Chapter 512 Cutting the Cake
In the early morning, sunlight shines into the office on the top floor of the Science and Technology Building.
Song Ci leaned lazily in the chair, his cell phone leaning on the table stand, his wife's delicate face reflected on the screen.
The background was a bit noisy, and the airport boarding announcement could be faintly heard.
"I heard that the premiere of "Partners" was quite a big event, and half of the entertainment industry was there?" Song Ci had a gentle smile on his face.
Liu Shishi chuckled softly at the camera, her eyes flickering with a hint of playfulness: "Yes, but compared to the supporters of Mr. Richest Man, they pale in comparison."
She leaned a little closer to the camera and suggested with interest: "Honey, in a few years, do you want to make a movie based on you?
It's mainly about internet entrepreneurship, and I've even thought of a name. How about "Top of the Wave"?
"'The Wave'?" Song Ci smiled and shook his head, "That's too ostentatious."
He paused, looked up at the screen, a sharp gleam in his eyes: "But if we really want to shoot it, I'm afraid a movie length won't be enough."
Once the thought arose, it began to grow wildly in Liu Shishi's mind.
She secretly decided to create an epic entrepreneurial inspirational film based on her husband to record the magnificent Internet era.
Seeing his wife suddenly froze, Song Ci slowed down his voice a bit: "What are you thinking about so absent-mindedly?"
"Ah? Nothing." Liu Shishi suddenly came back to her senses and collected her thoughts. "I'm about to board the plane, husband. Don't forget your plans for tonight."
Today is Mother's Day. The couple booked a table at a Michelin restaurant in the suburbs of Beijing to treat their two mothers to dinner to show their filial piety.
"Yes, I remember." Song Ci nodded, his eyes soft, "Be careful on the road, see you later."
After the call ended, about a quarter of an hour later, Zhang Yong and Wang Jing came together, entered the office and sat down directly in the guest chairs.
Song Ci got straight to the point: "Sun Tongyu and Shentong's Chen Dejun will be here soon to finalize the details of the new e-commerce platform cooperation. You two should join us."
As soon as these words were spoken, Zhang Yong and Wang Jing looked at each other quickly, with unexpected joy flashing in their eyes.
There have been many voices within the group calling for the group to enter the e-commerce market, but the chairman has always remained silent. Now he has finally given in. Although it will be an independent operation, it is still a key step forward.
Song Ci pushed two documents on the table towards them: "The new platform is named 'Pinduoduo', and this is the initial equity structure design plan."
Wang Jing took the document and opened it almost at the same time as Zhang Yong, quickly scanning the contents.
The new company's power blueprint is clearly shown in black and white:
Tengda Technology (strategic resource provider): 35%
Sun Tongyu (founder and CEO) and core management team: 25% (Sun Tongyu alone holds 20% and other core executives hold 5%)
Huiwen Asset Management Co., Ltd. (external venture capital): 20%
STO Express (strategic partner): 10%
Employee Stock Option Pool (ESOP): 10%
The subtle sound of shuffling papers was particularly clear in the quiet office.
Song Ci explained at the right time: "Pinduoduo will adopt the A and B share model. Tengda, Huiwen, and STO hold Class A shares, with each share corresponding to one vote.
Sun Tongyu and his core team hold Class B shares, each with 10 times the voting rights."
Zhang Yong heard this, his mind was calculating like lightning, his eyes flashed with understanding, and his tone was admiring:
"Although Sun Tongyu's team only holds 25% of the shares, they have over 50% of the voting rights thanks to the super voting rights of Class B shares, giving them absolute say in daily operations.
Mr. Song, you are trying to ensure Sun Tongyu's dominance over Pinduoduo's operations!"
Wang Jing read the protective clauses more carefully.
The document states that as a strategic investor, Tenda Technology has a veto over fundamental matters such as amendments to the company's articles of association, sales and acquisitions of major assets, and issuance of new shares.
He nodded slightly, his mind suddenly enlightened: "Grasp the big and let go of the small, and the whole will be clear."
The chairman does not interfere in daily operations, but at strategic junctures, he firmly holds the "brake" power to avoid major decision-making risks that may arise in the future.
She glanced down at the terms of the Shentong Express and employee option pool, finding them all reasonable. However, when she saw Huiwen Asset Management, which held a 20% stake, her eyebrows furrowed.
This venture capital firm is unknown, but it can occupy such a large share in such an important project, which makes her suspicious.
Wang Jing glanced at Zhang Yong, who remained expressionless beside her. After a moment's hesitation, she cautiously probed, "Mr. Song, is this Huiwen Asset Management...?"
Song Ci's expression didn't change at all, and his tone was flat: "Huiwen is an investment company under Shishi's name."
Although the words are short, they contain a huge amount of information.
Wang Jing understood instantly, and all her doubts disappeared.
Liu Shishi and Song Ci are husband and wife, and their interests are one. To put it bluntly, this 20% stake is an investment made by the boss in his personal capacity.
Pinduoduo's future is uncertain but its potential is huge. As the creator of this situation, it is understandable that Song Ci cuts a piece of the cake.
He said no more and just nodded slightly to show his understanding.
Song Ci took in the two people's reactions and further elaborated on the concept of equity design: "The core goal is to achieve the separation and checks and balances of ownership, management rights, and income rights, and to balance the interests of all parties."
Zhang Yong glanced through the document, roughly read it, closed it, and showed sincere praise on his face: "Mr. Song, your design is well thought out and can be regarded as a model.
This equity structure can not only mobilize the enthusiasm of Sun Tongyu and the management, but also ensure Tengda's strategic security through the veto clause.
I believe that under such a framework, Pinduoduo will be full of vitality and achieve great things."
Wang Jing agreed, but the woman was more thoughtful and immediately thought of the key aspects of the implementation. "The plan is very comprehensive. How do you plan to arrange the board seats?"
The board of directors is the true arena for power struggles and major decisions, and the allocation of seats is crucial. Song Ci clearly had a plan in mind and answered without hesitation:
The board of directors is tentatively scheduled to be five. Sun Tongyu will serve as chairman and CEO, holding one seat; the nominated CTO or COO will hold one seat.
Sun Tongyu will then nominate an independent director acceptable to both parties; Shishi will represent Huiwen and take one seat; and Tengda will appoint one.
Zhang Yong quickly weighed the composition and said with a smile, "Sun Tongyu's team holds two seats, and with the independent director he nominated, they hold a solid majority on the five-member board.
With super voting rights in hand, he is even more powerful than a tiger with wings, and can boldly expand his territory. Mr. Song, you really trust Sun Tongyu.
“Don’t employ people you doubt, and don’t doubt people you employ. Everyone has their own expertise, and when it’s time to delegate power, you should delegate it completely.” Song Ci chuckled and nodded.
His eyes flickered between Zhang Yong and Wang Jing, finally settling on one another. "Which of you two would like to take a seat on the Tengda board?"
Zhang Yong spoke first, "Mr. Wang, you should go. The group's affairs are complicated, especially during this critical period of international business expansion. I really can't handle it all."
Wang Jing was well aware of the CEO's busy schedule. After a moment's thought, she readily agreed, "Alright. Since Mr. Zhang is so busy, I'll take over."
Turning to Song Ci, he said solemnly, "Director Song, I will fulfill my duties as a director, safeguarding the interests of the group while respecting the decisions of the management team."
"Okay, that's settled then." Song Ci made the final decision and was quite satisfied with the arrangement.
Pinduoduo's equity and board structure have just been finalized, and the atmosphere in the office has eased slightly.
Wang Jing suddenly frowned, a look of worry flashed across her face, and she spoke in a cautious tone, "Director Song, I have a question.
Will the group's strong support for new e-commerce platforms and its pouring of resources have a substantial impact on JD.com?
After all, JD.com is an important strategic partner and is currently in a critical IPO phase. If Pinduoduo's rise affects its market valuation and expectations, it will likely indirectly impact the group's investment returns."
Zhang Yong, who was standing by, looked up when he heard the voice, and his gaze shifted from the document to Song Ci. What Wang Jing said was indeed a very important issue.
Tenda is not only a shareholder of JD.com, but the two parties also have in-depth cooperation in areas such as traffic and payment. Maintaining a good partnership is crucial.
Song Ci's face remained calm, as if he had already considered this issue, and he comforted her in a gentle voice, "Don't worry too much.
First, Pinduoduo is currently just a blueprint. It takes time to build from scratch, and it can't threaten a giant like JD.com in the short term. That's one reason."
He paused, glanced at the two of them, and patiently explained, "Secondly, and more importantly, when Sun Tongyu comes, you will understand after listening to his complete explanation of the Pinduoduo model.
Pinduoduo's path is completely different from JD.com and Taobao, with significant differences in target market, user base, value proposition, and operating model."
Seeing that the chairman was confident and had obviously considered the synergy and competitive effects, Zhang Yong and Wang Jing stopped talking and felt relieved.
But a strong curiosity also arises: What kind of "new model" can make Song Ci value it so much and be so sure that it can coexist with existing giants?
Half an hour later, Sun Tongyu stood in front of the presentation screen, his suit jacket open and tie slightly loosened, exuding enthusiasm. With his eyes gleaming and his passion surging, he described Pinduoduo's grand blueprint.
In the audience, the three giants of Tengda, Song Ci, Zhang Yong, and Wang Jing, the chairman of STO Express, Chen Dejun, and the CEO of Huiwen Asset Management, Zhang Tong, were all listening attentively.
“…Therefore, Pinduoduo’s core strategy for the first phase is: focus on sinking into the lower-tier markets, single-point breakthrough, and saturation attack!”
Sun Tongyu's voice was resonant and powerful. He tapped the page-turning pen firmly, and a simplified model of the mobile app interface appeared on the screen.
"Everyone, please take a look. This is the initial interface of the app I designed." He pointed at the screen. "It's extremely simplified, with only two main entrances: 'Homepage Group Buying' and 'Personal Center'.
Why is it so simple?
The purpose is to minimize the usage threshold for new users in the sinking market, especially middle-aged and elderly users who are not proficient in operating smartphones!
We need to make it clear at a glance and allow them to place orders with just one click, so they won’t feel intimidated! ”
Then, turning the page, the core operating strategy is revealed: "In terms of product strategy, Pinduoduo only launched a small number of SKUs daily in the early stage, but each one was a carefully selected 'super hit'!
For example, daily necessities such as tissues, snacks, small accessories, etc. with free shipping for 9.9 yuan.
By concentrating all platform traffic to attack these few products, we can create a huge scale effect and then negotiate extreme prices with upstream factories.
We need to make users feel strongly that 'you can buy incredible goods at low prices on Pinduoduo!'"
Speaking of the key points, Sun Tongyu confidently said: "To achieve rapid growth, we cannot do without the strong support of Tengda colleagues!
We need to make full use of the huge traffic pools of national-level applications such as WeChat, Weibo, and Toutiao to conduct precise and even saturated traffic diversion!
The target users are mainly those who have time, love to share, and are highly sensitive to prices, such as housewives, college students, and retired employees, so that they can become the initial 'seed users' of social fission!
Through the 'group buying' model, they can spontaneously invite their friends and family to participate in order to get a lower price, thus achieving viral growth through word-of-mouth from one to ten, and from ten to a hundred!"
Sun Tongyu picked up the laser pointer and the red dot moved across the supply chain diagram: "In terms of supply chain, direct cooperation with low-cost white-label factories is the priority."
He paused deliberately and turned his gaze to Song Ci with a respectful attitude, "According to Mr. Song's foresight, the platform will also select two or three landmark specialty agricultural products, use 'love to help farmers' as the entry point, and initiate direct shipment from the place of origin for group buying.
This not only helps farmers solve the problem of unsold products and quickly establish a positive image for the platform, but also allows them to accumulate experience in fresh produce operations – killing two birds with one stone!”
Sun Tongyu spoke eloquently, flipping through the PPT that took him eight hours to prepare, and began to summarize:
"In summary, by the end of 2014, Pinduoduo's first phase goal is to have over 100 million platform users and to catch up with JD.com in terms of daily order volume!"
Hearing this extremely impactful goal, Zhang Yong and Wang Jing subconsciously looked at each other, their eyes full of shock and realization.
I finally understand why Song Ci values Sun Tongyu so much and gives him great operational autonomy.
The "Father of Taobao" has a deep understanding of the e-commerce ecosystem, especially his insights into the markets in non-first-tier cities are extremely accurate.
Pinduoduo is based on social fission, focuses on extremely low prices, and focuses on basic consumption patterns. Its main target may be Taobao, which has a low average order value and a wide range of product categories.
For JD.com, which focuses on authentic products, logistics experience and high-end 3C home appliances, it will not pose a direct threat, at least for a considerable period of time, as the two companies' positioning and value propositions are clearly distinct.
Sun Tongyu was so thirsty from talking that he grabbed some mineral water and drank it in big gulps to slow down his rapid breathing.
Then, his blazing eyes swept over each decision-maker, and his voice became more steady and powerful: "Next is the second phase, planned for the whole of 2015."
Quickly switch to PPT, and the screen will show the blueprint for category expansion.
“The core goal of this phase is to comprehensively expand product categories.
From daily necessities and snacks, it has expanded to home furnishings, digital appliances, fresh fruits and other fields.
The platform will gradually introduce more brand dealers and authorized stores, but strategically,
It also specifically emphasizes that "the main products are brand tailor-made goods, inventory goods, or specific models customized for Pinduoduo channels.
The core principles remain unchanged: avoid direct conflict with JD.com's core categories and regular-priced products, and continue to consolidate its price-performance advantage."
After a brief pause, Sun Tongyu's eyes swept over everyone like an eagle, and finally threw out a goal that shocked everyone except Song Ci:
"If everything goes according to plan, I am confident in Pinduoduo's development in 2015!"
His voice was low, but every word carried weight. "I have the ability and determination to achieve a GMV of over 100 billion yuan in 2015!"
"One hundred billion?"
Even Zhang Yong, Wang Jing, Chen Dejun and Zhang Tong, who were used to the ups and downs of life, could not help but change color at this moment, with waves of shock rising in their hearts.
(End of this chapter)
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