I spent three days studying the biography of Duan Yongping, known as "China's Warren Buffett", and gained a lot!
He once made the famous Xiaobawang learning machine, which is a collective memory of the post-80s generation; later he founded BBK and entered the electronic product industry; After BBK reached a peak, he led his subordinates to establish the now-famous OPPO and VIVO. These two companies are now heavyweight brands that cannot be ignored in the mobile phone industry.
However, unlike many Chinese entrepreneurs, he quit when he was at his peak and moved to the United States with his wife. As a result, by accident and necessity He learned Buffett's philosophy and became famous by investing in NetEase, becoming the "stock god" in the hearts of many Chinese people. Later, he insisted on investing in the secondary market and also achieved great results.
Although he has established several well-known companies, it is said that 90% of Duan Yongping's assets were obtained through stock investment.
In short, Duan Yongping can be said to have a "cheating" life.
Pretentious, out of nowhere.
Duan Yongping was born in Nanchang, Jiangxi Province in 1961. He was admitted to the Radio Department of Zhejiang University at the age of 16. When he graduated, he was assigned to the Beijing Electronic Tube Factory.
Beijing Electronic Tube Factory was a very large enterprise at that time, with a total investment of 100 million yuan and 10,000 employees. It was the largest electronic tube factory in Asia in the 1980s. Many students may have heard of Beijing 798 Art District. 798 was actually rebuilt on the former site of the Beijing Electronic Tube Factory.
After Duan Yongping got this iron rice bowl, he could live without worries for a long time. However, it didn't take long for him to give up this opportunity, because at that time, semiconductor integrated circuit technology was rapidly replacing vacuum tube technology, and Duan Yongping did not want to be an unknown cog in this industry with no prospects.
After much thought, Duan Yongping chose to continue his studies. He was admitted to Renmin University majoring in econometrics and received a master's degree in 1988. Overall, he is also a top academic figure.
When Duan Yongping walked out of school in 1988, it happened to be the period when the spring breeze of reform and opening up was budding. At that time, the fortune craze was sweeping China, and even university professors were selling tea eggs. This made Duan Yongping realize that only those who are at the forefront of the trend can make a difference.
In March 1989, Duan Yongping came to be the director of a small factory affiliated to Yihua Group in Zhongshan City, Guangdong Province. This factory loses 2 million yuan every year. Faced with this mess, 28-year-old Duan Yongping decided to lead the entire small factory to completely transform.
If you still remember the "Brief History of Video Games" we talked about before, this was right after the peak of Nintendo's FC game console. Games such as "Super Mario" and "Contra" made FC Famicom popular all over the world. In the late 1980s, Nintendo's FC game console entered China as a parallel import and immediately became popular in major cities. .
In that era when awareness of intellectual property rights was weak, hot products meant a large number of copycats. At one time, hundreds of factories started making game consoles, and Duan Yongping was also preparing to join the industry.
However, Duan Yongping has a characteristic in his work - in his own words, it is called "dare to be the queen of the world". In my words, it should be "plan before taking action".
While others were still "assembling whatever brand sells well," Duan Yongping already had his own brand awareness.
Therefore, Duan Yongping gave his product the brand name "Little Overlord". Some students born in the 1980s may still remember that the trademark of "Little Overlord" is two boxing gloves connected together. One represents quality and the other represents after-sales service. These two points are deeply imprinted on Duan Yongping's products.
From the beginning, Duan Yongping paid close attention to product quality.
Because at that time, game consoles were basically assembled with imported integrated circuit components, and the repair rate of some manufacturers was as high as 30%. However, "Little Overlord" firmly controlled the repair rate at 0.3 no matter how much its production expanded. % on this scale.
In addition, despite insufficient funds, "Little Overlord" has also established more than 30 after-sales service centers across the country, and also launched a "repair package" "replacement" policy. As long as the product breaks down, regardless of the reason, it will be repaired and replaced with a new one. Don’t forget that this was the 1990s, and there were really not many businesses that could provide this kind of after-sales service.
Just three years later, the output value of this small factory that once suffered an annual loss of 2 million yuan has become 100 million yuan. Duan Yongping also officially changed the name of the factory to Zhongshan Xiaobawang Electronic Industry Co., Ltd. Among the many game console brands, Xiaobawang has become the well-deserved Xiaobawang.
However, the real take-off of Little Overlord began in 1993. At that time, Duan Yongping discovered that the craze for game consoles had gradually passed, and the computer was born. However, computers at that time were too expensive and few families could afford them.
Seeing this business opportunity, Duan Yongping spent 200,000 yuan to buy Professor Wang Yongmin’s Chinese character input method - "Wubi font", and then worked with his technicians to The Xiaobawang game console adds a computer keyboard and a computer learning card, and finally uses a TV as a display screen to form a computer learning system. This new product with Chinese characteristics called a "learning machine" was born.
At that time, a computer cost tens of thousands of yuan, while a learning machine only cost two to three hundred. This ignited popular demand.
In addition, based on my personal experience, I think there is another very genius thing about "Xiaobawang Learning Machine", that is, the name is so well chosen. Imagine if you were a child and your family asked for money to buy a game console, you would feel a little embarrassed. But if you told your parents that you wanted to buy a learning machine, it would be right for you... although you might still feel the same when you buy it back. game.
In addition to naming, Duan Yongping also showed his genius marketing ability.
Just like the well-known brands such as Jianlibao and Prince Milk, in China at that time, being able to make good advertisements was half the battle. For example, the song "Clap Song" from the TV commercial of Little Overlord, with the line "You clap one and I pat one, Little Overlord has a learning machine", was sung everywhere in China for a while, and it is definitely a classic among the classics of advertising slogans.
Later, Duan Yongping also invited Jackie Chan to shoot a TV commercial with the slogan "Both parents in the world hope that their children will become dragons and little bullies." It has also become a classic marketing case.
In this way, the Little Overlord learning machine became popular all over the country and became a standard feature of many urban families. A questionnaire survey in 1994 showed that the computer brand that Chinese people are most familiar with is neither Lenovo nor IBM, but Xiaobawang.
In this way, "Little Overlord" began his own take-off:
In 1992, Little Overlord used 200 With an advertising fee of 10,000 yuan, an output value of 100 million yuan was achieved, and the net profit exceeded 8 million yuan; in 1993, the output value reached 200 million yuan, in 1994, the output value reached 400 million yuan, and in 1995, the output value reached 800 million yuan...
In the years when the economy was at its best, Xiaobawang used newspapers to wrap cash in its year-end dividends, and stacks of newspapers were used for this purpose. There was an endless stream of people applying for jobs, and the factory rapidly expanded from a hundred or ten people to more than 3,000 people.
As for Duan Yongping, he also completely earned his first pot of gold. Because according to the distribution plan previously agreed between the group and Xiaobawang, the wages and bonuses of Duan Yongping and his subordinates were set at 20% of Xiaobawang’s net profit. Through this profit distribution plan, Duan Yongping has long become a rich man.
But as we have seen countless times before, things always boom and bust.
In 1995, Duan Yongping wanted to leave.
The reason is actually an equity issue that we are all too familiar with.
At that time, Duan Yongping’s ambition was to build Xiaobawang into China’s Panasonic, which required cutting off the group company from Xiaobawang. At that time, Yihua Group’s approach was more like It's about pulling money from under the cauldron - taking away the profits from the little overlord to support other departments. Duan Yongping's several joint-stock reform plans were rejected. Finally, Duan Yongping said: "I can't wait any longer." On August 28, 1995, Duan Yongping formally submitted his resignation.
However, Duan Yongping is much luckier than Li Jingwei of Jianlibao. Although the resignation was very sudden, Yihua Group showed a general style in this matter.
Chen Jianren, general manager of the group, personally hosted the farewell reception. This was probably the first reception held by Yihua Group for "runaways". According to Li Ping, the current chairman of Xiaobawang, the scene was very tragic. Many attendees shed tears, and Duan Yongping was so drunk that he passed out.
Later, when recalling this past event, Duan Yongping said: "Mr. Chen treated me well. He was kind to me. When I left Little Overlord, he gave me a gift. I have a Mercedes-Benz as a souvenir, and I keep driving it.”
Duan Yongping also signed a gentleman’s agreement with Xiao Bawang, promising not to have sex with Xiao Bawang within a year after leaving. Overlords compete. Now it seems that this should be an amicable breakup.
After sending away Duan Yongping, "Little Overlord" also welcomed a new general manager. But it turns out that there is only one Duan Yongping.
In the remaining months of 1995, "Little Overlord" continued to move forward with the inertia of rapid development, and its annual output value reached an unprecedented 800 million. However, in 1996, without Duan Yongping as the "little overlord" at the helm, performance declined rapidly. The group also began to frequently replace the "little overlord" general manager, but it never changed the fate of the brand's decline.
As for Duan Yongping, he is about to start a new chapter in his life - establishing BBK.
Still exciting.
During the few years he was in charge of the Little Overlord, Duan Yongping won the hearts of the people. So when they left, many middle-level companies left Xiaobawang and joined Duan Yongping's team.
The assistant general manager, the director of export sales, the director of domestic sales, the director of engineering, the director of planning and regulation, the director of production, the director of planning and finance, the director of logistics, the director of supply... all found similar positions in the new company. Even if the bully gives them a raise, he can't keep them.
At that time, Xiaobawang found several middle-level cadres who were preparing to leave and asked them why they did not stay and continue to develop. One of them said:
"The captain is no longer on the ship. The sailors don't know where the ship will go, so they ask to get off the ship."
September 18, 1995, BBK Electronics Co., Ltd. The company was declared established. Now looking back at Duan Yongping's backgammon period, he did three very important things right.
1. Transform the company’s equity system
Since Duan Yongping was once deeply troubled by equity allocation, he understands the importance of incentive measures. importance.
BBK implemented a shareholding system at the beginning of its business. Middle managers can buy shares and agents can also join. Even grassroots employees can join if they want to buy shares. If they don't have money, Duan Yongping will lend his own money to grassroots employees to help them buy shares. The way of repayment is future dividends and dividends on shares. In this way, employees are motivated to do a good job in the company's business. After all, they can pay back the money when they make profits.
Under this system, when BBK was founded, Duan Yongping, as the leader, accounted for 70% of the shares. However, as he slowly and actively diluted his shares, Later, Duan Yongping only held less than 20% of the shares.
Although the shares were diluted, what was gained was the team's unity.
2. Make products with a normal heart and be bold in marketing
1. Marketing
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Because there was an agreement with Yihua Group not to compete with Xiaobawang within one year, when BBK started, it mainly made student computers and telephones. In this new brand, while controlling product quality, he continued to regard advertising and marketing as a strategic weapon.
In 1996, Duan Yongping spent 80 million yuan in CCTV’s prime time advertising bidding meeting and won the 5-second advertising period after the News Network.
The next year, BBK took action again and won the first 5-second spot on News Network at an exaggerated price of RMB 123,456,789.
In the following years, BBK has been among the top bidders for CCTV advertising, and occasionally the top bidder. A lot of money is spent on marketing.
Investing heavily in advertising is one thing, hiring spokespersons is another.
During the BBK period, Duan Yongping first invited Jet Li to do a BBK VCD advertisement, and also hired professional musicians to create an advertising song. Some students may still remember some lyrics, such as "The world has its own justice, and efforts will always be rewarded. It is better to do what you say than to do it. If you do it, do it the best. Backgammon!"
The style of advertising back then was really different from today, but it really worked.
In May 2000, Duan Yongping invited international movie star Schwarzenegger to advertise for BBK. This kind of large-scale investment was very rare at the time.
In addition, I don’t know if you still remember the very classic and even a bit brainwashing slogan called “Mom no longer has to worry about my studies!” It is also the work of BBK.
It must be said that the Chinese entrepreneurs of that generation did their best in marketing, and produced such influential figures as Duan Yongping, Li Jingwei, and Shi Yuzhu, as well as Tragedy enterprises such as Kongfu Yanjiu, Qinchi, and Aido VCD.
2. Ordinary mind
In my impression, Duan Yongping is the kind of person who speaks very realistically, but has great Smart entrepreneur. Many people may know that he insists on blogging all year round, talking sporadically about his investment and business experience.
Duan Yongping: Everyone wants to hear novel stories from me. People may not believe me if I tell the truth. In fact, running a business is really like this, 99% sweat + 1% inspiration, I call it a normal mind.
The reason why athletes achieve results does not depend on which moves are beautiful on the spot or which goals are scored well. The reason is that they practice eight hours a day, year after year. What’s the road to becoming a champion? Practice ten hours a day, practice for more than ten years.
When you hear it, you might say, it’s so simple, anyone can do it. Yes, everyone can do it, but can everyone really do it? Table tennis is so popular in China, but as I said, there are only a few thousand people who practice eight hours a day for more than ten years. In the end, there may only be a few dozen championship-level players. Only then does the talent of luck come into play. Without the previous conditions, you are not even qualified to compete.
What is the common sense of running a business? It's very simple. Practice the basic skills well, earn the money you should earn, and don't deceive consumers. It sounds simple, but it's not that easy to actually do it.
For example, quality is basic skills. The quality of products is not tested or produced, but designed. It is actually very difficult to do a good job in quality. Quality is not just about holding a meeting and introducing a management system. But do it day after day, year after year. We spend millions of dollars on quality management consultants every year, and the pre-resignation training for ministers and above requires more than 100 hours per person.
Basic enterprise skills also include the balanced development of enterprise production, management, marketing and other systems. Different parts of the enterprise form a bucket. If a board is too long, it is meaningless and a waste; if it is too short, it needs to be made up. Some companies are indeed very long-term in marketing, but that can only be called a board and cannot be used as a bucket.
If you must ask which aspect of a company is the most important, I can only tell you: the weakest aspect is the most important.
Reporter: BBK is very good at advertising performance. For example, in 1998 and 1999, BBK was CCTV's "king" in terms of actual investment amount. Or, for example, the company would invite Jet Li and Schwarzenegger to shoot commercials. Is this normal?
Duan Yongping: The difference between having a normal mind and not is whether you know what you are doing. Why do we go to CCTV to advertise? Because our company is not strong and has little money, we can only invest it intensively. Why invite Schwarzenegger? Also to save money. Hiring the right celebrity can improve the efficiency of advertising.
Our experience tells us that if the proportion of actual efficiency improvement is greater than the proportion of hiring celebrities in advertising fees, hiring celebrities will save money. We are very sensible when bidding on CCTV. We have calculated every bid and only bid if we think it is a good deal. Some companies hold up signs when they are happy, but we are not like that.
For example, in 1998, some people said that I was quarreling with Hu Zhibiao (of Aido VCD). In fact, I was not quarreling with him. In my mind, this position and this time period are worth 200 million. If it exceeds 200 million, I won’t want it. I can spend the same money elsewhere and achieve better results.
3. Be a “hands-off shopkeeper”
If we talk about setting up a good incentive mechanism and building products and enterprises with a normal mind, And the excellent marketing level laid the foundation for BBK's success. During this period, the third important thing Duan Yongping did was to quit and become a "hands-off shopkeeper."
In 1998, Duan Yongping's career was booming. It was also in that year that he met Liu Xin, the chief photojournalist of The Palm Beach Post in the United States. After only two months of knowing each other, the two quickly got married. Duan Yongping promised his newlywed wife: "After pushing BBK to a new level, I will definitely join you in the United States."
In 2000, Duan Yongping fulfilled his promise . When BBK's development was relatively stable, he resolutely chose to retire in the United States.
Duan Yongping said that the purpose of people coming to the world is to enjoy life and enjoy happiness.
But before leaving, he still made an important decision.
After the establishment of BBK, Duan Yongping divided the company's business into three lines:
One is the educational electronics business, which is headed by Huang Yihe , the main business is Backgammon reading machines, learning machines, etc.;
One is the audio-visual business, which is headed by Chen Mingyong, mainly engaged in VCD, DVD, MP3, Blu-ray DVD, etc. Products;
One part is the communication business, which is headed by Shen Wei. It mainly operates cordless phones, BBK music phones, etc.
By the beginning of 1999, Duan Yongping restructured the BBK company based on changes in domestic and foreign competition.
He established these three major businesses into three independent companies based on the relationship of people following the situation, independent equity, and non-subordination to each other. In other words, Duan Yongping established three separate companies for three businesses and became three independent legal persons without any legal connection with each other.
If we must talk about relationships, it is that the three companies have some identical individual shareholders, such as Duan Yongping, as well as Shen Wei, Huang Yihe, and Chen Mingyong we just mentioned Several executives. In addition, in the initial period, in order for the three companies to develop quickly and get on track, they shared about 80% of BBK's brand and BBK's original sales channels.
Later, two of these companies became two brands that cannot be ignored in the mobile phone market today, OPPO and VIVO.
Duan Yongping’s approach of “giving away military power with a glass of wine” has formed a unique corporate culture of the “Backgammon System”. The boss does not hold much equity, and the middle and senior management and employees hold a large number of shares.
The two brothers OPPO and VIVO have also inherited Duan Yongping’s business management genes very well. At present, the actual managers of the two brothers O and V, Chen Mingyong and Shen Wei, only occupy their own positions. Holding about 10% of the company's equity, these two brands have gradually evolved into the most profitable mobile phone brands in China.
When his career was booming, 41-year-old Duan Yongping was not greedy for greater success and resolutely chose to cross the ocean to manage his family and life. This brought the second important stage of his life to a perfect end.
Move to the United States and achieve greater success.
After arriving in the United States, during a visit to a bookstore, Duan Yongping saw a book by Buffett on investment. In it, "Buying a company's stocks is equivalent to buying this company's stock." Duan Yongping agreed with the words "invest in companies that you understand and are undervalued by the market", so he became interested in investing.
In fact, Buffett and many successful large fund managers in the United States have the same philosophy, which is to buy stocks as if they were businesses. Duan Yongping happens to be from an industrial background, which gives him an advantage over others in judging the quality of a company's business and whether its management is reliable. This is also the wealth that his entrepreneurial experience has brought to him.
丨Fame in One Fight
Duan Yongping’s investment in becoming famous in One Fight was NetEase.
On June 29, 2000, NetEase successfully landed on Nasdaq. As a result, it suffered a stock market crash not long after it was listed. The Internet bubble burst completely. The Nasdaq index fell from the highest point of 5048 points to the lowest point of 1114 points, a drop of nearly 80%.
As a result, the house leaked and it rained all night. NetEase was found guilty of accounting fraud in the second quarter of 2001. After re-auditing the company, NetEase had to announce that its real revenue in 2000 dropped from US$8.3 million to US$4 million, a drop of half.
Because of this, NetEase's stock was suspended from trading by the Nasdaq stock market on September 4, 2001. At this time, NetEase's share price has dropped from US$15.5 when it was listed to US$0.64. A drop of 96%.
At this time, Ding Lei was only 30 years old. For this matter, he fired several senior executives at the time and began a four-month conflict with US regulators. appeal.
Afterwards, he recalled: His most urgent wish at the beginning of 2001 was to sell NetEase, but no one dared to buy it. By September, I couldn’t sell it even if I wanted to.
At the same time, Duan Yongping is wondering whether he can pan for gold in the "ruins" after the Internet bubble burst. Because he believes that the Internet itself is not a bubble, but it has been hyped too much before.
He said, "We use this thing every day, how can it be a bubble?" So Duan Yongping began to contact Chinese Internet companies such as Sina, Sohu, NetEase, and Lianzhong to understand Regarding their business conditions, he had also bought a small amount of stocks from these portals on a trial basis, but Duan Yongping was still hesitant about the models and futures of these companies and could not quite understand them.
In early 2002, NetEase was preparing to launch the online game "Westward Journey 2". For Ding Lei, marketing is his shortcoming. He thought about who did the best marketing in China, and finally thought of Duan Yongping.
Soon the two met. During this meeting, Duan Yongping learned about NetEase, which was at its lowest point. At that time, NetEase had just experienced a large loss the previous year, its stock price had dropped below $1, it could be delisted at any time, and it was also facing litigation.
But at the same time, Duan Yongping found that NetEase's valuation was very cost-effective: a company with a market value of 20 million US dollars had 60 million in cash alone and only 14 million in liabilities. In addition, the SMS value-added service provided by NetEase to China Mobile and China Unicom is developing rapidly. The most important thing is that NetEase is preparing to enter the online game business in a big way.
Duan Yongping, who was born as a bully, is very familiar with the game business and he knows how big this market is.
Although he could not predict specifically how much money NetEase could earn from making games, he said, "There is no reason why it would be less than when I was a Little Overlord in 1995. At that time, we had a turnover of almost 100 million yuan." At that time, he judged that this was a good business.
Of course, NetEase still faces many dangers. Especially in terms of legal risks, many people were worried about litigation at the time. So Duan Yongping hired a professional lawyer to consult on NetEase's lawsuit and found that the possibility of NetEase losing the lawsuit was very small, and even if it lost the lawsuit, the compensation would not be much. Now Duan Yongping has something in his mind.
In April 2002, Duan Yongping and his wife bought 1.52 million shares of NetEase in the open market for US$2 million, accounting for 5.05% of NetEase's total share capital.
The US$2 million was almost all the money Duan Yongping could mobilize at the time. Later, Duan Yongping said, "After doing enough homework, I basically spent all the money I could use to buy NetEase stocks." Later, Duan Yongping continued to increase his holdings of NetEase stocks to 2.05 million shares, accounting for 6.8% of NetEase's entire share capital. %.
Everyone knows the subsequent story. NetEase's business quickly improved, and its stock price soared. NetEase's founder, Ding Lei, once became the richest man in China. For Duan Yongping, his investment earned dozens of times in just two years.
However, making money is not difficult. What is even more rare is that Duan Yongping was indifferent after making so much profit and did not sell NetEase at all.
In the end, he held the stock for more than five years before gradually selling it, and the final profit exceeded 100 times.
丨Duan Yongping’s investment philosophy
Later, when talking about his investment philosophy, Duan Yongping said:
"I am not the only one who buys NetEase stock for $0.8, but there are not many people who insist on holding it until it reaches $100. Investment does not care about missing an opportunity, but never catch the wrong one. Opportunity."
There may be many reasons why you should sell a stock, but the only reason you should not use is "I have made money." Otherwise, it will be easy to sell a good company that was hard to find at a cheap price. The same goes for when buying. There can be many reasons to buy, but it is best not to use the price the stock has reached as the reason for buying. My criterion is whether it is valuable.
BBK’s investment team has an important job, which is to play games online, NetEase’s games and competitors’ games. "What games are popular among Chinese netizens now, what games will be launched by game companies, what problems will appear in the games, how each company will deal with these problems, whether it is quick success or a longer-term approach, our people know everything and can tell every company The company has many, many problems," Duan Yongping said.
Duan Yongping also plays. He spends at least two hours a day playing games. His seven or eight-year-old son admires his father for being good at playing games. When he sees his father playing, he says, "I want to play too." The answer he hears is often, "Dad is working." Duan Yongping joked that his son still hasn't figured out "why dad's playing games is work, but my playing games is not".
Duan Yongping said: "But this is how I invest. This is also the reason why I have been able to hold onto NetEase for 89 years. When I first bought NetEase, the average price was around 1 yuan. Most of the selling prices are around 120-130. During the 8 to 9 years of holding, I may be tempted by the selling price every day, and I use this reason to resist the temptation.
< p>“The big difference between speculation and investment is that investors are often very happy when they see the stock price drop because there is still a chance to buy cheaper things, while speculators are thinking about the company. Something must have happened, so leave quickly.
"Few people have patience. At the same time, few people can succeed in investment. Successful people must be patient. The so-called patience is a necessary condition. Of course, there are also people who accidentally make money, which is no different from making money in a Macau casino.
But as an investment, this is something that must be persisted for a long time. If you don’t persist for a long time and have patience, you will have no chance of getting good returns. Patience is what a so-called true value investor must have. If you don't have it, you won't have a chance. ”
Deng Yongping has once again achieved great success in investment. His repeated success tells us that we must continue to learn, expand our cognitive dimensions, and have a will to never give up. Be diligent, work hard, and study
At the same time, you must be a person with leadership skills that your subordinates are willing to follow. You cannot just think about yourself, but you must work together. People develop together, just use this record to inspire yourself to gradually learn and progress in your future life!