The journey matters more than the speed.

‍

‍

In 2020, the pace of global economic development slowed down due to the pandemic. Despite experiencing a wave of closures, many unicorns and quasi-unicorns, once shining stars with rapid development, fell in the post-pandemic era in 2021.

Katerra, a technology construction unicorn born in Silicon Valley in 2015 with accumulated financing of over $3 billion, collapsed dramatically; Knotel, valued at over $1 billion in 2019, raised over $400 million in funds, and operated more than 250 buildings covering 17 cities in 10 countries. Now, it has been forced into bankruptcy and liquidation. This illustrates that speed is no longer the standard for measuring the success of a company.

‍

‍

1. For a child, it's first crawling, then walking, and eventually running with big steps. The same principle applies to the development of businesses. Some companies, taking steps too quickly, may actually yield negative results.

Taking the restaurant industry as an example, the typical model involves customers settling bills immediately after dining. Additionally, some restaurants introduce promotional prepaid activities, making the restaurant business a typical industry with ample cash flow. Business managers can entirely support expansion with their own funds rather than resorting to borrowing, which is the safest and most common approach. However, when expansion exceeds the limits supported by internal financing, there is a possibility of adopting a high-leverage expansion policy, increasing leverage. When debt becomes excessive, scale becomes too large, surpassing the team's growth rate and exceeding the boundaries of team management capabilities, the inherent advantages and potential synergies of the business not only fail to materialize but also potentially bring about a series of new financial and legal risks, ultimately leading to severe operational crises.

In December 2013, the high-end restaurant brand "Qiǎo Jiāngnán" fell into a debt crisis due to poor management. The founder, Zhang Lan, and investment company CVC ended up in court, ultimately having to cede 82.7% of it's equity to the latter. In fact, all of this was foreseeable.

As early as 2008, "Qiǎo Jiāngnán" was favored by high-end consumer groups for its exquisite dining environment and delicate cuisine. Additionally, being the designated Chinese food service provider for the Beijing Olympics and Shanghai World Expo that year propelled "Qiǎo Jiāngnán" to its peak. The smooth start of the business led the management to accelerate store expansion even with dozens of existing branches. Soon, the company's own funds were unable to support the huge cash outflows. Consequently, it signed a fatal wager agreement with DHVC. Under the agreement, DHVC injected 200 million yuan into it and required it to go public by the end of 2012, or DHVC would exit by repurchase. By the end of 2013, with sufficient funds in hand, it accelerated its expansion plan for the second time. The number of stores exceeded eighty, nearly seven times the original number.

However, the rapid increase in the number of stores compressed the company's net profit due to the enormous costs of opening new stores. Cash flow once again became difficult. Meanwhile, it encountered multiple problems such as industry policy setbacks, food quality issues, and poor service attitudes. These factors accumulated, leading to "Qiǎo Jiāngnán" being rejected for listing by the Shenzhen Stock Exchange. Founder Zhang Lan lost control of the company, and the once "fast-paced" "Qiǎo Jiāngnán" eventually faded from consumers' sight.

Such stories not only occur in the restaurant industry but also in another well-known sharing economy company, OFO, which has had a similar experience. OFO went through eleven rounds of financing, from angel rounds to Series E++, with a total financing amount exceeding $3 billion. This $3 billion, combined with the financing and investment total of its parent company Mobike, could almost provide every urban resident with a free bicycle. However, most of these bicycles did not fulfill their role in solving the "last mile" problem; instead, they lay rusting and dilapidated in the dark corners of cities.

The unbridled and excessively rapid expansion of OFO was one of the factors leading to its failure. In October 2016, after completing a $130 million Series C financing round led by Didi, OFO began recruiting a large number of operations and maintenance personnel to enter third and fourth-tier cities, initiating a nationwide frenzy of promotion, bike deployment, and subsidy wars. It announced its entry into 11 cities at a rate of "one city per day" within 10 days. After the 2017 Chinese New Year, OFO expanded its coverage to over 100 cities.

The success of one city does not equate to the success of all cities; the success of first-tier cities does not equate to the success of last-tier cities. In this regard, OFO overlooked two major factors: the human nature of users and cooperation with local governments. The excessively fast-paced OFO did not have enough time to conduct detailed evaluations of the cultural quality of cities, resulting in a large number of incidents of private use and bike destruction, which caused significant profit damage to the bike-sharing business. Regarding government support, which should have been a strong protective umbrella for the bike-sharing economy, the reality was different, and there had been a precedent for failure eight years ago. Before the corporatized operation of bike-sharing, the Guangzhou municipal government cooperated with companies on a commercial model providing public services. Although the project was initiated by the government and awarded to bidding companies with support and subsidies, it ended in desolation and tragedy eight years later. While we omit the intricacies of these details, focusing solely on the story itself, the lessons of the past did not receive sufficient attention from OFO, leading to the tragic replay.

Neither "Qiǎo Jiāngnán" nor OFO can be said to have moved slowly, but both failed to go far. They leveraged funds to create growth miracles in the short term but also inflated asset bubbles. With one or two unexpected events, they collapsed. In contrast, world-class mature enterprises adhere to the principle that "the journey matters more than the speed." They develop steadily, with unique core competitiveness.

‍

‍

2. In the pinnacle of pyramid competition, companies are often formidable contenders with immense strength. Many times, a company's failure does not stem from the suppression of known competitors but rather from poor management, strategic errors, or a disconnection from the developments of the era and technological progress.

Disruptive adversaries often emerge from other industries, exhibiting unprecedented swiftness as they transition from one domain to another: today, Nokia and Motorola are no longer industry leaders but have been supplanted by cross-sector giants like Apple; the banking sector faces challenges from mobile payment technologies such as Alipay and WeChat Pay; Kodak's market has been almost entirely consumed by smartphones...

As entrepreneurs, it is imperative to keep pace with the times, anticipate risks, and not only focus on immediate development or achievements but also strategize for the long term, aligning with the developments of the era. As Larry Page, CEO of Google, said, "If you're not doing some things that are crazy, then you're doing the wrong things." Perhaps this statement indirectly confirms that for companies, the key lies in going the distance, and the secret to going far lies in envisioning the future.

‍

‍

3. "The adage 'It's more important to go far than to go fast' not only applies to companies in the later stages of development but also serves as a golden rule in the startup community. For a startup, no matter how swiftly you begin, only by going farther than others can you transition from a startup to a unicorn, and then from a unicorn to an industry leader.

People often say, 'If you want to go fast, go alone; if you want to go far, go together.' A successful startup's growth story often perfectly embodies this saying. As early-stage investors, we can provide the fertile ground needed for those enterprises and entrepreneurs with the most development potential and the greatest ability to provide value to society, including funding, resources, and everything else they need to thrive. As a startup, it's essential to embrace capital and grow together with investors. This is not only a win-win situation but also a necessary guarantee for the long-term survival and development of the enterprise.

AMINO offers comprehensive and mature post-investment services to help startups go even further. The 5C concept nicely summarizes how we accompany companies in their growth journey. The 5Cs stand for Cash, Content, Contact, Connection, and Capability, which respectively correspond to the funding support, content and strategic support, resource connections, networking, and entrepreneurial coaching we provide to entrepreneurs. Guided by the 5Cs, we walk alongside remarkable entrepreneurs, supporting them in advancing together and nurturing the seeds of ideas into towering trees."

‍

‍

4. When it comes to guiding a company towards greater success, there have been countless theories and insights shared by business leaders throughout history, with many resonating deeply in the online sphere. Here are three points that I personally find particularly compelling and would like to share with you:

First, staying attuned to trends; second, continuous learning; and third, unwavering perseverance.

At every stage of human society, there exists a unique path of development. What businesses should strive to do is to grasp the prevailing trends and adapt accordingly, allowing their development to flow with the current of the times and harnessing the natural momentum of the era. This aligns with AMINO's investment philosophy: rather than investing in a specific company or technology, we invest in future trends. When we invested in ChimeBank in 2013, the concept of online banking had yet to capture the public's attention. The founder was rejected by hundreds of investors. However, AMINO believed that this would undoubtedly be a disruptive direction for the future industry. Therefore, even before Chime had any products or users, we provided support for their business development. The latest valuation of Chime at $25 billion confirms our initial assessment.

Continuous learning refers to the need for enterprises to constantly enhance their innovation capabilities and use innovation as their core competitive advantage. This aligns with AMINO's GSD investment strategy, which involves establishing an ecosystem with Stanford University.

GSD stands for Google + Stanford + Data-driven investment. We have established a close partnership with Stanford University: our company is located on Palm Drive at Stanford University, adjacent to the Stanford campus. Through interactions with Stanford professors, students, and alumni, AMINO is exposed to the latest and most innovative ideas, enabling us to stay abreast of the latest trends, disciplines, and popular trends among the younger generation, and to incorporate them into our investment direction.

In the entrepreneurial journey, resilience is particularly valuable. Reflecting on my own "entrepreneurial" story, the founding of AMINO stemmed from a noble aspiration that emerged during a gathering with outstanding Chinese individuals such as Dr. Huican Zhu, Dr. Jun Wu, and Dr. Xiaoliang Wei in the summer of 2012: to provide targeted support for Chinese entrepreneurship and innovation, helping everyone carve out a niche in the overseas arena.

Since 2012, I and my partners at AMINO have interacted with over 5,000 startup teams and 10,000 entrepreneurs, investing in and supporting a large number of high-quality projects, including unicorns in various industries and companies that have grown by hundreds or even thousands of times. Over the past decade, we have experienced immense joy and inevitable setbacks, but the steps of AMINO's progress have never ceased. Along the way, we have grown and achieved together with remarkable entrepreneurs. Throughout the entire process, I have been striving and enjoying every moment of it, finding my true passion. This passion has given me the courage and confidence to persist unwaveringly.

‍

‍

5.For an enterprise to thrive and grow, it's more important to focus on longevity than speed. Only by going the distance can we talk about development; only by going the distance can we discuss scale; only by going the distance can we have the opportunity to gain favor from investors; only by going the distance can we have a chance at entrepreneurial success. Therefore, in the darkest moments shrouded by the pandemic, I urge entrepreneurs and business owners to persevere, persist, and persist again. Even if it means facing tremendous operational pressures in the coming period or even resorting to drastic measures for survival, please maintain hope for a brighter future.