Larry Chen of Gaotu Techedu: "At 53, I'm Still a Baby!" | Buming Qianbei Shuo

Last September, Larry Chen, founder, chairman, and CEO of Gaotu Techedu, came to the inaugural Buming Entrepreneurship Camp to share with all the "Buming" participants.

At first, Mr. Chen seemed to be speaking casually, without any particular theme, and we were all a bit lost. But soon, everyone was won over by his passionate, sincere, and humorous delivery, laughing heartily as they voted him the #1 "Most Beloved Senior" among Buming participants.

We think the reason Mr. Chen is so beloved comes down to one thing: authenticity. He let us know that even the biggest names get knocked down a thousand times, have blind spots and limitations, and lie awake at night feeling helpless when they've made "stupid mistakes." There are no secret moves, and luck doesn't usually show up. The only thing we can rely on is inner strength: dragging ourselves up with a brave heart and throwing ourselves back into the game of entrepreneurship with hearty laughter.

Today, we've compiled Mr. Chen's simple yet timeless wisdom into this piece, sharing it with you who are winding through the entrepreneurial journey. We wish you joyful entrepreneurship and a heart that stays true. If you'd like to meet more Buming seniors like him, welcome to apply for Buming Entrepreneurship Camp 2024 — let's create new encounters.

Scan the QR code to join Buming Entrepreneurship Camp 2024 ⬇️

Hello everyone, fellow entrepreneurs. Standing here among you, I feel like I'm seeing my younger self, remembering those frenetic years when I first started out.

We all want to accomplish something great, but whether we actually succeed isn't determined by our present achievements — it requires the test of time, examining and reflecting at some future moment, accepting inspection from the outside world, or having our accomplishments told by those who come after us.

In June 2014, I started my company in a basement near Wudaokou. Yiming Zhang and Hua Su were nearby at the time, and we had some exchanges. Over the years, I've watched us and our friends around us grow up, and gradually realized: If you can find the essence of your business earlier and keep compounding on that essence, you'll likely be more successful.

At the end of 2022, we started "Gaotu Youxuan" (Note: Gaotu Techedu's live e-commerce project), and I returned to the hectic state of entrepreneurship. I didn't even go home for New Year's Eve, still struggling to figure things out. I wondered: How can Elon Musk run several companies at once and still be CEO of Twitter? Is this guy a genius?

So I read Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future and discovered that while Musk appears to be managing multiple companies simultaneously, he's actually just setting the main direction while others ensure operational execution. When he built SpaceX, his 7th employee became company president. When he founded Tesla, someone was willing to be his unsung hero as COO. When he started SolarCity, the CEO was his cousin. It looks like he's doing multiple businesses, but it's actually extensions of the same thing.

So entrepreneurship requires sustained focus. For a considerable period of time, you can only do one thing. You absolutely must find a major track, think of a monetization scenario, and start a business for real commercial demand. Many people don't understand this principle.

You can add things in life, but ultimately you must subtract. Actually, subtraction gives you more, not less — 1 to the fifth power is 1, while 0.5 to the fifth power is 0.03. Focus on what matters most, persist for five years, and the full picture of your life opens up.

In The Effective Executive, Peter Drucker says that everyone's time is limited. The best founders make as few decisions as possible. If a founder has a new decision every morning, something might be wrong with their head (laughs). Warren Buffett says he makes one decision every five years. Over all these years, he's probably only invested in about 60 companies — few decisions but high quality. Maybe that's why he's still so energetic at his age. There's an old Chinese saying: "govern by doing nothing" — the core premise is that you've made some correct decisions early on, and then you can gradually do nothing later.

Once we've found something worth focusing on, how does a team iterate its understanding of that thing? That's actually not easy. When we first started, our team was full of ambition. Looking back now, there were so many foolish moments. Really, I've made every stupid mistake you can imagine. Everyone has blind spots. The most important thing is to look at other people's mistakes more often.

In 2014, the rise of mobile internet sparked mass entrepreneurship and innovation. Thousands of companies had business models similar to ours. Later, the vast majority of these companies disappeared. Everyone says entrepreneurship is nine deaths to one life, or ninety-nine deaths to one life, but actually it's more like one in a thousand or one in ten thousand that makes it.

Early in our startup, we quickly raised $50 million in investment, but soon faced enormous financial pressure. One month our expenses exceeded 20 million yuan, with zero profit. We had to start laying people off. I was extremely anxious during that period. To stabilize the team, I'd often take employees out for barbecue until 2 or 3 in the morning, then go back to sleep in a rental near the company, only to wake up at 4 a.m. from nightmares, wondering through the long night "when will the sun rise?" This kind of pain is hard to share with others. People will say: You've achieved so much, could you really encounter something this difficult? But that's exactly how it was.

Looking back at nine years of Gaotu's entrepreneurial journey, if I made only one good decision, it was choosing online live-streaming premium large classes when the market was engaged in subsidy wars.

Initially, Gaotu was seen as doing O2O education. At the time, there were probably thousands of companies doing education O2O, with hundreds having raised over a million RMB. The market quickly erupted into subsidy wars. This put enormous pressure on our employees, who kept coming to ask me: Should we join the subsidy battle? What about 6% subsidy? 3% subsidy? I kept firing back: Are you crazy? (laughs) We realized early on that this model didn't work in some industries.

We're very proud that Gaotu was the first education company in the market to leave the O2O model. In July 2014, we quickly built an audio-video team and tried several monetization approaches. By March 2015, Gaotu achieved live large classes with over 3,000 students online simultaneously; six months later, that number became over 10,000. This gave us a strong commercial scenario and was the most differentiated thing Gaotu ever did.

Although the education industry has experienced many ups and downs, we persist in this industry. Why? Two reasons: First, when things are unpredictable, we need to think about what the real changes are. Second, we need to see what doesn't change amid the changes. When the "double reduction" policy was implemented, I thought about what doesn't change? The answer is that the strong demand for education among 1.4 billion Chinese people doesn't change. Everything else just needs to be left to time, and the decision becomes simple.

I particularly believe in "being greedy when others are fearful." In fact, today's supply-side reform in China's education sector is happening nationwide, and very few companies can truly achieve nationwide layout, have excellent talent, and still have capital. Being slightly "greedy" at this moment and doing this well will yield tremendous rewards.

At Gaotu, we emphasize two phrases: Pour your heart in, give it your all; work happily, live happily. The logic is actually very simple, but making it truly the underlying culture of the company is both difficult and important.

What does "pour your heart in, give it your all" mean? Essentially, it's about not letting down your youth, your life, or every day of your dreams. The eight hours you spend at the company each day are yours — how can you not let yourself down? I think the best way is to pour your heart into and give your all to every single day.

What about "work happily, live happily"? Happiness means opening your heart. If employees can comfortably seek help, raise questions, and offer suggestions at work, they'll feel happy and fulfilled. So a company must let everyone speak, let every expression be respected, and let every individual have dignity. Whenever employees feel pain, I tell them to voice it. You open your heart, they open theirs — once connected, isn't it a brilliant universe, a brilliant starry sky? Look up and isn't it all a magnificent night sky? How could there still be pain? (laughter throughout)

Happiness is letting your good fortune survive. For example, if the company wins a battle and earns substantial profit, that only means we've received good fortune. But whether it can survive and be passed down long-term is another matter — this is why wealth rarely lasts three generations. So after every victory, we must find the underlying reasons for that victory.

I particularly believe in "life is like a play" — this is the highest realm of life. What are the characteristics of games? First, they must be fun. Second, there must be a chance to win. Work is the same. Some employees joke that I've said this 100 times, but I need to keep saying it — these words are worth saying ten thousand times.

A couple of years ago, friends threw me a 50th birthday party. One particularly close friend exclaimed: Mr. Chen, you're already 50. I said: What do you mean "already" 50? I should say I'm "only" 50! Although I particularly hate using wealth to measure a person's success, if we use wealth as one indicator of a person's growth, Warren Buffett earned over 99% of his wealth after age 50. That means I'm still young, I'm still a baby! (laughter throughout)

If the "only" 50-year-old me could give you one piece of advice, it would be to create your own Stop-Doing-List for life — that is, what not to do. For me, the things I need to figure out are these:

First, what absolutely does not belong to my business, no matter how much money it could make.

Second, who I should not associate with, no matter how excellent they are. Buffett says to strategically leave toxic people. Many people's pain comes from being with the wrong people, ultimately wasting their youth.

Third, health is important. Entrepreneurship has no shortage of sleepless nights, and you still need to show up energized for work the next day — how can you do that with poor health? You'll find that good health means good energy, which brings more positive energy to colleagues around you. The team becomes sunny and warm, flowers bloom everywhere, and business goes well too. You can give the team more input, and the value created is higher.

In the end, what brings entrepreneurs down isn't lack of capital or team betrayal — it's their own health failing. And health doesn't usually collapse overnight. Everyone should invest in their health earlier — run if you should run, exercise if you should exercise. I myself ran almost every day before age 30.

Today, I no longer want to compare myself with anyone. When your inner self is free enough, you no longer want to compare with others. But there is one thing I still compare — hoping to have better condition, energy, and personal charm, to be worthy of the partners around me.

If I had to give young entrepreneurs advice, I think three things are particularly important:

First, before truly finding your business model, try to keep a small team. As employee numbers grow, communication becomes extremely complex, and you can easily lose track of what's happening inside the company. If you can't make money at a small enough scale, scaling up is a disaster, and your emotions will be depleted.

Second, CEOs must put in sufficient effort on hiring. If you feel someone isn't a fit, letting them leave early in the startup phase is actually a good thing, even if they're important. Wasting time on the wrong person is a huge drain on a founder's energy.

Third, how do you question and critique yourself? I think founders must be extremely confident, extremely optimistic. Everyone should listen to advice, but you can't just listen to any advice. The true, ultimate breakthrough is something the founder figures out themselves — it's absolutely not advice from others, because it won't be your logical foundation or your cognitive system.

I'll stop here, thank you all!

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Buming Entrepreneurship Camp 2024 will host three themed events — Globalization, Hard Tech, and AI. Each session will last two days, intensively gathering quality entrepreneurs on the same theme for a brainstorming marathon. We promise it will be worth your while.

If you are:

• An entrepreneur / serial entrepreneur — have raised funding, built products, or even have company revenue
• From a major tech company — currently creating B2B/B2C products reaching massive user bases
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• Or even just young — obsessed with technology, with ideas about how tech can land in the real world

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