Wang Xiao of Jiuhe Venture Capital: Is technology really just a job for the young?

[51CTO.com original article] The WOTA Global Architecture and Operation Technology Summit hosted by 51CTO was held at the Beijing Renaissance Hotel from April 14 to 15, 2017. This WOTA has set up 15 cutting-edge hot technology forums, and 60+ technical experts from Google, LinkedIn, Airbnb, Baidu, Alibaba, Tencent and other first-tier Internet companies at home and abroad will bring more than 50 accumulated architecture practical experience and successful experience sharing cases, and work together to create a two-day industry top technology event.

On the morning of April 14, at the main venue of WOTA2017, Wang Xiao, founder of Jiuhe Venture Capital and one of Baidu's Seven Swordsmen, gave a wonderful speech entitled "Technology is really just a job for the young." The following is the transcript of the speech, let's take a sneak peek!

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Wang Xiao, founder of Jiuhe Venture Capital and one of Baidu's Seven Swordsmen

Hello everyone, I am Wang Xiao. I am currently working in investment, and I used to be a programmer, so I think the main reason I came to this venue today is because of my different experiences, so I will talk about this from the perspective of career planning.

I started programming in 2000, and I first developed search programs at Baidu. From technology to technology management, and then to business and division management, I experienced the comprehensive management process from programmers to divisions. These eleven years are equivalent to working on many product lines. So, I also gradually moved from pure code farmer to investment. In simple terms, I tried every possible way that our technical staff could go.

Today I have the opportunity to share with you my thoughts and views during this process. In fact, in the past five years, I have been doing early-stage venture capital, investing in technology-related projects and some business-related projects. In fact, we all understand that the entire society is driven by technological innovation and creation, and the innovation of business models is based on this. If there is no Internet technology, there is actually no current business model for Internet operations.

It just so happens that our era is now returning to a more grassroots era, including the era of artificial intelligence. I think it is a better time for technical personnel to start a business.

Of course, as we all know, programming is a very mentally and physically demanding activity, so it actually requires a lot from our bodies. When I first started programming at Baidu, I basically programmed from 12 noon to 2 a.m. I was very young at that time so I didn’t feel tired. Now if I were asked to program, I would feel a bit overwhelmed, so everyone thinks that pure technology is something that only young people can do. In fact, my understanding is that from technology to technology management, technology architecture design, and technology application in business, it is a long process that requires the accumulation of experience. There are also many really good entrepreneurs abroad who are technically skilled, but they started their own entrepreneurial projects in their 40s and 50s. In fact, it is the same in China. In China’s BAT and TMD, except for Jack Ma, all of them have programmed, whether it is Robin Li, Pony Ma, or the founder of Toutiao, etc.

In fact, this also shows that if we have an understanding of technology, we are likely to have an easier time on the road of entrepreneurship. At the same time, we also know that technology changes very quickly. Now there are various clouds, such as Qingyun and Alibaba Cloud, and other cloud computing platforms provide us with a lot of support. Our cloud computing volume is also very large. If we entrepreneurs do not understand technology very well, it is very likely that the design of your service technology will not be able to accommodate so many users at the beginning. Including the current smart Internet, we also need to have a basic understanding of artificial intelligence, so that we can clearly judge the direction we are doing. For example, Toutiao uses machine recommendations to help everyone see different personalized information. If there is no understanding of basic technology, I think it is difficult to formulate this direction. In fact, technology is a very important ability for us to start a business. Without the understanding and thinking ability of technology, our judgment may be inaccurate in many cases. Of course, technical personnel have a comparative advantage in this direction, and the development of technology foresight is better than that of ordinary personnel.

There are several changes in China that I would like to share with you. The first is the evolution of consumer Internet to industrial Internet. We know that most people now have smartphones. When most logistics personnel, truck drivers, financial personnel, and even doctors have smartphones, the Internet is actually improving from the pure 2C part to the direction of industrial efficiency. In other words, the industrial Internet has actually become more valuable, and this part is three to five years slower than the pure 2C Internet. Therefore, it is easier for entrepreneurs to make achievements in this direction.

The second part is that in the past, whether it was Didi or others, they were all innovations in business models, and there were not many pure technological innovations. But as we get deeper and deeper into the deep waters, I think technological innovation will become a very important part. Moreover, China's mobile Internet environment is ahead of the United States, and China's smart Internet, such as the Internet of Things, is ahead of the United States. Because China is a manufacturing powerhouse, many sensors and hardware are produced in China. Including now that cloud services are becoming more and more abundant, it is very likely that we will be ahead of the United States in the field of smart Internet.

This requires us to make some technical innovations to guide the technological innovation of the whole world. We may see such a trend in the next five years. Now, we have seen that the United States has begun to copy China, including the model of ofo shared bicycles. In fact, we can see that when the Chinese market is larger and more mature than the US market, we are likely to have to make technological innovations in the next wave of the Internet. We know that in the past, whether it was QQ or Baidu, there were models that could be compared in the United States, including Baidu, Google, etc. But now many Chinese companies are innovative, which are not the case in the United States. Instead, the United States is copying the Chinese model. So in the next five to ten years, we can lead the development prospects of the entire world Internet through technological innovation and business model innovation. This requires us not only to be able to do things, but also to be able to think and creatively explore some things.

Including the fields of artificial intelligence, AR, and VR that we know, I think the changes in application prospects and environment in China are likely to be synchronized with those in the United States, or even ahead.

The third part is that I think in China, we know that the young and middle-aged labor force is actually on a downward trend. In the past, China's development, whether it is manufacturing or our consumption, was driven by the demographic dividend. But now the demographic dividend is basically going down, and we are declining very quickly. When the demographic dividend is gone, our entire social driving force must rely more on technological innovation. In the past, we mainly relied on the large market and the large population, so you can see that whether we are taking out food, there are so many people to help you deliver it, so our service is particularly good. But when these young people are getting more and more expensive, and they are less and less willing to engage in physical labor, we must rely on innovation, such as drone delivery and unmanned vehicle delivery, etc. to offset the problem of population decline.

In fact, our next driving source must be technology-driven. The demographic dividend has already been used up. If we do not have a huge improvement in core technology, our GDP and the efficiency of our entire society will decline. This is a problem we will definitely face in the next five to ten years. This is an important direction that everyone here can help our entire society improve efficiency and creativity.

Of course, we can also see that our technical staff is very valuable in every large startup. Recently, the CTOs of several large startups, such as Didi, Meituan, and Toutiao, are all technical people from large companies, and many of them are from Baidu. So I think this actually also shows the status of technical staff in startups. In the past, there were no co-founders who were technical, but now their CTOs are all at the co-founder level. This is a big change.

Of course, technicians have their strengths and weaknesses. We need to look at what is written above as a technician. Generally speaking, it is difficult to deepen your technology if you are not focused. However, you must have the ability to think commercially while focusing. We can see that no matter what these CEOs of large companies have achieved, their biggest feature is not that they are particularly good at technology, but that they have a particularly good sense of business and are particularly good at judging trends.

In this case, it is easier for you to form a team. You have a team foundation. In fact, the evolution of the entire Internet relies on technology to solve some efficiency problems. Marginal cost is only a very important feature of Internet platform tools. For example, WeChat communication only costs traffic. The cost of editing services for each communication is very low. This is the value of technology. This is the ability we must have as a large platform, so technology is a very important driving factor. Including factors in the world, including Google, FaceBook, and Tesla are also technical. Of course, there are many technicians who bury their heads in technology and don’t think about other things, judgment and feeling about people, judgment and feeling about business, and the trend of the next business. If you don’t judge, it’s hard to start a business, and it’s even hard to be a CTO in a startup company. I think this is a requirement. I think this is a very important part of the sustainable development of technicians. Not only can you look down at the road, but you can also look up at the trend.

Of course, why in the past ten years, many of our entrepreneurs are technical personnel? In fact, because we were the first to come into contact with the Internet, we may have the deepest understanding of the Internet, and we can more accurately predict the next development trend of the Internet. If you play computer every day, you will know whether VR can solve the problem of dizziness, for example, and it can be solved in a few years. If you understand technology, you will think that this is not a problem, but a positioning problem, and it will not become the biggest driving force hindering the development of the VR field. You know that VR starts with watching movies and watching various short films. This is the driving force of the development of the Internet. This is the earliest form of the Internet. The earliest presentation of VR is such an entrance. You have all kinds of videos and all kinds of experiences. It will definitely produce very valuable products.

Starting this year, we proposed a concept called the smart Internet, which integrates so-called artificial intelligence, IOT, cloud computing, and application scenarios. In fact, this concept is different from the concept of mobile Internet and the traditional concept, because artificial intelligence makes us understand that there are some problems in the development of things, and artificial intelligence does not have too many Internet elements. So we proposed the smart Internet, of course, this is not just a concept, but an important logical thinking to understand the next development trend of the Internet.

We believe that over the past decade or so, the entire economic form of the Internet has been a traffic-based economy. Most of its companies rely on advertising to make money, including Baidu and Alibaba, which also make money through direct advertising. Tencent relies on monetization through games after attracting a large number of users. Its model logic is a traffic model.

The next step in the development of the Internet is the efficiency model, which helps us improve our decision-making ability. Autonomous driving is actually a simple way to understand it. In the past, we had to make various decisions when driving, and these decisions consumed our energy. If there are autonomous vehicles, we don’t need to spend time on making decisions during driving. Of course, this is just one direction. For example, in the automated industrial sector, robots can be used to produce automatically. In other words, human participation will become less and less. This improvement in decision-making efficiency may be the most important direction for the next development of the Internet. It does not necessarily rely on a large number of users, but on professionalism to solve certain core problems and improve efficiency.

For example, we know that the subways we take every day actually have drivers, and they work in three shifts. The annual salary cost for each line is about 70 to 80 million RMB, because many people have to work in shifts. If we use LiDAR and autonomous driving, I think it can be done in a closed environment in one or two years, and the 70 million labor costs can be saved, which is equivalent to improving the efficiency of decision-making and the efficiency of the entire social operation. Moreover, it can increase the density faster, because machines make decisions much faster than people. In the past, there was a train every two minutes, and it may become a train every minute. This is a very important change we see in the next five to ten years. Its economic model has undergone a major change, which requires technology, artificial intelligence, and a large amount of data collection and sensors.

Of course, some of you here would like to move up along the career path and get to technical architecture, etc. Some people also want to change the world through technology and start a business. These are two very high-end career paths in our career planning. Of course, I think it is more difficult, so I made investments, which at least made the technical staff I talked to feel that I understand him and I know him better than others because I have a technical background. So these three are directions you can try.

However, these three different directions may require different abilities and focuses. If you want to start your own business, you will have higher requirements for business sense and judgment, and management of financing. If you want to invest, your connections and your judgment, understanding and forward-looking thinking are all basic abilities.

Of course, there is a misunderstanding that the success rate of technical personnel in starting a business is low. In fact, I think this is a misunderstanding. Because the largest companies are all started by technical personnel, so if in the most core and strongest companies, I think the success rate of technical personnel in starting a business is the highest, much higher than other personnel. However, many of us understand or think that technical personnel are not good at management, cannot set strategies, and are not very good at financing, so they get less money. This is indeed a problem. So this is also a problem in our reality, but the truly successful companies basically have people with such abilities and backgrounds. This actually depends on whether its latitude is placed at a higher latitude or a more superficial place. It is definitely not enough to just understand technology. The thinking of the business model here mainly depends on daily accumulation. In fact, we can see that many people are doing historical research, how Internet companies used to do it, how each version of the iteration was like, and how they got to the present step by step. In fact, if we look back at the decisions made by the more successful Internet companies at each point in time, we can quickly understand the evolution of the Internet and what you should pay attention to when starting a business.

If you want to start a business, there is a good way, which is to take a good look at the key decisions made by these larger Internet companies from the first year to now, which ones are right and which ones are wrong. You can basically understand why they can do what they are now, some basic business judgments and model logic. Why did JD.com do logistics? It was successful at that time. Why are many e-commerce companies that have warehousing and have inventory pressure in warehousing basically unable to grow? There are many core rules in this, and you can basically understand it after taking a look. So if you want to start a business, just take a look at the development history of large domestic and foreign companies. This is a very important method.

From the perspective of entrepreneurship, what should be prepared? For technical personnel, first of all, you have to deal with people, because in the process of entrepreneurship, you have to deal with investors, partners, and upstream and downstream manufacturers, so your ability to deal with people should not be too bad. In fact, the core essence of entrepreneurship is to gather resources from all parties, turn your ideas into valuable services, and let more people use them. So how many people can you convince to help you do this, for example, you can convince many people to join your company, this is a kind of ability. Convincing early investors to invest in you is also a kind of ability. Without this ability, it is basically difficult to do it.

The second part is that you need to have a certain level of understanding in terms of the depth of technology. At the beginning, you just programmed for a short period of time and then wanted to start a company. I think that everyone's steps to rise are all in one place. If you do well on one step, you can then make a horizontal transfer, such as being a programmer, doing sales and marketing products. If you cannot go up every step, you can only migrate horizontally, which consumes a lot of your time. I have seen many young people who are in a hurry. They start programming for a year and then do product and marketing, etc. The accumulated time is too short, and they do not move up on each step. They just move horizontally. I think this is not conducive to doing things.

We also need to understand some trends and laws of technology development. Generally speaking, technology is a process of high expectations at first, then falling when it is found that it does not meet expectations, and then slowly climbing up from the trough. The best time to start a business is the process of climbing up from the trough. For example, VR was very popular in the past two years, but everyone thought it was useless and had no practical use. In fact, it fell again this year, but I think it is precisely in these one or two years that companies like VR and AR can really rise slowly. For example, the Internet bubble in 2000, but it happened that Internet companies grew little by little around 2000. It was precisely when the bubble burst that you should enter, not at the beginning.

Artificial intelligence is now slowly moving towards a similar downward process, because it was too popular in the past. In fact, the maturity of artificial intelligence requires a large amount of data and a large number of application scenarios that meet its requirements. For example, technologies such as driverless cars and autonomous driving are now slowly entering a process where it is very likely that mature application solutions will be seen in the next three to four years. However, this concept has been popular for a long time, and I think it will take the next three years to see the real implementation. We have recently been looking at some startups that have made very good technological breakthroughs, and I think this is also a point. So if you are doing technology entrepreneurship, you must find the right time to enter.

Another very important factor in entrepreneurship is luck. In the final analysis, luck is a choice, which has two parts. The first part is what time period to choose, and the second part is what field to enter and what problem to solve. So luck is a very important part. It can be said that these Internet giants all made a very basic application in the right time period, so they succeeded. I think they have very strong personal abilities, but the timing helped them more than we thought. So, when we start a business, we must consider the time to enter and what to do.

I won’t go into the specifics of the technologies involved, you can look at these charts. I think the truly valuable things in the future are likely to be commercialized after breakthroughs in core technologies.

There are still some stages in technology entrepreneurship that require continuous breakthroughs. At the beginning, you must use technology to make products and impress users with products. After users come up, you start to commercialize. At this time, you need to expand capabilities, channels, management teams, and strategies. Of course, there will be a repeated process in the middle, and you will continue to learn in the process. In fact, you see that many entrepreneurs have experienced two or three entrepreneurial failures and finally succeeded in a big thing, because they can learn valuable experience from each failure. The second time, it may be that the product was chosen correctly, but the business model was not chosen correctly. The third time, you find a larger market to cut in and use capital to leverage. All things have been experienced, team management, capital management, I think this is all possible. So it is very important to constantly learn from failure. Serial entrepreneurs have advantages in a sense, because there are very few real serial entrepreneurs, so everyone is willing to bet that they have already spent a lot of tuition fees. Can these tens of millions of tuition fees be saved? I don’t want to be the first one to pay tuition fees for him. This is all very possible.

So I think the most important thing is to return to the essence of technology and innovation. In the past, there were too many companies in China that were driven by models and capital. There was a war between thousands of groups. In the end, the relationship between the money invested in this industry and the commercial value generated by the company was not economical. In simple terms, if you invest 100 billion yuan, you may eventually earn 100 billion yuan, but the efficiency does not generate added value. I think technological innovation must promote social development. In technology, an investment of one dollar will generate at least ten times the return. I think this is what we should insist on in the future or what our group of people, our generation of technicians, should do, rather than just relying on the drive of business models to do things.

Another thing is to balance technology and business. Why is it difficult for university professors to start a business with only technology? His products may be very good, but they are not used in the right place or their products are not suitable for commercialization. Therefore, the balance between business and technology is a very important part. It is equivalent to each of us having two legs to walk. If you only have one leg, you may not be able to walk. Only with two legs can you run fast. This is what we need to pay attention to as technicians. Commercial products are not that difficult for you to think about. Because we use so many products with commercial logic, whether we use WeChat, or we are playing games, or we are using Mobike and Didi Taxi, you can find the essence of business if you think about it. A lot of it is human nature, our consumption concept, our understanding of things, our demand for convenience, and our requirements for cost-effectiveness and quality. The essence behind it is nothing more than these points. If we can think more about commercial products and the commercial essence of many products, we are likely to have a much higher understanding of business.

There is a report on the intelligent Internet. I think this may be the place where the most companies will be born on the Internet in the next five to ten years. The logic is very simple. First, cloud computing now has a lot of storage and computing power. The second part is that the cost of our sensors is getting cheaper and cheaper. There are all kinds of sensors for temperature and humidity, geographic location, environmental navigation, cameras, and even lidar, etc. Therefore, a large amount of data is generated. After we have the ability to learn deeply and process data, we are likely to make some simple decisions more intelligent without human intervention. This creates the opportunity for Internet connection, making the decisions we usually make very simple. For example, if I want to come to Shuangjing today, how can I make it more economical and faster? You couldn't do this before, but now it can help us make decisions and save us 20 minutes or 40 minutes every day. For example, Mobike can help us walk less and save five minutes. If everyone wastes five minutes less every day, you can spend these five minutes on more valuable things or play games to make yourself happier.

Therefore, I think the ultimate value of the smart Internet is to help us save time. The reason why humans have gradually developed many civilizations from the agricultural society is that they used to rely on hunting, so you ran around hunting monkeys every day, etc. But once we enter the agricultural society, we can save time. Why are civilizations born in relatively wealthy places? Because they have time to think. In the past, they thought about what to eat. Of course, after the smart Internet saves a lot of our time, our decision-making ability is put on more valuable things. This is the main way to promote social civilization. I think the smart Internet is doing this. In fact, the Internet has also helped us do a lot of things. This ability was impossible before, so each of us has the equivalent of all the public information in the world. This is the ability that each of us has. Therefore, each of us has much more energy than people in the past, and the Internet gives us such a superpower, and it can help us solve costs, so that we can spend one hour less on the road, that is, the length of our lives, and it is very likely that our quality will be much improved. This is what we do.

Another is that this is the best era for technology entrepreneurship. I took out all the internal research reports. I think we need to understand it together, so that China can move forward in the next era of intelligent Internet. I think there is an opportunity. Because our manufacturing industry, population, and cloud computing capabilities are all in good condition in this era. This is what we are doing.

That’s all I have to say. Thank you everyone.

51CTO reporters will continue to bring you exciting reports from the WOTA2017 Global Operation and Architecture Technology Summit, so stay tuned!