Original: Xue FangTencent deep network
Author | Xue Fang
Eight months after joining the YC, Lu Qi stood in the spotlight again yesterday. From the Baidu firefighting captain to the founder of YC China, how did Lu Qi complete his identity change and how to help localize this world-renowned business incubator in China?
YC is a world-renowned startup accelerator that provides seed-based startup solutions for start-ups with technology innovation as the core. It has invested in nearly 2,000 start-ups including Airbnb and Dropbox, with a total market capitalization of more than $150 billion.
Regarding YC, there is a saying in the Silicon Valley venture capital industry that there are only two types of incubators, YC and others. "In China's venture capital circle, YC is only a legend of Silicon Valley. There are occasional projects in the country to go to YC for gold plating. However, in the tide of entrepreneurship, it is only a drop in the ocean, and it has not set off waves.
Therefore, after Lu Qi joined YC, he launched the first pure local Chinese entrepreneurship camp.
“I spent more than four months at YC's US headquarters to participate in the overall operation of the 2019 Winter Venture Camp. This period of the venture camp attracted 11,000 entrepreneurial teams around the world, and 200 of them were accepted after the interview. & rdquo; Lu Qi elaborated.
In the process of interviewing entrepreneurs, Lu Qi worked with different YC partners to thoroughly understand YC's core and proven methodology. How to localize YC's incubating experience for so many years is the first question facing Lu Qi and YC China.
The current YC China Enrollment Autumn Venture Camp is basically the same as the YC Headquarters model. It consists of three months, including Office Hour (Work Meeting), Group Dinner, and Demo Day (Day Day), but according to China's entrepreneurial ecology. Corresponding adjustments and localization were carried out. The entrepreneurial camp uses Chinese in its entire journey.
In addition to Lu Qi, in addition to Lu Qi, YC China's part-time partner who can provide guidance for the entrepreneurial team, in addition to Huang Wei, Wang Huainan and Carnegie Mellon University professor Xing Bo, Lu Qi also invited Baidu seven swordsman, cool Lei Ming, the founder of my music.
In the business model, YC China's investment terms have also been adjusted to suit China's national conditions. In the US, the investment terms are $150,000 in exchange for 7% of the shares, and YC China's investment terms are $200,000 in exchange for 5% of the shares. Lu Qi said that YC China will also provide entrepreneurs with two choices of US dollar or RMB investment.
Before the YC China Autumn Venture Camp, YC China held a business camp in January-March. Six projects were selected from more than 50 local entrepreneurs' applications. They were trained at YC headquarters for two months, and in the middle of the month (catch the February Spring Festival) they can return to China for training.
Lu Qi introduced that he invited many founders Huang Wei and baby tree founder Wang Huainan to share the experience of the entrepreneurs in this venture. Now the six teams and the follow-up financing are also very smooth.
Learning YC, pondering the spiritual core of YC, and launching a localized entrepreneurial camp is only part of Lu Qi's work. In addition, in the past eight months, Lu Qi is still busy building a team of YC China. The progress is relatively slow, because he requires strict —— must be an entrepreneur, have experience in doing products, have the most personal experience in the front line.
At present, YC China has fewer than ten teams, including founding partner and chief operating officer, Yun Yunming, former former Lenovo and US group executives, and a continuous entrepreneur; junior partner Cao Yuwen studied wu research at Stanford University. He has had two experiences with YC, and his second company was acquired by Microsoft.
At the moment, Lu Qi is still recruiting, but he hopes that YC China will maintain the scale of the startup company and quickly iterate.
“A lot of American companies want to enter China, but it is not easy to succeed in China. The key point is to find a right person. ” YC President Sam Altman thinks that Lu Qi is the only one. In August last year, Lu Qi joined YC.
Last year, "Deep Net" interviewed Lu Qi during the YC Demo Day. In order to mingle with the young entrepreneurs and understand their way of thinking, Lu Qi did not think it was a challenge for him because of his past work. He has become accustomed to in-depth communication with a large number of engineers and entrepreneurs.
But as a firm believer, “rationalists” and “technology-driven innovations” believers, he believes that a big challenge is: how to incorporate “sensibility” into decision-making judgments, because of investment in early projects. To a large extent, it is “seeing people”, but people cannot be speculated by rational quantification.
Lu Qi said that he tends to make some choices with large and challenging uncertainties, which actually comes from him. “This choice will be better in the future.” Such rational thinking.
Joining YC is a new adventure for Lu Qi, but he has long been accustomed to this choice.
In the past few years, China has experienced several rounds of entrepreneurial enthusiasm, from O2O, to virtual/augmented reality, content entrepreneurship, and artificial intelligence and blockchain in recent years. Lu Qi believes that these are very exciting trends. He believes that the driving factor behind these trends is technology. He keeps his attention on the one hand, reading a large number of professional materials books on the one hand, and directly establishing personal connections with the most core people on the other.
“For the trend of technology, I spend more time myself. On the one hand, look at the materials, read books, and read articles. On the other hand, building connections, especially in important areas, I hope to be able to communicate with the best experts in these fields. & rdquo; Lu Qi said, "It is very important to be able to get important information through communication and help me to judge the trend of technology." ”
He believes that China's entrepreneurial environment has its own uniqueness, driven by macro factors such as China's market structure, cultural background, and policy environment. Any global product or experience that can truly reach in China must be thoroughly Localization.
“This is the principle that I have joined YC to be by China, for China and of China. & rdquo; Lu Qi said.
In addition to his uniqueness, he believes that there are some factors that are common to the world. For example, technology is the most effective, long-lasting, and most powerful means of promoting innovation.
“I think these are global, not a country or a region.” Lu Qi said, “The key is how to control the trend of globalization and to take advantage of some of the best experiences in the United States. Effectively landed in China.
Lu Qi believes that China's innovation ecology is in a process of continuous maturity. The driving factors in the past will be innovation in business models, innovation in user experience, and innovation in product forms. Next, more will enter the technology-driven innovation.
On May 9th, Lu Qi once again accepted an exclusive interview with the media such as “Shenzhen” and shared the latest understanding of localization and the Chinese venture capital market. The following is an interview with the deep network:
Q: What is the concept of YC success?
Lu Qi:YC founder Paul Graham has written many articles and talked about a lot about entrepreneurial ideas, but these ideas will only be truly understood after being explained by entrepreneurs using their entrepreneurial experience. For example, an entrepreneur came over and asked, this product was just launched yesterday. After the customer came, he used two times and left. What should I do? Only after you understand Paul's core philosophy can you solve it with Paul's philosophy.
If the core idea of YC can be clearly explained in a book, then there is actually no barrier to the YC model. The hard part of YC is that you must first have your own experience. My personal experience is that you must have a strong experience. If you have not done a product, it is difficult to really understand.
How does YC ask questions? These dozens of questions, I think, are very deep. Why do you ask about this question? The answer to this question can make you see a lot. Then there is the scoring system inside YC. How is the decision made inside YC? How to accept? All of this is the result of his long-term iteration.
We are the company that sees the most deaths. We see how many small companies die. This is very valuable. Then we can help startups to reduce their deaths as much as possible. Entrepreneurship is a life of nine deaths. To be honest, you only have to survive. But how to survive, you need to rely on the accumulation of experience.
So YC's method and Paul's text just provide a starting point, just like a doctoral thesis, you can't read a book, you can go to the mode. Only through experience, constant exploration, and then there can be several professors to help.
Q: How is YC localized?
Lu Qi:The localization of YC has several latitudes. First, the product must be localized, the product is the experience, and the content must be localized. The thinking and content of YC. YC will teach you what is a customer, and how to get a customer. First of all, there is a lot of such content inside YC, you need to translate English into Chinese first. This is a previous step. In the United States, the customer basically uses Facebook and uses the Google search engine. Therefore, the mentor and team of YC China must understand the core concept of YC and have a full understanding of China's entire entrepreneurial innovation, so it must be done. After the product and the business, the content can be localized. To sum up, the first is to localize the product.
Second, the value it brings, the way it works, localization, how to interview? How to choose? How to score? YC's scoring system in the United States is based on the entrepreneurial ecology of the United States. There are many core ideas in it, but it may not be suitable for China. This is the work we have to do. Generally speaking, it is the preparation for operation. How to enroll? How to score? How to interview? Then there is an ecology to be localized, and we must build China's investment ecosystem.
China's venture capital institutions, China's first-class, high-tech industries, top-notch high-tech companies, such as companies like Tencent, our friends in the ecosystem. In this way, we can get channel resources after we invest in the company. Some companies may be able to provide data resources, and some companies may provide resources for investment mergers and acquisitions. So how to build a very healthy and complete ecology? It is also what we want to localize. On the whole, it is the localization of products, the localization of operations, and the localization of ecosystems.
The premise of localization is the team. The whole team must have a strong desire to learn and must be full of feelings for entrepreneurs. Because China's innovation ecosystem is constantly changing, YC's methodology is alive and must evolve to be alive. I personally think that after ten years and five years later, YC China's methodology may be reversed to allow American teams to learn. Because China has a lot of innovative ecology, it may be a little higher than the United States. Some innovations are worth learning by American entrepreneurs. So it is a process of long-term iteration.
Q: Sam, the chairman of YC, said that in the next decade, there may be three or four companies in the world like Microsoft or Apple. Three to four are in China. Then you said before that you agree with this point of view, so I want to know which area of the company you think is likely to appear?
Lu Qi:I personally really agree with this sentence. First of all, I can talk about which areas are possible. If we know, our work is basically done (laughs). Because from the investment point of view, you only need to seize one, so which companies are relatively difficult, it may be that everyone knows that it is pure speculation.
But which areas are observable? First of all, let's take a look at Google's level, in its ecology, the first echelon of the company, the scope of its business. Google is such a company, Amazon is such a company, Apple is such a company, Microsoft is such a company, but it depends on its ecology. If you look at it from this perspective, let's look at what will be the same level as the Internet mobile Internet in the future. It is possible to have 5 to 6 births. I think there are two big ones based on artificial intelligence technology. New Mobility led by artificial intelligence technology, such as autonomous driving, and some new smart spaces, such as new retail, new plants, new homes, etc. China needs to analyze which areas may be wider and more successful than the United States.
About three of the ten and four of them may be in China. Why do you say this? The IT industry, the information industry, and the high-tech industry have been designed for the US market in the past few decades, with a slight change in global sales. Why is the United States the only country with both markets and talents, as well as technology and capital? But China is changing this pattern. China is outside the United States, and the only one has talents, markets, and capital. There are technologies. Then we may analyze China's national conditions, which may be a bit wider than the United States, or a higher chance of success. This may be the three, and the fourth, possibly Chinese companies. But this is only my personal prediction, personal speculation.
Q: We also found that China's investment institutions may have a tendency to develop in the future. Angels do VC, VCs do PE, so we want to know if YC China itself will continue to focus on angels.
Lu Qi:There is a tendency for China's investment ecology to move backwards. In addition, I have frequent exchanges with my friends in the investment circle. Basically, everyone has done it at different stages. In the past, the past period was backed up, and in the past, it was moved backwards. In fact, I think it reflects the opportunities that the entire social and economic development brings to the investment ecology. Every different investment institution is making corresponding adjustments.
For YC, we must bring unique value. If we are also chasing others to do the later stage, we have no experience, no ability, no connections, no need, we must find our own unique abilities.
I think YC's unique ability is in the early stage, from 0 to 1. Our unique ability is to have a deep understanding of artificial intelligence. We will bring unique value to artificial intelligence entrepreneurship. This is our core. Only in this way, I think YC can truly make a valuable contribution to China's entrepreneurial ecology.
Q: Some Chinese technology companies, especially artificial intelligence companies, have higher valuations. YC China's investment terms are US$200,000 in exchange for 5% of the shares. Will entrepreneurs be willing to accept it?
Lu Qi:If there is an AI entrepreneurial team today, he needs to get support from YC. The most important and most important question is what value YC China can bring to this team? If he hasn't found 0 to 1, then YC is really capable of helping. If he needs some help in methodology, if he needs some help on this core, YC China can bring his core value.
From the perspective of our YC China Entrepreneurship, our principle is any team. If you want to cooperate with YC, that's it, $200,000, you can't take a decision, don't work with YC, it doesn't matter. We are also very willing to support you, we will also have some content on our website, but I have no energy to teach you because of limited human resources.
But if you want to accept YC, we don't talk about valuation. We all use the same method. One of the reasons for this is to stay consistent with the interests of the entrepreneurial team. Because many investors are inconsistent with the interests of the entrepreneurial team, talking about valuation is the most typical manifestation of interest inconsistency, we have to avoid this, so why is there a fixed point? It is also related to this core concept.
Q: Have we enrolled before the autumn camp?
Lu Qi:In the period of learning and internalization, we actually did one thing, that is, YC China in the transition period. Because the financing team has to spend a lot of time, our enrollment in China has already started. We have hundreds of companies to apply for. I interviewed more than 50 companies in Beijing and finally accepted six.
Then we borrowed the American team, and the overall scores of the six teams were quite good. In particular, five of them were demos on the demo day, and they all got a very good next round of financing. The business is progressing very healthy.
Q: How do you evaluate the mentor of YC China and the founder of Huang Duo?
Lu Qi:I personally thank the Huang Wei for joining the YC China as a part-time tutor. You may know that he is a serial entrepreneur, and he is the third company. The first two are doing quite well. He brings a very rich entrepreneurial experience. In February of this year, the sharing of the five companies in his period was really good. I finally asked their feedback for the team of each entrepreneur. Everyone felt that his experience of sharing was very valuable, so I am very grateful to him.
Q: How long has it took for the team to build?
Lu Qi:Regarding the team, in fact, I started to hire people from the beginning, but it is very difficult. Because I am asking for a higher level, to be honest, I value people who have good work and income, so they must have patience, but I am very happy. We have Yun Yunming, Cao Yuwen, and Ke Han, and Guo Rui has Jin Peng.
We are today's core team, each of them is very good, we are a startup company together, high-speed iteration every day, learning every day, work is very happy. YC China itself is still a startup company. I hope that he will continue to iterate and make rapid progress.
Q: How do you look at the current venture capital environment?
Lu Qi:The capital is cold and the money is tightened. First, our investment is long-term, we are very early, investing in seed companies, so we must be patient and long-term is the starting point. Second, from the perspective of YC, if an entrepreneur has too much capital, too much, too high. In fact, for the innovation ecology, it may not be a healthy and appropriate supply, so that an innovation has a balanced historical growth. Our view is that, first of all, China's overall capital environment will not affect our business today.
Q: How do you think about the arrival of the 5G era?
Lu Qi:I think that 5G is technically a great opportunity for different industry ecology. Technically it is quite complicated. In an environment like unmanned driving, it has a very high demand for the network, but it is worth mentioning that 5G will bring many new opportunities for innovation. With 5G and artificial intelligence combined, there will be many new opportunities for early entrepreneurial ecology, and we are also very concerned about this.
Q: How do you think about small programs?
Lu Qi:I personally are very optimistic about small programs. My previous work experience, working at Microsoft, doing mobile ecology. Running out, this is the core concept of Zhang Xiaolong's design, so I personally is very good from the perspective of experience, from the perspective of ecological health, it is just fine. Second, we used to interact with us, including several Chinese startups we invested in. The little things they do are completely embracing small programs, and the small programs also bring valuable help to their entrepreneurial projects.