded around the world, they brought Taiwan greater global influence. Many of these electronics businesses trace their establishment to the 1970s. Electronics, including semiconductors, once represented only 2% of Taiwan’s market value, when financials, petrochemicals, textiles, and food stocks dominated. Through the continuing efforts of earlier generations of entrepreneurs, Taiwan became a technology island that drew the world’s attention.

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The short piece asks: I have 10,000 and my colleague has 1 million. If we both invest in something yielding 10% annually, will we be equally wealthy at year-end? No—the gap will widen from 990,000 to 1,089,000. When growth rates are identical, the absolute gap between us and the leader keeps growing. Those behind, or new entrants, must find a faster growth engine to have a chance of catching up and overtaking. Robin adds that in recent years, he has found larger companies also growing rapidly. With higher gross margins, they earn more and more: revenue growth of 30% can accompany profit growth of 50–80%.

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Robin observes that TNMG, an Asia-focused next-generation digital technology and media group listed on Nasdaq, had reached a market capitalization of US$5.6 million. Its businesses span media, AI, traffic, data analytics, advertising technology, ecommerce, and B2B. It attracts more than 45 million unique users each month, with Japan its largest market and Taiwan second. Yet with 2024 revenue of US$48.5 million, its price-to-sales ratio was only 0.12. Robin poses two questions: might a Taiwan listing offer the chance of a tenfold market valuation? And does the group need such a wide range of businesses, or would it be better to focus on one or two and make them globally competitive?

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Robin points to the chapters on calculating investment-project returns in corporate finance or financial management textbooks. If time permits, he suggests revisiting the later chapters and working through the calculations again. He recalls getting very high grades in financial management in graduate school, with a laugh. His personal impression now, however, is that even elegant financial models and projections often prove less accurate than a boss’s experience-based, off-the-cuff decision. Building a model still requires many conditional assumptions, such as the growth rate.

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Robin reviews revenue, gross margin, profit, and market value for two leading Taiwanese third-party payment businesses. 綠界 (ECPay, 6763) had 2024 revenue of 1.6 billion, a 41% gross margin, after-tax net profit of 350 million, and market value of 11.1 billion. LINEPAY (7722) had revenue of 6.3 billion, a 32% gross margin, after-tax net profit of 650 million, and market value of 38.6 billion. His impression is that fintech valuations are high, but there is still a benchmark: payments giant Visa, with full-year revenue potentially reaching US$40 billion, an 80% gross margin, market value of US$660 billion, and a price-to-earnings ratio of about 34. These figures reflect the publication date and have not been independently verified.

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Robin observes that Taiwanese companies have recently been keen to carve out subsidiaries for IPOs. Acer is a representative example, while Hon Hai previously carved out quite a few as well. Yet he seems to see this less often abroad. He asks whether Tesla would separate power generation, energy storage, systems, software, distribution, maintenance, and finance into numerous subsidiaries, or remain a single Tesla and build a much larger market value. The underlying approaches to management and capital-market operations are very different.

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Robin explains the Pioneer Stock Board. Quotes for ordinary Emerging Stock Board companies are not visible on Yahoo Finance, but Pioneer Stock Board quotes are. Its trade-matching system broadly follows the model for Taipei Exchange-listed companies, allowing buyers and sellers to see individual bid and ask prices and lot quantities. Investor eligibility restrictions still apply.

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Robin recalls that Mr. Qiu told everyone the previous day to pay close attention to the Securities and Exchange Act’s insider-trading provisions. Many colleagues serve as directors, especially of exchange-listed and over-the-counter-listed companies; at the time of the post, Robin was a corporate shareholder’s designated director representative at eight companies. Sometimes people do not realize their actions break the law, or how serious the consequences can be.

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Robin cites The Economist’s observation that Taiwan benefited from the preceding five years’ AI boom, with its stock-market capitalization increasing at a rate second only to Nasdaq in the United States, the origin of the boom. He adds that it is reasonable to call Taiwan the largest beneficiary outside the United States, while noting that the benefit is highly concentrated in the foundations of Taiwan’s core competitive strengths. The figures are quotations reflecting their original time, not current facts.

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Robin compiles Liu Songbo’s views from Dedao’s 30 Lectures on Corporate Governance. Startups easily fall into disputes over interests because business models, the importance of resources, and individual contributions continue changing dramatically after the equity structure is set. Haidilao’s Zhang Yong and Shi Yonghong agreeing to transfer shares after initially holding 50% each is a positive example; the dispute between Li Ziqi and Weinian is a cautionary one. The solution is to leave room for adjustment in equity design. First, reserve an equity pool rather than allocating all shares at once. Second, use vesting, granting equity progressively against milestones. Third, prearrange exit mechanisms, including conditions and prices for recovering equity. Ning Xiangdong also proposes a “pivotal minority”: two shareholders with 50% each give up 0.5% apiece, allowing an impartial third party trusted by both to hold 1% and mediate disputes. The post closes with Xu Xiaoping’s observation: do not pursue shared interests through brotherhood; build brotherhood through shared interests.

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Xu Xiaoping proposes three principles for equity design. First, hold a large stake without standing alone. Equal splits such as 50:50 or 3:3:3 suggest the team has no leader, but 98:1:1 does not create genuine partners either. A reasonable structure gives the largest shareholder at least 50% and the second at least 10%, with examples including 6:2:2, 6:3:1, 5:3:2, or 7:2:1. Second, earn equity before receiving it. Shares should not be handed over on day one, but earned through four years of vesting. After one year, a cofounder earns a quarter; someone who leaves or proves unsuitable takes only the earned portion. Third, add rather than take away. For a strong later recruit, issue options from an expanded pool rather than demanding shares back from early shareholders. Most startups reserve a 10–20% option pool on day one, preserving flexibility for future equity allocation.

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Wu Bofan analyzes Amazon’s long-term strategy: strategy focuses on new opportunities, while tactics optimize what already exists. Bezos is quoted as saying that a one-year horizon reveals many competitors, but a five- to ten-year horizon makes them hard to name. AWS launched in 2006 and, in the account, faced no real competitor for almost a decade. Amazon escapes imitators by moving forward rather than staying to fight: fear standing still, not moving slowly, and make the road your Great Wall. The lesson also considers the opposing view. Jobs objected to listening to customers, illustrated by Ford’s potential customers asking for better horses; Christensen argued that core customers dragged Kodak down. Robin identifies the key distinction: uncover customers’ real needs by starting with their ultimate purpose. They may want to reach a destination quickly and comfortably, rather than own a car or a better horse; or communicate more effectively, rather than own a phone with better features. Before deciding whether a project is a must-have or nice-to-have, define the customer and genuinely solve that customer’s problem. The lesson adds that customer centricity is a capability, not merely an intention. It requires a prism that reveals the spectrum of needs. Amazon leaves an empty chair for the customer at meetings, and customer obsession lies at its cultural core.

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Robin notes Appier’s planned March 31, 2021 listing on Japan’s Mothers market, under stock code 4180. Its prospectus was in Japanese. He shared several images that he himself guessed were balance sheets and income statements, with units he guessed were thousands of yen, and included the Japanese and English Japan Exchange Group links. His personal view was that one could certainly buy Appier in Japan, but those choosing to keep their capital in Taiwan, especially if they could not read Japanese, could pay closer attention to 91APP. This is a historical observation and personal view, not investment advice.

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In a July 2012 open letter to partners, Ma Huateng drew inspiration from Ren Zhengfei’s 管理的灰度 (Gray Areas in Management, descriptive title) and distilled Tencent’s fourteen years of experience into seven principles for creating a living organization. Demand alignment: user needs are the product’s core. Tencent product managers follow a 10/100/1000 rule—ten user surveys, following one hundred user blogs, and collecting one thousand user-experience reports each month. QQ Mail turned around after being rebuilt. Speed: take small, rapid steps and iterate quickly, accepting imperfection while moving rapidly toward perfection; nobody stays five seconds behind someone else in understanding. Flexibility: proactive change matters more than reacting to change. Redundancy: tolerate failure and some waste. WeChat emerged from competition among several internal teams. Openness and collaboration: lessons from the 3Q conflict mean a platform must choose what to do and what not to do. Capacity to evolve: Kodak invented the digital camera but organizational rigidity left it on the shelf; mechanistic organizations can become green deserts. Innovation: innovation is an outcome, not a cause, emerging naturally from the gray areas of a living organization.

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Legendary Lockheed Martin engineer Kelly Johnson established fourteen innovation principles for Skunk Works. Give the program manager nearly complete authority; maintain strong but small project offices on both the military and contractor sides; and restrict staffing to 10–25% of a normal organization, ruthlessly controlling bureaucracy and unnecessary work. Use a simple, flexible drawing-release system and require few reports while thoroughly recording important work. Review costs monthly, avoid books running ninety days late, and do not surprise customers with sudden overruns. Give contractors greater responsibility and authority to conduct flight tests. Push inspection responsibility back to subcontractors: quality comes from design and responsible operations, not inspection. Agree specifications before contracting, explicitly stating important requirements that will not be met and why. Provide timely funding, mutual trust, and close daily cooperation. Strictly control outsiders’ access, and reward performance rather than the number of people supervised. Robin’s view: innovative R&D is difficult, but simpler working methods and streamlined processes can free researchers from organizational constraints and help them concentrate. Make innovation simpler, freer, and bolder. He particularly highlights rule six on accurate cost estimation and control.

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Zhang Yiming wrote this guide to choosing an employer for technical talent when Toutiao was still a small company. He introduces the EC ratio—enterprise value divided by total funding. Google, Facebook, and Tencent had very high ratios. Maintaining a high EC ratio indicates organic growth capacity rather than dependence on outside funding; a low ratio combined with heavy fundraising can suggest a business fattened by capital. He recommends that first-rate technical talent choose leading technology companies, judging technical investment and technology’s contribution to business value rather than money spent on field promotion. Drawing on his rejection of an investment offer from a giant, he argues that bundled traffic and distribution can become stimulants, distort strategy, and force a company to take sides. Do not join a company marrying into a wealthy family; join an outstanding company and become a great one together. He also criticizes obsession with titles and management headcount: titles suffer more inflation than the ruble, while WhatsApp and Instagram had tiny teams. Companies made up of people concerned with how many they manage rather than what they do cannot have high talent density. Finally, early and late are relative; the scale of future potential is the absolute yardstick. Alibaba and Tencent still grew more than a hundredfold after their fifth year. Rather than speculate on a runner-up, choose the leader.

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This post challenges the claim that customer interviews are unnecessary because customers do not know what they want. Ford’s “faster horse” actually contains a real customer problem: people want something faster than their existing solution, and a horse is simply the solution they know. Jobs said knowing what they want is not the customer’s job; Paul Graham regards understanding customers as a founding team’s first task. Robin identifies the key issue: asking questions does matter, but you may not be asking the right ones. Asking what customers want tends to produce improved versions of existing products. Instead, conduct outcome-based interviews: ask what results they want, not what solutions they want. When an answer describes a solution, keep asking why and what it would do for them. Ask the right people too: industry experts’ feedback often differs greatly from that of most users. The post also recounts a conversation between Graham and Airbnb founder Brian Chesky: if your users are in New York, what are you still doing in Mountain View? Early startups should do laborious things that do not scale, visiting users individually. This is also the sixth counterintuitive rule cited from Blitzscaling. Robin concludes: stop imagining and forecasting; get out of the room and have in-depth conversations with users now.

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Robin opens with a view on entrepreneurship: quantify your products and services wherever possible rather than relying on empty narratives. Follow industry standards where they exist; where no quantitative standard exists, an even greater opportunity may emerge. Pantone’s dominance over color definition illustrates this. Shengdong Morning Coffee describes a seven-second rule in color marketing and a survey finding that 85% of consumers base purchase decisions on color. Starbucks green, McDonald’s yellow, and Tiffany Blue are classic brand colors. Pantone began as a printing business. In the 1950s, color mixer Lawrence Herbert noticed the high cost of communicating about color and created numbered swatches as a universal color language. The Pantone Matching System launched in 1963, transforming supposedly unquantifiable color into a standardized product. Its guides reportedly generate more than US$100 million annually. Pantone later established a color institute and announced annual colors, giving color an authoritative voice. Tiffany Blue carries the number 1837 and cannot be used without authorization; brand-color work contributes 15% of Pantone’s profit. More recently, Adobe users’ need for a paid subscription to use Pantone colors has raised concerns over color monopolization.

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Robin begins with a qualification: normally, he still encourages the standard Lean Startup approach—understand needs and do something you care about. But if a one-in-ten-thousand chance puts you in the path of a boom, it may be time to blitzscale. Liang Ning’s reading of Reid Hoffman’s Blitzscaling emphasizes speed over efficiency in a huge, uncertain market. To move fast, accept chaos, tolerate poor management, overlook customer complaints, and raise more capital than needed: the “barbarian rules.” Yidao founder Zhou Hang responded rationally, like a civilized person, and ultimately lost to Didi’s aggressive tactics. The account describes four stages: pirates, marines, army, and police. Pirates use flexibility and risk-taking to establish their initial position. Xiaomi’s early three-layer structure and “demanagement” resemble marines taking a beachhead, when conserving ammunition cannot take priority over firing. During Chinese New Year 2019, Zhang Yiming spent US$500 million promoting Douyin in eight days, separating it from Kuaishou, which emphasized spending nothing on promotion. When market headroom runs out, blitzscaling should stop and management must change, as Xiaomi moved toward an army-like structure. Banks and foreign companies resemble police maintaining order. The book reassures entrepreneurs who survived that their fundamental choice at that stage was right.

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This installment of Daily Lessons for the Elite introduces five tools that strategy scholar Richard Rumelt uses for strategic analysis. First, compare like with like: New York subway construction costs US$3.5 billion per mile—seven times the global average, four times London’s, and more than ten times Paris’s. The comparison reveals a problem; Paris has a design review committee that controls costs. Second, understand human behavior: a department manager’s attractive cash-flow forecast serves a competition for headquarters’ resources, highlighting good news and concealing bad. When knowledge, resources, and decision-making authority sit with different people, misleading claims arise. Most people avoid confronting their company’s real difficulties. Third, analyze data: detailed costing at a Brazilian window-blind company showed that large blinds were the real money-makers. A women’s clothing chain’s profitability depended on location and traffic rather than store size. Robin adds that breaking down startup pricing and subscription revenue often reveals losses. Fourth, use established frameworks: shipping’s overcapacity creates a prisoner’s dilemma; airline code-sharing and point-to-point services offer analogies. Fifth, seek insights from the front line: Kodak was defeated not by digital cameras but by a new ecosystem in which people stopped printing photographs.

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Robin identifies five requirements for developing a sport: active participation across society; joy and pleasure as the starting point; long-term planning; continuous exchange with the world’s best, including help for players going abroad; and integration with local culture. He sees the same principles applying to government efforts to build an environment for innovation and entrepreneurship: encourage attempts that may fail, do not fear failure, welcome challenges, learn from the best, develop culturally distinctive innovation, and plan over a longer horizon. The Look at the World article echoes these ideas. Behind Japan’s victories over Germany and Spain at the Qatar World Cup lies a century of soccer development: the association founded in 1921, league-based selection across 47 prefectures, and a professional league established only in 1993. A Japan Football Association office in Düsseldorf helps players abroad; leading players such as Ritsu Doan and Wataru Endo have European experience. At the community level, Football For All brings soccer into schools and neighborhoods, while club activities form a distinctive sporting culture. The JFA Values, established in 2015, put joy and pleasure at the heart of sport and players first. Coach Hajime Moriyasu asks players not to show excessive deference to world-leading teams, but to compete as equals.