Qin Zhi: The Things Only Entrepreneurs Can Teach Themselves | 2017 Ma Hui

Compared with most entrepreneurs, Qin Zhi was lucky — he once personally led a startup to a successful Nasdaq listing. He was also unlucky — forced out after a power struggle with the controlling shareholder. These dramatic ups and downs gave him a depth of experience and reflection on people and situations that goes beyond what most people ever acquire.

On April 22, at Source Code Capital's 2017 Ma Hui gathering, former Autohome CEO Qin Zhi appeared at the event to share his invaluable experiences in depth with fellow attendees across different cohorts.

The following is the full transcript of Qin Zhi's speech at Source Code Capital's 2017 Ma Hui:

Thank you, moderator. I'm still quite nervous getting on stage — it's been a year since I last did this. The past year, I was first busy fighting, then unemployed at home. Now I describe myself as an unemployed middle-aged man. First, I want to thank Source Code Capital for giving me this opportunity to share with everyone. Today I'll talk about my reflections from the past nine years, especially the past year, hoping they might offer some inspiration and help to you all.

1

Entrepreneurship Is Not a Solo Game

All of us entrepreneurs are playing a big game, the entrepreneurship game. But I want to remind you — it's still just a game. It's not all of life.

In the game, we definitely need to work hard, go all out, stay focused. But step back and think: games have rules, but they're still games. There are things that come after.

We entrepreneurs often talk about our original intention. What was it? We wanted to make some kind of change — whether changing our own lives, changing our surroundings, changing some experience or unmet need for Chinese consumers. This change requires many people's help. One person alone can't do it.

This is the importance of relationships. You need everyone to help you — your shareholders, your team, your customers, your partners. Let me share a few reflections on relationships, divided into three aspects:

First, shareholder relationships

Second, colleague relationships

Third, customer relationships

2

Think from the Shareholder's Perspective

Let me start with shareholder relationships. When I say this, many of you in the audience are probably thinking about my relationship with Autohome's current controlling shareholder. Wrong. I'm talking about my relationship with Autohome's former controlling shareholder.

Last June, after the fighting ended and things gradually settled. For a while, I actually harbored resentment. Because I felt like I was on a road leading to prosperity, then suddenly got off the car — the car drove away, and I was left standing there. That feeling was certainly not good.

At the time, I resented, resented the friends who fought with me. But gradually I suddenly realized — actually, that's not how it was. I hadn't managed a relationship well. I hadn't managed my relationship with the controlling shareholder, the major shareholder.

Previously, my relationship with them had been very good. Don't forget, in August or September 2009, at a merged company, with our controlling shareholder completely controlling the board, they elected me as CEO of the entire company. At that time we had two businesses: automotive and IT. In terms of seniority, I ranked fifth at best. That was how much trust the shareholders placed in me — handing me the authority, handing me the team. The atmosphere then could be described as harmonious. During this process, they changed three leadership teams, and each one was quite good.

Then things changed. In 2012 and 2013, we wanted to go public. For every entrepreneur, going public is finally proving yourself. Naturally, there were some conflicts in this process. I still remember when we fought over who would have special voting rights. In that small room, I said it was unfair that only they had preferred voting rights, that they were wrong, and if it had to be this way, I would go to Hong Kong for arbitration and make this known to the world. Looking back, I must have hurt them in this process, not thinking from their perspective. From their view, the company was finally becoming a listed company, and from a self-protection standpoint, they needed to maintain control — what if we issued more stock or more options? They might lose control of the company. I completely didn't think about any of that. My ultimate goal was going public. Driven by this goal, I felt I was right, and anyone who disagreed with my plan was wrong.

Later, one of our other shareholders had problems, and before going public, we needed to use cash to acquire all of that shareholder's stock to continue the listing process. But the company didn't have enough cash at the time. In the end, the controlling shareholder and our company together put up the cash, acquired that shareholder's entire stake, and Autohome successfully went public.

Of course, you could say the major shareholder did this to protect their own investment, to protect their own interests. But think about it — just two or three weeks after fighting in that small dark room, when problems arose, they were still willing to stand with you and help solve this together, preventing the listing process from dragging on another year or half year. They genuinely helped us.

Overall, looking back now, I feel I lacked consideration for others, lacked standing in his shoes to think about his needs and how to satisfy them. The final result was definitely because I didn't do enough.

Relating this to all of you — you've all raised a lot of investors' money, you all have shareholders. Each of us, to varying degrees, has had our mentality change. I believe, or I hope, that when you sometimes find yourself about to fight with a shareholder, you'll think back to when you received that investment — did you feel like you were doing that investor a huge favor, or that the investor was doing you a huge favor? Think more about this. I believe you should be grateful to investors, because without their trust back then, you wouldn't be where you are today.

3

A CEO Is Made by Team and Partners

Colleague relationships. This includes entrepreneurial partners, company executives, and our employees. As CEO, there's a bad habit — always liking to criticize colleagues for lacking the big picture, saying they should think from the company perspective, not their department's perspective. This is actually problematic. We often have this sentiment, feeling like I'm the only one in this company thinking from the company's perspective.

When we think from the company perspective, we want this manager to bring their team to make sacrifices. "Considering the big picture" definitely means sacrifice — if it benefits them, it wouldn't be called "considering the big picture." But have you thought about what result they get from considering the big picture?

Maybe this manager ultimately can't keep up with the company's development and leaves. At the very least, they considered the big picture — you should tell them, thank you for considering the big picture, thank you for caring about our company's future, thank you for caring about our needs.

Many times we don't say such things, because we feel considering the big picture is right, caring about the company's overall situation and future is absolutely correct, and every employee should do this.

Many times, it was the team that made me, that enabled me — not that we made them. We often get this backwards. This is our relationship with colleagues.

4

Trust Your Customers, Take the Initiative to Step Forward

Customer relationships. For a long time at Autohome, when people said "the customer is always right," we all scoffed. We thought — what do customers know? Each of us is also a consumer, each of us is also a customer. When we buy things, we also want the best things at the lowest prices in the world. Companies need to make money; customers want to spend less and get high-quality service — that's also right. How to solve this?

Our experience is: like the previous two relationships, think more for them, take better care of their feelings. It's not necessarily about price cuts or concessions, not necessarily about giving ground on economic interests. More importantly, have a service mentality, serve them well. Often you'll find that when users change, unreasonable demands actually disappear.

Let me share another story about trusting users. I forget the exact time — end of 2014 or beginning of 2015. Around then, something happened: several servers had information for 3 million users completely taken, someone had planted a backdoor in the system that we never discovered. Actually, this was our poor work.

At the time, several of us discussed this. We had several concerns: First, after user information was leaked, would it actually cause real harm to users? Our first reaction was no. Because at that time, Autohome hadn't truly done e-commerce, so our user accounts had no money in them — just a username and password, the account was essentially harmless. We just needed to help users change their passwords once, and that would be it. That was our first thought. At this point, quietly say nothing, sweep this under the rug, and it would be fine.

One manager at the time was truly wise and perceptive. He raised that this wasn't entirely correct. The same username and password were likely used in other accounts, and those other accounts might have money, might have personal privacy, might have all kinds of information. We should notify users about what happened here, and advise them, suggest they change the same username and password in their other accounts.

Internally, we had a dispute. First, if you tell users, and they post on Weibo, what then? Second, if users say they suffered losses elsewhere, and Autohome admits the username and password were lost here, and demands compensation from Autohome, what then? We argued about this for a long time — what should we do? When you're poor, you're short on ambition; with some money, you can afford higher values.

We made a decision at the time: we would admit it. We would communicate with every user — we generally had mobile numbers, email, all these methods. At that time, all our call center staff spent every day calling these users, explaining to them what had happened, and advising them to immediately change their other accounts.

If a user came to us with demands that seemed unreasonable to us, we had one response: we're all post-80s parents, every day telling our children — if you make a mistake, admitting it still makes you a good child. We would tell that user: I hope I can still tell my child the same thing tonight, rather than telling my child — if you make a mistake, don't admit it, or you'll get beaten.

For the first time, we truly felt that trusting customers was right, that admitting our mistake was also good for us. All 3 million people — we resolved it, not a single compensation. Instead, many users' view of us improved. They said they never imagined a company could care for them, love them so much, so they were willing to continue with Autohome. Even if they had losses themselves — no problem, the loss was the loss. This was something very moving for us at Autohome.

In interpersonal relationships, we often think too much about ourselves, set up many defenses, because we feel we live in a world of deceit. Sometimes we don't dare to take a step forward, to believe that I treat you well, I believe you won't treat me badly. Extending this to shareholder relationships, colleague relationships, customer relationships — it's often like this.

That experience gave us as a team one realization: the result of your relationship with anyone is actually a projection of your inner attitude toward them. If in your heart you're genuinely good to them, without any selfish motive, purely for their sake, and you're also willing to accept all their reactions and results toward you — in many cases, the result is good. If you persist in doing this, you'll get very good results. This was our realization during that period.

5

Leaving Room for Others Is Leaving Future for Yourself

Running a business is somewhat like — success is usually due to luck; not succeeding is inevitable. So for us, regarding these three relationships, how do we view others? Whether they're the customer across from us, our employees, our users. My previous realization was: in this process, you can't think too much about yourself. The more you think about yourself, the more twisted things become. You need to put yourself aside, think about getting this thing done — that's a huge contribution to society. If we get this thing done, there will be many good results, and I believe people will help you.

I have two realizations: actually, the earlier you make your position clear, the earlier you explain your preferences and demands to everyone, the easier it is to distinguish friend from foe, even distinguish competitors. The less clear you are about your position, the more friends around you don't know what you're doing, don't know your rules, don't know your principles, don't know how to help you.

After you make your position clear, there will definitely be some people willing to rally around you, because they want to be with you, they believe in the same things you do. In companies, the longest arguments are: you have your idea, I have my idea, everyone thinks their own idea is right — but are these ideas actually good for the company?

The best approach on this is: first, everyone define what is good for the company. If that's defined, then disagreements become easier to communicate. Let everyone pick which approach is good for the company, and many things are easily resolved. This was a major realization for us.

My current thinking is: in Chinese society, leaving room for others is leaving future for yourself. You force others into a dead end, and in the end both sides lose — there's no point.

If we want to change our surrounding environment, if we can consider others a little more, think a little more for others, slightly put ourselves aside — then our relationships with everyone around us will definitely become more perfect and harmonious. Thank you all!