"Tou Tien" is a new column in the investment field launched by Chuangbang, which aims to report the new dynamics of the VC/PE circle, capture the most forward-looking new trends, dialogue with the Bó Lè of the capital market, gain insight into the new tracks with the most opportunities, and strive to be a lookout at the forefront of the times.
Text | Liu Yan
Edited | Letters
Picture design | Li Bincai
On October 14, 2021, Child King (stock code 301078) landed on the ChiNext board, opening up nearly 300%, with a market value of more than 25 billion yuan, becoming the "king of market value" of A-share maternal and infant retail brands.
The child Wang rings the bell on the GEM
It is worth noting that Child King is actually only one of the incubated enterprises within Five Star Holdings, and since its establishment in 2009, it has completed investments by many market-oriented institutions such as Warburg Pincus, Hillhouse, Tencent, CICC, Jinglin, Wanda, Huatai and Staples Insurance. In addition to the child king, the other two companies incubated by Five Star Holdings, Huitongda and Haoxiangjia, have also been promoted to unicorns with a valuation of more than $1 billion in just a few years. And Huitongda is expected to be a Hong Kong stock IPO this year.
In his listing speech, Wang Jianguo, chairman of Five Star Holdings and chairman of Child Wang, said: "Today, Child King successfully went public, which is not my personal achievement. I have a co-founder and CEO, his name is Xu Weihong, he is young and smart, thoughtful, courageous, capable. I also have an excellent management team with complementary professional and complementary abilities, as well as a group of hard-working children! ”
In addition to the child king, they have also cultivated a number of subdivision industry leaders, such as industrial Internet logistics service provider Orange EasyDa, supply chain new channel provider Agra and other companies.
Along with the industrial entities, there is also a 10 billion yuan industrial fund Xingnahe Capital and a provincial science and technology incubator Xing Chuanghui.
"Enterprise that creates a business", this is the first label that comes to mind for entrepreneurs who know Five Star Holdings. Eleven years ago, Wang Jianguo sold five-star electrical appliances with hundreds of millions of dollars in profits every year and started a business again. His success rate of "batch copying" unicorns is rare.
Wang Jianguo, who does not hesitate to share, has also passed on his incubation "three axe" concept to many entrepreneurs, and its core essence is: continuous innovation, grasping the essence, and choosing the right person. This methodology has been verified within a number of industrial groups or listed companies, and the effect can be described as immediate. Wang Jianguo created 3 in one go in a short period of time, so some entrepreneurs honored him as the "father of unicorns" in Jiangsu.
In the next three to five years, the strategic goal of Five Star Holdings is to add a unicorn or listed company every year by way of investment or incubation. "High goals force innovation and creation, only high goals, it is possible to high growth, high growth." Wang Jianguo told Chuang Chuang Bang.
However, under the high failure rate of entrepreneurship and high failure rate, how does Wang Jianguo mass-produce unicorns? What kind of "Wang-style philosophy" is Five Star Holdings practicing?
Sell the company at your peak
Look for the second curve of life
As far as the generations of the rivers and lakes are concerned, Wang Jianguo is an entrepreneur of the same era and the same circle as Dong Mingzhu, Wang Jianlin, Shi Yuzhu, Zhang Jindong and so on. He has the gene of Su Shang's love to work hard, and has worked in government agencies, state-owned enterprises, and chain enterprises for ten years, and each time it is a new venture. "I personally pursued instability since I was a child, the surface is quiet, the heart is love to toss, always want to unveil the mystery, always want to think, always want to explore." For me, entrepreneurship is meaningful, entrepreneurship is valuable, and entrepreneurship is wonderful. "Although wealth freedom has long been realized, Wang Jianguo has always been on the road to entrepreneurship.
20 years ago, the home appliance players in Nanjing, in addition to Suning Zhang Jindong and sanpower Yuan Yafei, there were also five-star Wang Jianguo. Although five-star home appliances were founded 3 to 5 times later than friends, they quickly jumped to become the industry's third oldest to compete with Gome and Suning. Even with the shackles of the state-owned system, Wang Jianguo started a business from scratch and spent ten years transforming Five Star Appliances from a state-owned enterprise into a private enterprise, from a wholesale enterprise to a retail enterprise, and later into a leading home appliance chain. In 2009, coinciding with the explosive growth of the electrical appliance chain, Five Star Electrical Appliances has opened 100 stores, with more than 10 billion sales and hundreds of millions of profits a year, which has been very successful.
But at the peak of the momentum of enterprise development, Wang Jianguo made an incredible decision. It was early in the morning of February 2009, and he had been thinking for six hours on the banks of the Huangpu River in Shanghai and decided to sell Five Star appliances to the U.S.-funded home appliance chain giant Best Buy. Wang Jianguo failed to live up to the olive branch that Huang Guangyu took the initiative to throw, and did not hand over Five Star Holdings to Gome. Even later, he still had two opportunities to buy back five-star appliances, but he gave up fiercely.
Wang Jianguo said: "At your best time, go and look for the second parabola. ”
A big reason why Wang Jianguo's attitude is so resolute is inspired by the "life cycle" theory of Lu Hongde, a teacher at the National University of Singapore. "Any business has a life cycle, any person has a growth cycle, and at your best, look for a second parabola." Once the decline does begin, we will always save ourselves in various ways, but at a high price, which we are not willing to bear, and will leave us with no time to think about new things. ”
At that time, Wang Jianguo reflected that China's traditional retail industry has a strong industrial ideology and planned economy color, retail relies on good location, good market, good property, in Nanjing as long as the store is opened in the landmark Xinjiekou can ensure that money, this kind of retailer is essentially doing a two-landlord business, neither operating goods, nor operating customers, but operating property. He feels that this kind of good business will not last, only change can be hope, and he must boldly look for a second curve.
In Wang Jianguo's view, the thinking of the second curve is not easy to come by, and its emergence needs to rely on rational analysis, imagination, intuition and instinct; its practice requires the courage to overcome public opinion and step into the unknown field. "Giving up is the premise of gain, and only by giving up can we get it." What kind of chess game is Wang Jianguo playing? And how do you look for the next parabola?
Grayscale division of labor:
Talent is hard worked out, don't come up and divide "officials"
In 2009, Wang Jianguo sold five-star home appliances for $400 million to gain financial freedom.
At that time, the digital age had not yet emerged, and Wang Jianguo felt that a huge business revolution was coming in China. "This change is revolutionary and historic, all business can be reconstructed, all business can be restarted. In the face of such a historic opportunity, my judgment is not to miss! What is missed is not an opportunity, but an era; for me personally, what is missed is not an era, but a lifetime. He said in the speech of the child Wang Listing.
In the torrent of the times, Wang Jianguo wants to continue to toss a bigger cause. However, he does not want to do business that relies on resources such as property and market outlet to win, but is deeply thinking about how to do business model innovation with core competitiveness.
Leading two vice presidents, two secretaries, and three drivers to rent an office at the Metropark Hotel in Nanjing, Wang Jianguo officially opened a second venture.
The outside world can clearly feel the fundamental change in Wang Jianguo's thinking. For example, in the farewell speech of Five Star Appliances, he mentioned: "Let young people charge forward, I give them a stage, provide opportunities, let them sing, help them succeed, this is my wish." Li Ru, CEO of Five Star Holding Group CHO and Star Chuanghui, told Chuangbang: "At the beginning of the establishment of Five Star Holdings, it was defined as a 'enterprise that creates enterprises', 'enterprises that discover enterprises', and 'enterprises that cultivate people', and the purpose of our establishment is to help more people achieve their dreams." Mr. Wang acts as a coach and is responsible for setting up the stage. ”
This time, Wang Jianguo has built a very unique organizational form for Five Star Holdings: small group, large enterprise. He has an image analogy, Five Star Holdings is like a fleet, Five Star Holding Group is an aircraft carrier, and the subsidiaries such as Kid King, Huitongda, and Haoxiangjia are speedboats; subsidiaries rely on aircraft carriers and have the ability to fight independently.
It can be seen that Wang Jianguo is fighting fleet-style combat, which has both flexibility and integrity, and is no longer a locomotive with all the carriages in the chain era. This form of organization laid the foundation for Five Star Holding Group to become a "business that creates enterprises".
Wang Jianguo further explained to Chuangbang, "At the beginning of the second entrepreneurship, we realized that the era of the traditional centralized commercial empire has passed, and the future organization should be as small and flexible as possible. Therefore, we have adopted a strategy of distributed development very early, the enterprise is very large, and the group should be as small as possible. ”
Under this framework, his role and working methods have also changed significantly. Wang Jianguo's management approach can be summarized as: selecting projects, building teams, establishing mechanisms, and helping growth. "The most important functions of headquarters are investment, service, support, establishment of standards, establishment of systems, provision of resources." Li Ru added.
Build a team and build a team first. Wang Jianguo has a set of criteria for finding people, and he draws on the "PSD" model of 3G capital, namely Poor (poor mentality), Smart (smart), dream (with dreams). Under the guidance of this set of standards, the leadership groups he built are highly complementary, and everyone has their own division of labor. Liu Jianshu, director of the President's Office of Five Star Holding Group, told Chuangyebang that they have a classic metaphor for the division of labor in the team: an eagle in the sky, a tiger in a shaking mountain, a wolf that bites meat, a watchdog dog, and a dragon that changes color.
"But at the beginning of entrepreneurship, there were very few people, everyone was grayscale management, there was no clear CEO, COO, CFO and other tall official positions, because startups don't need so many officials to do command, first do it and then say, talent is hard work, not cultivated, don't come up and make a big deal of officials." Wang Jianguo said that the career platform "gives position, gives ladders, gives tickets, and gives face." Respect for the individual is an important part of the Group's values. ”
After having a team, Wang Jianguo did not play cards according to the conventional routine, abandoned the original home appliance format, and found four completely different entrepreneurial directions around four types of people" "children, farmers, rich people, and the elderly": "child king" in the mother and baby market, "Huitongda" in the rural market, "good home" in the high-end consumer market, and a community medical company in the market for the elderly.
The user is the essence
Differentiation is a higher level of competition
The four companies founded by Wang Jianguo at the same time have no connection to the business format, and the business model of each company is not cut from a small scene, but adopts the method of elevating and exalting to innovate the business model. "But multiple companies have a common underlying logic: the essence of business has not changed, the essence of business is the user, the user is the most fundamental." The way of thinking I use is still the underlying logic - innovation around the user. ”
To put it simply, they are around the four specific groups of children, farmers, rich people, and the elderly, providing specific goods and specific services. At its core is to re-architect new supply chains, re-architect new channels, re-architect new scenarios, and thus continuously build the moat of each subsidiary.
But more than a decade ago, "Wang-style philosophy" seemed extremely different and incomprehensible. In the case of Kid King, after examining advanced retail formats in Europe, Southeast Asia, and the United States, they found that there was no successful business model to follow. And their approach is to do a "building block" combination, transplanting the world's advanced retail elements. For example, Kid King borrows from Costco's membership system, Walmart's procurement, Watson's own brand, Carrefour's operation, etc. After Wang Jianguo sold the company to Best Buy, the valuable experience he gained was: retail as a service, service as an experience. As a result, they went on to make a fuss about user experience. The starting point of the child king is to seize the middle-class market, grab traffic online, and grab the position offline, all around the core users.
In the era of five-star home appliances, what they compete with Suning and Gome is not the operating user, but the price. Wang Jianguo confessed to Chuangbang: "At that time, the most annoying thing was to fight a price war. Compare prices all day, copy prices to competitors, and change up to 10 times a day. At that time, the price war was more intense than everyone thought. ”
After ten years of struggling in the Red Sea business war of home appliances, after research, Wang Jianguo finally found a market that excited him and "had a bright future". "The capacity of the baby and child market is no less than that of the home appliance market, and the social value is greater." I have been in the position of the 'old third' in the home appliance industry for a long time, and finally found the opportunity to be the boss. ”
However, it is undeniable that it is extremely difficult to enter the maternal and infant market. For example, the maternal and infant market industry is very finely divided, the production enterprises are not only too diversified, and the scale is relatively small, and the safety and health requirements of the products are high, so it is no accident that this industry has not been born a giant enterprise. Wang Jianguo himself admits that this market is not easy to do.
How exactly? The child king has no object to imitate, and can only touch the stone to cross the river. At the beginning of the founding of Child King, he was determined not to take a simple price competition model. Wang Jianguo does not advocate competition, not because he is afraid of competition, but because he believes that non-competition is the greatest competition, and "the era of simply selling commodities and engaging in price wars has passed." So, what if you don't fight a price war? It is necessary to do characteristics, and differentiated competition is the competition of a higher realm. So we do membership management. ”
Kid King has undergone digital transformation and transformation from an offline company
In addition to operating members, they make big stores, introduce parenting consultants, and also play the model of "goods + services + experience + social", these play styles are unique and differentiated, so that many people find it difficult to understand the child king's play. Taking the rental of large stores at that time, Wang Jianguo planned to open the first store in Wanda Plaza, proposed to rent a 5,000-6,000 square meter storefront, and build a complex that provided a one-stop shopping platform for mothers and babies and value-added services for childcare, Wang Jianlin refused to sign the rental property. To this end, Wang Jianguo made a special visit to the door, and Wang Jianlin asked: "The children's (supplies) shops are small shops, there is no big store, why do you want a 5,000 square meter?" Are there more than 2,000 square meters of stores in Japan? ”
Wang Jianguo talked about opening a different shop and tried to persuade Wang Jianlin to sign: "Boss, I just sold the company, whether this shop is successful or not, I will not owe you rent." Wang Jianlin agreed to rent out the oversized storefront to Wang Jianguo. Later, the child King's model of opening a store in Wanda Plaza has been tested for a long time. According to a survey, the child king covers an area of 2.5%, contributing 14% of wanda's passenger flow, becoming the "popular magnet" of Wanda Plaza. Later, in 2016, Wang Jianlin's Wanda Group also actively participated in the C+ round of strategic investment of the child Wang Lun.
Looking back, Zi Wang has experienced the changes in China's retail industry, and at the time of the advent of the Internet tide, he organically combines the ideas and technologies of the Internet with offline scenes and businesses, and completes the digital transformation and transformation from an offline enterprise.
The right to operate and manage may be delegated
Only cultural rights cannot be delegated
In the early stage of entrepreneurship, the team was small, the positioning and self-requirements were extremely high, Wang Jianguo was too busy to be busy, and almost no serious children took a vacation in the early stage of entrepreneurship. But they have always been very focused, and every day they only think about how to do a good job in entrepreneurship. "I was going to be a coach, but I became an athlete myself, jumping into the water and doing it myself. I also want to find young people to do it, but in fact, when the project first started, you coached it and couldn't do it. "Once the project is launched, Wang Jianguo will gradually delegate power to the team, fortunately, several teams are growing very fast."
Wang Jianguo admitted to Chuangbang that the biggest challenge during this period is how to do a good coach. "When I joined the team to do management, I couldn't manage everything, and I couldn't manage nothing, I had to take care of it."
When he was the first child king, the decision to open a shop, such as site selection, store area, and rent, was personally decided by Wang Jianguo. But he realized that it would be difficult to bring out the team if he had been making a big package. "The first time you lose the power to make a big decision to the team, it's like weaning a child, it's very tangled and painful, and once the decision is wrong, you will lose a lot." Finally, once, he voluntarily refused to participate in the decision-making meeting of the store, let the CEO make his own decisions, and he was even more nervous when he did not participate in the decision-making meeting, driving downstairs and wandering non-stop, listening to the afterglow of the meeting upstairs.
Wang Jianguo also has a feeling that being a coach sometimes requires some art, to make the right decisions when the information is asymmetrical, and this decision-making ability is not positively correlated with leadership. "Just like playing football, coaches need to 'kick the door' in key moments to give the team confidence and build prestige."
Now, Wang Jianguo still maintains a state of entrepreneurship, too busy to stop, he will not leave everything to his colleagues to do. "Entrepreneurs leaving the market and users is the biggest risk, there is no sense of somatosensory, taboo only to read the report." Liu Jianshu told Chuangbang that Wang Jianguo will now act as a mystery customer of the child King, and will also send the president's office to do market research of subsidiaries, and when Huitongda Financing due diligence, he also personally follows the countryside and listens to user complaints. "Where there is a complaint, there is a business opportunity. In addition, financing is actually a comprehensive test and improvement, a round of financing, I will find a lot of problems, this is the business opportunity. As the head coach, Wang Jianguo has a strong user acumen, and sometimes like the "inspectors" of various subsidiaries.
In his listing speech, Wang Jianguo said that in the face of the new historical period, private entrepreneurs should change the traditional boss thinking, change the centralized management method, and overcome individualism. He said: "Most of the older generation of entrepreneurs rely on their own efforts to start a business, but now the times are different, and the historical mission of our own entrepreneurship should be completed!" In the future, we must help young people more, help young people grow, and help young people succeed."
So, in Five Star Holdings, what is the relationship between the group and various enterprises? Wang Jianguo said that the group is sunshine, rain and dew and soil. The so-called sunshine refers to ideas, cultures and concepts; rain and dew are the support of capital and resources; soil is a connector, which promotes mutual exchanges and resource utilization between enterprises. Among them, the most important is "sunshine".
"The management, management and financial rights of the group can be delegated, but the cultural power cannot be decentralized." Wang Jianguo concluded: "If Five Star Holdings has achieved certain achievements, I think a certain degree is a cultural achievement, and the team relies on ideas and cultural connections. All kinds of resources will be exhausted, only culture can live forever, only culture can bring people together. Therefore, the annual cultural annual meeting of Five Star Holdings must be the conference that Wang Jianguo attaches the most importance to. Wang Jianguo has proved with practice that after the cultural foundation is consolidated, the risk of enterprises becomes very small.
Wang Jianguo further explained that the underlying values of the group are highly consistent, but each subsidiary naturally forms different cultures due to different business attributes, which they internally call "fruit culture". "The culture of each subsidiary, can be apple flavor or banana flavor, etc., to respect the personalized development of the enterprise, for example, the child king is the retail of To C, Huitongda is the To B playing style, the two businesses are not compatible, so the culture of each subsidiary is also different." However, the genes must be the same, all fruit genes, and the value bottom line must be kept. For example, you are not allowed to lie, you cannot deceive customers, you cannot play empty, and so on."
Without culture and values, businesses are in trouble. "Many companies will focus on whether the CEO is competent, which is only a phenomenon and does not grasp the essence." Employees should clearly understand the culture and values of the enterprise, not just slogans, but also tools and methods to help the culture land, but also assessment. In addition, Five Star Holdings will cultivate talents from generation to generation, which will also create pressure on the management layer, thereby transforming personal ability into organizational ability."
"Amphibians" in the Great Industrial Change
Unique unicorn "adoption" mode
Since the second venture, Wang Jianguo has given the team the feeling that self-control is getting stronger and stronger, and the more creative and younger. He gets up at 6 o'clock every morning to exercise for an hour or two. His favorites are reading and studying. He believes that people are ultimately exchanges, and this exchange is not only a material exchange, but more importantly, an exchange of ideas, and if you don't spend time studying, you can't communicate with others. To this end, Wang Jianguo continues to be hungry for knowledge, and classic or modern business management books have been carefully studied. In recent years, his notes made using the Cornell note method alone can be stacked more than one meter high, and the good articles he sees on WeChat every day will also be collected and printed, and he can print seventy or eighty copies a year.
In the process of creating a business from scratch, Wang Jianguo, who is constantly learning and good at thinking, has summed up a set of methodologies for "making unicorns". Five Star Holdings is not a typical CVC (Corporate VC, enterprise venture capital), and the way Tencent, Ali, Intel, Qualcomm and other investments are played differently; Wang Jianguo and Xu Xiaoping, He Boquan, Kai-Fu Lee and others behind the scenes to do angel investment or incubation are not the same. After investing in a number of projects of Five Star Holdings such as Zi Wang and Huitongda, Peng Zhiqiang, founder of Shengjing Netlink, defined a similar model as CIC (Corporate Incubator, that is, the business incubation model).
During the LP period, after investing in a large number of excellent funds, Wang Jianguo realized that the opportunity for industrial capital had come. Therefore, in 2017, Singnah Capital was established to start a direct investment model. At this point, Five Star Holdings has moved from "cultivating" unicorns to "adopting" unicorns. Wang Jianguo is well aware that excellent entrepreneurs not only need capital, but also need industrial resources and business wisdom, which Wang Jianguo summarized as "3Z" (capital + resources + wisdom). The advantages of Five Star Holdings are obvious: they know how to invest from the perspective of entrepreneurs and do business from the perspective of investment. Wang Jianguo called himself an "amphibian" who could start a business and invest, that is, "he could swim when he went to the sea and run when he went ashore", and he laughed.
In the era of industrial Internet, Wang Jianguo used the form of a creation company to prove that there are indeed great opportunities in the process of supply chain restructuring. Of the four projects he started, the only one that failed was a community health care project around the elderly. At that time, community medical care was looking for experts from the United States and Taiwan to do it together, and the starting point was very high, because the practice was too advanced, the policy was immature, and the medical insurance was not supported, and it ended in failure. "This shows that the timing and location are also very important, and entrepreneurship must be on the right beat." Wang Jianguo does not shy away from talking about failure, and he is very willing to share the lessons of failure with young people.
"I advocate that large enterprises should constantly split and multiply small businesses, which is faster and more likely to succeed than simple entrepreneurship." Wang Jianguo's play has been practiced by many industrial groups, and later recognized as a model with low capital cost and high success rate. In Wang Jianguo's view, enterprises with industrial resources, entrepreneurial experience, entrepreneurial methodology, and investment perspective all have the capital to create enterprises.
"The original was to create enterprises and incubate enterprises, and now and in the future is to discover enterprises and collect enterprises." Five Star Holdings is embracing the unprecedented industrial changes in a century by integrating industry and investment, and Wang Jianguo is also looking for a new world for personal career development with the new identity of "amphibians".
Wang Jianguo said: "Entrepreneurship is difficult, there is no success, only growth. We're still on our way to the exam..."