Secrets of Pinduoduo's success: Letters from the founder

Translated to English in one place for the first time

Pinduoduo and its subsidiary Temu have shot to worldwide renown, but I was surprised to find that the various letters founder Colin Huang has written, which are treated with the same reverence as those from Buffett or Marks in China, haven’t been fully translated into English - hence why I want to collect the best in one place.

I recommend everyone read the first 3 letters on general investing and business; people interested in Pinduoduo read the shareholder letters; and people who want to learn more about Colin Huang read the final 2 letters as well.

Table of Contents

1. Investing like an entrepreneur and entrepreneurship like an investor

2. Turning capitalism on its head

3. Free market or central planning? Thoughts on supply side reform

4. 2018 shareholder letter

5. 2019 shareholder letter

6. 2020 shareholder letter

7. 2021 shareholder letter

8. My education

9. My first job

Investing like an entrepreneur and entrepreneurship like an investor

April 2016

I’ve recently met some institutional investors and gotten to understand the investment procedure of institutions. It feels like sometimes the perspective of an investor and an entrepreneur can be pretty different. I never raised capital with my previous startups, and when I think about how I invested in secondary markets, my approach seemed to be the same as when I ran my startup, so the difference in perspectives is a foreign experience for me. Maybe the way I was taught about how to invest and be an entrepreneur is relatively niche, but time has shown that it probably works, so I think sharing my thoughts on investing  and entrepreneurship could be useful.

1)      Investing like an entrepreneur

Buffett said that buying a stock is like buying part of the company. My understanding of this is that you need to find quality companies and good management, with a  view to holding for the long term. This is actually very similar to entrepreneurship.

You have to pay attention to the  business model - pick the right model (not all models work); and spend a lot of time to understand the minutiae of the model. At the same time, you have to pick the right ‘partner’ - treating the founder/CEO as your prospective future partner. If their character or the culture would make you reluctant to work with them for the long term, then you’re better off passing on the stock. It’s the same as entrepreneurship. If there’s a prospective employee who you feel is a poor long-term fit, but is useful in the short term, my experience is that you’ll regret hiring them. If it’s a prospective partner and not an employee, it’ll be devastating rather than just regret.

When you invest, aside from checking the business model and the team’s quality, you also need to make sure it’s a good price. This looks different to entrepreneurship, but if you think deeper it’s the same again. Buffett’s mentioned a lot that Munger helped him evolve from cigar butt investing to buying wonderful companies at fair prices. The logic is easier to comprehend in entrepreneurship. If a business is easy, and cheap to enter, it won’t be a good business that brings in lots of cashflow over the long term. Good decisions are often difficult, and require painful sacrifices. A good company should spend its time attacking the hard problems, rather than chasing every little thing (If you have this mindset you’ll usually end up empty-handed. This is completely different from systematically building up small wins). Another price-related factor in investing is to look at the value at risk. The entrepreneurial equivalent is to check whether a new business expansion could potentially kill the company. Survival is the single most important thing for an entrepreneur. At the same time, you need to check whether you have the right to win. Can you win? Do you have enough resources to win?

2)      Entrepreneurship like investing.

It’s often said that a few decisions will shape your life – what you study, what career to pursue, who you marry. Just like how the business model is a critical determining factor in investing, your choice of startup industry and business model will have a huge impact on the eventual outcome.  Spend lots of time thinking about what you should do; and only then think about how you can do it well. It’s far better to slowly venture down the right path than to blindly sprint the wrong way. Buffett’s said that he’s seen lots of mediocre people make oodles of money in finance; and lots of incredible talents struggle in the wrong industry. Just like investing, in entrepreneurship, making the right decision is often far more important than how hard you work. Slowly venturing down the right path – like compounding at 20%/year for 20 years will leave you in a far better spot than doubling your money this year and losing half the next.

Buffett and Gates once gave a talk to some MBA students, and asked them a question: “If you had to ‘invest’ all your money in one of your classmates, who would it be?”.

Time and time again, the choice wasn’t the smartest, or the most capable classmate – it was the most trustworthy and reliable person. This is a great allegory for choosing a cofounder. You need a trustworthy long term partner more than a brilliant maverick that might stab you in the back at any time.

Buffett often mentions the concept of ‘business moats’ . If we think about every decision in entrepreneurship as an investment decision, then we have to determine which of the things we spend our time and money on are ‘assets’ and which are ‘costs’.  The simple answer is that the things that widen our moat over time are assets, and those that don’t are costs. There’s actually not a lot of risk in buying ‘assets’ – the biggest one is overspending. Wasted costs are far worse, because you’ll often have negative side effects. When running a business, there’s a special type of ‘asset’ in the form of a synergistic, united employee culture. This is offset by the cost of acquiring labour or skills. Identifying these two and turning the cost into an asset has a very high ROI. If we could capitalise all our costs I imagine our shareholders and CFO would be over the moon. But interestingly, often when we invest, we barely spend time on determining whether expenses are assets or mere costs.

(ed. Note. My understanding of what he’s saying is that similar to R&D capitalisation, other expenses can be either period costs or have long term benefits not accurately reflected on the financial statements, and determining the long term utility of various expenses is critical)

Turning capitalism on its head

September 2017

Warren Buffett captures the very essence of capitalism. His entire career can be described as the relentless, single-minded, rational allocation of capital. I like reading his shareholder letters. Decades repeating the same simple, pure message of capitalism. Half of his empire is insurance; and half is investing. Half sells risk management; and the other half takes the generated float and plows it into a moaty, compounding cashflow farm.

Originally, I wanted to write a post about insurance – ‘The ultimate show of capitalism’. TLDR: Insurance is a great reflection of capitalism. The rich have capital and thus an ability to weather risk; the poor can’t weather risk, so they need to buy insurance from the rich and derisk. Even though insurance gives  poor people a stable, certain life, it’s still a transfer of wealth from the poor to the wealthy at the end of the day, and the way it continually increases the power of capital is why I call it the ultimate show of capitalism. Insurance can turn the ethereal concept of ‘Wealth = safety’ into reality. If the market is not regulated and the law protects capital, then it’s very likely that income inequality will only get worse.

In my opinion, the reason Buffett is worthy of respect – some might even call him a great man is that he’s not just an incredibly talented, relentless capitalist; he fully knows that money is not the ultimate goal. While he frolicks in the capital markets with his wealth, he very wisely gave most of his money to the younger Bill Gates, trusting him to responsibly redistribute that capital. At the same time, he puts pressure on other billionaires to donate; and suggests the US raise the tax on the wealthy to redistribute wealth more equitably. (Interestingly, Buffett’s father was a Republican senator, but these ideas don’t sound very Republican)

In capitalist America, Buffett gets the joy of playing the two games of insurance and investing capital, and doesn’t have the crushing responsibility of deciding who in society he should be giving back to. I think that’s super smart, it’s probably the simplest way a capitalist can gain happiness in a capitalist system. In the never-ending cycle of gathering and distributing capital, Buffett focuses on the first half. In a post-capitalist world, let’s assume the effective redistribution of capital is just as important as gathering it. I can’t help but ponder – can you reverse the regressive effects of insurance and compounding to make wealth more equitably distributed? Are there any mechanisms that could allow the poor to sell ‘insurance’ to the rich, letting them monetise their soft skills, intent or risk appetite? This would enable a more granular feedback loop, and accelerate the flow of capital between the rich and poor.

For example, there’s a thousand people in summer that plan to buy a jacket for winter. They band together and send an order to a factory, willing to pay a deposit of 10%. In this scenario, it’s likely that the factory would be willing to give them a 30% discount for the guaranteed demand. The factory can plan ahead to manufacture these jackets when there’s a lull in demand and machine downtime; and it derisks inventory purchasing. The factory can even further monetise this guarantee further upstream through the supply chain to further reduce costs. From a transactional perspective, it’s like a bunch of people spent $1 to buy $3 limited time coupons, and then because the factory sold these coupons, they can themselves buy similar coupons upstream. If these thousand people had decent credit and indicated their plan to buy jackets, but didn’t pay a deposit, would the factory still be willing to give them a discount? Probably, but maybe its 8% rather than 30%. This is like the factory is using its own coupons to purchase insurance from consumers for derisk future demand. If you take this a step further, there are actually a lot of methods you can productise, tokenise and otherwise monetise consumer intent and implicit knowledge about their own future needs. If we assume everyone has to express a binary decision about their future demand for a jacket, that decision is like a coupon tied to the consumers history of accurately predicting their own future. Would that coupon be worth something to the capitalist running a factory? How would you price this coupon? What restrictions should there be around this transaction?

The core insight is that everyone, whether rich or poor, knows more about their own future needs and plans than outsiders do. And these future intentions and plans, as well as the probabilistic certainty in thesis future is of value to the supply side of the market. It can reduce uncertainty, and improve the efficiency of capital/resource allocation. This ‘reversed insurance’ can monetise everyones credit history and intentions. Insurance is no longer poor people accumulating a credit history and paying interest on a loan from the rich (effectively paying more for the same good); or spending money to buy certaiunty. Instead, it’s the rich capitalist transferring wealth to the poor to buy certainty for manufacturing. The flow of capital is reversed.

The question then is how we can productise this self-knowledge arbitrage for everyone, whether rich or poor; how we can express intent in 1s and 0s; how we can standardise it and make it tradeable like a discount coupon; and how we can tokenise and package these ‘intent transferal coupons’. Aside from this, we need to consider decentralising these products (because there’s too much variation in them) while avoiding fraud and creating a positive reinforcement loop. Maybe ‘reverse insurance’ is the killer app for blockchain…

Editor’s note: The perspective on how Pinduoduo gets lower costs by monetising certainty is interesting, but the whole capitalism diatribe seems a bit of a stretch. Perhaps its just part of the game you need to play in China.

Free market or Central Planning – thoughts on supply-side reform

September 22 2017

I was chatting to a friend recently about the history of clothing manufacturing, and he told me an interesting story. World War 1 created a brand new need for clothes to be mass manufactured cheaply and quickly. This demand resulted in a little innovation we know today as standardised sizing. Apparently, the famous Burberry trenchcoat was also created for the military. I haven’t fact-checked his story, but I’ve seen the ads from Burberry that use emotional war stories. I was pretty surprised (and a bit sceptical) when I first heard my friends story, but it did remind me of some thoughts I’ve had about supply-side reform in the past year.

Supply and demand are a chicken and egg problem – it’s debateable which comes first. If you’re going to implement reforms, you ultimately need to start from one side of the equation, and the story my friend told me reflects a rather strong feeling I have on the matter:

If you’re going to fundamentally reform the supply side, you have to first reform demand, which is the leading factor in the pair.

The first type of supply side reform is to satisfy existing demand that has never been fulfilled. For example, people have always wanted to fly. When the Wright brothers satisfied this demand, it also satisfied the demand people had to speed up international travel. This type covers the vast majority of the supply side improvements, fulfilling people’s demands for faster, more, better things. We humans are always sprinting along the hedonic treadmill, or if you want to be nice about it, we aspire to be better.

The second type of supply side reform comes from a new application being created. For example, a world war. Under this new and sudden application, clothes and many other things saw a need for standardisation, mass production and scaling, pushing reforms on the supply side of manufacturing, management and logistics.

The third type comes from a change in the cost of collecting information. For example, after smartphones were invented, the cost of collecting locations, routes and aggregating demand for ridesharing declined dramatically, creating room for Uber.

There are probably some more types of supply side reform I haven’t covered, but ultimately it should all come down to a response to unmet demand. Significant changes in application (novel scenarios like world wars) are rare. People’s existing demands becoming higher are a lot more common, but are all of these worth pursuing? That’s an important question to consider, but not in this letter. The third type of reform - satisfying existing demand through more efficient collection of information has huge potential, and is worth encouraging in most cases. If you take this third type a bit further, there’s a huge amount of unexplored possibility for lowering cost and increasing efficiency in unifying space and time. Abstractly, the biggest downside of large-scale centrally planned supply side production is the lag (from mismatches between forecasts and actual demand;inflexibility of large production runs etc). If we can introduce an element of central planning into the previously fully market driven demand side, we can move into a semi-market driven supply side with small made-to-order production runs, i.e.:
Use a demand-side ‘semi-planned economy’ to drive a supply-side ‘semi-market economy’ into existence.

Traditional e-commerce platforms like Amazon and Alibaba digitalised storefronts for commodity manufactured goods. This increased price transparency and competition among merchants, but didn’t affect the manufacturers significantly. Factories still need to plan their production runs months, or even a year in advance, mostly using guidance from offline supermarkets/retailers that represent most of the volume. The issue is that as competition increases online, the divergence with the offline-led projections increase. The high-volume export demand projections also diverge more with online SME retail sales. Factories are still mostly reliant on the likes of Walmart and Costco, and the marketisation of middlemen merchants doesn’t have any ability to change the centrally-planned lag of the supply side factories. In my opinion, we have to solve this lag and production inelasticity from the demand side.

For example, end consumers may demand a widget in different colours, at different times, from different places. If we can make the end consumer give up their desire for instant gratification and cooperate with other consumers, then we have an opportunity to group consumers into a single, planned order. We can also use consumer relationships to our advantage, asking consumers to check their network for hidden widget demand to gain more ordering scale. These grouped orders may not be as big as an order from Walmart, but it could be enough to make it economical to start a production line. This way, we can break a large Walmart order into 50 small orders. On the supply side, we can also go from a single centrally planned factory producing these products to 50 smaller factories competing against each other in a free market to produce the widgets.

If we can achieve this, it would solve the conflict between the transparent middlemen and inflexible manufacturing. We’d get more planned demand; and more market-based supply. The mismatch between projections and actual demand would decrease, increasing the efficiency of production and reducing reliance on traditional offline retailers. Clustering demand properly would let us produce 50 differentiated widgets in direct response to actual demand, rather than just 1 version decreed by the likes of Walmart’s sourcing managers (central planners).

Editor's note: This essay, written in 2017 seems incredibly prescient. Shein in particular has taken this idea of small, quick turnaround production runs in response to market demand to global dominance in the fashion industry. 

I’ve also included Colin’s shareholder letters posted directly by PDD IR below for the sake of completeness. The sources are linked in the headings.

2018 Letter to Shareholders

July 25, 2018

Pinduoduo is not a conventional company. We founded Pinduoduo when the China market accepted the status quo of the existing e-commerce landscape and thought its formative phase had come to an end. Within three years, Pinduoduo has attracted over 300 million active buyers and over 1 million merchants through a new shopping format and experience. This exponential growth shows unlimited potential of our platform. As our three-year-old platform is still burgeoning, we know we face many obvious challenges and uncertainties ahead. Hence, why are we bringing Pinduoduo into the ebbs and flows of the capital markets so soon? We'd appreciate you hearing our thoughts in this letter.

• We think the e-commerce business is closely tied with social impacts and responsibilities, and therefore its growth and value should be shared with the public;

• We believe in the tremendous potential of our platform; therefore, if we take a long-term view, there is no difference for our listing in three years, five years or longer. On the contrary, with public scrutiny and regulatory supervision, we may grow better and stronger; and

• We envision Pinduoduo to be an organization that reports to the public. It should create value for the public, rather than being a show-off trophy for a few or carrying too much personal color. We want it to be an independent organization that brings value to the society with its unique organizational structure and corporate culture. Most importantly, it should continue to strive to better itself.

Now as the founder, I would like to give you more color on my observation and vision for Pinduoduo so as to give you a more concrete understanding of the company you are investing into.

What does Pinduoduo do?

• Pinduoduo dedicates itself to creating a commingled "space" between cyberspace and physical space, where users can find the most value-for-money merchandise that meet their different needs and derive happiness;

• Pinduoduo leverages a platform and an ecosystem comprised of hundreds of millions of users, merchants, platform management personnel/operators and platform infrastructure/service providers; while each player is interdependent with one another, all of them evolve and improve as they constantly try to balance cost-effectiveness, efficiency, user experience and satisfaction;

• Pinduoduo's survival depends on the value it creates for its users; I hope our team wakes up feeling anxious every day, never because of share price volatilities, but because of their constant fear of users departing if we are unable to anticipate and meet users' changing needs; and

• Pinduoduo is dedicated to investing in the future and will always focus on the long term. It might appear too aggressive or too conservative at times. However, it always follows the basic and simple principle—growing its long term intrinsic value.

Company Value

Pinduoduo's core value is "本分" (Ben Fen). It is difficult to express it perfectly in English, but it essentially means to adhere firmly to one's own duties and principles. There are several layers of meaning here:

• Be honest and trustworthy;

• Discharge our own duties and responsibilities regardless of others' conduct;

• Insulate our minds from outside pressures so that we can focus on the very simple basics of what we should be doing;

• Never take advantage of others even when we are in a position to do so;

• Self-reflect and take responsibilities when problems arise instead of blaming others.

Specifically for Pinduoduo, the management's (Ben Fen) is to relentlessly focus on value creation for our consumers. We may not always be understood, but we always do things out of goodwill and do no evil.

Going forward

In the past three years, Pinduoduo has established and promoted a new e-commerce concept and experience of "team purchase" (or "拼", "pin"). We can reasonably expect that it would evolve into a variety of "pin" formats. We also hope that other innovative formats for different user scenarios will be created just like how we have created "pin" today.

If you close your eyes and visualize the next stage for Pinduoduo, it would be an exemplification of a multi-dimensional space, seamlessly integrating cyberspace and the physical space. It would be a combination of "Costco" and "Disneyland" (value-for-money and entertainment combined), driven by a distributed network of intelligence agents (versus the popular super-brain-like centralized AI system). It not only matches information efficiently, but also constantly puts the social interactions of the universe into consideration to make the entire experience more enjoyable.

As part of the process to constantly meet users' needs, we are highly aligned to be the driving force to improve the efficiency and quality of the supply chain. One good example would be the agricultural industry. China has relatively less arable land per capita given its population and landscape. This is different from countries like the United States, where large-scale farms are prevalent, and the production and transportation of agricultural products could be highly industrialized. We find "pin" an effective solution to aggregate consumer demand, match them with batches of agricultural produce, and mobilize China's well-penetrated and affordable logistics capability to have perishable and fresh produce shipped directly from farms to users and bypass multiple layers of distribution. This not only enhances user experience, but more importantly, helps to turn small scale agriculture production of different quality, variety, and volume into a semi-customized batch processing mechanism. It lowers the unnecessary costs of agricultural consumption and potentially makes small scale customized services viable. The social impact and value to our society would far exceed our business success or the perceived valuation of the company. We are excited by the small impact we see today, and think this would be a trend even beyond agriculture.

Appreciation for our investors

We are grateful to those who are willing to invest in Pinduoduo after reading through the utopian ideas above. It is not easy to take the leap of faith believing in such an unconventional company, which strives to meet both economic and social needs of users, and to make a positive impact to the society. The pursuit and focus of our long-term vision and intrinsic value may not always translate into near-term profits. Instead, we hope to show you the true colors of our company no matter how bumpy or rough the numbers may seem to be. We ask you to ride the journey with us for the long term. We believe it will be wonderful.

So, what should you expect from Pinduoduo as an investor?

First of all, you can reasonably believe that we are far from the best we could achieve. In fact, we are probably at our most rudimentary level of services now if we look forward in 10 years' time. Yet, many of our users have chosen to believe in us. We are encouraged and have every reason to believe that as we work hard day after day to improve our services, more and more users will stick with us, believe in us.

Secondly, you should expect a team with passion that is trustworthy and always focuses on serving users and our company's intrinsic value. We have the courage and the ability to invest in long-term opportunities.

Pinduoduo, as a growing organization, will always dedicate itself to do the right things, to create value for our society, and to make this world a better and happier place.

2019 investor letter

April 25, 2019

These are interesting times. The world is changing at an unprecedented pace. Good and bad changes are simultaneously unfolding, many of which are unexpected, and some may even leave people anxious or in disbelief. The inertia of old forces remains strong, and the problems that arise from them persist. At the same time, new forces, new ideas and new approaches are emerging. As Charles Dickens wrote in A Tale of Two Cities – “It was the epoch of belief, it was the epoch of incredulity.” Whether you believe or question, by choice or by chance, we and the world around us are sprinting into a new era.

(1) “New E-commerce” in the New Era

In the new era, what do we mean by “new e-commerce”? What is Pinduoduo’s relationship with the forerunners in our industry? First of all, we think the primary characteristic of “new e-commerce” is “Benefit All.” This is determined by the era in which “new e-commerce” was born. When the Internet was first introduced to China twenty years ago, it was accessible only to a select few – the more educated and the more affluent. When we launched Pinduoduo in 2015, whether you were in the city or the countryside, whether you were a professor or a farmer, mobile Internet was equally accessible to all. As the new platform born of this time, our mission has been to serve all and benefit all. From day one, we have devoted ourselves to this mission, working hard to increase the income of farmers by bringing agricultural products to cities directly, while providing savings to the urban population. This effort was the most important driving force behind the growth of our platform. Thereafter, through the C2M (Consumer-to-Manufacturer) model of direct sales from factories, we have improved the value-for-money proposition of the merchandise on our platform, thus providing affordable and better-quality household items to all. This marked another significant step towards our mission of benefiting all.

The second characteristic of “new e-commerce” is "People First.” This is in the DNA of “new e-commerce.” Pinduoduo was born in the mobile Internet era, bypassing the PC era’s search-based online shopping model which placed products first. “New e-commerce” no longer treats each individual merely as traffic nor does it simply take wholesale distribution of such traffic as its business model. Instead, “new e- commerce” tries to understand the human touch behind each click; it tries to aggregate similar needs through analyzing the connections and trust amongst people. Only when we wholeheartedly serve and respect people, can we harness the collective power of the people and transform long-cycled scattered demand into short-cycled aggregated demand. This introduces the possibility of on demand customized production, improves supply chain efficiency, and returns value to their creators – the everyday workers. “New e-commerce” also aims to create more happiness through greater interactions during the shopping experience. Features like Duo Duo Orchard are amongst our early experiments and have demonstrated great potential.

The third characteristic of “new e-commerce” is "More Open.” This is a conscious strategic decision. It is also the requisite of the new era. Our strategy has never been to disrupt a monopoly in order to create a new one of our own, but to disrupt in order to provide a choice. The rapid growth of Pinduoduo is the inevitable result of every player in the industry fighting for its long-term survival. Taking the logistics sector as an example, despite being on a weaker footing, our e-waybill system has become the second largest in China and probably the world shortly after its launch in March. This is not the result of our hard work or being smarter than others, but simply the will of the people. Deep in their heart, nobody likes to be coerced. Despite countervailing forces, people’s desire and hope for having a new choice for their long-term survival is irresistible. While other mainstream e-waybill systems have till now required the merchants in their ecosystems to only use their designated waybills, we still allow our merchants to choose from other systems. We hope this could set an example for the industry to become more open, to release the energy from fruitless and short-sighted fights for monopolistic power, and to divert them to more worthy causes, such as improving the logistics efficiency of agricultural products. These are much more meaningful initiatives that can benefit our society and people. From the progress to date, our strategy has brought evident value to the logistics industry. Apart from logistics, in cloud computing, our current scale allows us to either build our own facilities, or we could use a single provider, but we choose to include all the mainstream cloud computing platforms. In terms of payment processing, we are connected to all the mainstream payment platforms. We believe we should leave the choice to consumers.

Between the old and the new, many people tend to view this as a battle of life and death. Much like the ancient Roman spectators in the Colosseum, their entire world view is limited to a zero-sum game. Perhaps the dueling of the gladiators is more sensational, but the lasting reality we see is more in line with how Mother Nature encourages diverse and constantly evolving co-existence among all things.

“New e-commerce” is a latecomer, but also an innovator. It is young and weak with much to improve, but it is also a new force, full of vitality and hope. It represents the way of the future. At this opportune time, Pinduoduo, through its business model and technological innovation, has disrupted the status quo and created a new shopping scenario. We hope we can lead the way in building a world that will “Benefit All”, put “People First” and be “More Open.”

(2) Where We are Now

2.1 Pinduoduo is Still a Young Start-up

Even at its scale and pace of growth, Pinduoduo is still only four years old. It is like when Yao Ming just started in elementary school. He might have been quite tall, but he was nevertheless only an elementary school student. At that stage, what he needed the most were adequate nutrition, appropriate training and life experiences. Occasionally, he got pushed onto the court to compete head-to-head with adult players. It was during those times that the referees and coaches should have watched closely to decide whether the competition was fair – would this “little grown-up” become a stronger player through the cuts and bruises from the game, or would he suffer injuries that could be career threatening. We believe that everyone would prefer to see more talented players emerging and contributing to exciting games, rather than brawls on the court.

As his guardian, if you wanted to nurture him into a kind and independent individual, having him involved in community service or encouraging him to earn some pocket money on weekends might not be a bad idea. But it might not be a good idea if you asked him to count his pocket money in the piggy bank every now and then, and to solely keep it there. Investing in something that would benefit him in the future, such as a new pair of basketball shoes, might deliver better returns. This is because this "little grown-up,” having been pushed onto the court, had already proven his capability and potential to generate revenue” and make real money at any time.

Similarly, at this current stage, Pinduoduo has the ability to generate revenue, but it is weakly correlated with the large amount of spending we choose to incur. These short- term expenses are highly discretionary. In fact, we view a significant portion as long-term investments where we foresee meaningful continuous returns. It is probably not a good idea to put our money “in the piggy bank" into a fixed deposit at this stage. Hence, we will not change our business strategy for a considerable period of time. We will continue to focus on building our intrinsic value and proactively seek investment opportunities that can drive the long-term value of our company, even if these investments are recognized as expenses under the accounting standards.

2.2 “Forced Exclusivity” and Thereafter

The current “forced exclusivity” observed in the market environment is likely to persist for some time. However, such a practice will eventually be dismantled; co-opetition for innovation, new opportunities and growth is inevitable.

Pinduoduo disrupted the existing equilibrium of China’s e-commerce landscape. Naturally and consequently, it has triggered existing players to react. Sometimes, these reactions are out of bound. But none of them are constructive to the industry; they do not create value for consumers, nor do they deliver benefits to brands and manufacturers. In fact, most are at significant cost and damages to consumers and ecosystem partners. More often than not, these attempts to establish or prolong any monopolistic control are both wasteful and destructive. Sometimes it is akin to “killing a thousand enemies and losing two hundred men,” or worse yet, “killing a thousand enemies and losing two thousand men.” If such exclusivity cannot be maintained over the long term, all these short-term attempts would ultimately be in vain.

And these exclusivities are destined to be broken. On the one hand, taking a time horizon of one to two years, any momentary promise, from the perspective of merchants and consumers as a whole, is bound to be unsustainable. It might even require twice the payback. On the other hand, without a scaled “new e-commerce” player like Pinduoduo, the entire value chain of suppliers, brands, cash flow and deliveries will have no choice but to rely on one single de facto system. That is unthinkable and against any healthy business environment and natural evolution of a market. Even parties who thought they would benefit from such exclusivities would gradually realize that this closed system is a disaster. Therefore, the emergence of a scaled “new e-commerce” player is inevitable. If it is not Pinduoduo, then it will be another “Costco + Disney.”

Whether the current status quo is sustainable over the long run does not depend on how much commercial benefits can be split with the relevant parties, or how many participants would succumb to such pressure and make claims counter to their best interests. On the contrary, every incident of coercion only prompts a stronger innate desire to resist. Whether a business model or landscape could be sustainable fundamentally depends on the value it brings - whether it is beneficial to the value creators themselves (factory workers, farmers, etc.), whether it is irreplaceable, and whether it fulfills its social responsibilities.

(3) Future Strategies

Regarding our next step, I think it’s mainly centered around the following four points:

• Commit relentlessly to a consumer-centric approach, explore innovative solutions to solve existing problems, and offer new contributions to society;

• Fulfilling our social responsibilities is the cornerstone of our value system – protect intellectual property rights, combat counterfeits vigorously, support farmers, and alleviate poverty. We will focus on and get to the roots of these problems pragmatically and solve them persistently one by one;

• Focus on the long-term intrinsic value; we should not be afraid to invest for the future; and

• Continue to evolve our organization, and step-by-step make it a more inclusive, transparent, global and mature public institution.

The torrent of our times flows with great strength and vigor; its direction is unstoppable. Pinduoduo has gone through many ups and downs over the past four years of rapid development. We have prevailed because of the vote of confidence cast by each and every one of our users through their purchases. In a forest, neighboring trees often vie fiercely for nutrients in deep and complex ways. However, as a whole, they are uniformly growing towards the same direction. That is the direction of the sun. The desire to grow in the direction of the sun is incredibly powerful; it can transform many things, or pave the way for future transformation. The emergence and development of Pinduoduo is not because of our capability, nor the maturity of the platform, or even our diligence, but because we grow in the direction of the sun, one that seeks to “Benefit All,” put “People First” and be “More Open.” The sun we see inspires us to abandon the imperialist mindset of zero-sum competition, and to transform our thinking towards continuous innovation and value creation for consumers and the society.

No matter how big or small our role is, our generation will eventually be pushed by therapid torrent of our times into a different, new era we can call our own.

I thank the investors who choose to believe in us and join us in this wonderful journey of creating “new e-commerce.” Let us continue to move forward in the direction of the morning sun because that is where new life begins.

2020 Shareholder Letter

April 20, 2020

What time?

In February, the world learned a new word, “COVID-19”, which upended our lives. As I write this, half of the world remains confined at home, waiting for the tiny virus that causes COVID-19 to leave us. During the early days of the outbreak, as we waited in solidarity, we eagerly hoped to return to normal. But as the world has been put on hold week after week, we start to forget time.

We cannot help but ask ourselves, what is the time we are in now and what is time?

We are in a time of crisis – of division, misinformation, and chaos. The virus has caused countless conflicts and contrasts as we watch the news around us and worldwide. It is an unprecedented time to most of us. Yet if we put it in the context of the human history, it might just be a normal incident, a drop in the ocean.

This virus is a messenger by Mother Nature. Out of self-protection and preservation, our bodies desperately fought it using all the strength and energy available. Soon enough, the war against this seemingly unstoppable virus extended from our own bodies to the broader organisms that make up our society (if we see every institution as a living organism made up of people and relationships with a mission and purpose). Companies, governments, countries, big and small, are all scrambling in their own ways to combat this life-threatening virus. In these attempts, we possibly have unintentionally introduced more damage to ourselves.

These all started with an almost invisible virus, a tiny messenger carrying some information (RNA) and a negligible amount of energy that, independent of a host, cannot even replicate. It is in stark contrast with nuclear threat, the power we feared for decades. Which is more capable of greater and more prolonged damage to our human society then - a mushroom cloud representing massive destructive energy, or a “messenger” with virtually no energy?

We cannot help but wonder if this is a lesson purposefully delivered, a punishment, a redemption, or simple irony? No matter what it is, it is surreal to me.

Time for new

When Einstein wrote down his famous E=MC², he elegantly (in some sense also arrogantly) depicted a physical world in his mind. However, what he did not explain in his theory of relativity is the relationship between the human mind and the physical world, nor the relationship between energy and information.

Today, in this bizarre time, millions of people are staying at home, physically cut off from their families and friends. Yet we are connected and unified in spirit through shared sentiment, which in turn affects the physical world. The boundaries between the virtual and physical worlds are unprecedentedly blurred, and we are beginning to see (not just envision) a new world. In this new world, the phrase “virtual reality” is obsolete. Reality has become virtual and virtual has become part of reality. Similarly, the distinction between humanity’s physical needs and spiritual needs is also becoming vague.

When this tiny virus was dropped into our world, it acted just like a catalyst in a test tube, accelerating the formation of a whole new world. Inevitably, some dimensions of the previous world are being restructured, some rules are being rewritten. The impact of this sweeping force will fundamentally and permanently change the world we are in now. Just like what I explained in the previous shareholder letters about PDD’s formation, new models are bound to emerge and grow in a whole new setup. We are indeed seeing the phasing out of some as new ones emerge. It is the time of reestablishment.

Feel the time

1. Time with an arrow/direction

Human beings have long used reason to try to understand and control the world. In many cases, we succeeded, for example, science. In science, we strive to detach ourselves from the physical world we are in, to watch it as if we are a higher being “objectively” observing, understanding, and defining the world into a finite number of equations. In this framework, time is a reversible parameter in the equation -t = (-)t. It is merely a parameter in an equation to describe a predetermined trajectory of an object.

However, when an almost invisible virus awoken us to the reality that we are not above the world, but just a negligible part of the world to be observed, the only thing we can do is to sit still and let time carry its course. We then realize time is not really a parameter in an equation, but an irreversible vector. It is a silent and relentless directional force driving everything we see and feel. It effortlessly creates asymmetry, irreversibility and mortality, no matter how stubbornly and desperately we yearn for symmetry and immortality.

While the first law of thermodynamics (∆U = Q-W) gives us a sense of control and certainty, the second law (∆S ≥ 0) humbles us to acknowledge the unknown beyond just force and mass we used to define our physical world. Entropy (S) also relates to information. I am not sure if entropy relates to the spiritual world, but it does help us feel and comprehend time. Again, it is not a reversible parameter, but a silent and irreversible driving force beyond and behind both the physical and the spiritual world.

2. Time, crowd and uncertainty

When Newton revealed F=M(dV/dT), it gave us a delusive sense of control, or at least it allowed our wishful thinking that we can finally harness force. We no longer have to worry, because every object has a calculable trajectory determined by its position, mass, velocity and force. We assume each object’s current state fully encompasses and explains its past and that each object is independent. With that, large number of interactions among large number of objects over time would increase complexity and appear chaotic and uncertain, hence probabilistic. It seems that time has created this chaos and uncertainty. And probability is just a statistical aggregation of the trajectories of a large number of objects.

However, when we are isolated at home, waiting with anxiety and unsettling emotions, we start to doubt whether the notion of each object being independent is really a valid assumption in our attempt to understand and explain the world. In our yearning for certainty, we have conveniently chosen to accept some assumptions, such as independence among each object, that can help us explain the world. Our desire for certainty is so strong that we start believing it is truth.

But what if probability is a fundamental feature of each object, rather than a result of statistical aggregation? What if the large number of objects is intrinsically intertwined and interrelated? Just like our human society, no matter how independent each individual is, we are intrinsically connected both physically and spiritually. And these connections define who we are and our existence.

Because of these connections, the divide-and-conquer approach is no longer effective to reduce uncertainty. Instead, we see the large number of interactions among individuals over time becoming a force that brings order and certainty to the society. Again, we feel the force and magic of time.

Seize the time

When COVID-19 swept the earth, every organism was confronted with the brutal reality of Mother Nature. Some of us who are relatively young cannot help but to feel grateful and lucky. This is not to say that we see an opportunity to take advantage of during the crisis. In fact, I despise the saying “don’t waste a crisis”. A crisis is a crisis. Nobody can come out as a winner in the midst of a catastrophe. Any wishful thinking to capture the ‘opportunities’ (or exploiting loopholes) to benefit oneself seems foolish in the face of time. It is akin to a presumptuous gambler trying to outsmart time at a casino.

Instead, we feel the urge to work even harder. Because we, more than ever, understand and appreciate how precious youth is. More than ever, we realize that we now have our duty to fulfil. We need to demonstrate that our generation is innovative and different, that in this new world, new species and new creatures are bound to emerge and grow. Mother Nature will flourish and progress, regardless of any individual’s will. Understanding these rules of nature does not make us feel superior, nor does it give us the power to rule and order. On the contrary, it humbles us to admit that we are just part of a natural evolution of the world. One poet captured it all: “As I silently look back, all the sorrows and joy, all the twists and turns, of life, vanished like sands in the desert. And now I know, all I have accomplished, is just a part of life.”[1]

With this perspective and in this new world, we feel humble and calm. We are tremendously grateful for our precious youth, and we feel the weight of our duty. As a result, we will be more than ever committed to investing in the future, and to be part of the driving force to the new world we are seeing. The journey has only started.

This is our Carpe Diem. This is our C’est La Vie.

2021 Shareholder Letter

March 17, 2021

This year’s shareholder letter comes slightly earlier than usual so that we can keep everyone updated on some new developments. At our Board meeting earlier today, the Board approved my resignation as the Chairman of the Board. Lei will take over as Chairman with immediate effect while continuing in his existing role as CEO. As I step down from the Board and relinquish my executive responsibilities at Pinduoduo, the 1:10 super voting rights attached to my shares will be removed. I will further entrust the voting rights of these shares to the Board, which has been guiding Pinduoduo in the past 3 years. At the same time, I pledge these shares to another three years of lock-up; they will not be sold.

I stepped down from the CEO position on July 1st last year, with the plan to fully transition the Chairman role to Lei one year from then. Two factors have prompted us to accelerate this transition.

First, the intensifying, and to a certain extent, distorted competition in some area has made me realize that the traditional approach of competing through scale and efficiency has its inevitable limitations. To change this, we must take action on deeper and more fundamental issues and seek answers from core technologies and the fundamental theories that underpin them. Although Pinduoduo is still a young company with a long runway for growth, it is about the right time to explore what’s next if we want the same quality and pace of growth in 10 years. As the founder of this company, I am probably the most suitable person to take on this task by stepping out of the business and the comfort zone to embark on a journey of exploration. It would be all the better if the journey is also aligned with my personal interests.

Second, the pandemic has caused dramatic changes externally, which accelerated the evolution of our operations and management team internally. Pinduoduo has transformed from a pure asset-light third-party model to becoming more asset-heavy, with new investments in warehouses, agriculture-focused logistics, and upstream sources of agriculture products. New businesses have sprouted and grown rapidly internally. Not only have these new developments stimulated Pinduoduo, they have also birthed and groomed a new generation of leaders and managers. It is time to let them shape the Pinduoduo they aspire to build.

So, what will Pinduoduo become in the future? I cannot say for sure, but I am happy to share my thoughts.

First, Pinduoduo will always be a company that puts the interests of its consumers and societal value first. The philosophy of “Benefit All”, “People First”, and “More Open” that we have practiced will be more distinctly acknowledged by the industry and the public. Pinduoduo, being a platform that serves the masses, will make every possible improvement – significant or invisible – prudently bit by bit and strive to create value for consumers and society. And because of this, it will increasingly be embraced by the public. The various obstacles it faces will slowly be broken and overcome, even if the journey may require some time and may be bumpy. Nonetheless, “Benefit All”, “People First”, and “More Open” should be the direction, as they will bring new life and hope in this new era.

Next, Pinduoduo will be an imaginative and constantly innovating company. Our vision of “Costco+Disney” will be more distinctly and vividly presented to our users. Even though we are still at the very early stage of “More savings, More fun”, we have already sensed the subtle differences sparked by the multiplier effect of compounding “More savings” with “More fun” and felt the tremendous force behind this chemical reaction that makes 1+1>2. Our execution and experiences of “More savings, More fun” over the past few years have led us to believe that this vision is rewarding, fun, hopeful and worth pursuing.

Finally, Pinduoduo will endeavor to become a mature and global public organization. In our 2018 Shareholder Letter at the time of IPO, we said that, “We envision Pinduoduo to be an organization that reports to the public. It should create value for the public, rather than being a show-off trophy for a few or carrying too much personal color. We want it to be an independent organization that brings value to the society with its unique organizational structure and corporate culture. Most importantly, it should continue to strive to better itself.” At that time, Pinduoduo was still a child just starting elementary school. Even though it has only been three years since then, Pinduoduo has become a youth entering adolescence. Observing its rapid transformation and growth, I am both joyful and anxious. Pinduoduo will have its own growth journey regardless of whether I am nervous, excited, or frightened as its guardian. I hope that my stepping down as the Chairman of the Board will aid this young person into independent adulthood.

What will I be doing after stepping down? I want to work on research in the fields of food sciences and life sciences. Pinduoduo has its roots in agriculture. In the past years, Pinduoduo’s contribution in agriculture has been mainly in downstream distribution and improving midstream supply chain efficiency. We have created greater income for farmers and savings for consumers by streamlining the supply chain and matching supply and demand more efficiently. However, improved efficiency in distribution and sales still does not fundamentally add value to agricultural products, nor inherently improve our health significantly. What can we do if we were to take a step further and go beyond efficiency improvements?

For example, through managing the farming process, can we implement reliable and effective control of harmful heavy metal content in potatoes, sweet potatoes, tomatoes, etc, while improving their micronutrient content in a managed and standardized manner? If the tomato could be cultivated such that every single fruit is packed with the optimal amount of Vitamin C and other micronutrients our bodies need, would our quality of life be much improved?

Or, if we could better comprehend how our bodies would react to and be affected by the different plant and animal proteins we consume, and then incorporate these insights into the synthetic production of alternative meats, could we create a next generation of meat that is simultaneously healthier, greener, and more sustainably supplied?

Taking one step further, if we further research into the protein structures and their traits in the human body, could we build on the work of the 2016 Nobel Prize in Chemistry Laureates on molecular machines to produce protein-based molecular motor that can travel through the blood vessels in the brain and unclog them to prevent strokes?

When we are young, our teachers always ask us what we aspire to become when we grow up. Like many others, I declared that I wanted to be a scientist. Alas, in the blink of an eye, I am already in my forties. It is probably unlikely for me to become a true scientist. But if I work hard and combine the chemistry that I loved in high school, the computer science that I learnt in university, and the operation experiences I acquired at work, maybe I can still make something meaningful happen. Though I can no longer become a true scientist myself, I would feel very lucky and blessed if I have the chance to become a research assistant to a future, possibly great, scientist.

My education

February 2016

I went to a bog standard primary school in the suburbs of Hangzhou, but somehow I got incredibly lucky and was admitted into a rather special secondary school: Hangzhou Foreign Language School.

 ed. note: special indeed, Xi Jinping’s daughter and Frank Wang, founder of DJI are both alums

According to my primary school teacher, I was the first student in 9 years to be admitted. The wheels of fate can be rather amusing. My teacher pushed me to apply after I won a Maths competition, and I didn’t prepare for the admission interview at all. I had no clue what the school did, and after I was admitted, I told him that I didn’t want to go! Just the name ‘Foreign Language School’ sounded awful, I wanted to go to a STEM-focused school. Eventually, I succumbed after the headmaster got involved and gave me a lecture. Now that I think about it, it’s lucky I went!

It was a great school. The teachers and students were all amazing. We had foreign teachers; overseas exchange students; and opportunities to go abroad – all rarities in the early 1990s. It was the only school in the province that had the privilege of choosing its students from across the province – all other schools worked on a geographical catchment system. This was a big part of why it got such great students, and 80% of each cohort is admitted directly to university without needing to take the national university admission exams. As a result, teachers didn’t feel as much pressure to drill us into rote memorisation, and we got to learn more off-syllabus. I remember we even watched Hollywood flicks (which weren’t typically shown in China at the time).

There were about 160 of us in a year, mostly admitted through test scores. There were a couple with less impressive results who were admitted after donating to the school. Quite a few of us were the children of the rich and powerful. It was a boarding school, so we spent all day, every day together and formed much closer bonds than our compatriots at other schools. All these factors added together to make most of us rather more western and liberal than was typical.

After I graduated, I was directly admitted to Zhejiang University. The university was experimenting with academic streams, and I was chosen for the top stream after an interview and exam. There were 200 of us who ‘enjoyed’ not declaring majors, more advanced textbooks and the best professors. However, at the end of each semester, some of us would be eliminated into the normal system of picking majors. If you survived two years, you could choose a mentor and join their lab.

Zhejiang University isn’t up to the level of Tsinghua in resources, but we still got great opportunities in the top stream. We could skip the boring, useless modules, and we got some unique opportunities.

For example, in Year 1 I was lucky enough to be accepted into the Melton Foundation. This foundation was started by the founder of Verifone, the POS terminal manufacturer. At the time he’d exited the business and invested early in AOL and Paypal. When he saw the fall of the Berlin Wall, he realised the world was undergoing a seismic change, and came up with the idea of a foundation that would choose students from emerging areas across the world and invest in creating long-term relationships between them. The hope was that the intercultural exposure would help us change the world for the better in future. The top stream of Zhejiang University was the only place the Melton Foundation picked its fellows from in China. Fellows were also chosen from India, East Germany, Chile and predominantly black areas of the United States. 5 of us were chosen from each region every year. We were given a computer and free internet so we could message each other and get to connect, and then we’d fly to one region and meet in person for 10 days a year. The time I spent with my peers from other countries gave me the chance to observe how all our daily habits differed. A side benefit was getting used to Indian English early, which later proved incredibly helpful during grad school and work in the US, where I had Indian professors and colleagues.

The Melton Foundation didn’t change society significantly, but it was life-changing for all the fellows. It made me understand just how different all our cultures are. Their perspectives, approaches to problems and ways of thinking were eye-opening. There weren’t a lot of us, so the relationships we formed were quite close – a lot of us got married, not just between Chinese couples but internationally as well.

Upon reflection, my secondary and university experience was extremely lucky and somewhat unique. I formed a few opinions early on:

1) Rising from humble beginnings is rare. Most second-generation heirs to the rich and politicians are outstanding.

2) Small advantages in specific niches, properly leveraged, can lead to big successes across the board. Having fewer resources isn’t a killer.

3) Money is a tool, not the end.

My education was fulfilling, but one regret I do have is that I was too focused on being a good student. I wasted too much time studying, and lost the chance to rebel, have fun and enjoy my youth. I’m known for agreeing with the saying “60% is the best score, not the passing score”, but this was a philosophy I arrived at many years too late.

ed. note: "60% is the best score, not the passing score"is a saying from Jiang Fan, CEO of Alibaba's e-commerce businesses. The idea is you allocate the minimum amount of time and energy to things with minimal utility, like passing exams, and dedicate the saved time to more impactful things.

My first job

February 2016

My first job was with Microsoft, interning at both Redmond and Microsoft’s Beijing research lab (the pay gap was huge😊). I decided not to go back after I graduated, because 1) I felt I could see my life after a decade if I joined Microsoft and 2) my mentor advised me to join Google. He told me “This (then-nascent) startup is pretty good. I know you want to start a company in the future, joining Google will be useful. Try it out for at least 3 years, you won’t get to understand the company from an important role if you only work there for 1 or 2 years.”

So after graduating, I joined Google in Silicon Valley, first as a SWE, then in product management. By chance, I was lucky enough to be part of the team when Google launched in China, which was an exciting time.

I spent three years at Google (didn’t wait for my RSUs to fully vest after 4 years) before leaving to pursue entrepreneurship. I have nothing but good things to say about Google, I received far more than I contributed to the company.

First, to be frank, Google gave me financial freedom very quickly. I lucked into joining Google half a year before IPO, working on developing the advertising platform backend. There were only a couple hundred engineers at the time, but needless to say the company grew very quickly. If I remember correctly, we went from earning a few hundred thousand USD/hour to millions/hour; and we went from thousands of employees to tens of thousands. My bank account balance grew at a similar clip, which felt rather surreal. It was my first job, so I didn’t have anything to benchmark to. I only properly understood my luck a few years after I left. It wouldn’t be a stretch to call joining a company like Google just before IPO a once in a lifetime opportunity.

Secondly, Google let me see the side effects of sudden wealth. It’s like what the Buddhists say about karma – you need to have done enough good things to be ‘worthy’ of sudden wealth. If you don’t have good karma, sudden wealth could be a blessing rather than a curse. I saw this play out with some early Googlers, who lost their motivation for work and started looking to hobbies from flying to DIY tinkering to startups – even if they weren’t actually that good at it; and they ended up wasting the best years of their life on meaningless pursuits rather than making something better.

Thirdly, Google helped me understand the difficulty of running a tech company in China – both as a subsidiary of a overseas multinational, and as a domestic competitor. The Chinese market is competitive and fast-moving, which is difficult for domestic companies at the best of times. For international companies, you have the added difficulty of needing to getting HQ approval through cultural barriers and physical timezone differences. It’s tough for HQ to give you free rein, which is what’s needed to keep pace with the market. A very real experience we had was with recruiting – it was far harder than it looked. When we posted a job, we could fill a stadium with the applicants, but the best talent – the hardworking, experienced, competent and morally upstanding candidates were in short supply. Contrary to popular belief, it’s often harder to make a great team than it would be for a domestic company.

Aside from these, the constant popular discussion around Google due to its success has also made me think more about Google and business in general. There are lots of great books on Google’s story already, doing a far better job than I ever could, but I had a few personal observations I wanted to record and come back to in future.

Google reminds me of China in the early days. The ‘proletariat’ (engineers) occupy a privileged position, and when their ideology is challenged, the company has a strong reaction. Google’s style of management is also reminds me of China, but after Deng’s reforms. Innovation from the grassroots is encouraged while control over critical decisions remains highly centralised – a system that lets them concentrate resources on big goals.

The mantra of ‘Do no Evil’ is deeply embedded in Google’s DNA, not a fluffy corporate slogan. Google really puts its mission and values ahead of profit. Google’s profits are a byproduct of doing the right thing, just as described in the profiles of enduringly great companies in “Built to Last”. At the same time, “Do no Evil” is a warning to Google’s potential for evil. The higher up you go in Google, the more you understand how much potential Google has for making profit evilly. Declaring “Do no evil” publicly and inviting public scrutiny is actually a very wise move.

When I worked at Google, most of our M&A was very successful. Typically, these successes were acqui-hires of great teams, who were able to integrate in Google culture and scale with Google’s resources, the opposite of acquiring to kill.

There were also some areas where Google failed to disrupt the status quo. For example, Google wanted to use the same auction-based model underpinning ads in the IPO process and disrupt the investment banking industry, but the results were underwhelming. The founders kept trying to prevent Google from being clogged with layers upon layers of middle management, but they failed at that too. And finally, Google invested a huge amount into social media but failed just as badly as Microsoft has trying to break into search. Some things are simply harder than they seem, and require far more investment than anticipated. Like death and taxes, they are inevitable.

(ed. Note: Colin’s most well-known mentor is Duan Yong-Ping, billionaire founder of BBK Electronics – oppo, vivo, oneplus phones. Duan once took a 26-year old Colin to a charity lunch with Warren Buffett. Colin was introduced to Duan through William Ding, founder of Netease, who met Colin on an online forum. Duan has commented that the mentor mentioned in this post was not him, so it might’ve been Ding)