Shen Nanpeng is one of the world's most famous venture capitalists. As a successful strategic investor, his investment logic has always attracted much attention in the industry.
He believes that in the field of investment, only by grasping the general trend, paying attention to details, and understanding the development law of the industry can we make wise investment decisions. A good investor should pay more attention to those industries or companies with continuous innovation ability and high growth potential, and also have strategic vision, overall concept and market sensitivity, and use investment strategies in continuous accumulation.
First, the underlying logic of strategic investment and the magic weapon to win
1. The key factor for the success of my investment
I also have an emotional side, and behind my so-called careful thinking, I still maintain curiosity and enthusiasm.
People must have enthusiasm to get you through the tougher times, which is also the true meaning of entrepreneurship, that is, to have a certain judgment and perception of risks, but still willing to take risks.
The difference between being an investor and an entrepreneur is that a good investor must be an entrepreneur, but at the same time, he will have more coordination ability and the ability to manage the whole risk than the entrepreneur.
From the perspective of the overall management, he will probably be a little more conservative in taking risks than entrepreneurs.
For example, I saw a very exciting project today, would I spend 10% to 15% of your entire ** investment? If you are a good investor, you might say that it shouldn't be like this.
But you should have the same mentality and all-in as an entrepreneur in every project.
In fact, many people forget that what does the final result of investment really depend on? It is the most important thing to rely on how much money each ** has to return to LP.
There are three main factors for my successful investment, namely the Chinese market, staying focused, and not being blind.
A lot of people know to focus, but it's not easy to pick the right field and stay focused at all times.
Team capacity, resources, and judgment on where to invest are all factors to consider.
For the best, the most important thing is to have your own strategy and make forward-looking judgments on the industry allocation and investment portfolio.
2. Six secrets of my choice
There are six secrets to the project I choose, namely: looking at people, model, execution, customer order volume, efficiency, and data.
The ability of the founder and the team is very important, but it is more important that the people be reliable and honest, and do not fool investors.
Execution is the key node that determines whether a start-up company can raise money after the start-up period, because without execution, all ideas, all long-term goals are empty talk, if you want to start a business or are starting a business, please be sure to find a partner with strong execution.
There is also the number of customer orders, all the previous factors will be expressed in the number of customer orders, such as team, model, execution, etc., and at this time, as long as the number of customer orders is good enough, financing will not be a problem.
3. A good venture capital institution must have three characteristics
First of all, venture capital must take a long-term view of the company, and be able to have a long-term view of the company's development. Rather than the idea of short-term arbitrage, this is something that venture capital firms are really different from previous private equity.
In the era of intelligence, many companies will go through a very long stage of development, which requires investors and entrepreneurs with patience and a long-term perspective. For a long time, the pursuit of profit is not the main purpose of the company, but the ability to occupy the market and constantly create new product areas is what the company should really focus on.
Secondly, in the era of intelligence, good capital must not be a pure financial investor, but a strategic investor, and the best investor should be an investor who understands the industry.
Today's industry segmentation is becoming more and more important, and in each segment, as an investor, you must become an expert in the industry and an investor who can really help entrepreneurs. Without such an industrial background, there is no way to have a comprehensive layout and perspective on the industry, and such investors cannot really help entrepreneurs complete their strategic missions. This strategic perspective is a must-have quality for every good investor.
Third, a good capital or investor should have an international perspective and must be an international investor, so as to help the company achieve internationalization.
Today, it's hard to distinguish between Chinese companies, American companies, and Indian companies.
Many companies have taken globalization as an important focus on the first day, not only for their product design and marketing capabilities, but also for the globalization of their entrepreneurial vision.
At the same time, we often hear copy to China or copy from China, in fact, are not accurate, in fact, every local entrepreneur should learn from other countries, learn from experience, and at the same time create products suitable for local according to local special conditions, so there is no copy, is a continuous learning process.
I've always had curiosity. Whether it's going into Wall Street or later venture capital, I'm curious and find it interesting to do these things: I wonder why so many companies are successful? What is the reason? Sometimes in addition to your rational thinking, you have to be a little impulsive, a little passionate, take a certain amount of risk, and then the standard of judgment comes from your sixth sense.
Over the past few decades, I have made a very important judgment. More than 20 years ago, many people were really not so optimistic about China, and they had all kinds of worries. But now, all Chinese entrepreneurs who do big things have a common characteristic, and that is "longchina".
When choosing where to invest, we rarely invest in companies that are primarily focused on overseas markets. Because China is the most attractive place, as long as a product is popular in China, its growth potential is very, very great.
Investment has no choice but to force yourself to keep thinking about the development of the industry in two, three, or five years. Sometimes, we may not make a particularly perfect judgment and then try to make a judgment and then make a one-or two-step layout in this industry, which is a judgment that you have to make as a venture capitalist, even if you don't have enough data at the time.
5.The entrepreneur is the driver, and the investor is the person who looks at the map in the co-pilot.
In the choice of entrepreneurship and entrepreneurship, I give priority to entrepreneurship. An entrepreneur's abilities can only work if he has real qualities and virtues, otherwise he can be abused.
There are entrepreneurs who start businesses just to go public and make money, but the entrepreneurial motivation that we appreciate more is to create a product and service that meets certain needs, solves certain problems, and is motivated by curiosity and a sense of purpose.
Judging an entrepreneur is not only based on ability, but also whether he or she has positive energy.
The entrepreneur is the one who drives the car, and the investor is the one who sits next to the co-pilot and looks at the map and will help the entrepreneur make recommendations.
Although there is no driving thrill, there is also a sense of accomplishment.
Cooperation in the field of investment far exceeds competition.
Startups have to get rid of others, but there's a lot of collaboration between investors.
He needs to help start-ups grow at different stages, and he needs people with different investment backgrounds to help him complete the track.
6. Views on entrepreneurs such as "** founders".
1) A good entrepreneur should possess these abilities and characteristics.
Expertise and ability: You have to be an expert in your industry, but for someone interested in becoming a manager and leader, knowledge should be multifaceted.
Team spirit: We need to build trust, respect, and understanding among our teams.
It is important to understand the word, although it is at the end. When your colleague does not meet expectations for various reasons, you should give him some understanding and at the same time give him respect and encouragement so that he can make up for the lag.
Values: Now we often talk about positive energy. If over-marketed or deceived customers, while certain goals may be achieved in the short term, these will ultimately harm the company and yourself.
Responsibility: Everyone should have the best sense of responsibility for their work and small jobs to complete tasks. Because the team members expect you to do this task at your best.
Problem-solving skills: Many problems in the business world are much more complex than those in the books. You have to come up with creative ways to solve problems because there are no ready-made answers, books won't teach you, your boss won't teach you, and your colleagues won't have answers, which is also a test of one's professional ability. You need to have the ability to solve problems creatively, and problem solving is often done under tremendous time pressure, which is often encountered in the business world.
2) Eight tips for startup CEOs.
As a good CEO, quality is about constantly correcting their business plan and changing their strategy and direction based on market feedback, especially in the early stages of the company, which is inevitable.
The structure of basic scientific knowledge is essential to the personal growth of the CEO. Developing the ability to think logically and build models is essential for entrepreneurship and business management. In the early days of a business, neither the CEO nor the team can be strong in everything. Rather than being a generalist, you should be a professional.
CEOs should have a unique martial arts, and this unique martial arts varies from industry to industry.
CEOs need to understand and focus on the metrics that really matter, including customers, order volume, revenue, gross profit, loss ratio, profitability, and cash flow, in order for the numbers to speak for themselves. Because, when investors consider entrepreneurial projects, it is inevitable that data will be available after the A round: the number of orders, customer unit price, number of users, weekly retention rate, etc. are the focus of evaluation indicators, and it is difficult to convince the public without data.
If the CEO can settle the score, he can't make decisions on the head. I think there are at least two numbers that most companies have to keep an eye on. The first is gross margin, which determines whether a company has real bargaining power or pricing power. This is a number that CEOs need to pay attention to and keep sensitive; The second figure is unit economy.
The failure rate of airborne executives is not low. It is advisable for CEOs to find young people to train, who may not have that much experience, not necessarily a top MBA or investment banking or consulting background, but have ideas and a good business feel that fits the core innovation ideas of the team, and then let them grow with the company.
Of course, the CEO is also the product manager, and the team is responsible for execution, but the CEO needs to be deeply involved and involved to help the team polish the product.
For a CEO, he should be calmer and not confuse his position because of competition.
3) I have some opinions about the founders of ***.
First of all, they are absolute product paranoia, in other words, their product wins. For example, Wang Xing is definitely a product founder. Therefore, the most important competency of the CEO is the focus on the product and the perception of the product, which I think is significantly different from other post-80s generations.
When Wang Xinglai came to communicate with us, he was actually not the most powerful. Others are nearly twice the size of him, but I can feel his attention to the product.
The second is the difference between vision and expansion ability. I feel that as an entrepreneur, my horizons and expansion are quite impressive. Of course, we have seen this characteristic in Jack Ma, Ma Huateng and Li Robin. Now we can see these young people again. In fact, I think it's very admirable.
Sometimes I wonder, what is the difference between their post-80s generation and our generation of entrepreneurs? In my opinion, when they take risks, they can take risks. After a certain calculation, they have their own calculations, but in the end, How do they calculate, calculateCalculate Calculate TCalculate Calculate
In fact, I think it's an entrepreneurial spirit.
4. Enterprises need an effective internal control mechanism.
Capital is selective to the enterprise, and the enterprise is selective to capital. For today's businesses, it is very important that the company strikes a balance between development and internal control. We have invested in many young Internet businesses. Internet companies want rapid growth and market share, but there must be a very important strategic deployment behind the development of every enterprise, that is, internal control.
Traditionally, the term internal control has been used for financial-financial internal control, but technical internal control is very important.
Now, in addition to financial reviews and adjustments, businesses are also required to undergo technical reviews and adjustments. Have some of the data privacy concerns here been well handled? Is there an IP infringement problem? There is also the problem of swiping orders, and the Chinese Internet also has a part of the integrity problem. I think that as business leaders, including the board of directors and shareholders, we must attach great importance to them and have mechanisms in place accordingly.
There is a finance department, why is there no technical internal control department? The same is needed. Only in this way can enterprises have a mechanism that is truly effective in their development, which is very important.
In addition, you can't prevent employees or regional departments from stepping on red lines, but only if the company itself has such an internal control mechanism in place, can it really address the potential risks on this issue.
5. There will also be new opportunities in the fields of medical education.
Q: How long can this round of consumption, Internet investment, and entrepreneurship last? Actually, I thought about this three years ago.
Because three years ago I saw that the U.S. had started to slow down a little bit, so will China slow down?
At the end of last year, I had a point that, on the one hand, I think that the stronger a large company can be, the more opportunities it can really squeeze out some smaller companies; But on the other hand, it is not easy for various verticals, and large companies may not be able to eat this meal, so there will be new opportunities for medical education, cars, rooms.
Therefore, I think there are still many opportunities for companies with a market value of $10 billion in China's mobile Internet.
The second batch and even the 2ndIt is not particularly surprising that 5 batches of Chinese companies reached 10 billion.
It's still the same sentence: the water is big, the fish is big.
Shen Nanpeng's strategic investment logic has set an example for the investment field. His successful experience and unique insights have undoubtedly provided valuable reference and inspiration for investors. In the future, we hope that more investors can continue to explore the potential, pay attention to the vision and wisdom trend of strategists, formulate reasonable investment strategies, and achieve greater results in the investment field.