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"As an entrepreneur, even if I lose my business and my home, my spirit is still there and my methods are still fresh. At worst, I can start over again."

After leaving Dangdang, Li Guoqing founded Xiangyangyang E-commerce, and started live streaming wine and beverages. In just two years, he became the top influencer in the wine and beverage category on Douyin.

How did he do it?

In the face of today’s market environment, do young people still have opportunities to start their own businesses?

For those born after 1995 and 2000 in the workplace, can the previous management culture still play a role? How should entrepreneurs motivate them?

In response to these questions, we recently interviewed Li Guoqing. He said,"In the past, you only needed to generate traffic and sales, but that's no longer the case today. You have to generate profits."

"The post-2000s generation no longer accepts the threatening management style of the past and needs positive incentives."

The following is a condensed version of the interview, I hope it will be helpful to you.

Oral: Li Guoqing, founder of Dangdang.com

Interview: Sun Yunguang, Content Director and WeChat Editor of Zhenghedao

Editor: Mi Liping

Source: Zhenghedao (ID: zhenghedao)

Sun Yunguang: You are the first generation of Internet entrepreneurs in China and have witnessed the rise of China's business society. You are from Beijing. When you were in college, you dared to lose 1.5 million yuan when you started your own business. Was it because your family was so well-off? Did you have the confidence?

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Li Guoqing:No, my family is just an ordinary family, but we are really brave.

At that time, I was the chief editor of a series of books and got a contract from a bookseller for 200,000 sets of books. The dealer also promised to pay a 5% deposit in advance. We planned to print 100,000 sets first, but the dealer only paid the balance of 15,000 sets. The remaining books were not sold because they were unsalable. In the end, I owed the printing factory, paper mill, and bookbinding factory a total of 1.5 million yuan.

Some people told me to sue him immediately, saying that owing 200,000 yuan in 1986 was a big deal, but I didn’t sue him and just moved forward with the debt on my own.

Other booksellers and friends suggested that you go abroad. At that time, there was a craze for going abroad. They said that you would never be able to pay back the 1.5 million in your lifetime, which is conservatively equivalent to 60 million today.

I really wanted to leave, but the printing houses that printed for me were all contacted by the vice president and director of the publishing department of the publishing house. I was contracted by a public institution at the time, and if I left, the public institution would be cheated. So after thinking it over, I decided not to leave and see if I could pay back the 1.5 million.

My parents also supported me very much. In 1987, they took out all their savings of 5,000 yuan to help me, otherwise we would have been unable to make ends meet.

Sun Yunguang: Later, you seized the opportunity of online bookstores and founded Dangdang.com. The most exciting battle was the battle with Amazon. At that time, most people recognized foreign capital and thought that they represented a more advanced business model. How did you defeat them?

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Li Guoqing:Amazon originally wanted to acquire us. Our sales in 2003 and 2004 were 150 million, and they offered us 1 billion U.S. dollars. They were determined to get us.

Back then, Amazon won wherever it went. It took only one year to cripple the British book e-commerce industry. Later, it went to Germany, France, Japan, and South Korea. Without exception, when I refused to sell to them, they threatened us, saying that if we did not sell to them, they would start a price war with us.

But I think that if you sell English books, it is okay, but not necessarily in the Chinese book market; and China's e-commerce is still immature, accounting for less than 1% of its global sales, and as multinational companies their decision-making chain is also very long.

At that time, the price war had reached an unprecedented level of brutality. Amazon used crawler technology to select 100,000 books from Dangdang.com every night, and then set the price of each book to be 1 yuan, 0.1 cent or 10% lower than Dangdang.

I ordered Dangdang to fight back, and after a month of price comparisons, the price dropped from 25% to 35% and even 50%. I disclosed this situation in various meetings, and domestic private bookstores were the first to be shocked, and publishing houses were also in an uproar.

I used this opportunity to warn publishers about Amazon's ambitions. At the same time, I actively worked with the China Publishing Association, the China Book and Periodical Distribution Association and other relevant departments, using the Anti-Unfair Competition Law to require publishers to stop stocking unfair competition websites. In the end, Amazon Books lost $1 billion in China and withdrew from the Chinese market in disgrace.

Sun Yunguan: You were very bold back then. After Amazon, you fought against Taobao and JD.com. But later on, you missed several strategic opportunities. Why?

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Li Guoqing:At that time, Dangdang was far ahead in the book business, and books were also the most suitable for online sales. In Dangdang's exploration of department stores, I failed three times and burned through 1 billion yuan in ten years. There was a time when sales exceeded 100 billion yuan, but I didn't keep the department stores and missed the golden time.

Looking back now, the biggest problem is that the listing harmed me. One group is more radical and believes that you should develop department stores at a loss, while the other group believes that you are already a listed company and should pursue profits.

The fund representatives who hoped that I would expand the department store at a loss did not know that my competitors JD.com and Amazon (China) were suffering huge losses at that time. JD.com lost 8 billion in one year and had been losing money for five consecutive years. They cried out when I lost 200 million in a year.

In this situation, I needed to continue to raise funds. The 300 million US dollars I got when I went public was not enough to cover my losses, and I might not even be able to keep the books. So in the end, I resolutely defended the books, and the department store missed out.

The financing conditions were actually very good at that time, but Dangdang did not do it, which was a very big mistake.We have also encountered capital willing to support us. If they had succeeded, China's department stores might have been dominated by the three major players: Tmall, JD.com, and Dangdang. There would be no Vipshop and the subsequent No.1 store.

Sun Yunguang: How did your inner mentality change at that time, from being very courageous to becoming cautious?

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Li Guoqing:Our board of directors is a group of cautious people with traditional thinking. My investors and ex-wife Yu Yu are also highly cautious, so I have always been unwilling to accept that the decisions I made were not made on my own.

Dangdang has a huge number of users. When I entered the department store industry for the second time, clothing accounted for half of JD.com's sales, and baby products even exceeded JD.com. I have my own advantageous categories. JD.com is huge in digital products, and it also faced many difficulties in expanding its department store categories beyond digital products. However, I only lost 200 million yuan that year, which was far from 8 billion yuan, so I was stopped.

Sun Yunguang: What do you think of Liu Qiangdong today?

" Type="normal"@@-->Li Guoqing:I think he is bold and courageous, and he started his own business in the countryside. At that time, JD.com had an annual sales volume of over 100 billion yuan, but Liu Qiangdong spent a lot of money on building his own logistics, and it coincided with the financial crisis. He couldn't find investors to invest money, and suffered heavy losses. Liu Qiangdong's hair turned white overnight.
At that time, the money in his account was almost not enough to pay the salaries. I even publicly said on Weibo: "Lao Liu, quickly set up a surprise financing team, don't let e-commerce dominate the market!"

As a result, two months later, the Russian capital giant DST invested 500 million US dollars and he survived.

2. Don’t start a business only when you can’t find a job
Sun Yunguang: Your entrepreneurship has been dealing with books since the beginning. Why did you choose live streaming of the wine industry after leaving Dangdang?

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Li Guoqing:Since I started my business, I have never given up on books, and I am still planning to develop books. On April 23, 2022, we did a special book live broadcast, but the sales volume was less than 300,000 yuan. Categories like books have a very low gross profit margin, and it is difficult to support a team, so it is more suitable for individuals to test the waters.

Many people asked me why I chose to start in the highly competitive alcoholic beverage category. In fact, I had the following considerations:

First, choose a track with entry barriers.When choosing a business direction, it is best to find an absolute blue ocean. But at the same time, I think this track must also have an entry threshold. For example, the wine track has relatively high requirements for the supply chain, so that I can play to my advantages in negotiation and product selection.

Second, profitability.Some categories have low profit margins, while others have high profit margins, so the choice is very important. Where is the break-even point of the category you choose? What is the sales scale? Is it profitable to reduce costs, increase prices, or collect membership fees? These are the questions that different business models need to answer, and the wisdom of choosing a business model lies in this.

Third, analyze the fan portrait.In my last business venture, my fans were mainly middle-class and white-collar men.

For these people, the demand for alcohol is obviously greater, and the domestic market for white wine is larger than that for red wine. So my goal is to help fans discover high-quality white wine products and brands with real cost-effectiveness, and then use my negotiation and product selection advantages to achieve a win-win situation with fans.

What we are doing is cost-effectiveness. Cost-effectiveness means that our performance will be improved and the price will be increased a little. In the next ten years of low economic growth, cost-effectiveness means that the performance will be improved and the price will have to be lowered.

This is how Japan has grown over the past decade. You can see that catering services are getting better and better without increasing prices. The same goes for Uniqlo. Its price-performance ratio can win over more mass consumer groups.

Sun Yunguang: I think what you said will encourage the confidence of many entrepreneurs, because everyone feels very stressed now.

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Li Guoqing:Small profits but quick turnover.

The three-year epidemic has hit the catering industry hard, especially the catering industry. But don’t learn from the airlines and expect to make back three years of losses in one year. Only in this way can you build a century-old store. They are monopoly enterprises and we cannot compare with them.

I also encountered some restaurants that were not up to par. When I went to some old brand stores in Shanghai last month, the prices had tripled compared to before the epidemic. Of course, the commercial real estate developers also need to reflect and lower the rents as soon as possible. If the annual replacement rate of commercial real estate exceeds 30%, then the shopping mall is extremely unhealthy.

Sun Yunguang: Do you think it is more difficult to run a business now than when you started your business, or are there more opportunities?

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Li Guoqing:It is definitely more difficult, there is no doubt about that. Ten years ago, we caught up with the rapid growth of China's economy, with a growth rate of 8.5% for many consecutive years, so we require that the growth of enterprises must be 24%. 16% growth is nothing. It can be said that the chances of success in entrepreneurship and wealth creation are very high.

In the new decade, if our economic growth is 5%, the success rate of entrepreneurship will be twice as difficult, but there is still a lot of room.

In the past, we have generated 200 million people with strong purchasing power, and their consumption is still upgrading. Even the richest people may wear a Uniqlo base shirt, but they will never wear a Uniqlo coat. Everyone's consumption behavior is upgraded or downgraded, which is quite complicated. However, we don't know what their future lifestyle choices will be, and there are many opportunities here.

Coupled with technological changes and the global situation, in the medium term it is unstoppable to stop the entire economy from moving out of China. This is a huge space and opportunity for the new generation.

In the past, we made money carelessly and casually, but now you have to provide high quality and high service.

Sun Yunguang: Do you still encourage young people to start their own business? If young people start their own business, what would you tell them?

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Li Guoqing:I encourage entrepreneurship, and I even encourage college students to start their own businesses. But if you don't have new ideas and just copy others' ideas, don't start a business.

Business school professors studied successful entrepreneurs and found that they all had genius ideas. This genius idea is not management ability, but insight into users. When you discover what users' needs are not met, you go and do it.

For example, the silver-haired economy, what exactly do they need? Beauty pageants may be a big market, and there are many similar ones. Find new needs and then start a business, this is the first.

Second, don’t start a business just because you can’t find a job.If you can't even find a satisfying job, starting a business is much more difficult than finding a satisfying job.

Of course, starting a business now is different from what we did before. Don’t always pursue unicorns, but proceed step by step.

Capital nowadays is not that enthusiastic. In the past, you said that three or thirty stores were not making money, but when you passed the critical point of 300 stores, you would make money. Now, you have to open 30 stores yourself and make money first, then capital will look at your model.

In the past, it was enough to just circle traffic and sales, but that’s no longer possible today, you have to circle profits.

3. Positive incentives should be given to the post-2000s

Sun Yunguang: What do you think about the post-00s generation rectifying the workplace? Are they too pretentious, or are the older generation of entrepreneurs out of date?

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Li Guoqing:Now that the post-2000s are entering the workplace, corporate culture has to be adjusted. The old corporate culture, “996”, etc., are no longer applicable in the new era. Your management methods and management tools must conform to the concepts of modern people.

Young people today really don’t accept the “996” and overtime work schedules. Even my company that sells goods through live streaming is no exception. “Post-95s” and “Post-00s” can work more but earn more, and if they don’t earn more, they won’t work more. Some people don’t want to work overtime even if they earn more. These are the two mainstreams. In the past, people didn’t necessarily get bonuses for working more, so no one would do it.

The past management model and management culture must be adjusted. Otherwise, if we stick to the old ways, those born after 1995 will soon become the mainstream.

Of course, there are some old-school managers who think that since the current employment situation is bad, I will torture you. This is called threatening management, and threatening management cannot lead to a creative and innovative team.

What is threat motivation? The leader toasted his subordinate, but the subordinate refused to drink and was slapped in the face.

There are also some Internet companies whose threat incentives have intensified in the past few years. A group of key employees have worked in the company for more than ten years. Most of them are over 40 years old. They have elderly parents and young children to take care of, and they also have mortgages and car loans.

The company knows that they are reluctant to leave the platform and the salary, so they torture them, even knock them to the ground and step on them. These are all threats and incentives.

This kind of threat incentive can indeed improve labor productivity under certain circumstances and for a certain period of time. But its effect will not last long and may even cause a fire in the backyard of the organization.

Today's "post-90s" and "post-00s" don't buy into threats and incentives. If you try to intimidate and incentivize them, they'll leave without saying goodbye. Today's "post-90s" are very straightforward in "firing their bosses" and they'll say goodbye with just one word.

On the other hand, I think that after four years of experience from college to the workplace, the post-2000s will also be divided. 20% of them will accept the traditional management methods, while the vast majority will not. They will then find new types of companies and new cultures.

A company without a wolf culture will definitely not succeed, but the wolf culture of a company is not reflected in the extension of time, nor is itIt is reflected in the fact that there are many indicators in the process, but it is result management.

Especially when many workplace models are unclear or even when there are conflicts, in a word, it is result management. You don’t have to come to work, just give me the sales results.

Sun Yunguang: I see that your management of programmers is also in the same way, allowing them to work from home.

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Li Guoqing:Yes, get results. Now the United States can work from home two days a week. When I was at Dangdang, I advocated working from home. What I want is efficiency and effectiveness. To achieve efficiency and effectiveness, your management must encourage creativity.

Now the problems of big companies such as adherence to conventions and bureaucracy have permeated into small companies. They write daily and weekly reports all day long, but in the end they forget the results. So there will be a lot of changes in corporate culture.

Sun Yunguang: What are your thoughts and ideas on motivating the post-2000s generation, that is, mobilizing their creativity, professionalism and enthusiasm?

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Li Guoqing:I am not one of those who lie flat on my back. I am not saying that life should become comfortable, but that I should create the qualifications to lie flat on my back.

I don't think work is an end; it's a means. Don't lie on the concrete floor; you can lie on a carpet. But you have to spend money to buy a carpet.

Today’s “post-00s” are ambitious and enterprising, because they are all only children, are filial to their parents, hope to do something to help their parents, and are willing to challenge themselves to do so.

At the same time, they lack a sense of security and belonging, and are relatively lonely. On the other hand, we also think they are selfish. In fact, they have little communication with the team. They should do more team building, have dinner together, go out to play, and let them build a sense of honor for the small team. I think the team atmosphere is very important.

Sun Yunguang: Whether you are starting a business now or have some past experiences, I am reminded of a saying: managers should be carpenters, not doctors. Doctors only see patients and find faults in others, while carpenters look at the strengths of others. When everyone is criticizing the "post-00s", you find the shining points of the "post-00s", including some people and things in the past, and you look at their strengths.

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Li Guoqing:That's right. 20 years ago, Ellison, the founder of Oracle, said that if you are interviewing a subordinate, see if there is anything you admire about him. If not, then pass him as soon as possible.

This appreciation is not fake or hypocritical. It is not about saying abstractly "You are so nice" or "You worked really hard today". Rather, it is about a certain characteristic of his. For example, he likes to play the devil's advocate and is not unreasonable, or he always has sudden ideas and is very rigorous in his work. You find the unique characteristics of your employee and tell him and speak them out.

In fact, it is the same when raising children. Every child has a different personality and behavior. If you appreciate something about him, he will be encouraged. This is positive motivation.

4. Where is China’s physical bookstores heading?

Sun Yunguang: You have been dealing with books since you started your business and have rich experience. In 2019, I went to the offline bookstore in Meixi Lake, Hunan Province, which was jointly opened by BBK and Dangdang. The price of books was the same as that on Dangdang.com. Today's offline bookstores seem to be under great pressure. Why is it so difficult for the book industry to survive in China?

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Li Guoqing:There are two reasons. On the one hand, the physical bookstore industry was in a difficult situation before Dangdang, mainly because the book prices were too low and the rent was too high. Our book prices are only one-third of those in Hong Kong and Taiwan, and even lower than those in Europe and the United States, but our rent is almost the same, and this cost has always been high.

On the other hand, books are also facing challenges around the world, that is, they are too cheap online. When I went to the United States, the dean of the business school told me that he was sorry that he had formed the habit of buying books on Amazon after reading them in physical stores.

Sun Yunguan: I have been to many really good bookstores and really wanted to buy books, but they are really expensive. Why can’t the prices be reduced?

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Li Guoqing:I wanted to do an experiment at that time. Dangdang's physical store has the same price as the online store, but it doesn't make money. The decoration costs and rent are all paid by the commercial real estate. We moved in right away, but Dangdang Bookstore's cumulative loss in labor costs totaled 10 million yuan in three years, mainly due to high rent deductions. The annual average sales volume (referring to the efficiency of the terminal store per square meter in a year, annual average sales volume = annual sales performance/store area) of the supermarket bookstall was as high as 20,000 yuan.

I also asked other physical stores why they couldn't have the same price as online. They said the operating costs were high, so why couldn't they get close to the idea of ​​small profits but quick turnover?In fact, I think we haven’t found a successful model yet.

Even if the prices don't need to be completely equalized, there should be no discounts. For example, if you become a member, you can enjoy the same price as Dangdang. Why not?

For example, Sisyphus is located in a shopping mall and has annual sales of 1 billion yuan, but it is still able to maintain the same level. They have also made a lot of efforts and explorations, and it should be a banner. However, they dare not make the price of books the same as online.

Second, physical bookstores still believe in big bookstores, thinking that big bookstores are more wonderful and better, but their sales per square meter are very low. Only the state-owned Xinhua Bookstore can afford it, and they build their buildings with money subsidized by the government.

Third, the physical bookstores are not comprehensive enough, and selling coffee and cultural products does not account for 30% of sales. The best location for selling coffee should be visible as soon as you enter the door, so that everyone can check in. Now many bookstores sell coffee in corners, and there is not enough exploration in this area.

Sun Yunguang: The book industry has undergone tremendous changes in recent years. It is very difficult for publishers to survive now. Past experience may not be applicable. Many titles of books planned by Hua & Hua are horizontal, so that the titles will not be blocked when placed on the bookshelf. This is based on the model of offline bookstores. But now, there is only one book in the live broadcast room, and the model has changed a lot. What do you think will happen to the book market in the future? What should we do to survive in the future?

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Li Guoqing:I think the lipstick effect on books is due to the lack of talent and innovation in this industry. I think facing the new reading population mainly composed of people born in the 1990s, content innovation, as well as discovering new writers and promoting them are issues that publishers need to think about. Now that the wave of digital reading has arrived, how to seize this wave is also something that needs to be considered.

The characters in Hua & Hua's books are as large as possible because they are placed on the bookshelf. Online book shopping is the mainstream now, so we have to think about how to stimulate online orders. We call it text description. Why not add a short video to introduce the book? Audio is also fine. Why must we use densely packed text to introduce it? There is a lot to explore here.

The price war has basically stopped in recent years because the pattern has been set and there is not enough innovation. I think a new group of writers will emerge in the future, catching the "post-90s" and "post-95s", and a good work can lead an era.

Sun Yunguang: You are 60 years old this year. You are qualified and have the conditions to lie down. Why do you have such endless motivation in your heart?

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Li Guoqing:As an entrepreneur and start-up, from founding to managing Dangdang for nearly 20 years, I feel satisfied with my life.

In a broad sense, I am a giver at heart, not a taker, so I am willing to do something. I keep moving forward and am willing to do something. Even if I don’t run a business or do charity work today, I hope to do it in a big way. This is what I pursue for myself.

Even if the result is not successful, for example, Zaowan Dushu did not become the second Dangdang, I still enjoyed the process.

Of course, you also have to respect your own physical condition. When I was founding Dangdang and it was the most difficult time, our family and I still had five short holidays with our children, ranging from three days to seven days. It is possible to balance the holidays by arranging them every year. It does not mean that we should just ignore our lives and dive into it headfirst.

On the other hand, I no longer care about Dangdang. Even though I am a major shareholder, I cannot get any dividends.Some people say that the tiger has fallen into poverty, but at least I have been a tiger.

Life has been like this for decades, and the world is full of ups and downs. Everything that knocks me down will be my capital for moving forward. Ups and downs are all part of life. Instead of lying flat, it is better to accept reality and continue to struggle.

typesetting| Cao Buhua | One centimeterRotationEditor-in-Chief| Xia Kun