Wang Zhongmin: The "Accelerator" of Long-termism
We are here today to worship "long-termism".
"Chinese Entrepreneur" reporter Tan Liping
Edited by Mina
Image source: meeting site
On December 9~10, the "21st Annual Meeting of Chinese Business Leaders" sponsored by China Entrepreneur magazine was grandly held. In the opening keynote speech session held on the first day, Wang Zhongmin, chairman of the Shenzhen Institute of Financial Stability and Development and former vice chairman of the National Council for Social Security Fund, delivered a keynote speech.
From Wang's presentation, you will gain the following key takeaways:
1. If the previous enterprise has become an ecological-level company, it should provide an "accelerator" platform for all its subsequent new investment enterprises and new innovative enterprises to make its foundation evergreen and its life can be continued and sustainable.
2. No company dares to say today that I have completed all the parts in an industrial chain and a supply chain, and if you want to complete all the parts, I'm sorry, you're slow. At this time, you will find that we have a professional vertical subdivision that is 1 cm wide but 10,000 meters deep. And I produce for other people's utensils, and this industrial chain is long and deep enough to say that we have achieved long-termism today with infinitely smaller granularity and infinitely longer link chain.
3. Today, we are here to worship "long-termism", and when we only use to give its logic of social practice and practice, there will be countless new accelerators, countless new acceleration containers and acceleration logic scenarios, which are solid, effective and sustainable.
The following is a transcript of Wang Zhongmin's speech (with abridgement):
Thank you to Tribute to Long-Term Doctrine for inviting me, a long-term investor, to share some of my thoughts here.
If we look at the social security fund, one of the things that the social security fund has to do is how to make our people working today and tomorrow's assets after retirement get the "rose of time" in the long-term investment, and finally make the long-term life, long-term economy and long-term pension sustainable and linkable. So today I chose a topic called "Accelerator of Long-termism".
If the entrepreneurs here today have been working with the logic of the social company system of the enterprise for decades or hundreds of years, we will find that we will give different new systems and new logics in the company system of this enterprise container. What we like today is the partnership system, after you come in, you are not running for operating cash flow, but for capital cash flow and long-term program growth. If a company can do more than 100 years, your share of every dollar can rise hundreds of times, thousands of times, tens of thousands of times, this is the social practice of long-termism in every capital origin of the partnership, and the law, company, and even the combination logic of taxation, investment and capital of the partnership system are the best accelerator containers.
Then put this thinking into the perspective of investment and business management of the whole society. In the past, we used to call development zones "incubators", but today we suddenly use the same word "accelerator", how does it accelerate? We have another new logic at the enterprise level and in accelerators - "CVC".
If the previous enterprise has become an eco-level company, it should provide an accelerator platform for all its subsequent new investment enterprises and new innovative enterprises if it wants to make its foundation evergreen and its life can be continued and sustainable.
If you are in my platform, if you do new innovation and development, the extension of the new industrial chain, and even when we make a new APP, new boundary, and new logic in the mobile phone application, he will say you come, I will give you all the open source without paying, I won't charge a penny when you don't make money, when you start to make money in it, I will give you a share of profits, and when you share profits, I will divide the small head, you will share the big head, and if you do well, I will invest in you, and you will do better and become one of my platforms. When the effective structure of the industrial chain is established, I will acquire you wholly by the company. With the CVC logic of this investment, it is the long-termism that makes the company system and the innovation system move towards tomorrow and towards a century-old durability - using the logic of acceleration to realize, explode, and grow.
If you put this logic into my field, you will find that it was all self-owned investment and state-owned investment. Today, I will use another combination mode of funds to see how big and deep we can go, such as the parent fund, the industrial guidance fund, the state-owned capital, the private capital, Social capital, capital in different monetary states, if I am in the parent fund, only LP can include all social capital in a limited liability partnership of multi-level, and I choose a GP with the most management talent in the market to manage it, and it invests in the most professional subdivision of the vertical fund, and then the fund to invest in the different stages of all our start-up enterprises today, if you invest in the earliest stage I call it an angel investor, if you invest in the risk period I call it a VC investor, if you make a profit we call it a PE investor, we also promote the IPO, at this time you will findThis new modality of the fund is the accelerator for us to use the logical framework of long-term investment to achieve the fastest innovation at the moment.
Let's go down, today in all the industrial chain, no company dares to say that I have completed all the parts in an industrial chain, a supply chain, if you want to complete all the parts, sorry, you are slow, at this time you will find that we have 1 cm wide but 10,000 meters deep professional vertical subdivision. This professional vertical subdivision adopts a "specialization" that we have in the industrial chain of the new era today, and I produce for other people's utensils, this industrial chain is long enough and deep enough to say that we have achieved long-termism today with infinite granularity and infinite extension of the link chain. In the end, each point can get its own profit sharing and growth in long-termism, and its own profit sharing and growth can drive the orderly growth and development logic of other industrial chains, which is the most professional subdivision investment logic that we are moving towards long-termism today.
When we are investors, if you don't make such a container and the logic of growth, I won't invest in you, because only in this way can you go to tomorrow, to the future, to eternal life.
Put this logic in one of the most stimulating data we have today, scientific research. If a company is even an eco-level company, and you say that all the research is done by me, I'm sorry, you must be slow, because not only innovative talents, but the key is that you don't know where the most exciting is in the marginal needs of society. You only need to change the long-term logic of our today's rush to tomorrow, let all your investments follow the logic of angel and VC investment, and then distribute them among other innovation points in the whole society today, you will find that even if 90% of these innovation points fail and 10% succeed, the 10% success part captures the future genes and growth, and the scale of his growth can actually cover all 90% of the failures.
The social opportunity cost of social technology innovation and business model innovation can be achieved with such a new container, and the opportunity cost of social failure is almost zero. And the opportunity cost of a real investor's failure is almost zero. If the opportunity cost of failure is zero both internally and externally, social technological and commercial innovation will definitely be realized, and it is precisely this container that provides us.
Today you will definitely notice a word that is particularly attractive to the entrepreneurs here for us, "registration system", you can pursue an IPO without going public. Today, every province and every place says how many listed companies there are, of course, before the listed companies, we say how many unicorns, and we now have to see that the new institutional logic of the registration system, such a modern IPO, has been fully implemented today. IPO is a tribute to long-termism for us today, which happens to be used to elongate the node of any company, whether it is a start-up, a unicorn, a profit, or a profit, whether you iterate in your own industrial chain, or multiple iterations, any change in the face of long-termism, any impact change and trace variables, can be in the IPO market.
As long as what you say is true, what you do is true, and what you do is something that investors can understand, listen to, and are willing to invest, you can go public based on the logic of information disclosure, and you will find that we use the container of the secondary market social system to promote the most innovative in the whole society, and tomorrow may lose the line of time ahead, and can actually use the combination of new capital to develop.
I also want to give you a little bit of stimulation of the cerebral cortex today. If you go forward to long-termism, and what you do ahead of you has some problems from the perspective of investors, from the perspective of equity, and with the logic of partnerships, and there may be a lot of falters in running into tomorrow, do we have a container to start this kind of thing again, from scratch, from new marginal variables?
A very professional word gushing out: SPV (special purpose company), you cut off from all the disputes such as legal disputes, financial disputes, sales disputes, etc., a new piece of capital is in a new container, the relationship between law and demand, financial relationship, all the relationships are clear and clear, this company has only one special purpose, this special purpose is only to make a company structure, it can allow you to start again, and the past can be broken.
If we are looking for a new posture of listing in the registration system in the logic of the registration system today, the special purpose vehicle company can actually be listed when the company does not have the actual target assets, and use this to acquire the target assets after listing and financing, and only account for 5% ~ 7% of the equity of the target assets, and run towards tomorrow and the future together.
We will find that the state of a clean company with a special purpose can not only cut off from the past, but also effectively organize various resources and innovations of production factors for new special purposes, and can also use the company system, the investment system of the fund and the financing system of going public to tomorrow, and rush to a sustainable tomorrow.
Today, we are here to worship "long-termism", and when we only need to give its logic of social practice and practice, there will be countless new accelerators, countless new acceleration containers and acceleration logic scenarios, which will be solid, effective, and sustainable, and all the micro factors that accelerate time fission will join hands to go to tomorrow.