Xu Jiayin and Jia Yueting "suffocated together"? Today's FF is more like "reheated meat"

Two months ago, when Xu Jiayin "bottomed out" Jia Yueting's FF, some industry insiders asked: Is this going to "suffocate" the dream together with Jia Yueting?

Now it seems that it is really possible.

On June 25, Evergrande Health announced that it had become the largest shareholder of FF Automobile with an investment of HK$6.7 billion. Starting from the day after the announcement, Evergrande Health's market value soared from nearly HK$40 billion to HK$140 billion in late August - a market value increase of HK$100 billion with an investment of HK$6.7 billion, a 15-fold profit in two months!

Xu Jiayin's net worth once surpassed that of Tencent's Ma Huateng, making him China's new richest man and enjoying a period of unparalleled glory.

But starting from the first trading day of September, Evergrande Health’s stock price suddenly turned downward. In three days, it fell by 40%, and its market value suddenly evaporated by 66.4 billion!

This roller coaster-like market makes people think deeply: Is this really a good investment? Will Xu Jiayin's investment in Jia Yueting's FF Automobile end up in vain? How do you view the sharp rise in Evergrande Health's stock price? How can investors avoid falling into the "Jia Yueting-style" entrepreneur trap? With these questions, this issue of "China and Foreign Management Observer" interviewed Mr. Cha Li, a famous angel investor and founder of Qianlong Venture Capital, to hear how he views these issues.

Today's FF is more like "reheated pork", the taste has long changed

"China and Foreign Management": Jia Yueting has long been on the list of "deadbeats", and "returning to China next week" has even become a joke. However, Xu Jiayin chose to invest in Jia Yueting's FF and benefited greatly in the short term. What do you think of this investment event?

Cha Li: I personally don’t think highly of FF. Before Jia Yueting, FF had hoped to ignite the market by telling stories, but it never really took off. Jia Yueting took over in a difficult situation and hoped to achieve rapid growth. However, after several twists and turns, the car factory was closed for a time as Jia Yueting got into trouble.

Now, FF is alive again, but I am not optimistic. First of all, because the new energy vehicle market is already a red ocean, it is difficult for FF to emerge. Especially in the process of development, it has been tossed around many times, just like "reheated pork", which has changed its taste after being cooked many times!

Secondly, whether it is the team, product or technology, FF is vague. It seems that it has never formed real core competitiveness, and the future market is also unpredictable.

"China and Foreign Management": With Sun Hongbin's previous failure, as a mature entrepreneur, can't Xu Jiayin see the situation clearly?

Cha Li: I personally don’t believe that you can “make” something successful just by relying on money, because today’s market emphasizes quality products. If the product and story are not good, it is difficult to succeed. If Lei Jun jumps out to start Xiaomi Auto, I think it has more prospects than FF, because FF has changed, and it is almost impossible for Jia Yueting to make a comeback with it.

"China and Foreign Management": Jia Yueting has essentially crossed the entire business order and law.

Cha Li: In fact, it is not difficult to find that although Sun Hongbin and Jia Yueting shook hands and got along well, Jia Yueting had no decision-making power in this and could be kicked out at any time.

Now he has finally found an investor who is willing to invest in him, but his position is not stable, because there are many details in the investment agreement that are invisible to the outside world. The investor will definitely choose a dominant position. If there are any conflicts or disputes in the middle, Jia Yueting is likely to leave. Take the last LeEco crisis as an example. Jia Yueting did not do a good job, and his character means that the future of FF is uncertain.

LeEco's problem is not its strategy, but its corporate genes.

"China and Foreign Management": One of the important reasons why the capital market was optimistic about this investment was that Xu Jiayin and Jia Yueting had a bet agreement in the investment agreement. If FF cannot achieve mass production in the first quarter of next year, Jia Yueting will face being eliminated. Many investors believe that this means that FF will lose the negative factor of Jia Yueting, and this bet agreement is a positive. What do you think of this bet agreement?

Cha Li: This must be included in big investments. It can be called a bet agreement. To put it more nicely, it can also be called a milestone. If you can't achieve this milestone, you can leave. No matter how big the dream is, it always has to have a foothold.

FF's mass production at the beginning of next year is Jia Yueting's "second take". In fact, electric vehicles are a very mature industry. As long as there are no problems with the supply chain and the capital chain, it is not a big problem to build a car. If Jia Yueting still can't build it under such circumstances, he really shouldn't be in the industry. However, the quality of the mass-produced cars and the market response remain to be verified.

I think a good entrepreneur has to face his own problems. Whether it is his shareholders or his consumers, he should be clean. At least Jia Yueting did not do it cleanly, so this will definitely affect his future career or entrepreneurial career.

People have continuity, and we cannot just write off history and pretend nothing happened, and come out as a hero again. If we cannot face history, we may come out as a "pirate" with missing limbs!

Before Jia Yueting got into trouble, many of the companies I invested in had signed contracts with LeTV, but I discovered very early on that LeTV never paid. So when startup companies told me that they had signed a contract with LeTV, I didn't agree. I was afraid that they wouldn't get paid for the contract with LeTV. I have encountered too many such things.

Before LeTV got into trouble, basic business principles were not followed, and the fundamental reason was that there was something wrong with the company's genes.

FF has many genetic diseases. It has its own genetic diseases. This company had nothing to do with Jia Yueting, but Jia Yueting jumped in like a parasitic crab and has now become half-dead. In my opinion, this company is just not doing well.

"China and Foreign Management": People generally conclude that the reason for LeEco's failure is that there were problems with the seven ecosystems created by Jia Yueting. But in your opinion, the problem is not with the strategy, but with the genes themselves? If there is no problem with this strategy, there will be problems with other strategies, right?

Cha Li: Yes, and his story is too exaggerated. Jia Yueting said he was building an ecosystem, but I think he was destroying it! He found and tricked a bunch of people to work for him, but he didn't pay them. What is an ecological cycle? It means to pull the upstream and downstream to cooperate. I benefit, you benefit, and everyone benefits. However, he took all the benefits for himself and let others serve others for him. How can this be called building an ecosystem? This is obviously intentional destruction of the ecosystem.

In fact, strategic matters are easy to talk about, because strategies are all virtual. You can talk about strategies to the outside world and the media, but in our business operations, LeTV's attitude, methods and practices towards the supply chain are not building a plaque at all, but destroying the ecology. It is deceiving upstream and downstream to gain benefits, and it is forcing others to death to support its story, so it will "explode" sooner or later.

At present, FF has not been truly commercialized, it is still just a story. Maybe Xu Jiayin wants to enter this industry, and he happened to have this opportunity, so he went in first and then saw if it didn't work out, and then he would replace him. This is normal. Of course, the core of this is Jia Yueting and FF itself: whether FF itself can really guarantee its brand, its quality, and the user experience is still a question.

The second question is whether Jia Yueting can do this well? This is also a huge question mark. I personally think it is unlikely. Because in today's market, especially for products like FF, it is a fan-level product. The so-called fans must have a bunch of almost blind and brainless fans who like you, but how many people can Jia Yueting find to like him?

Sometimes people must have courage, why didn't Jia Yueting have this courage? He ran away quietly, and his "return to China next week" became a laughing stock.

In fact, when his company was not going well, he had been to the United States. LeEco itself had problems in its genes. I remember when someone interviewed me, I thought, if Jia Yueting was a real man, why would he wear torn pants and rebuild them? If it were me, I would definitely not do that.

Looking back on this matter now, I feel that everyone has a pattern. Unless you subvert yourself and start anew, I think you are still repeating the original pattern.

Don't believe in stock prices, good products and good founders are the key

China and Foreign Management: Another interesting aspect is that the stock market is very excited about this matter. In just two months, the market value of Evergrande Health has increased by 100 billion. Does this reflect the irrationality of the stock market? Or is there something else wrong?

Cha Li: In fact, in the Chinese stock market, whether it is the mainland or Hong Kong stocks, the possibility of being manipulated is very high, and the stock market's growth cannot fully prove its value. Take the surge in Evergrande Health's market value, for example.

"China and Foreign Management": Many investors are currently looking for projects. How do you think they can avoid the pitfalls of LeTV's Jia Yueting or FF? What advice do you have for them?

Cha Li: I think people should return to their original intentions and think about why they do this thing? How to start a business? Everyone has his basic values, outlook on life and principles of doing things, so we have to return to the most essential things. I personally believe in today's consumer market. In today's Internet market, a good product and a good founder will have a healthy valuation and lasting growth.

If you have a little money and a story to tell, it is difficult to really succeed in today's market. Maybe you can do it in the short term, but it is difficult to make it big and last. We must return to our original intentions in everything. The Internet era cannot cover up any negativity. Only sunshine and light, and being upright in doing things can do things well.

"China and Foreign Management": Many investors want to find good entrepreneurs and good products, but when they do it, they may also encounter people like Jia Yueting, such as Sun Hongbin. How do you judge whether this person is a good entrepreneur?

Cha Li: Everyone makes mistakes, that’s fine. The problem is how you recover from failure and mistakes, which is crucial.

You can't guarantee that a person will always succeed. Even the largest companies will face market unpredictability. How entrepreneurs or founders deal with these problems, their approach and attitude are crucial. For example, someone like Jia Yueting left in a dishonest way. If it were me, I would definitely not invest in him.

A good product should be warm and make people like it

"China and Foreign Management": How to judge whether a product is a good product? Is there a relatively simple "yardstick"?

Cha Li: Good products on the market today cannot be judged solely by their cost-effectiveness. Good products should have warmth and emotion, and should have a "nutrient" beyond basic functions. Only with this value can they be considered good products. For example, Apple mobile phones, whether in terms of appearance, functions or quality, are actually similar to other mobile phones, but they are far inferior to Apple mobile phones.

To give another example, a while ago I met a post-90s in Zhejiang. He launched a juicer for 299 yuan. Now it is said that the daily shipment volume reaches 10,000 units. His juicer is very interesting. There is a very small design on the bottom, a bit like a slot machine in a casino. There is a small button next to it. After pressing it, you can see the pattern inside rolling from the round window above. When it stops, the result will be apples and bananas. Then you can buy apples and bananas according to the result of the turntable and put them in. The next time you want to drink something but haven't decided, press it again. When it stops with a "snap", the result may be grapes and kiwis. You will feel very happy when you buy some grapes and kiwis. This experience far exceeds its own value. Many celebrities have bought this, which is equivalent to endorsing it for free. This is a product with warmth, not just used by consumers. This is the product needed in this era.

"China and Foreign Management": If you use such products as a benchmark, what do you think of FF?

Cha Li: I think this car is just average. There are already many distinctive electric cars in Silicon Valley. For example, Tesla's chief designer went out on his own and designed a great car. People can lie in the back seat with a full glass top to look at the sky and stars. It can also drive automatically. It will be quantified and put on the market soon. But Jia Yueting's FF is not up to this level at all.

In addition, FF's current million-level price is at the sports car level. Since the price is so high, it must be a very good car. Just like buying a horse, if it is a Arabian horse, its breed must be good and its genes are good, and many people will be willing to spend money to buy it. But if this horse is a hybrid, even if the horsepower is good, will you still buy it at a high price?

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.