Feng Dagang, CEO of 36Kr, delivered the opening speech: Hard But Right Thing | WISE2024 King of Business Conference

From November 28 to 29, the two-day 36Kr WISE2024 Business King Conference was grandly held in Beijing. As an all-star event in the Chinese business field, this is the twelfth WISE Conference. It has witnessed the resilience and potential of Chinese business in an ever-changing era.

2024 is a year that is somewhat ambiguous and characterized by more changes than stability. Compared to the past decade, people are slowing down and developing more rationally. 2024 is also a year in search of new economic momentum, and the new industrial changes have placed higher demands on the adaptability of each entity. This year's WISE Conference takes "Hard But Right Thing" as its theme. In 2024, what is the right thing has become a topic we are more eager to discuss.

Feng Dagang, CEO of 36Kr

The following is the speech record, edited and sorted out by 36Kr:

Good morning everyone, and welcome to the 36Kr WISE2024 Business King Conference. I'm Feng Dagang from 36Kr. As you can see, the theme of this year's WISE is "The Right Thing". Indeed, 2024 has been a rather challenging year. We have found that the flow of money has changed, the needs of customers have changed, the market we are facing has changed. Broadly speaking, our industrial structure is also undergoing changes. When these changes suddenly become the "norm", we are all somewhat struggling to cope. However, the more difficult the moment, the less we should discuss whether it is difficult or easy, painful or happy. Instead of complaining or giving inspirational talk, we should discuss what is right and wrong.

So this year, our WISE Conference is somewhat different from the previous ones. Instead of designing too many topics about envisioning the future, we have invited guest representatives from various industries and enterprises to come together to discuss the right things they have done this year and the logic of thinking about the right things.

We have actually discovered a small new trend. That is, many chairmen and CEOs are sitting in the audience today. They do not want to give a speech, but they are willing to observe what is happening at the WISE site and think about how to do the right things. Indeed, we have reached an era where we need to calm down and think more than ever before.

36Kr is committed to allowing some people to see the future first. In the past year, our several accounts have reported more than 4,000 articles from various aspects such as industries, industries, investments, and young people. We will help everyone take a look at what has happened in the past year from these articles.

1. Venture Capital: Respecting Cycles, Understanding the Times, and Knowing Yourself

There is no doubt that the primary market is still in a relatively sluggish stage.

Throughout the first half of 2024, 4,603 financing events occurred in the Chinese primary market, 1,302 fewer than the same period last year, a decrease of 22%. The main popular financing industries are intelligent manufacturing (947), medical and health (605), and artificial intelligence (418).

From the flow of money, we can also see that 2024 is a year in search of new economic momentum. Real estate and old infrastructure are gradually stepping down from the center stage, while technology industries such as the digital economy, AI, new energy, and low-altitude economy are becoming the main roles. The industrial changes have placed higher demands on the adaptability of each entity. This includes entrepreneurs, practitioners, and related chain service providers.

This is only the change on the asset side. The change on the capital side is also worthy of attention. There is no doubt that the Chinese venture capital market has entered the era of state-owned capital. Data shows that in the first half of 2024, the combined disclosed capital amount of state-controlled and state-participated LPs accounted for 81.2%, which means that more than 80% of the money in the primary market comes from state-owned capital, and state-owned capital has become an extremely important part of the Chinese venture capital ecosystem.

To do venture capital in China at present, one must learn how to raise money from state-owned capital. They will see if you are investing early, investing in small projects, and investing in technology. If you are doing consumer business, you may not be able to get their money because it must be in line with the national strategy. To get this money, you must make reverse investments and attract investments. Now, many private GPs in China have established a value-added service department, which is actually to help local governments attract investments.

As far as we can see, the current state of the primary market will continue for some time. The reason why share buybacks have become a hot topic is actually a helplessness of the capital market. Essentially, it is still a problem of how investment institutions exit. Investors are trapped in exits and DPI, and entrepreneurs are trapped in share buyback clauses. Just as 36Kr "Dark Waves" detailedly analyzed in the article "Investors Trapped in Share Buyback Agreements" at the beginning of the year, on the road of GP seeking to exit, share buybacks are generally regarded as the simplest solution, but in fact, it is difficult to truly stop losses. This is a "vicious cycle" where there can be no winner.

However, as the source of innovation, we believe that the primary market and the venture capital ecosystem will eventually improve.

Just as Ziping Kuang, the founding managing partner of Qiming Venture Partners, called for, "Through the greater patience of the primary market, the moderate opening up of the secondary market, a more active mergers and acquisitions policy, especially the further relaxation of the mergers and acquisitions policy of listed companies for unprofitable enterprises, the more supportive and encouraging attitude of regulatory agencies towards overseas listings, and a more practical measurement scale for LPs to evaluate whether GPs fulfill their share buyback obligations, we should give these enterprises and entrepreneurs some breathing space, so that they have a greater possibility to continue to grow and benefit the society." Although this may be an overly idealistic call, today's primary market and today's world need such idealism.

2. "Young People and Consumption": Young People Who Are Hard to Understand Are Educating the Market

Over the past year, 36Kr's "Post-Wave Research Institute" has been paying attention to the young group and their consumption trends. In a questionnaire survey, we found that post-00s men and women spend more than 70% of their money on themselves. For comparison, 80s women spend only 40% of their money on themselves, and 80s men only 30%. However, this does not mean that it is easy to make money from young people. How to understand the consumption preferences of young people and make money from them has become a problem that major brands rack their brains over, but often without results, and even with failures.

So, where do young people's money go? Let's take a look through some fragmented scenarios.

(1) Returning to "Real Life Enrichment", Paying for Vitality

After work, they come to the tanning salon, take off their clothes, apply lotion, and spend 150 yuan to tan for 10 minutes, in order to get a sunny and healthy wheat-colored skin. Outdoor activities such as frisbee, cycling, and river tracing are prevalent, and the single Asian cultural aesthetic of "a fair complexion hides seven flaws" is being shaken by a "tanning" trend. Sports apparel is worn by young people as daily commuting outfits, and the sales of windbreakers, tennis skirts, and yoga pants are booming. Young people's consumption is to shape a vibrant and dynamic self, to be a fulfilling winner in life.

(2) Willing to Create Trends, Creating a New Homogeneous Layer

Cycling, a sport that combines fashion, social interaction, and health, has become extremely popular among young people. Young people who fall in love with this sport start to compete in equipment and clothing, which has also driven the rapid growth of the cycling market and created a business with an annual income of over 100 million yuan. In order to "escape the city", many niche outdoor hobbies have become popular. From camping, Citywalk, Cityride, hiking, frisbee, paddle boarding, skiing, to the current Wildeat, young people are willing to try new ways and are also willing to "create words" and "create trends". From recognizing and using a new word to entering a new hobby circle, young people refuse to be "shaped" and instead create and "label" themselves, just to find "like-minded partners".

(3) Health-Conscious Fighters, Health Preservation Becomes the Top Priority

Health preservation has become the top priority for young people in terms of food and drink. Milk tea and beverages are to be drunk, but they also need to carefully observe whether the product interface is marked with zero sugar or sugar substitute. Because "sugar control" is becoming an increasingly normalized concept among young people. Blood sugar anxiety, high uric acid crisis, and even working with cancer... The younger onset of chronic diseases and even cancer has forced them to face the alarm bells rung by this delicate instrument of the body in advance. Fish oil, vitamins, probiotics and other nutritional supplements are still small expenses. They have even created a 100-billion-yuan wearable medical device market.

(4) Intelligent Consumption, Spending Money Must Be Smarter

In the current era where saving money and cost performance are dominant, small hot pots and fancy buffets have once again come into the public eye. Gyms are closing down one after another, and young people are flocking to 20-yuan "poor devil" dance studios, focusing on reducing risks, costs, and never getting membership cards. For non-essential goods such as jewelry, they are even more strict in considering cost performance, resulting in a significant drop in the sales of inlaid jewelry. The price increases of Uniqlo and Decathlon have made young people sensitive. The former "affordable" prices are obviously not "affordable" enough at present, and the new substitutes have launched fierce price wars, and the overwhelming discounts at Outlets are making people excited. Today's young people are seemingly stingy but actually rational. They are not not spending money, but spending it more wisely.

(5) Information Dieting, Taking Back the Initiative Controlled by Algorithms

Rather than being overwhelmed by information, young people nowadays have begun to actively practice information dieting. They avoid consuming a large amount of information garbage and consciously carry out information screening. When in the meeting rooms of big companies, they are discussing how to increase users and how to improve user retention time, this generation of young people has actually started to buy feature phones - they are determined to break free from the digital cage. Young people have begun to try and advocate for "phone detox", escaping "phone dependence" by using "feature phones". The podcast market continues to grow. Compared to aimlessly swiping short videos on the subway, they prefer to independently choose the content they consume and firmly hold the "electronic initiative" in their own hands.

We see waves of hobbies and marketing buzzwords of young people, extremely individualistic and seemingly irregular, but essentially, it is still an emotional business. On the basis of satisfying emotional value, cost performance is the first choice criterion. Therefore, in the future, the business that can win over young people must be "emotional value + cost performance". And the basic marketing in the future is also the communication between people, and the private domain is very important. So this year, we have seen the chairmen, founders or CEOs of dozens of familiar brands such as 360, Xiaomi, Xtep, Gaofan, Little Swan, GuJia Home Furnishing, Perfect Diary, etc., have personally started live-streaming.

It doesn't make much sense to talk about cost performance alone. As a business media, we are committed to serving brands. Brands contain emotional value and interaction with users. We believe that this trend will be more strongly verified among this generation of consumers.

3. "AI and Various Industries": 24 Months Have Passed, and More and More Practitioners and Investors Are Beginning to Wonder How AI Can Make Money.

If we have seen exciting opportunities this year, AI must be one of them. In just 24 months, we have experienced multiple rounds of discussions on the Hundred Model Battle, AI AGENT, AGI Argumentation, Embodied Intelligence, and AI Applications.

24 months have passed, and more and more practitioners and investors are beginning to wonder how AI can make money, or to use a more AI-circle description, called "PMF" (Product-Market Fit), which also reflects to a certain extent the confusion and anxiety of people towards AI at present.

The commercialization progress of AI is still in a slow climbing stage. Every AI product advertisement you see on Douyin, Bilibili, and Douban, and every question you ask AI to answer, is the financing of AI companies burning. Up to now, the large model companies have still not produced a truly phenomenal product. We are looking forward to the emergence of a phenomenal product, similar to Douyin in the mobile Internet era, to initiate the summer of AI.

At present, AI has begun to play a role in finance, medical care, education, manufacturing and other fields in China. At this year's Alibaba Cloud Computing Conference, the three exhibition halls of AI can clearly feel that this is not a simple AI show, but a fusion conference of AI and various industries.

In the TO B field, how many points the large model list gets, what its ranking is, and how large the parameter quantity is, these are not the real concerns of enterprises. In the early investigation, the large model will face a series of realistic questions: "How to calculate the ROI?" "Can it increase revenue?" "Can the product solve my current pain points?"

Baidu's Li Yanhong revealed that as of the beginning of November, the daily average invocation volume of Baidu's Wenxin Large Model exceeded 1.5 billion, a 7.5-fold increase compared to the 200 million disclosed in May, and a nearly 30-fold increase compared to the 50 million first disclosed a year ago. Baidu's Shen Dou believes that the application of AI is taking off first in the B-end.

However, the AI-ization of enterprises also faces difficulties. 36Kr's investigation found that some enterprises have been observing and dare not enter the field, believing that the large model technology is not yet mature, and there are many challenges such as data and costs in the implementation in the subdivided industries. Although some enterprises have an open attitude, they have many questions about the implementation form of the large model - what does the product that combines the large model and the scenario look like? In which scenario should it be implemented first? How to solve the technical reliability problem?

In the case of insufficient digital infrastructure, the large model will not play any role. If the digital foundation is insufficient, the first step for the large model to be implemented is to sort out the data from the beginning, classify and summarize the management data, and then build a dedicated cloud. It takes at least two to three years to initially achieve digitization in this way. With a digital foundation, the large model can not only improve quality and efficiency, but also create some new, native new experiences and new applications. One thing that can be confirmed is that enterprises that do not use AI in the future will definitely be gradually eliminated.

For infrastructure suppliers and large model manufacturers, only when more industries, companies and entrepreneurs invest in AI can there be a broader space for development.

Here I would like to talk about our 36Kr partner Lenovo. In the entire history of AI development, Lenovo is a name that cannot be avoided. Maybe many people's impression of it still stays at the level of a hardware equipment provider, but in fact, what Lenovo is doing is not only hardware, but also a "full-stack AI" product, solution and service provider, a promoter of hybrid AI, and is committed to promoting AI to be practical and truly enabling AI to be applied in various industries. This includes the vast majority of SMEs that make up the majority of the market.

Why do I say this? For example, the Lenovo Baiying One-stop IT Service Platform they did before aims to help SMEs achieve high-quality and rapid growth. Now this platform has been upgraded to Lenovo Baiying Intelligence, which is also the first IT service intelligence in the industry for SMEs, specifically designed to provide SMEs with one-stop AI scenario solutions.

Coming back to the point, what are SMEs most concerned about when doing AI? In fact, it is not difficult to understand. Internally, it is how to reduce costs, increase efficiency, and open up sources of income. Externally, it is how to use AI to create revenue. In a more popular way, it is how to use AI to make money.

Now with Lenovo Baiying Intelligence, all internal problems can be handed over to it to solve. After SMEs use Lenovo's IT solutions, they can achieve a significant reduction in IT operation and maintenance costs, along with a great improvement in work efficiency. Enterprises can also use AI to help SMEs attract customers and convert them.

After the internal problems are solved, the external problems