Xu Peixin, A Red Child, Rethinks: Barbaric Growth And Farewell To The Age Of Grass

Red child founder and CEO Xu Peixin

Rethinking barbaric growth

At the beginning of 2008, we had a good atmosphere at that time. I had a special feeling.

As a result, after a meeting, a colleague made an opinion to VC, saying that you could see Lao Xu giving speeches on the floor. All of them were boiling up. They all stood up to drum up their hands and said whether they had a little personal worship for Lao Xu.

After I knew it, I didn't take it seriously. I also had the opportunity to run the man.

Then, when I started the quarter meeting in March, I found that we made a profit in that quarter, and this profit is a bit wrong.

In the early stage of e-commerce, the scale must be made. Profit is not very right, and no one can tell why it is profitable.

The red child was founded in 2004, creating the first step of China's maternal and infant products B2C, plus a combination of directory marketing and telemarketing, and red children developed very fast.

By 2008, our sales volume was about 1 billion yuan, and the growth was still rapid.

But this growth is a bit of a pull. That is to say, with the help of the development trend of the whole industry, our catalogues and branches are also widely distributed.

However, healthy enterprises need growth driven from inside to outside, which requires a sustained effort.

Now when we look at the business of the time period, we can see that the red child's product mix, gross margin, logistics distribution and customer feedback are not as well coordinated as we expected.

It's like driving, and the car is running fast, but the speed and the gauge are out of order.

Looking back at the company, I first feel that the culture of the company is a bit wrong. Many qualified managers, as well as former brothers, call me boss.

I am just wondering what kind of culture it is. Is it not a cottage culture?

I am now very grateful to the person who gave advice to VC at the annual meeting. He asked me to reflect on whether this culture is good or bad for the company.

Good places do not need to say that in the early days of the business, Shanzhai culture was conducive to the unity of the organization.

But what's wrong with it? If it goes on, there are at least two disadvantages. First, my bottleneck must be the bottleneck of the company. Second, if the culture is broken, can the company still operate normally? I hope that the company can go well instead of a hundred years old store or giant company, but I hope that this company can at least be an excellent company that contributes to the society.

Eradicate loopholes in the system

During the May 1 holiday in 2008, I went to Seattle, went to Amazon, went to Zappos, and went to WAL-MART.

A senior vice president of WAL-MART is our consultant. I went to America to visit him.

I remember the scene at that time. He had a friend flying from Harvard and having a family gathering in the evening. We agreed that the time was from 1 p.m. to 5 p.m.

That day we chatted excitedly, talked about the future retail, what is the core of the retail industry, and finally talked until 10 in the evening.

We talk about why WAL-MART can make the lowest price in the whole country, because its supply chain is complete and the system is the best in the world.

So, coming back from the United States, I know the second problem of our company: our information operation system does not support its sustainable development.

At that time, we were not afraid of jokes, but in fact, by the time we grew rapidly in 2008, we were still not clear about our accounts.

No way. I called the people of DDT to audit.

The people over there came to me and said to me, "Lao Xu, you don't try it. Your IT system is having problems."

It turns out that the profit and loss statements and cash flow tables we have been looking at are false.

I quickly called the people down to see how chaotic our IT system was.

At that time, our branch was responsible for mining, for example, there was a product with 16 suppliers. The prices of these 16 suppliers were different in one month. How much money did we earn?

The front desk is there to promote sales, and how much it will be reduced. Finally, it will not be possible to lose or earn.

We were still pursuing innovation and development before 2008, but we felt as if our fist was hitting cotton.

Why? The system does not support it.

This is the story of SAP and other systems.

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Choosing the right time to change

If you want to win in the future competition, you must first train your internal skills and practice internal skills first, first solve two problems: first, the corporate culture of the company must go from the wilderness culture to the corporate governance; second, the IT system must be good.

And these two points are interlinked, so we must combine hard and soft.

So when I opened the board of directors in 2008, I made a very difficult decision. I hope that the director will give the company some time to let the red child slow down, and give me two years of IT pformation and corporate culture.

Many people feel that red children have gone too early to walk the way of professional managers.

In 2008, electronic commerce just got up, unlike today's massive outbreak, then it was stronger than it is now.

In fact, every company will go through a stage similar to a red child, just to see when they choose.

For example, when your sales volume goes up, the risk coefficient will be different after doing it again.

If we do not slow down these two years, according to the speed at that time, we will achieve 3 billion today.

In accordance with the 10% industry average loss, I need 300 million yuan of cash flow support.

In September 2007, we got a $25 million venture capital investment from Kay Peng Huaying. We spent $20 million, or about 150 million yuan, on the daily basis, and my cash flow was cut off without supporting sales to $3 billion.

What does cash flow mean for the retail industry? Look at the home world of Lao du (DU HA), the retail industry is not dead, but only the cash flow is broken.

IT pformation is not what you think is the last system.

On the system, the company means that people do not have the final say, but the process, the system said, forget it, for many vested interests, that is, seize power.

China's SAP success rate was 35%, when Lenovo spent more than 3 years.

In addition to the system, the pformation of companies that want to make a standard management structure is essential and even more important.

So, I set goals for myself, correcting the past incorrect processes and rules in the past two years, establishing a set of processes that can carry the company's greater development, and completing the pformation of professionalization and legalization of the company.

In the middle of 2008, red children also introduced a group of new professional managers. Tina (the red child is now CTO Xu Jing) is the first one I introduced personally.

I first saw Tina in Procter & Gamble. At that time, we learned advanced experience in Procter & Gamble's speech. She was the lead of Procter & Gamble IT project. She was responsible for giving us information. At that time, I thought she was particularly suitable.

Later, I flew to Guangzhou 3 times, 8 o'clock in the morning, 11 to Guangzhou, lunch and chat with her at noon, and then fly back at 4 p.m.

It can be said that Tina and our reorganized technical team are the foundation of our information and operation system.

In October 4, 2008, I came back from the United States. I first talked to one of the founders, Li Yang. The conversation was that he and his wife had to go one way, not to buy one by one, and to sell by one.

After that, the 35 major executives of the whole country will have a big adjustment.

I am very grateful to the brethren, who have feelings for me and have feelings for me. They did not rebel during our major operation. During that time, the red children basically rejected all media interviews, and we need to deal with them quietly.

No fear of other things. Too much attention is paid to the internal changes of red children, which will have a great impact on the morale of the whole company.

It is difficult for outsiders to imagine the emotional conflict in the whole process of pformation, the emotional conflict between me and everyone, the conflict between the old and new people, the conflict between new and new people, every conflict will affect others, and it will also have an impact on the overall situation.

Solving these problems is very tiring and emotional hurt is very large. From 2009 to 2010, I put a lot of time and energy here. I often say that I am the biggest HR in our company.

In the process of brothers' going, I also experienced a process of self negation.

Some brothers in the past were not suitable for the whole process of professionalization. We should consider what kind of career development he has, and whether the company can find a better position for him. Do we think the suitable position is in line with his direction of self development and his psychological state at that time.

I am also a person. When people start to work hard for me when I start my business, I am obliged to take care of their emotions.

We had a distribution clerk before, earning 2000 yuan in 2005, and then growing up as a distribution manager because of his excellent performance. He went to the distribution manager and then to the deputy general manager of the branch company, and finally he went to the General Logistics Manager of the company to manage the whole company's distribution business. He was very competent. When we started the creative meeting, he could come up with several plans himself.

Then a general manager of the company and the people to discuss, feel that he is not very suitable for the general manager, the management of such a large business, he is not able to get his own time is also very difficult.

He knew he said to me, "I understand the boss's feelings for the company. I am watching the company grow up step by step.

My ability may not be suitable for such a big booth now. "

I was very sad when he left that day, and I was very sad when every brother left.

In fact, every enterprise will experience this stage.

Ma Yun's eighteen Lohan are now still with him.

So many changes have taken place in the red child. I hope it can make a change.

But I never said that red children were pformed from entrepreneurial culture to professionalism.

Professionalism is not contrary to entrepreneurship, spirit is spirit, culture is culture, entrepreneurial spirit is constantly expecting and dreaming for the future, and has strong will and practical action to solve it.