“Small but beautiful” is no longer a choice for entrepreneurs or for early stage investors like us. For example, when starting a business, you can choose not to do “small but beautiful” things, but choose to expand the scale and expand the scale of the enterprise from the beginning, but very few people can do it. This is almost not a choice, but a must to take the “small but beautiful” route. Because entrepreneurs must make this choice, investors will invest in this field. Regarding “small but beautiful”, what is small? “Small” means that you should be small at the entry point of entrepreneurship and not think too much. If you want to do everything, you will definitely not do it well. Because user needs are diversified, companies need to respond quickly. If companies want to do too much, they will inevitably become slow and lag behind their competitors in competition. Another “small” is the scale of the company. We often see some companies with a large number of employees, all relying on the superposition of manpower. These companies are definitely not in line with the characteristics of the future. You can check the list of layoffs in 2016 on the Internet. Many of them are hiring a lot of people, and these people themselves cannot generate very large added value.
From a global perspective, the scale of companies has been decreasing in terms of the number of employees in recent years. As you know, China Mobile was surpassed by Tencent some time ago, and Tencent has become the company with the largest market value in Asia. China Mobile has 500,000 employees, and several major banks have 200,000 to 300,000 employees. How many people does Tencent have? Tencent has only more than 20,000 people.
For example, Facebook abroad has only more than 3,000 people. WhatsApp, which Facebook acquired for more than 19 billion US dollars, had only dozens of people at the time. Entrepreneurs usually worry about one problem: I am doing such a small thing, my market size is too small, and the ceiling is too low. All entrepreneurs have this worry when choosing a segmented entry point. If you open up your mind, this worry is unnecessary. I talked about a similar problem with a friend before. For example, the game industry is also segmented. It is difficult for entrepreneurs to succeed if they want to make games that all players play. They must target a certain type of players. China has hundreds of millions of Internet users. In other words, if the Internet can segment the market, all goods in demand can be sold. Do entrepreneurs still worry that their entry point is too small? I don’t think they need to worry. What do entrepreneurs need to worry about? We should worry about the problem of beauty, and whether we can achieve beauty at this point.
Da Gong is also getting smaller now. Take Tencent for example. Why did Tencent give up half of its life some time ago? It builds an ecosystem and only makes core products. Tencent’s core products are QQ and WeChat. It transfers all the businesses that it does not need to do, such as ticket sales, life services, and corporate services, to the outside world, and builds its own ecosystem through the bond of capital. Even the most core business is done in the form of an internal team. It looks like a behemoth on the surface, but in fact it has become “small and beautiful”. “Small and beautiful” is an inevitable choice. If you are an entrepreneur, don’t think too much, find the right point, do what you want to do well, and make it more beautiful.