Some people ask this question: what era are we in now? Is it the era where capital is king, products are king, or traffic is king?
I think this is the era of products. The era of traffic has passed. I started working on the Internet in 2000 and traffic in 2001. At that time, traffic was easier to do. But after 2009, the traffic business became more difficult. Later, I entered the product business. I think this is the era of products.
In this era, many people talk about “small and beautiful”. Everyone says that this is the era of “small and beautiful”, but I think what is hidden behind it is actually “big and strong”. “Big and beautiful” and “small and beautiful” exist at the same time. If we go back to the 20th century, some older friends should know the company Yitong. At that time, surfing the Internet was still a big problem, and you had to buy an Internet card yourself. As for payment, you don’t even have to think about it.
In the 21st century, Alibaba appeared, and we think it is a very large platform. And why can we “small and beautiful” exist and survive? This is precisely due to the “big and beautiful” and “big and strong” Alibaba and Google. These big companies have created opportunities for us. So I think that now and in the future, “big and beautiful” and “small and beautiful” will definitely exist at the same time, and if “small and beautiful” wants to develop well, it must rely on “big and strong” and “big and beautiful” companies to solve many common problems.
For example, from 2003 to 2005 In 2017, we even had to develop many e-commerce websites ourselves when we were doing e-commerce. Many things may need to be written from scratch, and there is no open source to refer to, but do we still need to do the development ourselves? Of course not, because there are very good platforms for us to use and rely on.
From a more academic and difficult point of view, what is the basis for dividing big and small? Based on transaction costs, if the internal transaction costs are lower than the external ones within the enterprise, the enterprise can continue to expand until the internal transaction costs are equal to the external transaction costs. So from this perspective, now and in the future, “big and strong”, “big and beautiful” and “small and beautiful” coexist at the same time, which is also the difference between “small and beautiful” and “big and empty” and “big and abusive” enterprises.
Now, large enterprises and small enterprises All are innovating, so are small businesses better than large businesses in seeking change and innovation? I personally think that the cost of innovation is very high, which is why some large companies are unwilling to make too much investment in this area. For small businesses, innovation has many advantages. If it can find new methods or new ways, it will have the opportunity to develop.
Large companies also started from small companies and have also experienced the process of innovation. When they find the way to innovation and have a relatively mature model, they have better choices and can continue to expand their scale on the road of corporate development to earn higher profits. I think this is also the reason why small companies are willing to innovate, while large companies are not. Of course, many large companies now break up many of their internal organizational structures and create small teams and product teams in them to encourage innovation.