More important than fighting for luck and capital is fighting for “heartpower”


Editor’s note: This article is from WeChat public account Chaos University (ID: hundun-university), author Wang Bin, 36 氪 Published with permission.What kind of “transparent” experience should be used to disassemble Bezos’s business empire with complex thinking?Why is Amazon resolutely abandoning a $ 2 billion business?Recently, Wang Bin, a student of the fourth phase of the Chaozhou University Venture Capital Camp, and Chairman of the Capital Group, in the mini class sharing session, used what he learned to output his unique thoughts to his peers, and also shared some ideas about improving the cognitive levelIn terms of experience, very penetrating, good text recommended.Chaos University Venture Capital Camp is an innovation seminar for top investors. It gathers a group of China’s most curious, independent thinking and most ambitious investors; Mr. Li Shanyou is the chair professor and aims to broaden investmentHuman cognitive boundaries.(At the end of the article is a list of students from the fourth phase of the venture capital camp.) “If you want to run better and faster in investment and business, in addition to fighting for luck, the size and coverage of the capital are more important.Cognitive hierarchy evolution becomes a little faster than a single company. “—— How important is Wang Bin’s cognitive ability to an investor or entrepreneur?What levels does it have?What’s the most critical to improve judgment on complex things?This time, we tried to disassemble the business empire Amazon with a complex thinking model and feel the power of higher-dimensional cognition.01. Complexity thinking, a system of continuous loop evolution What is complexity?That is, the individuals in the system have a certain number of foundations, and the individuals have strong interactions, which is an embodiment of complexity.Subject to the second law of thermodynamics, there will be an increase in entropy in an isolated and closed system, which will eventually lead to decay; but if you go in another dimension, when the complexity accumulates to a certain degree, the threshold of complexity is broken,A new path will change.Among them, the landmark event that broke the threshold is the “self-replication” of the individual.What is self-replication?That is, in a specific environmental field, individuals replicate themselves to form a cyclic evolution.Evolution to a certain stage will lead to different levels, and the levels can be divided into four levels: high and low, scale, containment and virtual.These four levels will be opened one step further, and the internal and external parts of the individual will interpret new changes.The internal complexity will evolve into a virtual hierarchy (which can be simply understood as being able to be split), while the external complexity may evolve into a super-individual (which can be simply understood as being able to converge into a new unit).Case: Roadmap for Bezos’ complex business empire evolution-why invest in a $ 2 billion business?Based on this thinking, let us dismantle Bezos’ business empire.In 1995, Amazon started selling books.At that time, it was a single product and a single business model. It showed a straight line in a one-dimensional logic, which was relatively simple.Moving forward, in 1997 Amazon began to quickly acquire several companies in the appliance industry, and then quickly achieved listing; in 1999, it launched a new platform.Looking at these two dimensions-we think it is still based on a two-dimensional logic-it adds things in a one-dimensional perspective, and the complexity increases to two-dimensional, but it is still a plane.In 2000 was an inflection point, and Amazon began to open up, allowing third-party merchants to enter its platform.This mode of thinking and presentation has undergone certain changes compared to the past nine years.It can be seen that the changes after the Amazon millennium were very rapid: AWS was launched from 2000 to 2006, kindle was launched in 2007, and then a series of actions such as the acquisition of warehouse robots in 2011, including the launch of mobile phones in 2014 …The company suddenly ceased to be a plane, it began to become three-dimensional, and became a three-dimensional complex structure. At this point, I think a state of self-organization has emerged.Amazon’s management logic has always been a group of seven people, starting from small products; once it is successful, push it away and start independent productization and independent business units, let it grow and run independently.The previous series of mergers and acquisitions also follow this line of thinking.There are also trade-offs in Amazon.The most representative example is the mobile phone business launched in 2014.In 2017, I went to understand how the mobile phone business was chosen at that time.A friend told me that Amazon likes to prepare silently and fully prepare for two years before launching the mobile phone in 2014; however, Bezos knew that he had “lost” after the listing.At the same time, his firm decision was surprising: the phone went on sale at the end of July, the contract machine dropped from $ 199 to $ 0.99 at the end of September, and the unlocked phone dropped from $ 499 to $ 199 at the end of November, which was completely cleared.The investment of 2 billion US dollars is just such a resolute choice.What is his selection criteria?He must have standards.I guess three points summed up by myself: ① Is it of long-term value?② Is it possible to have a large market share?③ Is it possible to have a monopoly opportunity?If not, no matter how much money is invested, it may be cut off.In the process of Amazon’s evolution, there are clear standards for entering and exiting in two dimensions, so over time, he has not only grown, but has evolved.It started to get involved in content, into everything.Today we see that Amazon has accounted for 40% of the total e-commerce in the United States, close to 50% of the total cloud computing services, 42% of the total sales of paper books, and 33% of the streaming media market share.Large and complex systems.Of course, to this day, Amazon is still expanding.Along the logistics, along with the mergers and acquisitions of offline chain stores, including major league live broadcasts, and also launching satellites … and so on, it is becoming super complicated; it is not just in a simple three-dimensional, startingWith the possibility of four-dimensional structures or more complex structures.Under such a thinking, what else will emerge from the internal virtual hierarchy of Amazon?we do not know.When so much content is combined, what kind of super-individuals can be formed, we do not know today.Bezos has become the richest man in the world, and the Amazon company has become one of the world’s largest companies by market capitalization, and it is still one of the giant companies that have not stalled.What will it look like in the future?There are many possibilities.Reflection: In addition to fighting for luck, fighting for capital … and more importantly-fighting for cognition, what I want to explore here is, from the perspective of an investor, what dimensions do our cognitive judgments and choices reflect on?What kind of hierarchy are you looking at?For example, if we saw this company in 1995, when it began to jump away from a single product in 1996 and 1997 for rapid mergers and acquisitions and expansion, do we think it should first stick to a single business, andGood enough, let’s talk about listing; or is it acceptable for its expansion and diversification?This is the first point.Secondly, in 2000, the company actually started to open the platform and began to do platformization. At this time, Bezos personally established the “blue origin” for space exploration.Everyone knows that every year Bezos will invest 1 billion US dollars.This company has now become one of the world’s top space exploration companies and has top-level rocket research and development capabilities.However, at that time in 2000, when we as investors made choices, should we invest in Amazon?Because its core founders are doing things other than their main business.And at that point in time, there was absolutely nothing to do with the main business, and no connection point could be found. What do we think of it?And the choice?Third, by 2014, the company had spent $ 2 billion and re-injected it on mobile phones to compete with Apple for C-side users.At this point in time, when he launched a mobile phone, he had his own traffic, he had a platform, and he could sell the phone.If the phone can be sold, he can further iterate and improve, right?But he didn’t, but stopped losing, and 2 billion US dollars is equivalent to a slump.In this situation, as investors, what are the levels we think about, what are the levels we see, and what are our choices?It’s the same in today’s 2019. It’s so complicated. As investors, how do we see such a huge business empire and how should we choose?We put these thoughts together, what do we want to say?In fact, as investors, our own cognition has super obvious hierarchy boundaries. It is difficult for us to jump out of our own hierarchy and understand things outside our hierarchy.Therefore, if you want to run better and faster in investment and business, in addition to fighting for luck, the size of the capital and the coverage rate, it is more important to work hard to make your cognitive hierarchy evolve more than a single company.faster.Of course, this is particularly difficult.04. Cognitive upgrade, you must have the “force” in your heart. I am an investor with financial background, but jumped back to the industry to grow again.From 2005 to 2006, he was one of the youngest directors in the A-share market.After 2011, he started to create his own fund and create his own physical industry, step by step to today.We hope to be a native “industrial capital industry company that is deeply involved in value creation” (originated from capital, but striving to structure the core competitiveness of people and things in the industry.) By continuously fighting with people in the industry, Fusion together, in exchange for some level of cognition to switch feelings.For example, for the investment itself, I think there are at least four levels: the first level is the strategy: the investment at the strategic level can be judged and can be strategically traded.The core point is control.The second level is opportunity: investments at the opportunity level can also be judged and strategically traded.But if you want to accumulate knowledge of industry and people in advance, you can implement strategic trading when opportunities arise.If there is no early accumulation of industry and people, it is very dangerous to follow others to seize opportunities. This is not a strategic operation.Therefore, this level of trading is ahead of the core point.The third level is the trend: investments at the trend level can still be judged and strategically traded.But the difficulty is too much, because this cycle is too long, and even exceeds the length of an investor’s personal life.To implement this well, I want luck and the right people.Therefore, the core point of this level of trading is depth and patience.The fourth level is the general trend: the general trend refers to the power of the advanced productivity level.Investment at the general level is very difficult to judge, especially for pure analysis.Just like when electricity was invented at that time, some people recognized that this was new energy, but how many people could predict and judge the emergence of electricity in that historical period will evolve to bring today’s information age, artificial intelligence era ….. It is really difficult to “judgment” at this level. What is more difficult than finding at this level is holding beyond the scope of time and psychological fluctuations.We currently have two major variables of productivity levels: one is artificial intelligence and the other is space.Wealth has been evolving in the course of historical development. Speaking of essence, the core of wealth evolution is to discover, follow and believe in the general trend.So, for me now, compared to some innovative practical methodologies, the experience that can be used, I am more interested in things that are more logical, a kind of “switching” in thinking, and chaotic venture capital camp.I like some imaginary lessons.So, how to improve this awareness, especially for investors or entrepreneurs?I think from the bottom, the competition is “mind power”, you must have that power in your heart, you can do the corresponding action, and the latter is the method.If you have learned all the methods, but you do n’t have that kind of power in your heart, you have n’t learned much, you only have a look and feel.How can we have inner strength?I think this is a lower level soul torture.For example, suppose we really go back to 1995. As investors, in the face of Bezos, we may not really have such a strong heart, to believe, or to pull the trigger to do this.In other words, if our hearts cannot grow and strengthen in that dimension and space, we will almost never keep up.Bezos spent 20 years, following this “trend”, constantly opening boundaries and constantly evolving.This level of “mind power” can be said to be a “belief power”.(Finish).