Chapter 22 CEO Living Room: Dialogue with Yu Feng and Jiang Nanchun

Yu Feng: You have no choice whether to compete or not. You can’t imagine that this industry is monopolized by you alone. The definition of a market economy is competition. Unless it is highly monopolized, you have no choice. Jiang Nanchun: Many people think that making money is a kind of happiness, but the sense of accomplishment does not come entirely from money. Compared with money, I prefer work. Wang Yanbo: Editor-in-chief of the character section of "Win Weekly", author of the "Born in the 1960s" series. Zhen Jinghui: Reporter of Winning Weekly. According to the latest report of CMMS (China Market and Media Research), the indoor LCD TV media has shown an incredible growth trend, and its weekly arrival rate for all adults has reached 17.6%, which is higher than that of another new media - the Internet. The time it took to reach this reach rate has been shortened by several years.According to the report of Shuiqing Muhua Research Center, the total number of domestic building LCD TVs and mobile TV screens will reach 120,000 this year, creating an emerging advertising market of 1.01 billion yuan.Under this huge market, focusing on the crowd and gathering the crowd, two companies born in the same city with exactly the same business, staged two completely different dramas.There are too many stories to explain between the two rivals. We chose to talk to Yu Feng and Jiang Nanchun to give a comprehensive interpretation of these two companies and their individuals.

Yu Feng: Born in Shanghai in 1963, he founded Shanghai Dianyang Digital Media Technology Co., Ltd. (Target Media) since 2000, and later registered as Shanghai Juzhong Target Media Co., Ltd. ◎Reporter: When Juzhong first entered this industry, what was the market structure like?Why let the focus take the lead? Yu Feng: We are basically at the same time. He does Shanghai and I do Beijing. We searched and found the same manufacturer to help us process video products. The factory found both of us and said that you should stop arguing and you do Shanghai. Let him do Beijing.At that time, I didn't think about how big it would be, but later I realized that it would not be possible without a national scale, so he went to Beijing, and I also went to Shanghai, so the competition started.

◎Reporter: Some data shows that there is a big gap between your market shares. Yu Feng: You are referring to a certain investigation company. They gave us a statement saying that this is something that their opponent paid for them to do.We think facts are stronger than explanations. Their statements are clearly written, saying that they cover more than 50 cities, but in fact there are only 20 of them, and the remaining 30 are agents. ◎Reporter: Isn't agency a good model?It can expand rapidly at low cost. Yu Feng: You are right, but for example, I am an upstream company. As a brand owner, the franchisee pays me a franchise fee. What else do I earn?So I basically think they are at a loss.For our kind of media, the investment in the early stage is quite large, but after I sort out the market, there are many local customers in each region, such as telecommunications, mobile, local tobacco, wineries, etc., I can use my own Operations generate benefits.For national customers, we must provide corresponding services in place, and the direct sales method is conducive to service.

◎Reporter: But in terms of listing, is direct marketing a big limitation? Yu Feng: From our point of view, we must first control our own pace, because Sina, Sohu, Shanda, e-Long, Ctrip, etc. have not been listed on the market for a long time, and almost all of them are facing many problems.If adjusted in place before then, it may be avoided.The strategy we use is to reserve funds and make various preparations before going public. ◎Reporter: We know that Focus Media will be listed on Nasdaq on May 6. Are you anxious? Yu Feng: One year before he went public, I was thinking about how to go public.This has something to do with our strategic investors. Focus has released a list of more than 20 investors. Small investors will consider how to go public and get their money back.And big investors will consider how to lay a solid foundation and make the company's structure more stable, rather than competing for who will go public earlier.

◎Reporter: So where is your goal to go public?Is there a timetable for listing? Yu Feng: Maybe Nasdaq, or Hong Kong.Not really, not that urgent. ◎Reporter: As far as we know, the competition in the building video industry has become extremely fierce today, and it can even be called tragic. Do you regret choosing such an industry so far? Yu Feng: I think that compared with other industries, the competition in this industry is far from saturated, so I am quite lucky to be able to find such an entry point, and there are only a few big names in this industry.If it is a newspaper, there are thousands of newspapers at every turn, so the competition is fierce.

◎Reporter: However, it is almost a contest between the same city and the same building with its rival Focus Group. Moreover, Focus Group is listed first, which should be quite a big pressure on Juzhong.What's more, Focus's Jiang Nanchun gives the outside world a murderous and aggressive image, and you are a gentle and elegant professor. I don't know what kind of mentality you have when facing such a competitor? Yu Feng: First of all, you have no choice whether to compete or not. You can’t imagine that you are the only one in this industry. The definition of a market economy is competition. Unless it is highly monopolized, you have no choice.Secondly, a certain degree of competition is very helpful to the development of this industry. If there are no two companies to do this market, it will be difficult to develop so fast.

◎Reporter: Many times we will compare you with Jiang Nanchun. Jiang Nanchun is very flamboyant and willing to show his style to the media, but you rarely tell the public what kind of person you are. Are you avoiding it deliberately? Show your heart? Yu Feng: Competition will bring pressure, but what makes you happy is that you will think of many ways and create a lot.It may be because I am relatively old and have a lot of experience in the industry, so I will be more balanced and consider the problem in an all-round way. Now building a company by myself is not only a question of tactics, but also a question of strategy to use to develop the company. Do it slowly, there are many goals, processes, and assessment methods.For enterprises, they have to do some routine affairs every day. If they are too excited to sleep every day, this situation will not last long.Enterprise is a long-distance race, which requires endurance, not just explosive power.In fact, this has nothing to do with personality. When planning or designing, there is passion, but when doing things, we must be down-to-earth. It is impossible to subvert the market in one wake up.

◎Reporter: Do you mean that no matter how new a company is, it cannot break away from the traditional management model? Yu Feng: To be precise, any enterprise must not deviate from the rules. It must straighten out the process and make the assessment in place. These are all interlocking.The most important thing is that the enterprise must survive. If an enterprise does not make money, it will not go far. ◎Reporter: A market needs multiple competitors to be perfect. So, is this market too small to accommodate only two companies without third parties?Moreover, the profit model of this industry is very simple. If an outdoor advertising company has a lot of customer resources and financial strength to enter this market, why doesn't it take action?

Yu Feng: International capital believes that how to build a capital barrier as soon as it comes up, so that others cannot come in.He told us, don't think about how much it costs to do it, but how much it will cost to do it.This makes you think about how to quickly form a large scale and make latecomers feel tremendous pressure. ◎Reporter: Can you say that the culture of a company is mainly determined by the boss's personal style? Yu Feng: There is no way to change the style. It is impossible for me to tell the salesman, let me do the order.The most important thing in running a business is to set up a platform and let the most capable people do it. You have to believe that others have many professional skills better than you.The so-called enterprise is a gathering of many people. If everyone's potential is brought out, it will be considered a success.What I have to consider at this time is that I have to determine the strategic goals of the company and set up a good platform.If the best people in the industry are cultivated through our education system, then that is success, not for me to solve specific problems.

◎Reporter: I wonder what is the difference between you and Focus?Where is your core competitiveness? Yu Feng: The difference is a phased difference, because the market is too big. When everyone is an airline, you can say that there are too many differences.Currently we are considering how to segment this market.When the industry has matured, then you have to think about differentiating yourself from your competitors.For example, we have completely divided up the office buildings. When expanding into new fields, for example, we found that hypermarkets and convenience stores are also good, and started to enter. Later, Focus also entered these fields.

◎Reporter: When you first entered this industry, did you ever think about building places other than commercial buildings? Yu Feng: At first, to be honest, I didn’t think too much about it. I thought that a market could be settled with a few million dollars, but because of competition, customers in the market thought that your coverage was not enough, so they thought of developing it. ◎Reporter: I once talked with Jiang Nanchun, and his vision is quite broad. For example, when he started to build commercial buildings, he already had ideas such as airport express network broadcasting, etc. It seems that he already had a strategic layout at that time .Is the idea of ​​crowd gathering in this field complete? Yu Feng: In fact, we are focusing on where our target people go after leaving home?Where are the people affected by this media?Everywhere you go I will cover it as my network.So I feel that the development of new things is closely related to technology and market.It may not be useful to think about some things early, and of course you can’t be later than others. There is a saying that three steps earlier may be a martyr, and two steps earlier may be a pioneer. That is to say, the rhythm must be mastered.Especially with the rapid development of the Internet and new technologies today, you have to think about the next step, but thinking too early may not be a good thing. ◎Reporter: In the process of running a business, what do you usually think about? Yu Feng: I never read management books, but rather messy things.Treat thinking as a habit, and you can constantly get new inspiration.For example, seeing this newspaper now, how can I do it differently from others? Can I learn from and integrate what others have done well to form my own characteristics? ◎Reporter: There may be a speculative mentality in running a business. For example, making money is more important. If you get the plate up and the land area down, the service can be handed over to others. Yu Feng: I used to be a stock trader. I saw a lot of people sell a stock from 1 to 10, and then buy another 10, and then the 10 fell to 5. It is better to be optimistic about one thing and keep doing it well. If the industry is very good, why not make it from one yuan to 50 yuan?In fact, the number of money has no meaning to you at a certain time. After one thing is done well, money is a natural thing, so why is it necessary to restart the stove and make other money. ◎Reporter: In other words, you still have great confidence in this industry? Yu Feng: Yes.Frankly speaking, do you think the competition in this industry is painful?I think that compared to the original competition in some fast-moving consumer goods industries such as the daily chemical industry, there are only two companies operating in this industry, and the strength and structure of the entire industry are still very weak. This is a very new industry. Its development The industry, structure, talent, and competitiveness are not as good as those of some very mature industries, so why can't I take it higher and further, and have to quit and start in another industry?Seeing a gold mine ahead, why not dig it a little deeper?This is true from the perspective of making money, not to mention that it is a media that can give you unlimited imagination, and there are more extended services waiting for you to explore. ◎Reporter: Your mentality is relatively mature and old-fashioned among young entrepreneurs. Is imagination important for your age? Yu Feng: Very important.Why do you say that China lacks international enterprises?Compared with foreigners, Chinese people are definitely smarter, but because of this, he will think that one makes money and that makes more money, so our company has a history of more than ten years. It depends on whether we have dug deep in an industry. transparent, making it a respectable enterprise.So if you say I am old-fashioned, maybe I am more concerned about whether I can bring this enterprise to a long-term perspective.I dare not speak big words, at least within the scope of my ability, I will lead this enterprise well. ◎Reporter: Do you have the biggest regret? Yu Feng: Frankly speaking, I didn't think about it very clearly before starting to do it. I was groping, so I lost a lot of opportunities in the process.Having said that, since it is a new thing, the game between the two sides is long-term, so the tuition is still affordable. ◎Reporter: So you still have anxiety? Yu Feng: It must be a lie that there is no anxiety.This anxiety is not only about the focus, but also about the market. How many customers can accept you?There is no standard for this, and customers don't know it, so you can only influence customers in your own way. Jiang Nanchun: Born in Shanghai in 1973, he has served as Chairman of the Board of Directors and CEO of Focus Media since May 2003. ◎Reporter: You have been engaged in the traditional advertising agency business since you graduated from school. Why did you suddenly switch to create a new media concept like “Focus”? Is there any chance or coincidence? Jiang Nanchun: Since 2002, I have realized that the advertising agency industry needs to change.I remember it was at an Internet festival in 2002, I strongly advocated: the advertising agency industry, the profit is getting thinner, the competition is getting more and more cruel, and it needs to be transformed.They said, transform into what?I said to transform into a new media: first, this new media must use high technology to bring about major changes in the form of media expression in China; Ethnic groups are the leading consumer groups or key consumer groups of certain consumer goods or consumption places; third, new media must create new time and space, thereby creating a new advertising market; fourth, there must be compulsory viewing Advantage. Why do you say this way?Since Deng Xiaoping’s southern tour in 1992, the Chinese market has actually undergone very significant changes—social classes have become more and more subdivided, and product positioning has also become more and more subdivided.Let me give you an example: there is an old brand of shampoo in Shanghai called "Bee Flower". Many people used it in the past. A few years ago, almost all the people used Pantene and Head & Shoulders. who?I think most of them are laid-off workers, right?Rejoice is the working class, Sassoon is the white-collar worker, L’Oreal is the middle class, and Shiseido is the quasi-noble.Therefore, products and markets are becoming more subdivided, so it must need a subdivided media to impress its specific consumer groups. ◎Reporter: From advocating such a concept to deciding to try it yourself, have you ever hesitated during the process? Jiang Nanchun: I decided to do it myself because I have spotted the building TV network, which completely meets the four requirements I mentioned above.After seeing this point, I thought, why do I always tell them what to do, but never think about doing it myself?In fact, I can do it myself!So I decided to set up Focus and strive to create a high-level building network. ◎Reporter: It seems that this year you are no longer satisfied with building TVs, and have begun to enter other fields. Jiang Nanchun: Focus is not only building an in-building TV—it is an outdoor TV industry, and outdoor TV includes in-building TV and store TV, etc. These are just different channels in an industry.This year we started to do store channels, and our building TVs have also begun to differentiate into golf channels and airport bus channels... This helps us segment the market more and face the most accurate people.For example, airport buses are more focused on business travelers, while golf is the top elite in China. ◎Reporter: Obtaining the financial support of venture capital can be said to be a decisive factor for the rapid growth of Focus.I know that Focus’s office was right across from Softbank at that time, and Softbank later became an investor in Focus. Is this kind of “getting the moon first” a coincidence or did you “premeditate”? Jiang Nanchun: I didn't do it on purpose, it should be a coincidence.Because before the establishment of Focus Media, Yongyi’s office was opposite to Softbank. When I first moved in, I hadn’t started working on Focus Media yet.Later, after Softbank invested in Focus, it moved away, and now it is 500 meters away from us. ◎Reporter: Compared with the past, has Focus, after listing, undergone major changes in terms of operation, management, and personnel? Jiang Nanchun: The first change after listing must be the financial support.After the financing, the pace of both sales and distribution has accelerated a lot. This speedup probably started in April or May this year.I can give you a figure like this: As of the first quarter of this year, the number of Focus LCD screens in the country was 18,000, but by the end of June, it was already more than 40,000. more than double that. ◎Reporter: Many people say that Jiang Nanchun of Focus is not so much the boss, but rather a super salesman of Focus. In fact, you have mentioned to us before that your personal advertising sales accounted for the entire company last year. 7% of the sales volume, do you think your personal positioning will change after the listing? Will Jiang Nanchun in 2005 and 2006 still be a super salesman? Jiang Nanchun: I admit that compared with ordinary CEOs, I am more inclined to manage sales work-this may have something to do with my background.If a boss has a financial background, he may put more energy on financial management.I used to be an advertising agency, so it's normal to have a lot of sales.After the listing, I think I will still focus on sales management, but no longer facing specific customers, but facing the entire market.Marketing provides the basis for sales, which is an important part of my job.I think every manager of the company has his own focus, and I won't have problems in other aspects just because I put more energy on market promotion.Because our company’s internal management, such as administration, personnel, and financial background management, is managed by our CFO; strategy and market research are managed more by the chief strategy officer; now Focus has added a lot of people to the management team. In terms of mergers and corporate strategy, many people have come, and our division of labor has become more and more detailed, and everyone has a lot of work on their hands. ◎Reporter: Specifically, what are you doing? Jiang Nanchun: I am the promoter of business.Now the company’s advertisements in the first-tier cities are already very full, so now I’m mainly promoting the growth of advertisements in the second-tier cities. Of course, the first-tier cities also have many growth strategies, including strategies for price growth and population growth.After the listing, it is obvious that I focus on sales, but I do not do personal sales, and mainly support each group to achieve sales goals.But some particularly large customers prefer to come to me. This situation still exists, so I ask my assistant to do the specific operation.Therefore, my personal performance this year may still account for about 5% of the company. ◎Reporter: After your IPO, your value has risen a lot. It seems that many people in the outside world have doubts about the purpose of your IPO. Do you really want to develop Focus Group for a long time, or do you want to make money? How do you view such doubts? Jiang Nanchun: I don’t think this kind of suspicion is aimed at me alone. Every CEO of a listed company will face such speculation at the beginning. Are you trying to collect money?I don't think it's necessary to respond, just do your own thing.Now, I am busier than before I went public. Many people think that making money is a kind of happiness, but the sense of accomplishment does not come entirely from money. Many people know that I prefer work to money. ◎Reporter: It can be said that from the time when the concept of commercial building network came into the eyes of most people, Juchuang has inevitably become the old enemy of Focus.To this day, the debate over whether Mr. Jiang or Mr. Yu first discovered the commercial building network has not stopped. Jiang Nanchun: I think it would be pointless to discuss this issue today.I've never had a fight over who discovered the building network first - found the word weird, do I think it's necessary?If you really need to know who discovered it first, you should go and see which of these two companies was founded first, and who started to build this building network first.But today, it is really unnecessary for a company like Focus to argue with others about who came up with the idea first, and I have no interest in it. ◎Reporter: You are no longer interested in arguing about this issue. Does it mean that after listing, Focus has widened the distance with its opponents, and the two sides are no longer evenly matched? Jiang Nanchun: I feel that since the listing of Focus, the two companies, Focus and Juzhong, have begun to develop in a wrong way.I have also been paying attention to some reports about Juzhong recently. You know that the store is a brand new key channel created by Focus following the commercial building network, but Juzhong has already indicated that they don’t want to follow us as a store, but they will enter two new fields. -Apartment buildings and convenience stores.And this field is just something that Focus Group is not very good at entering, so our two companies have already diverged, and we no longer have very direct competition as before. ◎Reporter: Do you think that Juzhong gave up stores, and Focus didn’t enter apartments and convenience stores, because everyone has the same consideration: in order to avoid the sharpness of competitors, take the road of differentiation? Jiang Nanchun: I don't enter apartments and convenience stores because I don't agree with this development idea.I can analyze it from two angles.The reason why in-building TV is successful is that it targets high-end consumer groups; similarly, the target group of the store channel is also very clear, that is, mainly people like my mother, housewives who often go to the store, and they are the decision-makers for household goods purchases. By. But when we look at convenience stores in turn, the convenience store channel is just a terminal media. The effect of hanging a TV in a convenience store is to affect your desire to buy certain drinks or snacks, such as affecting your purchase of Master Kong ice cream. Black tea is better than Uni-President iced tea, or Mengniu is better than Yili—the effect is nothing more than that. I think it is also impossible to build an apartment building, which is only suitable for posters.why?Maybe you can make some nice apartment buildings for high-income people, but it also has two unsolvable problems.One is the flow of people - the flow of people in the apartment is only 1/10 of that in the office building, is this obvious?The second is the waiting time - it takes a minute or two for a white-collar worker to wait for an elevator to go to work in the morning, but waiting for more than ten seconds for the elevator at home is a big deal, so the waiting time of an apartment building is also 1/10 of that of an office building. It is decided that it is the same as a convenience store, it is impossible to do a 12-minute advertisement cycle, and it can only be done for a maximum of three minutes, otherwise consumers will have to spend 48 days to finish watching a cycle of advertisements.We say that the most important factor for the success of in-building TVs is the price advantage.On the basis of covering the same target audience, the building TV is 1/10 of the price of the local TV station, but if the people flow and waiting time of the apartment are 1/10 of the office building, the result is that its price is 10 times that of the TV station advertisement , so where will advertisers be willing to invest? Therefore, we insist on building a network for commercial buildings and a network for stores, not because we are afraid of competition, but because we do not agree with these two markets.I always think that an LCD screen in a commercial building can be viewed by 1,000 people, and its return on investment is very high; but apartment buildings have low traffic, so they are only suitable for low-cost advertisements such as posters, and posters do not require waiting time. You know what to say at a glance. ◎Reporter: You have always been very confident that Focus Media will maintain a position far ahead of its competitors in the field of commercial building networking. So what do you think is the basis for Focus Media to maintain a leading position in this industry with almost no technical barriers? ? Jiang Nanchun: The key point is that Focus has gathered a group of people who know this industry very well.I have been engaged in the advertising agency industry for more than ten years. I have never worked in other industries since I graduated. I grew up in this industry and understand the needs of customers, the judgment mode of customers and the distinction of audiences.Our chief strategy officer, Chen Yan, is the deputy general manager of Zenith Media Outdoor. He used to be responsible for the procurement and selection of the entire Zenith Media outdoor advertisements. He can completely consider issues from the perspective of buyers; With a TV background, he can analyze many things from the perspective of TV commercials; Liu Xueyuan is the general manager of Manager Magazine... With such a professional team running the business, it is difficult to get out of the wrong path; in addition, we will not pursue the point of form The increase of advertising, we do not pursue imaginary, but only the real advertising effect.Therefore, the key to our success is that everything we do can be considered from the perspective of advertisers, and the only criterion for evaluating a media is precisely the recognition of advertisers.