Traveling back to 1977

Chapter 853 Just Thought Of
Riding her horse out of the brigade headquarters, Zhou Yali was very curious. "A professor at our school once said that the most difficult thing for an investor is to be able to suppress their desires."

You've said it several times before: the domestic market is now a supplier market, and almost everything requires ration coupons. If you can produce things that don't require coupons, you won't have to worry about selling them.

So, how do you manage to suppress your desire to make money?

Chen Fan, riding on the back of a mare, swayed rhythmically with the horse's movements. Hearing her question, he turned to look at her and smiled, "Simple, because the industries in Lujiawan have little to do with me."

Looking at Zhou Yali's blank expression, he laughed and said, "It's just like how stock traders never use their own money to trade stocks. They only earn commissions. If other people make a lot of money, they also make a lot. If other people lose all their money, it doesn't stop them from getting commissions. That's why they can be relatively objective."

Look at ourselves now, how many industries have we invested in? We started with publishing, then moved into the telecommunications industry by developing routers and proxy switches, then into the computer industry by making Chinese computers, and finally into the gaming industry.

Then they invited their aunt to be the CEO, aiming to integrate the publishing industry and then add the media industry.

These are just in the US; what about domestically?

Shenzhen already has clothing, shoes, bags, televisions, papermaking, printing, logistics...

As he spoke, he turned to look at Zhou Yali and laughed, "Doesn't it sound confusing?"

Upon hearing this, Zhou Yali felt her mind go completely blank. "No, you know the risks of disorderly investment, so why are you doing it?"

Chen Fan clicked his tongue, his smile fading slightly, and said seriously, "Because I know that the next ten years will be a once-in-a-lifetime opportunity. No matter what industry you're in, as long as you build a large-scale factory, you have the potential to become a multinational corporation."

in other words,……"

He suddenly loosened the reins, opened his arms, and chuckled softly, "In the next ten years, the mainland will be overflowing with gold. Why wouldn't I want money that's been picked up for free?"

After hearing his explanation, Zhou Yali still looked puzzled. After several seconds, she shook her head. "But you don't recommend that Lujiawan do this?"

Chen Fan grunted twice, tightened his grip on the reins again, and gave it a gentle shake. The little mare immediately took off running and quickly ran out of the area of ​​Team Five.

Once Zhou Yali caught up, he said softly, "Can Lujiawan compare to us? If we invest in the Shenzhen Industrial Park, you can immediately bring in a mature management team from the United States. What does Lujiawan rely on?"
How can we rely on those production team members who can't even understand the documents and have at most a primary or higher primary school education?
We hold US dollars in our hands, and the entire domestic and international markets are our purchasing grounds. Lujiawan barely earned some foreign exchange thanks to my uncle's company, but we used it all to purchase raw materials. We stopped buying machines and stopped trying to make a living.

Without US dollars, who would sell them large quantities of raw materials? They could only rely on themselves and other nearby production teams to provide them.

We have been granted special permission by the mainland that products manufactured within the industrial park do not need to go through import and export companies and have direct export rights.

We also have the right to independently develop sales channels in mainland China.

What about Lujiawan? More than half of their current market was developed through my connections. If we let them run around on their own, who has the ability to expand and maintain the market?
You have no idea, although the domestic market is currently a supplier's market, there are still all sorts of traps and tricks. If you really run into a big pit, how will you deal with it?

Zhou Yali's eyes were full of surprise. "Huh? Aren't they all state-owned enterprises? How come there are such big pits?"

If all organizations are government-owned, then all the cheating and ripping off is ultimately just cheating the government, isn't it?

Chen Fan chuckled and glanced at her. "Who told you that state-owned enterprises don't have big pitfalls? The simplest one is that they make you ship the goods first, but then hold back payment and drag it out for three years. What can you do then?"

Don't be fooled by the fact that these days everything is done between government entities; there are still quite a few tricks involved.

Take the simplest example: procurement.

As we all know, procurement is divided into planned and unplanned procurement. So, which is simpler, planned or unplanned procurement?

Many people might think that the plan only requires a simple coordination, so what's so difficult about it?

However, finding supplies outside of the plan will undoubtedly be fraught with difficulties.

Well, actually, the reality is quite the opposite.

Unplanned procurement is almost never difficult, for a simple reason: unplanned procurement personnel almost always have connections. They can simply use those connections, and you can't do this job if you don't have connections.

Planned purchases, on the other hand, particularly test the purchasing agent's abilities.

It's not like I have to give you something just because you place a task order.

Of course, in principle we should give it to them, but there are objective difficulties!

Everyone knows there's a shortage of supplies, so I'll pretend I'm short of supplies now and stall you for ten or fifteen days, okay?
No?

Anyway, I can't do it. Go find someone who can.

Everyone has a secure job. I followed the rules and didn't make any mistakes, so who can do anything to me?

This is where the purchasing agent's "ability" is tested. Whether it's drinking, pestering, or coming up with other methods, they finally manage to secure the supplies.

Okay, now that the supplies are secured, how are you going to get them back?
First, you need to find a dispatcher, then you need to secure railcars, and third, you need to get the loading and unloading teams and drivers in place... You have to overcome all these obstacles until all the supplies are in storage, at which point your mission is only "halfway complete".

Now that the supplies have arrived, shouldn't you thank the people in charge of the checkpoints along the way?
Otherwise, do you still want the next shipment?

This is just one procurement; there are many pitfalls on the sales side as well, the most typical being payment collection.

State-owned enterprises also have operating targets and profit-handling tasks. They can't just do a haphazard job and wait to die. At the very least, if the payments to customers aren't collected, how will you hand over profits and pay employee benefits?
If they dare not block legitimate state-owned enterprises upstream, why wouldn't they block a collective enterprise?
Chen Fan casually gave a few examples, leaving Zhou Yali completely bewildered. "They...they don't all follow the contract?"

Seeing her expression, Chen Fan chuckled and said, "Now I suddenly understand why your uncle allows you to come back to China so often and to be in charge of the domestic business."

He swayed on his horse, grinning as he said, "You think America has always been like this? Don't be so naive, kid. Back then, there were just as many dirty tricks in the American business world, not to mention the influence of gangs. In comparison, these things in China are actually quite easy to deal with once you figure them out and become familiar with them."

I reckon your uncle just wants you to observe and learn more here. How can you become a business tycoon without making a few mistakes along the way?

Zhou Yali shook her head. "I can't accept what you're saying. If I really encountered that, my head would probably explode."

She shook her head and turned to look at Chen Fan. "So what are your plans? Will our company really do everything from now on?"

Chen Fan immediately shook his head, "Of course not."

He paused for a moment, then smiled and said, "I define the next ten years as a 'wild growth period,' during which we can engage in diversified operations and do whatever makes money."

Of course, the number and scale of industries should be selectively controlled, rather than developing in a truly disorderly manner.

Ten years from now, according to my plan, all industries will be divided into three tiers.

Zhou Yali's eyes darted around slightly. "Which three layers?" Chen Fan held up his finger. "The outermost layer directly drives companies to go public, such as clothing, shoes, bags, and home appliances, which don't have particularly high technical requirements."

Although all industries have deep requirements for technology, the degree of reliance on technology varies depending on the industry.

Industries with low reliance on technology can be gradually decoupled, whether through IPOs or direct transactions; they will gradually be marginalized.

Zhou Yali nodded slightly, "And what about the second floor?"

Chen Fan extended another finger, "The second layer is the core business layer. In my vision, industries with high technological content, high profit margins, and significant social impact will be the company's main business in the future."

To put it bluntly, the companies occupying this level are Wanmuchun Group's computer, communications, and video game businesses, and Qianfan Company's publishing and media businesses.

Zhou Yali frowned slightly, thought for a moment and said, "If that's the case, then I'll have to make some arrangements to spin off the peripheral industries you mentioned in advance. At the very least, they should be given a different name so that they can't be confused with Qianfan and Wanmuchun companies."

Chen Fan nodded slightly, "Of course."

He paused for a moment, then continued, "For companies at this level, my idea is to only open up a small portion of the shares to strategic investors that we must win over or cannot refuse, so as to form a community of shared interests. But we must ensure our absolute controlling stake."

Zhou Yali immediately asked, "What about stock option awards for senior executives? Aren't they allowed to apply to them either?"

As early as 1952, Pfizer introduced the first stock option plan, allowing executives to exchange performance for stock options at a low price. This is considered the prototype of modern equity incentives.

In the 7s and 80s, many large companies, especially technology companies, competed to use stock options as a standard compensation package to attract top talent.

Therefore, without equity incentive plans for senior executives, it may be difficult to attract strong talent to the management team.

Chen Fan smiled and said, "It's very simple. We will give the senior executives of the main company two options: one is to receive dividends from phantom shares, and the other is to exchange their stock options in the company for shares in the marginalized listed company, making it easier for them to cash out."

Zhou Yali raised an eyebrow slightly. "Then there's no problem."

He then asked, "I'm curious, what is your core business?"

Chen Fan raised his third finger and said seriously, "Technology. Laboratories focused on technological research and innovation are the absolute core that we must control ourselves and absolutely not allow outsiders to interfere with."

Zhou Yali frowned deeply. "A laboratory? My God, do you even know what it takes to set up a laboratory?"

Chen Fan shrugged and laughed, "Of course I know, the astronomical initial funding, the continuous investment in research and development, and the continuous influx of research and development talent."

He turned to look at Zhou Yali and said, "I didn't say we should start now, spend ten years making a lot of money, and cultivate a group of companies that can go public. Can't we use that money as start-up capital?"
As for talent, we can recruit from the world's best universities. For true R&D talent, what attracts them is never high salaries, but rather topics they are interested in and the most advanced equipment.

In the fields of computers and communications, there is never a shortage of cutting-edge research topics.

With the best equipment, top-notch salaries, and cutting-edge research topics, how could we possibly fail to attract outstanding scientific research talent?

Hearing this, Zhou Yali suddenly realized, "I understand. You want to use the 'golden decade' to earn enough funds to start the laboratory, use Wanmuchun Company's projects to complete the initial technical accumulation, and then, after ten years, make a breakthrough and officially establish a world-class laboratory?"
Actually, all the previous efforts were preparations for the final laboratory!

The two horses were walking side by side, and the two men were naturally very close to each other.

Chen Fan reached out and patted her shoulder, laughing, "Young comrade, you're quite perceptive."

Zhou Yali slapped his hand, "Who are you calling 'little comrade'?"

Chen Fan laughed and said, "However, you've only guessed half of it. Why don't you guess what the other half is?"

"The other half?"

Zhou Yali's eyebrows furrowed together. "What's the other half?"

Chen Fan looked at her with a smile, "Qianfan Company is in the publishing and media industry, what does that have to do with a laboratory?"

Zhou Yali looked at him, puzzled. "Yeah, what does it have to do with the lab?"

Chen Fan patted her shoulder again, "You're still not very mature. Let me ask you a question: Have you ever seen a large company that only gets scolded but has no ability to fight back?"

Upon hearing this, Zhou Yali immediately realized, "It's about social influence and the right to speak."

Chen Fan nodded. "Indeed. To build a top-notch laboratory, you either need a powerful background that others can't afford to offend, or you need to have your own weapons. Otherwise, if you achieve something that others envy, you'll only end up as meat on the chopping block."

Since we don't have any powerful connections that others dare not offend, we can only forge our own weapon. Even if this weapon doesn't guarantee our safety, at least we won't be powerless to fight back.

As long as you have leverage, you have room for negotiation, and even for refusal.

Upon hearing this, Zhou Yali suddenly thought of another question, "So, this laboratory couldn't be established before Qianfan Company grew up?"

Seeing Chen Fan nod and smile without saying a word, she shook her head and sighed, "You're really thinking far ahead."

He then asked, "So your plan is so far-sighted. No wonder Dad always praises your strategic vision. But why didn't you tell me before?"

Chen Fan smacked his lips but remained silent.

Can I say that these are just some thoughts I've come up with?

"Having gained Long, one desires Shu; but what's the use of wanting Shu when one hasn't even gotten Long?"

Only when all the conditions are met can we make the most reasonable long-term plan from a holistic perspective.

Those were indeed ideas he came up with on the spur of the moment while helping Lujiawan with its planning.

Just as they were about to arrive home, Zhou Yali suddenly exclaimed, "Hey bro, have you prepared a gift yet?"

Chen Fan turned to look at her, puzzled, and asked, "What gift?"

Zhou Yali said mysteriously, "A Valentine's Day gift, huh? Today is February 14th, Valentine's Day. Aren't you going to give your little wife a surprise?"

Chen Fan blinked. Although we usually remember the Gregorian calendar, after the 20th of the twelfth lunar month, we basically only remember the lunar calendar. Who remembers that today is February 14th?
Besides, who celebrates Valentine's Day in China these days?
He immediately and confidently declared, "We are Chinese, we don't celebrate Western holidays."

Then he flicked the reins, "Let's go home."

(End of this chapter)