Rebirth 04: Starting from Taking an Unconventional Approach

Chapter 166 Three Principles

Han Fei checked his watch in the publishing house's main conference room. It was 8:30 a.m. on Monday. He confirmed that all fourteen people were present.

Fourteen people. It's surprising how quickly the publishing house has expanded to fourteen members. The new members include three classmates: Lin Xiaohe, Lu Yiming, and Wen Jie, as well as three editors recruited by Lu Hai who just passed their interviews yesterday. They each brought a chair from another office in the publishing house.

Han Fei inspected each member. He knew that the city of Shanghai outside the window behind him was bathed in sunlight, the streets sparkling from the rain. The rain had been falling all morning and had only stopped ten minutes ago. According to the average pattern of summer in Shanghai, it should start drizzling again soon, but the sun was just beginning to peek through the clouds.

There wasn't much to say about Wen Jie's three classmates. They sat in a row, their clothes, hairstyles, and even the smell of laundry detergent emanating from them almost identical, leading Han Fei to suspect they had planned it beforehand. Their expressions were even more uniform—all expressionless.

Lin Xiaohe sat in the corner, a faint smile on her face, as if she were pondering something very interesting. She held a notebook in her hand, the cover of which featured a silhouette of Sherlock Holmes, smoking a pipe and holding a magnifying glass. She said it was to remind herself to "find a good story like finding clues."

Lu Yiming was dressed neatly in a black suit jacket and bow tie. As soon as he entered the door, he warmly shook hands with everyone. When introducing himself, he emphasized the word "channels" as if these two words were his pledge of allegiance.

Han Fei examined the three new editors very carefully. He had asked Lu Hai to conduct the interviews yesterday, and hadn't seen them then. Lu Hai had specifically arranged for them to sit in the front row. They were all young, but had impressive resumes.

The man sitting on the far right is Su Beining, a graduate of the county cultural center who also worked as a social science book editor at a publishing company. In his report, Lu Hai claimed that he was drawn to Su Beining's sensitivity to the details of rural life and his solid writing skills, believing that he was fully capable of handling the initial review and communication with authors of local-themed manuscripts for the "Roots-Seeking Project."

Another new male editor, Zhao Yuan, worked as an editor for "Legend of Today and Yesterday: Story Edition" for four years. He is a versatile talent who understands both traditional popular stories and SP channel conversion.

The new female editor, Qiao Siyi, is a journalism graduate who previously worked as the lifestyle editor for "Shanghai Weekly" and has experience in content planning. She is very familiar with the reading preferences of young urban women and the logic of online content dissemination.

Han Fei briefly introduced the current business rhythm of Qingniao Ziqian, and then quickly assigned the "first lesson," letting Wen Jie's three classmates familiarize themselves with the system architecture and operation and maintenance process. Each of them spent half a day with Wen Jie, and then rotated through different positions. Han Fei's original words were: "You need to be like emergency room interns, first going through all the departments to know what you are most afraid of."

Lin Xiaohe's task was to take over the backlog of one-line submissions from the past week and sift through the garbage for gems. At the opportune moment, Lu Hai interjected with a heartfelt "Don't treat yourself like a sieve, treat yourself like a miner," stealing Han Fei's line.

Han Fei instructed Lu Yiming to produce a preliminary survey plan for the distribution channels in Songjiang and Qingpu districts by this afternoon. The three new editors were assigned to three different piles of manuscripts. Su Beining was responsible for rural-themed manuscripts, Qiao Siyi for urban romance manuscripts, and Zhao Yuan for reviewing the copywriting and conversion rate analysis of all published works.

The morning meeting/welcome party ended quickly. Han Fei returned to his office and saw several sheets of thermal paper on the fax machine tray, with the fax time displayed at the top line being half an hour ago. He pulled one out and saw that the header read "NetBill Strategic Development Department".

Recipient: Han Fei, President, Qingniao Publishing House Sender: Wang Yu, Head of Content Innovation Business, Strategic Development Department, NetEase Date: August 30, 2004 Subject: Invitation to NetEase Internet Content Innovation Observation Salon (Shanghai) The invitation congratulates Qingniao on successfully protecting its rights and winning the bid from Guangdong Mobile. It also states that NetEase's Strategic Development Department has been closely monitoring innovation trends in the digital content field. To promote sincere and pragmatic exchange within the industry, an invitation will be sent to NetEase Internet Content Innovation Observation Salon (Shanghai) on September 8th (Monday).

At 2 PM, a small "Internet Content Innovation Observation Salon" will be held at Yuanqi Tea House, No. 12 Hengshan Road, Shanghai. Please let Han Fei know whether you will attend before September 2nd.

Yuanqi Tea House. Not a venue for online gambling, Han Fei thought, and put the invitation away.

At this moment, Zhang Ruiyi walked in and handed Han Fei a brown paper envelope.

"It was mailed," she said. "Sister Mei just received it downstairs."

Han Fei took it and saw that the sender's address was "Feiyada Building, Futian District, Shenzhen". The seal was stamped with the seal of Tencent Technology, and there was also an EMS express delivery slip on it. The recipient's name was handwritten: "To be opened by President Han Fei".

Han Fei didn't open it, but simply nodded: "Did Uncle Zhang go to headquarters?"

"When I got home last night, he was already gone. He must have left yesterday afternoon."

"Okay, that's perfect," Han Fei said, taking out the dedicated machine that directly connects to the Mobile Strategic Development Department.

Zhang Qiming sat in a chair in a small, secure conference room on the top floor of the mobile headquarters, watching Fang Jing stand before the conference table, leaning over to operate the square conference phone in the center. It was 10:00 AM; they had only recently arrived at the conference room, and the meeting hadn't started yet. Zhang Qiming wanted to ask where Zhao Guoqiang was and why he wasn't attending the meeting. He also wanted to ask Fang Jing what Han Fei had said on the phone and why she needed to use the conference phone to stay in touch with him.

He noticed Fang Jing turn on speakerphone and then press a number on the keypad. The phone emitted a short beep, followed by Han Fei's voice echoing in the room: "President Fang."

"Han Fei," Fang Jing said, "you can speak now."

"Okay, regarding the 'Strategic Cooperation Memorandum' sent by Tencent's Strategic Development Department, I've briefly summarized the core terms. There are two main points: first, the right to priority negotiation; second, a 'non-competitive lock-in.' It doesn't involve any financial transactions or restrict Qingniao's normal operations. Judging from the wording, they've temporarily abandoned a deep partnership, instead aiming to secure a de facto cooperation as quickly as possible using a low-cost approach."

Silence fell over the conference room. Zhang Qiming frowned, looking at everyone, and noticed that the lingering effect of Han Fei's words had made the atmosphere heavy; even Liu Zhenhua couldn't help but sigh.

"These are the core terms of the Strategic Cooperation Memorandum," Han Fei added. "Fang Jing, you go first," Liu Zhenhua called on her.

"Let me state the facts first," Fang Jing said. "First, from a legal perspective, this memorandum doesn't strip Qingniao of any operational rights. Second, the fact that Tencent chose this time to release this document indicates that they've internally assessed the situation and concluded that investment is not a viable option, or at least not in the short term. Therefore, they've had to settle for a lower-cost, lower-risk approach to secure Qingniao. Third..." She paused, her gaze sweeping over the three of them, "If they refuse, how will Tencent react?"

No one responded.

The lighter on the other end of the phone made a clinking sound.

Fang Jing answered herself: "A refusal means that Qingniao has no sincerity in cooperating. Once Xu Cheng reports... at the latest within three months, Qingniao will be facing a competitor a hundred times its size with top-tier channels."

"So, Mr. Fang means to sign?" Chen Yuanshan asked.

Fang Jing shook her head: "I was just stating the consequences of not signing, not drawing a conclusion. Because signing also carries risks. An exclusive lock-in would block Qingniao's cooperation channels with other investors, which would be equivalent to selling Qingniao to Tencent ahead of time."

"That's like being stuck at both ends." Chen Yuanshan sighed, rubbing his forehead and then moving his hand up to the lagoon entrance. "Signing isn't an option, and not signing isn't an option either."

Zhang Qiming felt his lips were dry, so he smacked his lips but didn't intend to speak. However, Liu Zhenhua's gaze was fixed on him.

"Qiming," Liu Zhenhua said, "is there anything you'd like to say?"

"I..." Zhang Qiming clasped his hands together on his knees. "My opinion is that we can't simply reject this memorandum. The cost of rejection is too high. Although Qingniao is moving fast now, the size difference is still there. If we go head-to-head, we'll be the ones who suffer."

"6

"Old Zhang, so you think we should sign it?" Chen Yuanshan asked.

"I didn't say I'd sign. What I'm afraid of is that if I sign, Qingniao will be locked down in another way."

Everyone looked at Zhang Qiming.

"Be more specific," Liu Zhenhua said.

"Okay, Mr. Liu," Zhang Qiming said. "If we sign it, firstly, Qingniao's strategic credibility will be locked up. The reason headquarters is willing to support Qingniao is because they consider Qingniao one of their own, a strategic foothold for China Mobile in the content-based SP (Service Provider) sector. But if Tencent announces that Qingniao is their strategic partner, what will the headquarters leadership think? Mr. Liu, you can distinguish whether Qingniao belongs to China Mobile or Tencent, but what about the higher-ups? What about the leaders of other departments? They will only see the fact that Qingniao has signed an exclusivity agreement with Tencent. At that point, will headquarters be able to maintain its support for Qingniao? I'm not sure."

Liu Zhenhua nodded slowly.

"Furthermore, morale will be severely damaged. Qingniao's most valuable asset is its authors. These people may not understand exclusivity clauses or priority negotiation rights, but once they hear that Qingniao has been tied down by Tencent, what will they think? Is Qingniao going to be sold to Tencent? Who will own my stories in the future? Can I still create independently? Once morale is lost, no amount of money can buy it back. Finally, Qingniao's development ceiling will be locked in. Qingniao doesn't need financing now, but that doesn't mean it never will. If we want to expand into new businesses that may require cooperation with third-party companies in the future, then exclusivity clauses will be the biggest obstacle. So what I'm most worried about now is that all three of these points will be sacrificed, which would be equivalent to Tencent blocking Qingniao's future path with just this one piece of paper."

The other three watched him silently and nodded in agreement.

Chen Yuanshan leaned over the conference phone: "Han Fei, this is Chen Yuanshan. Did you hear that? Your Uncle Zhang has already analyzed the current situation for you thoroughly."

Han Fei chuckled a few times: "Hello, Mr. Chen, I heard everything. Uncle Zhang's analysis is indeed very clear."

"But the problem is..." Chen Yuanshan glanced at Zhang Qiming and sighed, "Old Zhang, aren't you caught in a dilemma? Signing is like a frog being slowly boiled in water, a slow death; not signing means facing immediate, direct crushing from the giants. What should we do?"

"Han Fei," Liu Zhenhua said slowly, "I am Liu Zhenhua. You heard what Qiming, Yuanshan, and Fang Jing said just now. They all explained the pros and cons of signing and not signing from the perspective of protecting Qingniao and hoping that this path would proceed steadily. You are a party involved and the captain of this ship. We are analyzing the situation here, while you are the one fighting on the front line. Now, I want to hear your own thoughts. Speak freely and boldly. There are no outsiders in this room today, and there is no official jargon. If you are wrong, no one will blame you. If you are right, we will back you up."

There was a moment of silence on the other end of the phone.

"I understand, Mr. Liu," Han Fei said. "My thinking is that this memorandum must be signed. Because if we want to maintain the illusion that Qingniao is willing to cooperate, and make Tencent think that Qingniao is still at the negotiating table, this memorandum cannot be refused under any circumstances. But at the same time, we can't sign it unconditionally. We need to work on the terms, turning this memorandum from a chain into a parking sign."

Zhang Qiming nodded involuntarily, looking at his colleagues gathered in the conference room. Although Han Fei hadn't yet revealed the specific plan, the desired effect had already been achieved ahead of schedule. The other three stared intently at the conference phone, as if it were a chessboard, and Han Fei was using his unseen fingers to move the crucial piece that would determine the outcome.

"Okay, go on," Liu Zhenhua said.

"Okay, Mr. Liu. I think there are three points that are workable," Han Fei said. "The first is to shorten the timeframe. Tencent probably wants a minimum of one year; for them, the longer the better. But we can shorten the timeframe to one month, or at most three months. The reason is quite good: Qingniao is in a period of rapid growth, and its business model, team structure, and market environment are all constantly changing. An excessively long lock-in period is not in the interest of any party. Let's sign a short-term mutual trust observation period first, and then evaluate it after that."

"Secondly, confidentiality. This memorandum cannot be made public. The reason is quite practical: Qingniao has just emerged from the media storm surrounding 'People's Stories,' with the president rescuing people, reporters being kidnapped, and the illegal publication operation still generating buzz. If news were to emerge now that 'Tencent has locked down Qingniao,' how would the media interpret it? Capital entry, Qingniao taking sides, behind-the-scenes maneuvering—we would be thrust into the spotlight again. I need time to quietly focus on content creation, distribution channels, and user acquisition, not dealing with public opinion."