This article is the exchange and sharing of Duan Yongping with Chinese students on the Stanford campus in 2018. Duan Yongping is the big boss behind BBK, OPPO and vivo, and also the mentor and early investor of Pinduoduo Huang Zheng. In the dialogue, he revealed his “secret of success”: there is a “Stop Doing List”, it is more important to do something wrong, not to do the wrong thing, than to do the right thing.
Duan Yongping still expressed his optimism about Apple, and at the same time bluntly stated that “price-performance ratio is an excuse for poor performance.” As for Tesla on the cusp, Duan Yongping also stated very directly from the perspective of investment: Tesla is a zero-value company and will be finished sooner or later.
The following is the exchange record:
1. What is most important to you? why?
Duan Yongping: The answer is different for different ages. Now it is family, affection and friendship. Does this still need to say why?
2. Without a sales department, what is your price decision mechanism?
Duan Yongping: When doing market research, try to fix the price as much as possible when it goes public, and make timely adjustments if it is wrong. (Electronic products) The essence of competition lies in product differentiation, to do things that others cannot provide. Without differentiation, it becomes a basic commodity for daily use, which can only rely on price to compete, and it is difficult to make money.
3. Have you ever tried to change your personality and way of thinking?
Duan Yongping: I don’t think it is, it is difficult to change the character. According to statistics from CEIBS, the CEOs of Fortune 500 have all kinds of personalities, and they have only one commonality, that is, integrity (honesty).
4. How should Chinese private enterprises deal with the challenges of the trade war?
Duan Yongping: The most important thing is that it depends on the company itself. It doesn’t matter whether there is a trade war or not. Many companies that do not do well will use the trade war as a fig leaf. When a crisis comes, a good company is an opportunity. We don’t take loans and we have ample cash flow, so every crisis comes an opportunity.
5. What is the logic of investing in early-stage companies?
Duan Yongping: I don’t invest in the early stage, I only invest in listed companies. I voted for Huang Zheng for personal reasons. He is my friend. I know him and believe him. Huang Zheng is a rare and savvy person I know. He pays attention to the essence of things.
6. Talk about marketing methodology?
Duan Yongping: (outside) there is a misunderstanding that we think we value marketing very much. In fact, for us, marketing is not important at all, the most important thing is the product. No company fails because of marketing failure. The company’s failure is essentially due to the failure of the product. Of course I am not saying no marketing, in fact, we do a good job in marketing. Marketing is to use the simplest language to spread the information you want to spread (to your users).
I want to emphasize that marketing is not the essence, the essence is the product. The most important thing in marketing is not to talk nonsense. Corporate culture is the most important. Advertising can only affect 20% of people at most, and the remaining 80% is affected by this 20%. If the marketing is not good, at most it will sell slowly, but as long as the product is good, the result will be the same 20 years later, regardless of whether the marketing is good or bad.
7. What are the opportunities for Chinese brands in emerging market countries?
Duan Yongping: I don’t quite understand this, but I don’t think there will be much difference. It is all about paying attention to the needs of users. An ordinary mind is to go back to the origin of things.
8. What happened at Buffett’s dinner?
Duan Yongping: I do charity, and Mr. Buffett (Buffett) also does charity. I donated it directly, which is the same as donating it through the old bus. So I took a photo of Buffett’s lunch, just as a charity, and I can learn from the old bus. You don’t have to eat, just watch the videos, speeches, and shareholder letters of Mr. Bus on the Internet. What the old man (said) is logically smooth, and it sounds like music to enjoy.
9. Nowadays, mobile phones (enterprise) have two modes. One is Xiaomi, which first circle users, and then monetize them in other ways; the other is Apple, which makes money from the product itself. Which is better?
Duan Yongping: First of all, from the perspective of customers, Apple is better than Xiaomi; secondly, in the long run, no company makes money on cheap. The price/performance ratio is to make excuses for yourself. We must focus on users. It’s not that we have to do high-end or low-end, but do what we can do well to meet the needs of some people. Even Apple has not satisfied everyone.
In the early years, we often talked about the price/performance ratio, until I once talked to a Japanese from China Connect and talked about the cost-effectiveness of our products. The other party asked in confusion, what is the price/performance ratio, and is it a “sex-price” ratio? I was stunned for a moment, and felt that there seemed to be no cost-effective thing in Japanese dictionaries, and it took a long time to realize that “cost-effectiveness” is actually an excuse for insufficient performance. I hope our company will not use this term anywhere.
10. Future investment/startup trends?
Duan Yongping: This question is a bit difficult for me. Personally, I don’t care much about cutting-edge things. I am generally lagging behind and invest in good companies after understanding them. The cutting-edge things are what companies like Apple pay attention to. What I do is find companies like Apple.
11. With so many mobile phone companies, why is Apple the most successful?
Duan Yongping: Apple is hard to come by, the focus is on what you do. Apple’s pursuit of profitability is to make the best products. Apple’s culture is very strong and has a strict “Stop Doing List”, which must satisfy users and make the best products. We don’t compare with Apple, because some of the 1,000 functions are better than Apple, which means nothing. It’s like CBA basketball can’t beat the NBA, saying that we know how to fight, isn’t it a shit.
12. What is the relationship between the social “Stop Doing List” and investment?
Duan Yongping: I am anti-social, socializing is very tiring and time-consuming. There are too few friends in general social, and it seems to know a lot of people, but it is actually difficult to understand deeply. I prefer to play basketball when I have time. My investment is just a hobby, average (average) can beat (beat) S&P.
13. Why do you say “dare to be the queen of the world and compete for the first in the second”?
Duan Yongping: All masters dare to serve the world, but they do better than others. The success of our company is not accidental. Adhering to our “Stop Doing List”, we will sift partners and suppliers, and we will gradually build a good circle, which is very valuable in the long run.
Dare to be the world, refers to the product category, because you guess the market demand is often difficult, but others have clarified the demand, and you are more certain if you meet this demand. (Dare for the world refers to the category of the product, and the first refers to the ability to make a good product. In other words, the dare for the world refers to “doing the right thing”, and the first refers to “doing things.” Right” ability.)
14. Have there been any investment errors?
Duan Yongping: No investment mistakes, speculation. (In fact, I have made investment, but the mistake is very small, I may not think of it at the time.) When speculating on Baidu, I was short squeeze (short squeeze) and lost 100 million to 200 million US dollars. I learn from the old man: I don’t touch the ones I can’t figure out, and I will definitely miss many good opportunities, but I promise to seize the right ones. Investment follows Mr. Ba’s logic: first look at the business model and understand how companies make money. Ninety-five percent of people invest in the market by Focus, which means they don’t understand investment. Must focus on business. The company wants to make money.
15. When do you sell apples and why?
Duan Yongping: Good companies don’t need to sell!
16. After you came to the United States, how has your competence circle improved?
Duan Yongping: The ability circle is not to draw a circle on the ground with a golden hoop, saying that you should stay inside and don’t go out, there are monsters outside. The circle of competence is: be honest with yourself, know what you know, don’t know what you don’t know. With this attitude, and if I can understand something, then it is in my circle of ability, otherwise it is not.
Apple’s 1 trillion market value? I never care about this, I only care about its ability to make money. Buying a company does not intend to sell it unless its profitability changes or it has a better target. I know it well and the price is very low.
17. What do you think of the entrepreneurial “Hope is only after persistence” and “Stop Doing List”?
Duan Yongping: “Stop Doing List” is about doing the right thing. If you know that you are wrong, you will change it immediately. Entrepreneurship still applies. (That is, you must stick to the right things, and correct the wrong things as soon as possible!) As for how to do it right, it is methodological and can be solved through learning.
If you don’t know what is right or wrong, that is, there is no right and wrong view, then it is very difficult to achieve in this life. The concept of right and wrong is to be cultivated and persisted by yourself, there is no shortcut. For example, smoking. Many people do not quit smoking because they do not know that it is bad, but because they cannot resist short-term temptations.
18. Why not see the media?
Duan Yongping: I don’t want to give the public the impression that I am in control of the company, so I rob the CEO of his sense of accomplishment. It is very important not to take credit for them, because in fact I have not been on the front line for more than 10 years. If I were the CEO, the company might not be able to do so well.
19. How do you think about the difference between the Chinese and American market environments for entrepreneurship?
Duan Yongping: The US environment is better. It’s even harder to be a business in China. After doing your own business, you have to do police, fire, and security matters. Trouble…
20. You advocate no loans and no margins. What if you miss the opportunity?
Duan Yongping: Loans and margins are faster when you make money and faster when you lose money. I often walk by the river. How can I not wet my shoes? Once the shoes are wet, they will be wet for a lifetime. Why do you take this risk? (Some opportunities are always to be missed. As long as you ensure that you seize the right ones, it is enough.) Most of our competitors in the past have disappeared, and we are still alive. This may be the reason.
21. What do you think of the smartphone case industry?
Duan Yongping: I don’t understand. But I know that good things don’t need to be promoted. As soon as smart phones come out, they will soon become popular. If you don’t catch users quickly when your product is launched, it’s definitely not good enough. You must come back and think about your own problems.
22. Suggestions for the career development of newcomers in the workplace?
Duan Yongping: Do your job well, don’t jump around. Many people in Silicon Valley like to change jobs, but 30 years of working at Apple is better than jumping to most startups.
23. How to look at entrepreneurship?
Duan Yongping: If you don’t understand what you are doing, it is impossible to convince investors that you are. Huang Zheng is particularly good. He keeps asking what this means and what does this mean, and he pays attention to the nature of the problem.
24. Corporate culture?
Duan Yongping: The corporate culture is Mission, Vision and Core Values. “Mission” is why it was established; “Vision” is where we are going; “Core Values” is what is right and what is wrong.
Recruit people who are qualified and suitable. Appropriate means cultural match, and qualified means ability. People whose values don’t match, resolutely don’t. Those who cause trouble for the company are often qualified but inappropriate people. A group of suitable ordinary people can do great things if they work together.
25. How do you think Chinese companies love to overtake in corners?
Duan Yongping: Alaska has a saying, shortcut is the fastest way to get lost (shortcut is the fastest way to get lost.) There is no such thing as overtaking in a curve. It is most important to pay attention to the essence! Otherwise, even if you exceed it, you will be overtaken back.
26. How to judge that the stock price is not cheap?
Duan Yongping: This is a question that people who are concerned about the short-term market will ask. I do not consider this issue. I pay attention to the long-term and don’t touch the ones I don’t understand. Any thinking about the market and timing may be wrong. I don’t look at the market, but I look at business. You said a certain stock is expensive, how do you know? Standing now and looking 10 years ago, it is estimated that everything is expensive. You stand 10 years later and look at the present. You can understand and cheap companies, just buy them.
27. How to understand “Stop Doing List”?
Duan Yongping: The main thing is to do the right thing. It is not a skill (skill) or formula (formula), but a way of thinking: If you find a mistake, stop immediately, because the cost is minimal at this time. I can’t tell you right or wrong, how to judge right or wrong, you have to accumulate it yourself.
You should not lie to users or investors. Every sentence is a promise. You should know this. You go to find investment and say that there is no business, no skill, and nothing, then you go to your dad. You must have something to see investors. If you don’t know what to do, how can investors trust you?
As for how to do things right, it takes time to cultivate skill sets (it means to have a learning curve, to allow mistakes). Adhere to the “Stop Doing List”, which is amazing. Compared with Apple, OPPO is the same in doing things right, but there may be some gaps in doing things right. But we have accumulation. We are better than most companies.
“Stop Doing List” does not have a shortcut (shortcut), you must rely on yourself to accumulate, to save, to realize. Stop doing is to stop when you find a mistake. The effect is obvious after a long time. Many people can’t let go of the temptation before them, and they will still be there 30 years later. You must stop if you are wrong and resist short-term temptations.
28. How to better bring babies in Silicon Valley?
Duan Yongping: The most important thing is to give children a sense of security. How to give? It is to give quality time, it is high-quality company, to make friends with them. High-quality companionship means staying together and hiding the phone.
Love unconditionally. Chinese people are prone to conditionally love, “You got first, and my father loves you very much”, these two sentences must not be put together. The Chinese also love to boast that their children have won first place, which can easily put pressure on their children. The child will think: I am second, do you not love me anymore? I take my children and insist on not saying “NO” to my children as much as possible. Except for matters involving borders, let them explore boldly.
29. What do you think of the old bus?
Duan Yongping: Mr. Ba is a very good person. He is sincere and sincere to people. He is very wise, and he can speak the essence of any complicated problem in one or two sentences. He is so wise, so successful, and so good to people. I have basically never seen this in Chinese companies, and there are very few American companies.
30. Why sell NetEase?
Duan Yongping: Because Ding Lei is an older child, he can’t worry about putting so much money in his hands, although the stock price proves that I might have sold it wrong.
31. What do you think of Tesla?
Duan Yongping: Munger said that Musk is a proven genius. His IQ may be 190, but he himself thinks he is 250. But run a company, you must be rational (to run a company, you must be rational!). In my eyes, Tesla is a zero-value company, and it will end sooner or later. His culture (corporate culture) is terrible.
32. How to build long-term friendship?
Duan Yongping: It is to deal with people sincerely. What I learned from my wife, the most important thing in a person’s life is friendship. So be tolerant to friends, be kind, and be honest. But he didn’t say to have many friends, it is enough to have a dozen good friends.
33. How to inherit culture?
Duan Yongping: There is no special secret. The main thing is to choose and find people in the same way. Because you can’t convince people who don’t believe you. People who don’t believe in you, when you talk to him, his eyes are floating, you can tell. Then we talked year by year, month by month, and day by day, and weed out the inappropriate ones by year.
34. How to choose people, including partners and employees?
Duan Yongping: Finding the right one is luck. The main thing is to have standards, which should be eliminated, and the groups should be separated. Know that you are wrong and have the courage to stop. The sooner you stop, the lower the cost.
35. Take your “Stop Doing List” as an example.
Duan Yongping: What I think is not what I think. I learned radio, but I didn’t do this, because this is not what I love to do. The job you were looking for when you graduated from graduate school said how many years can you be the chief of the department, and you can divide the house in two years. But I am not interested. So I left. Later, I went to Foshan Radio No. 8 Factory. The company with only a few hundred people recruited 100 undergraduates and 50 graduate students. Everyone is not satisfied, and many people want to leave. As a result, I made it two years after I left. When I went back, I found that the group of people were still there (only one person left).
Many people say “I didn’t find a better opportunity”, but they didn’t have the courage to stop doing the wrong things. So stop doing means to stop immediately if you find something wrong, or you might stay in that bad place two years later. What I have been thinking about is long-term things. Many people are turning around in their immediate interests, and he will still be there in 30 years.
36. The US misunderstanding of China?
Duan Yongping: Americans have a good overall understanding of China. I support political right, because if you are not even politically correct, how can you be correct? The current American presidential election is very confusing to me, but I believe it will be better in the end.
37. What is the most important thing about (value) investment?
Duan Yongping: right business, right people, right price. (The right business, the right people, and the right price. This is what Mr. Ba said.) The right business refers to the business model, and the right person refers to the corporate culture. Price is not that important, business and people are the most important. Culture has a lot to do with founders. Business model is the way to make money. You have to realize this by yourself, and I can’t tell you. Just like if you don’t play golf, I can’t tell you how fun it is.
38. How to persist in starting a business?
Duan Yongping: My understanding is very simple. If you can’t persist, you can’t persist. What you stick to is definitely something you can’t let go, and then you will know it yourself.
39. What do you think of Bitcoin/Blockchain?
Duan Yongping: I am not interested in things that do not generate cash flow. I don’t understand the blockchain, don’t understand it or read it, don’t understand it, I can’t make a big bet. But I don’t understand, it doesn’t mean you don’t understand, you have to vote for what you can understand.
40. How to find out and keep calm?
Duan Yongping: It’s not difficult to keep it, because it’s there (it’s something already in my heart). However, Ma Yun also said, “It is difficult for ordinary people to have a normal mind, so a normal mind is also not a normal mind!” Discovery, it depends on suffering. Because there is no normal heart, if you don’t be rational, you will stumble.
41. How do I find what I like to do?
Duan Yongping: If you always stay in a place you don’t like, you may never know what you really like. So if you find something wrong, you have to stop. Try and find. Do what you like, there is no concept of overtime, because you will work hard.
42. I think failure is inevitable, success is accidental, right?
Duan Yongping: There must be a reason for success.
43. If there is a chance to live again, what will be done differently?
Duan Yongping: I don’t know, I haven’t thought about this issue that way. Maybe drink less red wine?
44. What do you want to say to your son most?
Duan Yongping: It’s no use saying anything, what you do is important (the most important thing is what you do). (This is what the old man said)
45. How to find out what is right/wrong?
Duan Yongping: Have time to think. You may think for a long time, but one day suddenly there is a flash of inspiration, and you will understand that it is wrong/right. We thought about Xiaobawang’s advertising slogans, but after half a year, we thought about the words. Many people are busy all day long, have no time to think, and may never understand.
46. Is there a major crisis in China?
Duan Yongping: Someone asked me on WeChat if there would be turbulence. I said I thought we were in turmoil all the time. I think we have always had crises. There are crises and opportunities. Just be yourself.
47. What do you think of the trade war?
Duan Yongping: If you look at it in 10 years, this matter will definitely pass. If there is a problem with the stock market, Apple must have a lot of cash, so it must be better at this time.
48. How did you find the mission of your company’s products?
Duan Yongping: The product angle was found out slowly, and if it was not right, I stopped quickly. For example, Apple’s charger has been talked about for a year, but it has not been launched this year. If it is not launched, there must be problems that have not been resolved. Do not push if it is not resolved.
49. Men are afraid of going wrong. Which one will be popular in the future, what you are good at, or what you like?
Duan Yongping: If you know: good at + good at + like, then you must do that. The problem is that it’s hard to know, so do what you like first. A lot of money is not a good thing, because making money is a great pleasure, and if you have more money, you lose a very important pleasure. Money is almost enough, it is more important to do what you like.
50. Is the Apple Watch ECG FDA certification valuable?
Duan Yongping: Of course there is. First of all, it attracts the eye and makes people know; secondly, the doctor will recognize it after certification.
51. The next breakthrough in human-computer interaction?
Duan Yongping: I don’t know. But the machine is definitely getting stronger and stronger. People have already lost in Go, and you can’t beat the machine even in speculation. But in terms of investment, machines can never beat people, because machines cannot understand companies.
52. How to treat differentiated pricing (different prices for different customers)?
Duan Yongping: The prices are inconsistent, one is that they will find out sooner or later; the other is that customers find that they can bargain, and they will try their best to bargain with you, and waste a lot of your time. This is troublesome. The price is the same, which will save a lot of trouble. The main purpose of making products is to capture customer needs, not prices. Take a look at John Leahy of Airbus. (One person defeated Boeing! Of course, it is the product behind it!)
53. What (advantage) of Huang Zheng made you vote for him?
Duan Yongping: I have been friends with Huang Zheng for more than 10 years. I know him and I trust him!