What is the future trend after 2020?

I particularly like to talk with investors about future trends.

Why?

Because investors will use real gold and silver to pay for their own research and judgment. If they are wrong, they will lose money.

In July 2020, I led the members of the "Ask China" entrepreneurial team to visit Tiantu Investment and consult with CEO Feng Weidong.

Tiantu Investment is an investment institution focusing on consumer goods.

Feng Weidong has won the titles of Top 100 Investors in the Investment Circle of Zero2IPO Group in 2019, Top 100 Best Venture Investors in China of Forbes in 2018, Top 100 Best Venture Investors in China of Hurun in 2016, etc., and has been rated as one of the top 10 investors in China's new consumption field by the list of investors in China, 36 krypton and other companies for many years in a row.

You must have heard or seen the enterprises they invested in:

Xiaohongshu, Zhouheiya, Baiguoyuan, Naixue's tea, Feihe, Zhong Xuegao, Master Bao's pastry, melon seed used car, Jiangxiaobai, etc.

What did we ask Feng Weidong for advice?

What else can it be? It must be what many people care about most, In the eyes of investors, what will be the trend after 2020?

Faced with this problem, Feng Weidong, President Feng, a firm scientist, will never hide when sharing, and will teach his investment logic, trend judgment, brand creation and other methodologies.

There is no chicken soup when dry goods are full.

Now, I will share with you the valuable thoughts Feng Weidong shared.

1. New trends: use slow variables to predict trends and lay out the future.

Often asked, as investors who want to bet on the future and the trend with real gold and silver, how do we predict the trend?

We cannot predict the short-term future.

But, Some long-term and trend things are determined by slow variables. Because the change is slow, the direction is one-way cumulative, and it is the result of the accumulation of human social cognition.

These can be predicted.

So, what are the predictable trends determined by slow variables?

Let's start from the demand side.

The first trend determined by the slow variable is that income increases.

In peacetime, the variable of per capita income is one-way cumulative and will grow slowly and persistently all the time, which will bring continuous changes to the entire consumption.

The second is: education promotion.

Many parents today are actually a group of people who have benefited from education. Because of their study, they can be admitted to big cities from small places.

Therefore, parents will be very willing to invest more in the next generation on the proven success path.

The third is: life improvement.

This is a comprehensive result. After the industrial revolution, the life expectancy of our entire human race has increased very quickly.

In 2019, the average life expectancy of Chinese residents will increase to 77.3 years old, and some developed countries have reached more than 80 years old.

The fourth is that families become smaller.

This trend is a change brought about by urban civilization.

For thousands of years, China has regarded the idea of four generations living together as the ideal of family.

But now, after marriage, children will basically go out to set up their own families, and even now there are more and more single people.

The above four trends, income increase, education increase, life expectancy increase and family size decrease, are profound changes determined by slow variables on the demand side.

below, Let's take a look at the supply side and see what trends will be determined by slow variables in the future.

The first is: market changes.

Take channel change as an example. In the past, we thought that the Internet was a non mainstream channel, but now it has become a mainstream channel.

Previously, CCTV was the mainstream media. Now, with the rapid rise of Hunan Satellite TV, iQIYI, Youku, Tencent Video and other online media have also become a force that cannot be ignored.

The second is technology empowerment.

Make full use of the Internet to empower all walks of life, which will become a must for every industry.

In the past, many people said that the Internet is a dimension reduction attack on traditional industries, and Internet technology is a killer weapon.

But slowly, the Internet will become an infrastructure on which every industry naturally grows.

The third is cost change.

After the Internet becomes an infrastructure, with the development of society, we will establish a security network covering the whole people to maintain the operation of the market economy.

This is bound to bring cost changes to all walks of life.

The fourth is regulatory change.

In the future, the government will supervise more and more aspects of the economy.

Above are the eight trends determined by slow variables that I introduced to you from the demand side and the supply side respectively.

These are profound changes. If we don't see these changes when we build brands, we will be abandoned by the times.

2. It belongs to new product category in the future.

So, how can these trend forces be implemented into our specific enterprises?

We believe that these trend forces will be implemented into something called category differentiation.

what do you mean?

Selection is a foundation of our brand investment.

Then why do I say that trend forces will eventually be implemented in category differentiation?

There are more and more consumers in one category, and it is bound to be difficult to adjust.

If these groups cannot be effectively satisfied are relatively small, they can only tolerate it.

But if these groups are large, there will be enterprises, brands and products to meet them.

These differentiated products produced for the needs of a small number of people are differentiated to a certain extent. Therefore, a new category was born.

This is category differentiation.

Take shoes for example.

In the past, we went to buy a pair of sneakers and told the clerk to buy sneakers directly.

That can't be said now.

Now if you say, buy a pair of sports shoes, the clerk will ask you, what kind of sports?

Just say sneakers.

The clerk will ask you, what is that ball? Football, basketball, badminton?

This is the power of category differentiation.

The future belongs to the new category.

They are entrepreneurs who can understand this trend and follow the trend.

3. New brand: why are you, not the incumbent giant.

At this time, many entrepreneurs may encounter a headache.

That is, Why do you create new categories and brands? Rather than the incumbent giant?

There are many theoretical studies on this point. Today I would like to talk about a path that I think entrepreneurs have a chance to defeat giants.

What path?

That is to do something that the giant "can't look up to, can't understand, and is too late".

First, let's start by saying: I don't like it.

What are the things that giants don't like?

Let me list three points.

That is: Small demand, non standardization and hidden potential.

The giant is large, so once it starts, it likes to do things with clear prospects, standardization and public demand.

At this time, those giants don't look up to it. The small demand, non-standard and hidden potential are the opportunities for entrepreneurs to create new brands.

Second, let's say: I can't understand.

Let me list 3 points for your consideration.

That is: New media, new channels and subculture.

what do you mean?

In other words, as a startup company, you should not enter the traditional media, channels, and value networks to compete with giants in the first place, but make full use of subculture, new media, and new channels.

Why?

Because many subcultures, new media and new channels are very cool and trendy.

For these practices, big brands can't put down their airs and posture.

This also gives entrepreneurs the opportunity to create new brands.

Third, finally, we said: It's too late.

What is too late?

As an entrepreneur, you have done something that giants don't like For example, create a new brand with new media, new channels and subcultures that giants cannot understand.

With the development of time, subculture has become the mainstream culture, and new channels and new media have become the mainstream media and mainstream channels.

At this time, it was too late for the giant to do it again.

It is too late.

You can also say that you have the first mover advantage over the incumbent giants.

What are the first mover advantages?

From the demand side, there are three first mover advantages: Brand effect, network effect and migration cost;

From the supply side, there are also three first mover advantages: Economies of scale, learning curve, factor monopoly.

In addition to these six first mover advantages, there is also the first mover advantage of scope economy, which belongs to both the demand side and the supply side.

Let's speak one by one.

1. Brand effect.

When you are a category pioneer, there will be very few brands competing with you at the beginning, Once your brand has defined a category, the latecomers no longer have the meaning to do it.

Take Jiangxiaobai as an example. After Jiangxiaobai's careless writing became popular. If other brands do the same as Jiangxiaobai, will customers take photos and send friends?

Very few, because everyone is tired of aesthetic appreciation and feels not fresh.

At this time, it may cost more than 10 times more to achieve the effect of Jiangxiaobai later.

This is the first mover advantage of brand effect.

2. Network effect.

Many people are familiar with the concept of network effect, The more people use it, the greater the value.

Many companies in the Internet field have network effects, such as WeChat.

In the field of consumption, is there any network effect?

yes , we have.

Take Moutai for example.

If you have dinner with an important person, even if you don't know whether the other person likes to drink Maotai, you will not make mistakes when you take it out, and the other person will feel your respect.

Because Moutai is a good wine, consensus has been reached among consumers.

However, if you take out a wine that has not reached a consensus, you may spend half an hour to explain to the other party where the wine is good and where it comes from.

Otherwise, you are afraid that the other party will misunderstand and you do not respect him.

This consensus is actually a network effect and a first mover advantage.

3. Migration costs.

Migration cost means that when a user uses a product, he or she will also invest some resources in the product. If he or she does not use the product, then his or her resources will be cleared.

For example, online disks.

In the past few years, you have saved 2 T's of data in Baidu online disk. At this time, there is a new online disk tool, which may be more favorable than Baidu online disk. Can you change it?

Probably not.

Why?

The money is cheaper. If you want to move the 2T data to a new online disk, you'd better forget it. Use the original.

This is the first mover advantage of migration costs.

4. Economies of scale.

The so-called economies of scale mean that the larger the quantity, the lower the cost.

As an entrepreneur, you should do it first. If you don't make mistakes, you usually have the largest scale and the lowest cost.

So, At the same price, because your cost is low, you can still make money, but others will not make money again.

This is the first mover advantage of economies of scale.

5. Learning curve.

What is the learning curve?

That is, when you first started doing this, it was not complicated, and consumers could tolerate the imperfections of your products.

As time goes by, you are constantly making micro innovations, and then the entry cost of latecomers is very high.

Because the product he wants to launch is not compared with your first generation product, but with the product you are launching now.

But your current product has already iterated many versions, and the latecomers can't do so in a short time.

This is the learning curve first mover advantage.

6. Factor monopoly.

What is factor monopoly?

That is, as a starter, you have the opportunity to get some rare elements, such as patent formula, license plate, and even name.

These elements, If you have it first, the latter can't do it, or they have to pay a higher price to be like you.

This is the first mover advantage of factor monopoly.

7. Economies of scope.

What is scope economy?

That is, once consumers like one of your products, there is a great chance that they will also buy other products of yours.

Take Moutai as an example.

In the production and fermentation process of Moutai, there is no way to completely standardize, which will make the quality of wine uneven.

But you can't make all these wines into Maotai without discrimination.

Those with lower quality will be made into other sub brands of Maotai and sold.

At this time, if you don't do this, you will pour it out, which will actually increase the production cost of Maotai liquor.

This is the first mover advantage of economies of scope.

So, as an entrepreneur, in the future, why can you, not the incumbent giant, create a new brand?

The path I suggest to you is, Do something that the giant "can't look up to, understand, and it's too late".

author : Liu Run, the founder of Runmi Consulting, the principal of the 400000 students "Five Minutes Business School", the former director of Microsoft strategic cooperation, and a well-known domestic business consultant. We have provided strategic consulting services for many well-known enterprises such as Haier, COSCO, Hengji, Baidu, etc.