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interview丨xue fang compiled丨jia lin edited丨xue fang

produced by: deepnet·tencent news xiaoman studio

silicon valley diary editor's note:

silicon valley, located in a narrow strip of land of nearly 50 kilometers from san francisco to santa clara and san jose in california, is an important electronics industrial base in the united states and the most famous electronics industrial concentration in the world. this land has always been the birthplace of legends. the earliest legend can be traced back to 1838, when an adventurer named sutter discovered this fishing village, defeated the natives, and became a millionaire by relying on the fertility of this land.

ten years later, by chance, people discovered that an area on this land was full of gold, and sutter instantly became the richest man in the world. this huge amount of wealth also brought an irreparable disaster to sutter. adventurers from all over the world ignored the law and plundered this place. in the end, sutter died penniless and lonely. "gold rush" is the description of people's most crazy memory of that era and this land.

perhaps it is due to some kind of historical compensation. many years later, the golden sands can no longer be seen on the ground, but a group of talented and intelligent brains still gather on this land to create myths about science and technology. since the mid-1960s, silicon valley has gradually formed with the rapid development of microelectronics technology. its characteristics are based on some world-renowned universities with strong scientific research capabilities nearby, such as stanford, berkeley and california institute of technology, and on a group of high-tech small and medium-sized companies, and has large companies such as cisco, intel, hp, lucent, and apple.

after the 1980s, research institutes for emerging technologies such as biology, space, ocean, communication, and energy materials emerged one after another, and the region objectively became the cradle of high-tech in the united states. technological innovation has never stopped in silicon valley. the garage where the founder of hp repaired the oscilloscope, the cozy cottage of microsoft, the inspiration for the cpu created by the young people of fairchild, the bar where genius flowed in intel... "silicon valley fever" and "silicon valley fire" also inspired a group of domestic internet giants to write their legends with the times.

of course, technological innovation is endless in silicon valley. openai has become a new legend in this land, opening the interstellar door of a new era. the buildings in silicon valley are simple and unpretentious. there are few high-rise buildings. most of them are three- or four-story buildings hidden in the green trees. it is also in this place that countless technological legends were born.

in late july, during qingteng's global private visit to silicon valley, zong yanping, managing director of de'longhi greater china, also participated in the study tour. he explained to ai light years some of his thoughts after returning from the study tour.

it can be said that the overall situation is in a normal state, or has entered a peak period of investment.

the average life cycle of a coffee shop in china is only 8 months

the domestic coffee industry has been booming over the past decade. as a supplier of coffee machine brands, delonghi has always been a "shovel seller". delonghi is an italian company that started to explore the chinese market in 2005. i also joined delonghi in that year. now in the field of coffee machines, delonghi has a dominant market share.

in 2021, the global coffee machine market size has reached us$15.34 billion, and is expected to grow to us$20.60 billion by 2028, with a compound annual growth rate of 4.3%. in china, in 2022, the sales of coffee machines on tmall increased for six consecutive months, with a year-on-year growth rate of more than 200%. coffee machines have become a "high-end new rigid demand" small appliance.

in recent years, even in an environment where consumer attitudes tend to be cautious, more and more people are drinking coffee, and the market for commercial and residential coffee machines has expanded. from this perspective, delonghi is indeed a beneficiary. but the current coffee market is not as prosperous as it seems.

here is some basic industry data. last year, about 80,000 coffee shops opened in china, and about 45,000 of them closed down, which means that the net increase was only about 30,000. on the one hand, this industry is very hot, with practitioners and capital pouring in; on the other hand, the industry's competition is extremely fierce.

according to the industry data we have,the average life cycle of a coffee shop in china is only 8 months.this is a very cruel market. friends often tell me that as a coffee industrysellshovelers, you must have made a fortune. in fact, although our business is growing, it is not as easy as everyone imagines.

why is this? because a large number of coffee shops that opened not long ago have closed down.second-hand coffee machines currently account for about half of the market.we are in the new machine business.

the domestic coffee industry has a typical homogeneity problem, which will inevitably lead to price wars. even though some fast-moving coffee brands have more than 10,000 stores, the efficiency improvement is not obvious in terms of revenue, so the entire coffee industry seems to be losing money or making a slight profit.

i am not saying that there is something wrong with the low-price model. in fact, 9.9 yuan or 8.8 yuan is not the reason for the weak revenue. coffee on the streets of europe is basically 1 euro or 1.2 euros, which is 9.9 yuan or 8.8 yuan. if this price can achieve profitability in europe, then there is no necessary connection between the losses of domestic coffee shops and low prices.

many people say that the 9.9 yuan and 8.8 yuan prices are the reason why many competitors of luckin coffee and kudi have withdrawn from the industry. as a participant in the upstream of the coffee industry, i don’t think so. i think it is more of an operational issue, and in a sense, it is also related to the capital’s eagerness for quick success.

despite the current "volume" of the domestic coffee industry, i still believe that the future is very bright. for people of our generation, coffee has a higher social attribute than a beverage attribute, while for the generation born after 1995, coffee is a beverage that provides a basic beverage with emotional value. from this perspective, the entire market will inevitably continue to develop rapidly.

in fact, homogeneity, price wars and "involution" exist not only in the coffee industry, but in all industries. if i compare chinese and foreign investors, foreign consumer goods and high-tech investors value products, whether the founder has a new vision, or technical barriers; chinese investors value business models more. if there is a new business model based on homogeneity, investors may take action.

it is a long process for a new product to go from production to sales and then to profitability. some investments cannot see returns within one or two years. take our industry as an example. commercial coffee machines of brands such as delonghi have made money, and some investors have followed suit. however, the logic of commercial and civilian coffee machines is completely different. commercial users are conservative and do not have the mentality of trying new things. they tend to choose products that have been tested by the market rather than taking huge profit risks to try new products. it is conceivable how difficult it is to persuade customers like starbucks to switch to new products.

another problem is that some chinese startups are often under pressure from investors and have no time to polish the details. they are rushed to launch their products. in the process, they adopt a marketing-heavy and product-light approach. in my opinion, this approach is very dangerous.

in recent years, chinese investment institutions have gradually shifted from internet investment to hardware investment. this transition period is also an adaptation period. the key to hardware investment is to have a deep understanding of the industry. otherwise, even top investment institutions will make some wrong decisions.

in the ai ​​era, from anxiety to certainty

this time i came to silicon valley with a question: does the development of the high-tech sector rely more on talent or infrastructure? i used to think that talent competition was relatively important, but after listening to experts’ opinions, i found that infrastructure may be more critical, but not in the sense of “building roads and bridges”, but in the high-tech sector.

my observation is that silicon valley has entered a new peak in this regard. in the wave of development of the ai ​​industry at home and abroad, for about two years, i have also been anxious about the future of humans and ai. will ai replace a large number of human jobs? more extreme, will silicon-based humans replace carbon-based humans?

the core anxiety is that if the model is "people + ai", the only difference between us and europe and the united states is the tools. the shovels are not as advanced and the efficiency is lower. we can make up for it with diligence or intelligence and still be on the same track and dig gold. but if the future model is "ai + people", given the backward infrastructure in the high-tech field, it will be difficult for us to surpass them.

after visiting silicon valley and listening to lectures by real experts, i came to a positive conclusion: the future will still be a "human + ai" collaboration model, rather than ai replacing humans. delong's product development and business operations will all be conceived in this direction.

on the last day of qingteng's study tour in the united states, we invited zhang hongjiang, a member of the u.s. national academy of engineering, founder and founding chairman of the a-scal institute. he talked about eight observations on large models at stanford, breaking down an extremely complex problem in a short period of time, allowing me to transition from vague concepts to concrete thinking. if the future direction of the world is "people + ai", we can start to take many specific actions, and anxiety and fear will be easily resolved.

as a traditional company selling shovels, although ai has little impact on delong in the short term, it will still have an impact in the long run. first, in product development, "people + ai" will shorten the time of product development. all the data was originally accumulated through experiments, and now ai algorithms can be used to improve efficiency; second, in marketing, with extremely low investment costs, we can use ai live broadcasting to bring nearly 20 million in revenue growth each year.

in recent years,many coffee robot companies seek cooperation with delongin fact, they are cooperating with us rather than competing with us. the core extraction technology of coffee machines is in the hands of delonghi. it is similar to a car engine. each parts supplier can do a good job, but it is not so simple to put them together.

some people say that any great company is built through hard work. i think the problem lies in how to define greatness. i have been at delong for 19 years. in 2016 or 2017, the management team of delong attended a four-day course at google university and then went to alibaba for exchanges. when discussing this issue, the answer of fabio de' longhi, the ceo of delong, was very interesting:tigers run fast, turtles live long.

as you can see, the oldest companies in the world are all engaged in basic consumer products. it is normal for them to survive for 300 or 500 years. however, the life cycle of high-tech companies at the forefront of the trend may be only a dozen or twenty years or even shorter. but on the other hand,all ferocious animals have a relatively short life span. we don't need to blame a company that is once at its peak for quickly declining. running fast and living long are both great, and there is no better or worse.

personally, i don’t quite agree that great companies are built through hard work, but if the goal is to make the company survive for a long time, many practices require caution and restraint rather than radical measures.

as a relatively conservative european enterprise, delong has always been restrained, not at a certain stage. in the period of rapid development, we should remain restrained and not be blindly optimistic or put all our eggs in one basket. when the market environment is bad, restraint means that a gentleman should not stand under a dangerous wall, and decisions should be made more carefully and with a high level of awareness of risk assessment.

delonghi has less than 100 business employees in china, and less than 5,000 employees worldwide excluding factories. we have always maintained a lean team with a high degree of flexibility, which in a sense is also the reason for our longevity.