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First, let us review the process of Xiaohongshu’s transformation from a small and beautiful startup to a large company.

Before 2018, Xiaohongshu had only a few hundred employees. The company's initial community department was more like a magazine, recruiting interesting editors and young people with big ideas. By 2021, after the epidemic, Xiaohongshu's daily active users reached 30 million. With the surge in the number of users, the things that needed to be done and the problems that needed to be solved also increased exponentially, and the staff began to expand greatly. In 2021, the number of Xiaohongshu employees has increased tenfold compared to three or four years ago, and now, with the commercialization and e-commerce business, Xiaohongshu is already a company with about 10,000 people.

Image: Xiaohongshu Office Building

When Xiaohongshu's user base expanded rapidly, technical issues, especially search and algorithm issues, were the first to be addressed. A slice of the organizational expansion of the technical department can also explain what happened to Xiaohongshu.

Currently, the most powerful technical leader of Xiaohongshu’s business is Wang Xiaobo (nickname: Fengdi) from Alibaba Entertainment, who is responsible for community, e-commerce and some internal applications.

An old employee of the technical department who has left the company told us that after Wang Xiaobo came, more former Alibaba employees came and formed groups. After getting the results, the snowball rolled bigger and bigger, and the group became bigger and bigger.

When Wang Xiaobo jumped from Alibaba, he was a P9 and was only responsible for the search of Xiaohongshu, but now he is the vice president of technology of the entire Xiaohongshu, managing a team of more than 1,000 people and reporting to COO Ding Ling (nickname: Conan).

The employee explained that "grouping" is necessary for products with weak technical architecture like Xiaohongshu, because the familiar team can quickly copy the previous code and quickly make up for the technical deficiencies. Working as a team can also get results faster.

However, grouping up also brings a problem that only occurs in large companies - "mountains". As the technical department expands, more and more small mountains are formed. Xiaohongshu employees have to take nicknames when they join. At one time, the technical team had a small group with the nickname of "wuxia" and a small group with the nickname of "Avengers". The internal nickname was "wuxia vs. Avengers".

Some old employees who do not stand in line are excluded. It is a common practice to first assign the core business of the old employees to trusted subordinates, and then give the old employees more difficult or marginal business after the gradual transfer. When it comes to assessment, they are given low performance because the results do not match the current position.

The employee who voluntarily resigned was paid 3.5- in the first year and 3.5- again in the second year. "Unless you have no pursuit for what you do, you will just lie down. But when people's values ​​are denied, it is hard not to feel pain, or even humiliation."

In addition to the "mountaintop" problem, many old employees also feel that they have entered a new stage of being "geared" and "instrumentalized" from their original creative state with a larger scope of responsibilities.

This is inevitable because more complex things often require the collaboration of more people, and everyone can only become a link in the process.

Several employees who have left or are about to leave expressed their understanding of this. They just feel sorry that everyone wants to stay in a fast-growing company, but in the end, "they have done the work, suffered the hardships, but have not reaped the rewards."

How should managers choose between getting business results quickly and increasing organizational entropy? The employees who left felt that the top management acquiesced and approved of the current results.

Any company will inevitably go through a stage of organizational chaos during its rapid development, and Xiaohongshu is no exception. In other words, Xiaohongshu’s “big company disease” is inevitable, it’s just a matter of how the top management views and faces this inevitability.

What’s more tricky is that before Xiaohongshu had the chance to truly become a more competitive large company, its business problems outweighed its organizational problems.

Currently, 130 million users visit Xiaohongshu every day, but the company's top management has set a goal of 300 million daily active users for the app.

We learned that this goal was proposed as early as two years ago. Xiaohongshu employees who are familiar with the situation said that at the time, they wanted to achieve 300 million in three years. In addition, according to the news from New Vision, the goal of "sitting one and watching three" was also clearly proposed at the 2023 executive co-creation meeting.

An employee of Xiaohongshu told us that the internal time limit for the 300 million target is roughly between the middle and end of next year. This means that Xiaohongshu needs to at least double its users within a year based on its current level.

But in reality, the growth of this number has been a bit slow. Questmoblie data shows that as of April this year, Xiaohongshu's daily active users have increased by less than 10 million.

Under this anxiety, not only did the founder Mao Wenchao personally lead the community department, but Xiaohongshu also began to change people and strategies from the CEO down.

But the reality is that the more difficult and anxious growth becomes, the less likely anyone can make real decisions. Yun Fan from Bilibili and Ye Heng from Kuaishou have only been with Xiaohongshu for less than half a year. For them, with a CEO involved in the business, what they do may not be important, but what the CEO wants to do is more important.

In the past few years, Xiaohongshu has experienced frequent turnover among its senior management. How to land and how to stay has become the first problem many people have to solve. Employees see them as a group of people who are even less secure than themselves, and guessing the CEO's intentions has become the most effective way to get through the probation period.

The same is true for middle-level managers. In order to protect themselves, new middle-level managers must show performance and achievements that are different from those of front-line employees, and for this reason they inevitably have "selfish motives."

Some middle-level managers who have just joined Xiaohongshu, when communicating with their superiors, prefer to work on projects that are beneficial to their reports rather than on business that other teams need to cooperate with. Frontline employees therefore feel that "it is a double attack to deal with the selfishness of their superiors while also doing business."

When senior employees met senior management at the company, they complained to them, and the other party responded frankly, "There's nothing we can do. It's difficult for everyone."

But in the final analysis, besides the fact that the business itself is difficult, what else is difficult about it?

A former Xiaohongshu executive who has left said that the reason lies with the founder Mao Wenchao, because he is indecisive in making decisions and unable to organize a combat team. However, the person who is really responsible for the human resources system of Xiaohongshu is another founder Qu Fang.

Photo: Mao Wenchao and Qu Fang

The Netflix Culture Handbook argues that the way to keep a company vibrant and entrepreneurial is to make everyone understand the company's business, and "HR should also operate like those high-performance engineers."

However, according to Xiaohongshu employees, Qu Fang, the person in charge of organizational construction, has not participated in a business review meeting for a long time. The new and old HRs are constantly being replaced during the replacement of senior executives, and the team supporting the organization is not stable.

At present, the three business departments of Xiaohongshu, namely the Community Department, E-commerce Department, and Commercialization Department, are each busy with their own business. Employees are not even aware of the current situation of other departments, and have not been told frankly and clearly about Xiaohongshu’s real difficulties and solutions.

Xiaohongshu’s culture also does not support the company in dealing with “big company disease”.

In the last anniversary speech, Mao Wenchao recalled the promise he and Qu Fang made at the beginning - he proposed to leave any position in Xiaohongshu to the most qualified person; Qu Fang proposed to open their ears and listen to each other. "The promises we made to each other that night were actually 'culture'."

However, the culture of freedom and honesty has not taken root in Xiaohongshu. Some employees feel that the democracy of Xiaohongshu is superficial.

For example, when it comes to promotions, Xiaohongshu will ask everyone to vote, and then the supervisor will comment on it. After the results are announced, everyone will discuss them again. But most people feel that it has nothing to do with them and don’t really want to give effective opinions. In the end, the promotion vote becomes a matter of trying to figure out the boss’s thoughts and giving opinions. “After two or three rounds, it’s better to let the boss make the final decision.”

Telling the truth is not an easy thing. Netflix's culture of "absolute honesty" is not just an empty slogan, it has a series of systems and practices to ensure it.

When they meet with the executive team, they do a "start, stop, and continue" exercise. In this exercise, everyone tells a colleague one thing he should start doing, one thing he should stop doing, and one thing he is doing very well and should continue to do. After the executives return to their own teams, they continue to share and pass on these contents. The importance and impact of telling the truth are repeated and exaggerated, setting an example of honesty from top to bottom.

In the early days of Alibaba, the culture of transparency was largely achieved through intensive cultural value training and a free intranet. In the past, Alibaba employees could discuss public affairs related to employee interests, exchange business, question executives, and even deduct points from the founder on the intranet.

Xiaohongshu has done little to ensure transparent communication. It advocates listening to each other, but decisions are not made through effective debate, but based on the founder's intuition and opinions. It has an intranet, but it is not open enough, and posts that are not liked will still be deleted.

Xiaohongshu has developed some of its own characteristics in management, such as emphasizing "asynchrony", that is, it hopes that all information will be in the form of documents before the meeting, and participants will deposit their opinions on them. During the meeting, they will quickly review the documents they have already read and draw a conclusion.

The "asynchronous" culture does not encourage interrupting other people's work rhythm at any time, nor does it promise to respond to the needs of other partners at any time. However, this precisely hinders some timely and effective communication.

Alibaba drives its employees with its mission of "no business is difficult to do"; ByteDance strives to create a culture of excellence that encourages self-motivation; Netflix eliminates all the hassles for its employees and promotes a corporate culture of "freedom and responsibility" to allow more people to have an entrepreneurial mindset.

What about Xiaohongshu? Ultimately, Xiaohongshu has not yet established a truly effective organizational culture.

In the internal letter on the 11th anniversary, Mao Wenchao and Qu Fang said: "These phenomena (of big company disease) make me deeply feel the pain of Xiaohongshu's classmates on the front line. They often have no energy to use, and see opportunities slip away. They also feel the bloat and entropy increase brought about by the complexity of business and the growth of organization."

But going back to the source, the reason for "not being able to use the energy" may not be because of organizational bloat, but because the founder himself did not think clearly. Only when the founder is more determined can there be a clearer direction and communication from top to bottom.

Where is Xiaohongshu's future and what exactly does it plan to do? Only by answering this question honestly and clearly to everyone, whether it is front-line employees or mid-level employees, can they each perform their duties, take responsibility, and truly achieve self-drive.