Meituan CEO Wang Xing certainly seems to know what he’s doing; after all, his company is one of the few that has emerged victorious from the brutal culling of most of China’s group buy sites. So when he has advice for entrepreneurs, it’s probably a good idea to listen. He recently wrote a short piece for The Founder magazine, and said some interesting things:
Lots of entrepreneurs rely on capital too much, and think capital can solve any problem. What you have to understand is that Tencent will always have more money than you […] Tencent invests over 10 million RMB in outside companies every year. Tencent has more money than your VCs. So how do you beat Tencent? [In China] you can’t say, I’ve got money to spend and he doesn’t, that’s untenable.
That was probably important to remember last year when group buy companies were burning money and expanding like crazy. Indeed, Wang says, he wasn’t too concerned with keeping up because he’s playing the long game: “My patience is a bit longer than most founders’, that’s something I’ve gotten from years of startup experience.” That patience helped prevent Meituan from expanding faster than it could support — a mistake that killed more than a few of its competitors.
So what should you do instead? Wang has the answer:
For an entrepreneur, the most important thing to think about is how to use money more efficiently than your competitors, which raises your startup’s value. I’ve been thinking for the last two years about how to operate internet technologies in a company with low costs and high returns. As our efficiency gets higher and the more information we collect, that’s when we have an opportunity to influence the whole industry.
Food for thought, no?
[The Founder via Sina Tech]
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