Business Model

After the Luojia Forum ended, Lin Jia couldn't stop sighing on the way back:

"President Lei is too shrewd. He effortlessly rode the wave of popularity. That question about recruiting you felt like he had coordinated it with the host beforehand.

He subtly responded to the recent widely discussed Huawei Genius Youth Program online.

Listening to his interview, it seemed like he said nothing, but the outside world automatically interpreted what he wanted to say for him.

When there's an issue with that content, he can then casually step forward and say that wasn't what he originally meant."

Coming from a business family, Lin Jia had met many prominent figures, including many in the internet industry. President Lei was definitely the most skilled marketer she had ever seen among them.

Lin Jia had thought this before, and this time only deepened that impression.

Chen Yuanguang didn't quite grasp it: "Did he mean what you said?"

Lin Jia knew Chen Yuanguang was slow in this regard but didn't expect him to be this slow: "Of course he did. Since Huawei launched the P20 Series last year, its rapid rise in the smartphone market marked the entry of the market into a more intense, white-hot stage.

A large number of small players are struggling to survive or have already failed. Huawei, relying on technological innovation and American divine assistance, is attacking Xiaomi's core market.

Among the four major domestic manufacturers, HMOV, that have formed in the past two years, OPPO and vivo both rely on offline channels. They don't focus on cost-effectiveness or compete for online buzz. Their target users have very low overlap with Xiaomi's.

Huawei originally used offline channels, from early collaborations with carriers to later building its own channels. Since the P20 last year, Huawei's growth in online channels has been very rapid. Its sub-brand Honor specifically targets Xiaomi's flagship configurations, following a cost-effective route.

This is why Xiaomi's stock price has been falling since the second half of last year, because Huawei has severely impacted Xiaomi.

President Lei needs to find every possible way to resist Huawei's attack. He won't miss any opportunity in the public opinion arena, just like today, using the topic of recruiting you to respond to Huawei's Genius Youth Program.

This is a top marketing master's self-preservation tactic. Of course, for him, this is just a trivial on-the-spot improvisation. Just wait and see the good show online later." Lin Jia spoke eloquently.

Chen Yuanguang roughly understood Lin Jia's meaning. He asked, "If Xiaomi can't hold on, and I start a business later and look for President Lei for investment, will he be short on cash flow?"

Lin Jia first retorted: "If you start a business, come directly to me. I'll invest in you. I can make decisions for amounts within 20 million, and I can find a way to reach 50 million. For higher amounts, you might need to talk to the old man yourself."

Then she explained: "What are you thinking? Although President Lei is the founder and helmsman of Xiaomi, Xiaomi's struggles don't mean he's struggling. Xiaomi's performance on the Hong Kong stock market has been very poor this year, constantly falling, but it doesn't affect his personal assets, which continue to rise.

Besides Xiaomi, he has made many investments, and the success rate of these investments is very high, comparable to the most impressive venture capitalists I know.

If you plan to start a technology-based company in the future, approaching him is indeed a good idea. With President Lei's endorsement, subsequent financing will be much easier."

Chen Yuanguang thought about the accelerated learning technology. If he took a direct sales route, he felt he could quickly break even and wouldn't need subsequent financing.

This technology was too sensitive. Chen Yuanguang planned to discuss it with Lin Jia after returning home.

And his words were quite cautious: "What if there is a technology that can help people speed up their learning?

For example, if you previously needed about fifteen minutes to memorize 500 characters to achieve instant memory, after using this technology to stimulate the brain and memory-related cortex, you only need five minutes to memorize 500 characters, and the memory lasts longer.

If it's a science and engineering student, this technology can improve their logical and computational abilities. How do you think this kind of technology should be commercialized?

While doing computational chemistry, I've roughly developed some ideas in this area and plan to focus on this technology during my PhD at MIT."

After returning home and ensuring they were alone, Chen Yuanguang brought up the ideas he had during the interview to discuss with Lin Jia.

Chen Yuanguang felt he wasn't sensitive to business. He was involved in too many secrets, and the subsequent commercial operations might need to rely on Lin Jia.

And for Lin Jia, proving her ability before entering the family system was also something that was entirely beneficial and harmless.

Lin Jia's eyes lit up after listening: "This technology is worth at least hundreds of billions."

However, before we can monetize this, we need to solve a few problems. One is clinical safety and efficacy validation, which involves a large number of clinical trials. Since it directly stimulates the cerebral cortex, the cost will be particularly high once it reaches the human clinical trial stage.

Therefore, the initial investment will be very large. You need to first verify its feasibility, and then seek investment. The experimental costs, plus subsequent patent registration and clinical licenses, will add up to at least 1 billion yuan.

This is only for some countries. If you want to obtain clinical licenses in Europe and America, the money will at least double.

This initial investment is too large. Finding President Lei is the right move. Only he is likely to be able to come up with this money, or rather, he can help you find someone who can.

After completing the previous work, the issue becomes the business model. There are many types. Selling only the equipment and maintenance services has the advantage of being a relatively simple company, easy to manage.

Plus, it's a monopoly business, so it will be a top-tier cash flow business, just like high-precision instruments, where only one or two companies are the best.

The disadvantage is that you can only earn a very small portion.

Improving learning speed is a need that too many parents and individuals worldwide have. If you only earn money from the equipment, the bulk of the profit will be taken by intermediary institutions.

The second type is self-production and self-sales, setting up your own institution to sell services, selling services that improve learning speed. This involves site selection, venue, personnel, marketing, and so on. After this technology is launched, there will definitely be people deliberately causing trouble. If you operate it yourself, there will be many lawsuits and disturbances.

While you earn profits, you also have more things to worry about, and the management difficulty increases exponentially.

Of course, we can also look for an intermediate model, which is the franchise model, similar to selling equipment to franchisees, and then we become the rule-makers for the industry.

For example, how much does one service cost, and how much do we take from it? We eat the meat, and give the franchisees some soup; they are responsible for the trivial matters.

These are roughly the three types, and they all boil down to the same principle.

But are you sure you can develop this technology?"

Lin Jia felt that she trusted Chen Yuanguang too much. The technology he proposed was so sci-fi, and she was still helping him analyze the business model.