After entrusting the refinement of the tactical system entirely to Rick Carlisle, Lin Qi did not stay in Milan for long.
He called on EBA president Maurizio, who was in Italy inspecting the game, and the two flew on a private plane directly to Herzogenaurach, a small town in Bavaria, Germany.
This is a major hub for the global sporting goods manufacturing industry, and also the location of Puma's global headquarters, a sports brand that Lin Qi just began acquiring in June of this year and now holds more than 80% of.
Because the acquisition had only been finalized for a little over two months, Lin Qi hadn't yet truly gained a deep understanding of this Germany company with over half a century of history. Therefore, when they sat in the top-floor conference room at Puma's headquarters, the current CEO, Jochen Zeitz, first gave the young new boss an in-depth report on the company's strategy.
"Lin, this is the first time we've sat down to seriously discuss the company's product line." Zeitz pushed several proposals bearing the classic Puma logo in front of Lin Qi, his tone tinged with emotion.
"In the early 1990s, Puma was actually on the verge of bankruptcy. As a professional manager, my first decision after taking over was to avoid direct competition with Nike and Adidas in the purely professional sports field. Because we simply couldn't compete on R&D budgets." Zeitz pointed to several retro casual shoes on the proposal, explaining Puma's current predicament, "So, we repositioned Puma as a sports fashion and streetwear brand. This strategy proved to be the key to our survival, and since last year, the company's financial statements have shown a very clear recovery trend."
Lin Qi flipped through the proposal, which was indeed filled with a large number of cross-brand collaborations and design sketches for trendy sneakers.
" Zeitz, you saved Puma's finances, that's fantastic. In those dire circumstances, going the fashion route was a wise survival strategy." Lin Qi closed the proposal, his gaze becoming deep and serious. "But I spent so much money buying Puma not just to create a company that sells trendy casual shoes."
Lin Qi crossed his arms on the table and got straight to the point. "I've completed the privatization and delisting of Converse. Now, both Converse and Puma lean towards trends and retro styles. But what I need is sports science, especially technological research and development for top-tier basketball shoes. That's what can truly build a competitive moat."
Upon hearing about professional sports science and basketball shoe technology, Zeitz's relaxed expression vanished, replaced by deep helplessness.
"Lin, if we want to advance into the pinnacle of basketball science, I must tell you a harsh reality of the industry." Zeitz sighed and frankly explained the enormous barriers at the bottom of the industry.
"In this field, football is Adidas's domain, while basketball belongs to Nike. Nike established its own sports research laboratory as early as 1980. Their current annual R&D investment exceeds one hundred million US dollars. Their expertise in shock absorption, torsional rigidity, and materials science has put them a generation ahead of the industry."
"I chose Germany because it has the world's top orthopedic surgeons and sports biomechanics experts," Lin Qi stated, specifying why he wanted to buy Puma.
"But..." Zeitz paused, pointing out the most difficult problem in conducting research and development in Germany, "These people are almost all snapped up by the Europe R&D centers of Adidas and Nike across the street. Those core executives and chief scientists have very strict non-compete agreements. Even if we offer double the salary, we can't poach them legally. Without these leaders, it's very difficult for us to start from scratch in sports science."
A brief silence fell over the conference room. Maurizio sat to the side, and although he was the president of the basketball league, he couldn't help but frown when he heard about the monopolistic barriers of such a business giant.
"If we can't get the top-level chief experts, then let's try a different approach." Lin Qi wasn't deterred by this difficulty; he interlaced his fingers and offered his solution.
" Zeitz, hire those mid-level researchers laid off by Nike and Adidas, or those hard-working individuals who've hit a career ceiling in big companies. They may not have glamorous titles, but they're the ones actually in the lab staring at data and doing fundamental testing," Lin Qi's thinking was very clear. "At the same time, get the investment department moving, looking for small tech companies struggling on the verge of bankruptcy but holding patents in biomechanics and cushioning materials. Buy their patents along with their teams."
Zeitz quickly jotted down notes in his notebook, but still raised the most crucial question, "Boss, piecing together mid-level technical staff and buying patents can certainly build the framework of a laboratory. But the most critical foundation for sports science research and development is sample data."
Zeitz looked at Lin Qi: " Nike sponsors tens of thousands of top athletes worldwide, and their labs receive massive amounts of real-world feedback every day. Even if we build a research and development team, without long-term tracking data from high-level professional athletes, the shoes we create will still be just products made in isolation."
That's why I invited Maurizio here today.
Lin Qi smiled slightly and turned to look at the EBA president beside him.
Maurizio paused for a moment, then spread his hands. "Lin, EBA is a basketball league; we don't know anything about making shoes."
"You don't understand shoemaking, but you hold the most valuable data goldmine in all of Europe." A businessman's foresight flashed in Lin Qi's eyes. " Maurizio, tell Zeitz about the current scale of EBA."
Maurizio gathered his thoughts and began, "Currently, the EBA has thirty professional teams, bringing together hundreds of the top professional basketball players from across Europe. Moreover, with the commercialization of the league and the advancement of the promotion and relegation system, the players' physical confrontation, running distance, and the intensity of the game have all reached the highest level in Europe history, second only to the NBA."
Lin Qi looked at Zeitz again and presented a grand idea that was enough to overturn the traditional R&D model of sports brands.
" Zeitz, I won't put this heavy R&D burden directly on Puma's current financial statements; that would drag down the recovery momentum you've just built up."
"I will set aside a separate sum of money to establish a completely independent sports science data company in Germany." Lin Qi tapped his finger on the table. "This company will become the technical support behind Puma and Converse."
" Maurizio, the EBA will enter into an exclusive strategic partnership with this newly established sports science company, granting them access to game data from all players in the league," Lin Qi outlined the future plan. "In return, this independent lab will provide free, high-specification foot modeling for all starting and core rotation players from all thirty EBA teams, custom-designing exclusive basketball shoes for them! These custom-made shoes will transmit a massive amount of data."
Zeitz gasped. He finally understood the young boss's enormous ambition.
No sponsors? Then just take advantage of the entire Europe Basketball League that the owner owns.
"Through these hundreds of high-level professional players, who engage in high-intensity running, jumping, sudden stops, and changes of direction during the long eight-month season, our independent laboratory will continuously collect the most realistic data on plantar pressure distribution, joint impact absorption, upper torsional rigidity, and material durability." Lin Qi's voice was steady and powerful.
" Nike spends a lot of money collecting player data piecemeal all over the world, while we've turned the entire top-level basketball league in Europe into our own sports science laboratory!"
Zeitz was deeply impressed by this crazy and ingenious idea. As a veteran in the industry, he knew all too well what licensing an entire league's worth of real-world data meant for footwear development. It was a priceless treasure that no amount of money could buy in a short period of time.
"Boss, if this plan comes to fruition, we can definitely achieve a leapfrog development in terms of underlying data." Zeitz's apple bobbed slightly, and his professional manager's instincts kicked in as he quickly did the math. "However, establishing an independent sports lab of this level, plus the costs of mold making, production, and data tracking for custom-made shoes for hundreds of professional players, is an astronomical figure. A preliminary estimate is that it will burn through at least tens of millions of dollars a year."
"I'll take care of the money."
Lin Qi leaned back in his chair, his tone exuding an undeniable confidence. He currently had ample cash flow, more than enough to support this level of strategic investment. The initial investment of tens of millions of dollars annually was just the beginning; once the lab was on track, he even planned to gradually increase the annual budget to over one hundred million dollars, at least matching Nike's R&D investment in terms of financial scale.
As for the specific brand portfolio, Lin Qi had already made a long-term plan in mind. He would not only not cut Puma and Converse's existing fashion and trend lines, but would continue to use them to generate revenue. As for the professional sports science line, he planned to wait until the time was right, use Puma as leverage to acquire Fila, and then use Converse to acquire Brooks, a technology-driven brand on the verge of bankruptcy that had been deeply involved in the professional running field. Using acquisitions to fill the technological barriers of the professional line was far more efficient than starting from scratch.
Of course, Lin Qi had only gone through these subsequent capital operations and acquisition plans in his mind and did not need to reveal them in full to the two executives in front of him for the time being.
"We have a clear division of labor. Zeitz, you're in charge of building the framework for my science lab. Maurizio, you're in charge of ensuring cooperation among the 30 EBA teams. I'm just responsible for providing the funding."
Looking at the two executives in front of him, Lin Qi gave them a final deadline. "I don't expect to see results next year. I'm giving this lab three to five years. Five years from now, I want our self-developed basketball shoes to be on par with Nike and Adidas."