LeTV has such great ambitions. Where does Jia Yueting’s confidence come from?

If you always complain that others do not understand your business model, the cost of explaining your business model to the public will be very high, which will objectively reduce the competitiveness of your company and increase the risk of your company's survival.

More than 40 days have passed since LeTV’s financial crisis broke out on November 6.

The 40 days of hardship and suffering did not seem to give LeTV a window of opportunity to explode, and most people tend to believe that the LeTV crisis is still ongoing.

Of course, LeEco's gains in these 40 days were not all bad news, there were also good news. For example, Jia Yueting borrowed $600 million from his classmates at the Cheung Kong Graduate School of Business, and LeEco's super car industrial park in Moganshan, Zhejiang Province finally bought land and announced that it would start construction at the end of the year; and when the Nevada Treasurer kept accusing LeEco of a "Ponzi scheme", the Nevada Governor finally stood up and praised Jia Yueting; and of course Jia Yueting was as confident as ever, for example, at the 2016 China Business Leaders Annual Conference, Jia Yueting declared, "Looking at the future from the future, LeEco is the most suitable and capable company in the world to make Internet smart electric vehicles."

As one netizen said, "LeEco has indeed affected our lives, but in the form of online headlines."

In recent days, there has been a lot of news about LeTV.

For example, on December 13, Liu Chuanzhi, a heavyweight in China's business community, talked about LeEco. He said, "LeEco's ecosystem has given us a lot of inspiration. The most interesting thing about LeEco is that it combines hardware and software, launches the software, and then sells the hardware to consumers at a low price, on the condition that consumers must purchase content." "There are many benefits to doing this. In our country, the valuation and price-earnings ratio of content are much higher than those of hardware. LeEco took advantage of this valuation difference to drive the manufacturing of hardware. At the same time, it also forced consumers to change their bad habit of not paying for content."

Obviously, this is a high evaluation.

In fact, before Liu Chuanzhi, LeTV had also widely spread similar praises of LeTV by Yang Dongwen, president of Skyworth Group, but this was immediately denied by Skyworth, which said "don't take polite words seriously."

There are still fewer people who are optimistic about LeTV than those who are bearish on it.

On December 14, Lang Xianping, a professor of finance at the School of Business Administration of the Chinese University of Hong Kong, said in an interview with the media that Internet companies face four major difficulties in making cars: the amount of capital investment is unimaginable, the design is unimaginably complex, the technical difficulties are unimaginably high, and the supply chain management is unimaginably complex. He concluded that "LeEco cannot succeed in making cars."

However, an announcement released by LeTV on December 14 left people with a lot of room for imagination. The announcement stated that LeTV is planning to introduce strategic investors through a private placement of shares.

Earlier news also stated that on December 12, another debt rights protection incident occurred in LeTV Building, with more than 70 people gathering in front of the LeTV Building to demand their wages.

It can be said that the past 40 days have been the most tormenting period for LeEco founder Jia Yueting since he started his business. Regarding this crisis that seems to have no end in sight, Jia Yueting firmly believes that "the black hand behind the scenes is planning and pushing it in every possible way."

However, most media and even the public do not think so, "We are not so easy to be exploited." A survey by Baidu Baike showed that 72% of people believed that "LeTV is in a domino crisis."

Jia Yueting said that there was a black hand behind the scenes, but he did not tell people who the black hand was. In fact, if a company is really healthy, no matter how you blacken it, it will be useless; on the contrary, if a company is in crisis, no matter how you cover it up, it will be useless.

Looking back at the past 40 days, careful people will easily discover an interesting phenomenon. Basically, all the good news about LeTV came from LeTV's unilateral dissemination, and most of them used the "future-tense" expression - "FF Nevada factory will enter the second phase of construction in February next year", "Faraday will release its first mass-produced car at CES 2017", "Moganshan LeTV Auto Super Industrial Park will start construction before the end of the year", "Mobile phone product supply will return to normal", "LeTV will most likely become the company that surpasses Apple"... "will" is the most prominent keyword in this expression.

Obviously, LeTV and Jia Yueting are still continuing the routine of "painting big pictures" and "telling stories".

Facts have proven that this routine has failed. The most telling event was when LeEco held its most high-profile cross-border press conference in history in San Francisco, the United States, on October 19. More than 400 people from domestic media chartered a plane to attend. The result was disappointing. In addition to the fact that the car was not seen after it was released, LeEco's stock price fell instead of rising that day, and continued to fall in the following days, showing that the capital market had completely despaired of Jia Yueting's routine.

It is strikingly similar to the fact that the public and investors mostly have negative comments about Zhuhai Yinlong, but Dong Mingzhu is the only one who has a special liking for Zhuhai Yinlong. When the public and investors have less and less confidence in the LeTV model, Jia Yueting and his team are still full of confidence in the LeTV ecological model.

The source of Jia Yueting's confidence is still his original "ecological reaction" theory. According to Jia Yueting's explanation, "ecological reaction" means that the seven sub-ecosystems of LeEco can produce a strong chemical reaction, which is commonly known as a "chain reaction." What is ridiculous is that the positive chemical reaction did not occur between LeEco's ecosystems, but the reverse chemical reaction did. On December 6, the media reported that LeEco Sports had laid off 20% of its employees, which caused LeEco's stock price to plunge that day and had to be suspended urgently.

LeTV felt that investors had misunderstood it. How could information from a non-listed company be transmitted to a listed company? Little did they know that this was exactly what Jia Yueting called "ecological backlash"?

There are precedents for such "ecological backlash". In mid-September this year, Samsung's Note7 mobile phone exploded. Soon after, sales of other models of Samsung mobile phones were also affected. Even Samsung's entire series of home appliances and digital products were affected to varying degrees. This is what we often say "a fire in the city gate affects the fish in the pond". In the eyes of consumers, it was "something wrong with Samsung products" rather than a specific model of product.

However, in Jia Yueting's words, the chain reaction caused by his own crisis became "the black hands behind the scenes are extending more and more wantonly, trying to pass the turmoil of the non-listed LeEco to the listed LeTV.com", "the more they are hacked, the more resilient they are, and we will see on the battlefield." Obviously, this is an emotional catharsis, which is neither rational nor valuable.

Jia Yueting can’t play the “High Mountain and Flowing Water”, but he always complains that it’s hard to find a soulmate who can appreciate his high-pitched music. He always says that too few people understand his ecological model theory. He even said that LeTV’s “ecological model is too new, so new that many people don’t understand what LeTV is saying” and “it takes 15 years to understand LeTV’s ecological model”. Contradictory, he also said that LeTV’s ecological model “cannot be proven by itself or by others”. It’s as if all the IQ of the Chinese people is given to Jia Yueting alone.

In fact, a truly good business model is one that people can understand at a glance. A business model that people cannot understand at all is likely to be inconsistent with business logic. For example, how many people say they cannot understand the popular private car model and Mobike model this year?

If you always complain that others do not understand your business model, the cost of explaining your business model to the public will be very high, which will objectively reduce the competitiveness of your company and increase the risk of your company's survival.

In China, the company that is least concerned with business models and organizational change is Huawei. In fact, in the eyes of many people, Huawei is a traditional company. However, it is such a traditional company that has achieved the glory that Chinese companies have always dreamed of - the most globally influential Chinese technology company.

Therefore, when Jia Yueting called Huawei Technology "a fool", many people laughed. Huawei's rotating CEO pointed out: "Why do many Internet giants in China have trouble sleeping? Because most of them are innovating business models, have little technical accumulation, and are weak in the ability to innovate new technologies and new businesses. They rely more on gambling in strategy, and their new businesses are more about who can copy Europe and the United States earlier, who has better execution, and who has more money to burn."

Focusing on technology and being ridiculed is the shallowness of some Chinese Internet business leaders. However, in the eyes of the international management community, the biggest gap between Chinese companies and international mainstream companies lies in the lack of patented technology, original technology, and invention technology, rather than the lack of business model innovation.

From another perspective, perhaps it can better prove that the LeEco model has reached the point where it must be thrown into the Pacific Ocean. According to statistics from Caijing, in recent years, LeEco has achieved a total of 70 billion yuan in various financing (Lang Xianping said 80 billion yuan). What kind of LeEco has such a huge amount of capital investment brought us? Everyone has seen that it is a company that is full of crises and has been criticized. What can better prove the failure of the LeEco model than facts?

However, after "reflection", Jia Yueting repeatedly declared that "LeEco has never said and will not change its strategic direction. What needs to change is only the strategic rhythm."

A company that makes mistakes but doesn't know where it went wrong and refuses to reflect has no future.

In fact, Zeng Qiang, the founding partner of Xingen Capital, the second largest shareholder of LeEco, also bluntly said after the LeEco crisis broke out that "LeEco still needs a deeper transformation... from individual monopoly to collective decision-making" and "LeEco's turnaround depends on Mr. Jia's decision." However, it is interesting that Jia Yueting publicly stated that "LeEco does not have a second or third shareholder."

Jia Yueting said that LeTV "will either be great or die". If we treat different voices with this attitude, I'm sorry, LeTV will not be great, but will die.

Looking back 40 days later, Jia Yueting's 5,000-word letter, in addition to making LeTV's financial crisis public, did not bring any valuable changes to LeTV. We still do not see any signs of LeTV getting out of the crisis and moving towards a new life. LeTV's current situation is nothing more than a painful struggle of exchanging time for opportunities. LeTV's biggest expectations at present are, first, waiting for Faraday Future to release mass-produced cars at the 2017 CES Consumer Electronics Show, so as to stimulate the public and the capital market to regain confidence in LeTV; second, introducing strategic investors through private placement of stocks, casting a new imagination space for the capital market. Obviously, this routine is still in the future tense.

Some people pointed out sharply that rather than saying that Jia Yueting conducted "deep reflection", it would be better to say that he pledged to persist stubbornly.

Wang Shuo said, "Ignorance is fearless." So, when Jia Yueting said, "When cars and the Internet are about to merge, a company that surpasses Apple will emerge, and LeTV will most likely become that company," almost everyone laughed. Because Jia Yueting is only responsible for conveying confidence to the public, but never responsible for explaining to the public.

This is exactly what I am worried about for Jia Yueting and Dong Mingzhu. Who dares to say that the enthusiasm for cars is not the last straw that overwhelms Jia Yueting and Dong Mingzhu? In the eyes of the automotive bosses, their common likability is that they underestimate traditional automotive companies and have a too one-sided understanding of the automotive industry.

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.