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Note: VC money is a double-edged sword, can enhance the company's development speed at the same time, can also directly destroy the company's control, this is particularly profound for Chen, the Whale Music Network is its pioneering process in the unforgettable lesson. In Tencent's new book "Lessons" press conference, wow Smart Headset founder Chen in view of the giant whale music network failure experience, remind the entrepreneur first to fight for power, with corporate control.
The following is Chen Live transcript summary, from Tencent Technology:
The power of entrepreneurs is paramount
As an entrepreneur, the first to fight for is power. The whale was my first start-up company, and I actually held about 40% of the stock when the whale was founded.
First of all, as an entrepreneur must have the power to finance, it is very important. As a founder, there is one thing that cannot be abandoned, that is, the power of being a founder and CEO. In other words, when everyone is in a mess, you have full authority to make decisions.
Power is paramount, is an entrepreneur, CEO Supreme, must strive for.
For example, I said to Angel shareholders, a shareholders or AC shareholders today, there are only two positions I can stay in the team, one is the CEO, the other is the CFO, I will never allow investors and shareholders to interfere with my team's power. Because that COO, AP and the like is my job, is an entrepreneur and CEO, founder should do things, so this power is special, particularly important.
So the founder's power should be put in the first place, in the shareholder meeting, the Board decision, the founder must control, control is the last person can decide. My experience and lessons are basically in line with China's national conditions, in accordance with Chinese culture, in 95% of the situation.
In seven years, we have missed many opportunities for investment and independent development. We build a strong team because there is no stock, no ammo, no power, and then there is no way to make decisions when there is a real danger.
"Alongside the wealthy" should be prudent
Entrepreneurs need to pay attention to the second problem is "alongside the rich", we made such a mistake, when next to Google. Google Music Project at that time is 22 engineers, is Google's internal world's largest business, the team pinned Chongwang, including Kai-fu, Guo to disease (micro-BO), Lin and so on, we are very concerned about this project.
But after the Google withdrawal from China, some of them continued to retreat and put me here. Because I was the last one to withdraw, at that time under the Streetlight Lin said to me, "now to be removed, to form a new company, is there any interest in it?" That is millet, I said I am not interested in other, I only interested in music, then I try to save Google Music Search, in fact, may save part.
We were at that time with the girls first love, the first time alongside the wealthy like, especially happy, Google how big rich. Finally we signed a few contracts with Google, which is the preferred stock holder, accounting for 30%. But then I thought, actually, it was time to sell the whale.
Google has the right to sell advertising, business operations, the giant whale with Google's investment to pay royalties, but also responsible for day-to-day operations, bandwidth and servers. But the whale does not have the right to advertise, which means that Google did 5 things with an investment. In commercial terms, I should have been a little more ruthless, that is, from the investment outside, Google every year in advertising and I share the proceeds.
But at that time did not see the world, all of a sudden was fooled dizzy, so that later opened, the entire Google Music team, and these people have gone. Guo to create Orchid Pavilion set potential listing, Flood peak and Lin went to the millet, Peng Zhijian to Tencent to do investment, opened the innovation Factory. Then I suddenly can not find people, only directly to Google to invest in strangers.
Especially with international companies above, the first quiet some, cooperation is to cooperate, but in the process of the wealthy, we must adhere to the future independent development. Need to look very seriously at contracts, commercial contracts, investment contracts, otherwise, with you to cooperate with a team of people do not have to get the contract can drag you to death.
And, always want to know the rich and you think differently, so in signing the contract, you see the thing, the other rich if you want to contract you, hurriedly sold to him, do not in the middle, if today said just a lover relationship, then you still have a separate space. When signing everything, calm down, calm down, and say that I will find someone else to marry in the future. This thing you must be clear of these two, never in the middle.
Reasonable allocation of equity
The third is equity, according to the actual experience, I certainly do not agree with 60%, 30% such allocation method. Because the first group of team members are not necessarily suitable, the company's founder and CEO have full, 100% of the obligations and responsibilities.
If there are six partners in the plan, I am the absolute boss, now take 78% of the shares, six each person to 3%, up to 20%, the options pool alone, we work together, can not guarantee the future listing of the brothers each of them 3%. If you set up a company today, you have 30 million dollars, and push back the equity should be how to calculate?
As for the shares I hold, to be honest, as long as I get the music thing up, I don't care about 1% of my own, but right is particularly important, I don't care how much you take the stakes, I'm sorry about the vote and the right to decide.
When I was a whale, I had a 40% stake in my hand, and when Google came in I was almost 20%, and then I would give our engineers a 5500 option and a partner on the phone for 4 hours, and then a lot of great whales left because I couldn't give them anything.
Remember, if you can't make a commitment to your team, the company can't do it. That is to say once boss mouth inside said I want to give you a raise salary, achievements after the achievement how, finally you found no right to cash, soon everyone withdrew, so must have sufficient ammunition in my hand.
Speed: Only fast and not broken
What's the speed? Is there any entrepreneur willing to answer how many years and when the company will be listed?
Our general plan is this, learning millet, poly-mei excellent products, because the media see is these. Of course, there are eight years, ten years, Ali this is needless to say, including Huayi Brothers, also from 1993 to return to the beginning, you see people today's brilliant, you do not see people over the past decades of efforts. But at this moment, it's really fast, the speed is especially important, why? March 2009, we all think the whale slowly come, the rally is gratifying, but I think not enough, because you still in a house practice.
Speed is not how fast you run, but how fast you drive. I am now thinking every day, in order to achieve the goal, I can drive faster car, can be listed as soon as possible, or even today on the market? The understanding of speed is a strategic choice, as an entrepreneur I think every day can be faster, how can be faster.
The significance of the whale: open the door of genuine
Google Music Search for me personally, the sense of achievement is really too big, although we do not have a successful company, but Google music to open the Chinese online music genuine, this is also my founding whale to do Google Music Search, the only place to compete
I've never thought of the whale as a failure, and I'm in a particularly welcome place now, because we've opened the door to the world of Internet music, and then everyone is following.
Before March 30, 2009, the genuine Chinese online music was meaningless. At that time I suppressed this strength, is to solve the problem of online music genuine. Last year, China's top 10 online music platforms were paying the record companies, almost 500 million yuan last year, which was the proudest thing of my life. As a start-up, there is no regret, for me personally, I can tell my children that China's genuine online music is starting from me.
I am starting this company is the same, because the music industry's genuine and piracy has been turned over, what is the next step? The music industry returns to its essence how to make money, I want to solve the problem is how each music person how to make money.
In the process, I learned a lot of things, if you are an entrepreneur, you implore you really want to listen, because the tuition is too heavy. Don't spend your life arguing, you must have full power. I do not want to repeat the big whale when the mistakes, the future will be difficult to start a business, encounter difficulties you have to take the team to rush out, but if you can not take the team, then you can not rush out, it is so simple.