Jia Yueting Dialogue Forbes: Xiaomi Conference Attack Means Sinister

The Chinese version of Forbes recently spoke to Jia Yueting twice in recent days. In an interview, he said that the core reason why LeTV was attacked by Xiaomi was that the company was making up for shortcomings in capital, which made the competitor panicked.

Regarding the reduction plan he had thrown at the end of May, Jia Yueting's own explanation is that this is a rare innovation in the world: “There is no founder of a company in the world that sells its stocks out of billions of dollars for a long period of five years. Interest-free lending to listed companies is very simple, but it is very difficult for ordinary people to make such decisions. This is a very tangled process."

In response to the report to be released tomorrow by Liu Yongwei, Jia Yueting and LeTV commented that this will be a collision between the new and old times on how to evaluate the value of Internet companies. He hopes to take this opportunity to start a big industry debate and discussion. LeTV.com's stock price dropped below the limit for two consecutive days last week and continues to fall by 1.34% today to close at 54.30 yuan. For stock price performance, Jia Yueting told Forbes that LeTV may still be under pressure in the secondary market in the short term, but in the long run, he is full of confidence.

The following is an excerpt of the dialogue. Jia Yueting's reply does not represent Forbes's position:

Forbes: For the past two weeks, LeTV is in the whirlpool of public opinion. You are in the center of the vortex. How do you see Millet's questioning of LeTV?

Jia Yueting: Xiaomi has panicked. Because they did not expect LeTV to enter the field of mobile phones, but also directly into the high-end market. LeTV's mobile phone sales have reached record highs, and Le Max’s total reservations have already exceeded 2 million. These figures make opponents afraid. On the other hand, millet, they do not have their own content, and they are all introduced in the form of replacements, shares, etc. In addition, they are doing the ecosystem and jumping from one piece of hardware to another. LeTV started with a video website and built a complete ecosystem. In terms of strategy, we are more forward-looking and have more advantages than our rivals.

Some people think that LeTV is best at capital operation and government relations. In fact, this is LeTV's most vulnerable link. LeTV only raised 100 million U.S. dollars in the open market, but reached a market value of 100 billion yuan. Are we very good at capital operation? We are a company with very short cash flow. Government relations are not the long list of LeTV.

Now, LeSco, with its advanced strategy, is making up for the shortcomings of capital, which will certainly make competitors nervous. I think this is the core reason that Xiaomi took the initiative in launching a LeTV attack in the near future. Their practice of developing a special attack on a listed company is also rare and dangerous. Xiaomi’s practice has affected LeTV’s original financing plan, and we will reserve the right to sue Xiaomi.

Forbes: Is LeTV's selling TV allegedly in violation?

Jia Yueting: We have already explained this issue through the press conference. (Note: On June 16, 2015, LeTV held a press conference to show that the company is currently cooperating with China Radio International (one of the seven largest licensees of the Internet Television Integrated Broadcasting and Control Platform) to rectify Internet TV terminals. The plan has been reported to the regulatory authorities and has met the policy requirements, and is only to be adopted in the end. LeTV also stated that it will work hard to complete the rectification as quickly as possible and meet the regulatory requirements of the regulatory authorities.)

Forbes: Did you underestimate the impact of the policy when you entered television in 2013?

Jia Yueting: This definitely has an impact on our sales volume, but it does not have much impact on LeTV's overall strategy. In the past year, competitors have been attacking LeTV by radio and television.

When I was doing television, many people objected and said that this is a very strong area of ​​political barriers. However, I think that as long as we take a little bit of control, as long as we really promote the progress of this industry and society as a whole, there will always be a chance of survival. It is nothing more than a matter of speed. No policy can impede the development of history. No one can stop the wheel of history. Technology trends are unstoppable to anyone. It is only that it makes you slower, but it does not change from the true direction. Now, although SARFT is also strictly controlling, policy makers have gradually understood that LeTV is not destroying the industry, but is promoting the upgrading of the industry. 70% - 80% of young people do not watch TV. The government can now control the TV terminal instead of controlling the user. You cannot force the user to sit in front of the TV. The terminal was confined to death. The user went to the PC and watched the video on the mobile phone. Although the experience was very bad, the content was very rich. He had the right to choose. The users were all gone. Is the value of the radio and television not being weakened?

The advantage of LeTV is that it will once again bring back a large number of young people back to the television. The significance of broadcasting and television is even greater. Policy makers also slowly understood that their attitude towards LeTV began to gradually ease, and even listened to many of our voices.

It is no exaggeration to say that LeTV has actually redefined and built the entire industry from the change of program production to broadcast institutions and terminals. All participants in this industry have already begun to imitate the LeTV model, including Xiaomi. Xiaomi set up a low-level cloud computing company, took a stake in Century Connect, and then became a shareholder in Thunder. He also hoped that it would be able to penetrate deep into the vertical realm. Now that millet is just an ecosystem, not an ecological chain, it has acquired many hardware companies. From software to hardware, from hardware to the Internet, the threshold is relatively high. It was not very smooth last year but the direction was correct.

We particularly hope that LeTV's model will allow everyone to learn from it and really allow Chinese companies to gain an advantage in the global competition. Everyone often discusses the future trend of the entire economic development, especially the global economic development trend and what the country’s competitive landscape is. My point is that the next one or two decades will be the world of Chinese companies, especially China's Internet eco-enterprises. On a global scale, I think that Japan and South Korea will soon be defeated and the success of globalization will be achieved.

Forbes: At the end of May this year, you threw out a plan to reduce the holding of 10 billion yuan in stock to lend to the company. This matter has a lot of controversy, including the view that LeTV's operating conditions have problems. What are your considerations?

Jia Yueting: Many people consider this issue from a negative perspective and criticize this proposal. Actually, if I just want to realize cash, there are innumerable ways. Many people asked me: “Do you prefer to pledge and do not want to sell stocks?” I now have a very high rate of pledge. Only selling stocks can let this money be lent to the company for a long time because the pledges are short-term and not suitable for long-term. investment. I will lend the 10 billion yuan of interest-free income to listed companies for five years without interest. This helps the listed companies and the entire LeTV ecosystem to be very large. Let’s do it today. If it’s still for personal money, there’s no need to be so desperate.

Although the criticism is far greater than the praise, but it is closely related to LeTV's genes, LeTV is a highly innovative company, dare not say that everything is an innovation, very important node, LeTV did too much global unique Things. This reduction is also unique in the world. There is no founder of a company in the world that sells its stock for more than 10 billion yuan and lends interest-free loans to listed companies for five years. Listening to people is very simple, but it is very difficult for ordinary people to make such decisions. It is a very tangled process.

The most important thing is that you have to determine what you are reducing. If the major shareholders reduce their holdings for pleasure, then of course this can be viewed as bad, and it may be considered that the company's business may have a problem. But my reduction is to continue to invest in the company for LeTV's business and innovation. This is a completely different concept.

Forbes: You have pledged stocks dozens of times over the past few years. Many people believe that LeTV is built on top of the stock price and needs to keep telling stories and pushing up stock prices.

Jia Yueting: Financing has always been a very short shortcoming of LeTV. Let’s say that Letv Ecology is built on the stock price. Frankly speaking, there is a certain truth, at least in the past. I have done a lot of equity pledges and invested all the money in the non-listed company system, which means that we are fighting on two lines. One is the rapid growth of the listed company system business, the other is all the money-burning business, the cultivation period business, Businesses that have not entered the period of rapid growth in profits have to do it themselves.

This is determined by the rules of China's stock market capital, because you are not allowed to lose money. If you lose money, it will become ST in a few years, and you will have to exit the market in two years. You can only put forward-looking business in vitro. Many shareholders do not understand, and some say why Le Sports is not included in it. Sports is a business that is unlikely to be profitable in the short term. Revenues are growing rapidly, but it is not profitable at present. This is the case with mobile phones. Letv regard mobile phone as an important entrance, and it is the entrance to the entire mobile internet ecosystem. We will not make money on hardware, and listed companies simply cannot accept it. In this situation, you have to use my personal money to vote.

LeTV has a theory that it will never over-finance. It will never be early financing. The biggest damage to over-financing and premature financing is not only me, but also more damage to the team. Why do many companies have been controlled by capital? Many founding companies have no control over the team. They are even being expelled from the company. The most fundamental reason is over-financing and premature financing. As a result, they have forgotten their own hearts and cannot master themselves. s future.

When pricing products, many insiders said that they should be priced at a high price. In any case, the supply is in short supply. This is true, but doing so will become very difficult in the future. Earlier profits will actually be more difficult in the future. Earning means that you have high prices. High prices mean that you are blocking many users. The acquisition of users is much slower than the development of your current model. When the number of users is not large enough, the mobile Internet will have a new product or new product in the future. In the model, the impact on you will be very great.

Forbes: If the stock market bubble period, this theory is very perfect, from the secondary market investment to listed companies, there will be a lot of gains. Once the stock market is down, the risk comes out.

Jia Yueting: LeTV has never over-burned, otherwise it is impossible to use 100 million dollars to achieve today's fitness. However, early financing does not over-finance, and the other is that it does not generate profits quickly. We hope that we will earn slow money, but in the future, the revenue that actually generates profits will be big money. Amazon is a very great company. It does change the shopping habits of the Americans. Amazon is still a loss, but it does not prevent it from being a great company. It will not affect the value of the company because of the ups and downs of the capital market. In fact, the price of stocks cannot determine the value of a company. Only the long-term price of stocks can be pulled down and it is possible to determine the value of the company.

The capital market is a weighing machine, but it is long-term weighed, not short-term. Whether a company is worthwhile, profitability is only in the latter half of the period, at least after the middle market, to consider profitability. The early days should never be considered prematurely. Considering profitability will inevitably hurt user interests. The Internet model is all user-centric, not enterprise-centric. In the industrial era, with enterprises as the center, the formulation of all strategic goals is to consider the value of the company, followed by the user value.

In the Internet model, the value of a company is not your profitability, but your ability to truly promote the progress of the industry and promote the ability of human lifestyle changes. This is the greatest value of a company.

Forbes: The outside world for LeTV and your impression is a master of capital operations.

Jia Yueting: From the beginning of listing, everyone has been questioning LeTV. It should not be your listing, or should not be today. But just knowing that LeTV really knows in depth will make it clear that LeTV is a company with very poor capital capabilities. It can be seen from several data. First, as of today, LeTV's entire listed company's equity financing is about $100 million, which is a very rare company in the world. LeTV is currently divided into two types of assets. One is global LeTV ecology, and the other is automotive ecology. Global music as the ecology is divided into two blocks: listed assets and unlisted assets. This piece of listed capital has reached a total of about 100 million U.S. dollars for financing as of today, but we have achieved a market value of about 100 billion U.S. dollars today, and it does not matter whether the bubble in the Chinese stock market is large or small. This is not important. The important thing is that we can do such a big ecology with such a small investment.

LeTV has a lot of competitors. Our seven sub-ecosystems are seven types of competitors. In each industry, these seven are our competitors. The LeTV model is open. For capital, we use such money to build the content from the bottom-level cloud platform to the upper layer to the smart terminal. This actually has nothing to do with capital. Capital's help for LeTV is not that great, but after listing, it is indeed a huge increase for LeTV brand, but it does not bring cash, because China's stock market is very limited.

Forbes: Liu Shuwei also questioned LeTV. Have you communicated with Liu Weiwei?

Jia Yueting: We very much hope that Professor Liu Xiaowei can come to LeTV to experience our innovation. We also hope that the business and academia can really hold a big debate and big discussion to discuss how to judge the value of innovative companies and Internet companies.

Forbes: The market will worry that LeTV will not be the next Lam Tin.

Jia Yueting: Impossible, how is it possible? LeTV is doing innovation, and Lam Tin is a fake company. How to look at LeTV's financial status and profitability is essentially a collision between innovative and new companies. For innovative companies, they should pay more attention to the business model and the ability of the company to change the industry and its contribution to all humanity.

The U.S. capital market is also the same. Amazon does not use profits to take into account, and considering the price-earnings ratio for Alibaba, the two companies appear to be close, but the market views are completely different. What are the reasons? The most important reason is still The vision of strategy. Ma Yun is a very great man, a strategist, thinker, and socialist. His strategy is absolutely extraordinary. However, Alibaba's current strategic investors can already see the future, and mature companies can't change much.

Although Amazon has suffered long-term losses, U.S. investors believe that Amazon’s strategy is still just beginning and the company’s market value has exceeded trillions. This is a company that is constantly innovating and represents the future. Bezos's theory is to promote social progress. I can burn all my profits, and I want to continue to innovate and constantly do new business. He also made a lot of attempts, such as mobile phones. Although it failed, it is related to his philosophy. The only company in the United States that can catch up with Apple may be Amazon.

The same is true of LeTV. Net profit should not be the first criterion for measuring the value of a company. In the old industrial era, the ability to earn money was first and foremost. But now, the measurement of corporate value should be to look at the future, not a hard target such as net profit.

Forbes: LeTV.com's stock price has been falling for two consecutive days last week. What do you think of the company's future performance in the secondary market?

Jia Yueting: We will focus on product development and continue to innovate. In the short term, the secondary market will certainly be under pressure and investors may panic. But I have the greatest confidence in LeTV. In the long run, the stock price of the company will definitely return to value. LeTV is a company that continues to suffer hardship, but we will not be defeated.

Forbes: Xiaomi proposed that LeTV's closed model is not an ecological one. It can only be called diversification. Can you explain what is LeTV Ecology?

Jia Yueting: Now as long as it is a similar company, everyone is talking about ecology. They all think that the ecological model may be right. But the ecology is divided into several types. One is the ecosystem, the ecological circle is mainly horizontal, the other is the ecological chain, and the ecological chain is vertical, just like LeTV a few years ago. The other is the real ecosystem. The ecosystem is both vertical and horizontal, and it can truly integrate the value of the vertical ecological chain and the value of the horizontal ecosystem to a greater extent.

The benefits of ecological chains are the ability to form self-circulation and self-evolution. The benefits of the ecosystem are the ability to bring together large amounts of social resources. We hope to create an ecosystem. First, we will complete an ecological closed-loop and a chain. We will open up to the outside world in this important part of the chain and form an open closed loop. Many people do not understand that closed loops and open loops are closed, why are they closed loops? We say that Apple is a closed closed loop. It really does a very extreme job. Closed loops can create cross-border innovations, break industry boundaries, and create new product experiences. However, openness is the ability to truly gather social forces to enter this ecological environment, form continuous self-evolution, and so on. The concept of LeTV is to create an ecosystem. 2016 is our opening year. There are two main tasks before 2016. The first is to truly complete the ecological closed loop, and the second is to lay the foundation and prepare for the full ecological openness of the future. . This is a different concept of ours. This is a different view of ecology. Like Samsung, there are also ecological, but just hardware, 90% of the Samsung mobile phone components are their own, LeTV in the hardware, almost do nothing, is to do research and development, only technology.


Before LeTV was watching TV, the entire industry was laughing and questioning. But after the product came out, people began to think that whether it was right or wrong, let's follow it up. It sounds like a simple combination and does not understand the essence of ecology at all. The essence of ecology is to chemical reaction, it is to really break the boundaries of innovation. How to break the boundaries of innovation, the most important thing is to break the boundaries of enterprises and break the boundaries of the organization. This is the music-based eco-type organization, and even a contribution to the global organization.

Just like electricity in the industrial era, the Internet is already the most basic and basic industry in the information age. It can also be said to be a basic factor and a core element. The ecology we enjoy is called the ecology of the seven children. There are seven major eco-visual ecology, Internet ecology is a basic thing, the remaining six ecology, including video, television, mobile phones, film and television, sports, cars are vertical, that is, through the basic ecological environment of the Internet, Six completely irrelevant industries have truly broken the boundaries through the Internet, truly realized cross-border innovation, and finally integrated it.

Each time you enter a new field, you will feel very crazy, and the internal disputes of the company are also great, but I chose to push forward resolutely. LeTV is a content industry, and it is the core of LeSport's ecology. LeTV is based on Internet genes, innovative integration of the Internet and film and television industry; LeTV as the first time we enter the hardware field, reconstruction of the television industry; music as the mobile phone because We see that the mobile Internet is once again entering the period of upgrade and development. We should seize this entrance; Letv Sports has just completed the financing of 100 million U.S. dollars and is the first to lead Internet+Sports; the mission of LeSports Automotive is to protect the earth's ecology and improve the living environment of humanity. Once again subvert the automotive industry. Behind each ecological chain is a global trillion-level market.

Forbes: Let's create an open closed loop, how can we open it after the closed loop?

Jia Yueting: Our philosophy is that LeTV does not have any secrets. We hope that every successful point of LeTV will be shared with the whole society and everyone will use the right model to promote economic development.

As an open concept of music ecology, Letv regard the openness of ecology as two parts: strategic opening, business opening, resource opening, and then capital opening. We hope that the capital of LeTV will not only be shared by internal people, but also hope that the people of the whole society will share the whole society and share it. It is not the secondary market that will publicly share content after the public listing. It is only shallow sharing. A deeper level of sharing is that all people and organizations that are able to generate strong correlations and strengthen anti-revolution with LeEco's ecology, and we all welcome the capital sharing plan that enters LeEco's ecology. When we are financing, we do not provide financing to financial investors, but to all important players involved in the industry chain. Financing is not an end in itself, but it is to make them truly and symbiotically symbiotic. We hope to use an open model to truly form an external and internal symbiosis and the symbiosis of the entire society. I think this is another very big innovation in the global capital field.

LePar (Lesso Super Partner Program) is now at a relatively early stage and hopes to announce our core strategy after establishing a certain threshold.

Forbes: Each business unit is an independent company. How do you break their business boundaries?

Jia Yueting: Relying on a common vision and dream, a common sharing mechanism. We have established a global partner system in which all of the people’s equity incentives are two or even three. First, your business line, you own your shares. Second, you will own shares in listed companies of LeTV. Third, you will own the entire equity of the entire non-listed company in the future. This means that everyone holds two or three shares. It is easier for my VPs, such as Zhang Zhao, who owns shares in LeTV, and at the same time he is an important partner in LeTV's global partnership. Therefore, he holds two kinds of equity. What does this mean? He is able to obtain revenues from film companies. At the same time, the success of Let's Eco brings him more revenue than LeTV.

When conflicts arise between the interests of major business segments, it is necessary to weigh short-term interests and long-term interests, and choose to give up or sacrifice their interests. Because each stage will have different general strategic appeals, each of the total strategic appeals will be subdivided into the ecology of the eldest sons. Which of the sub-ecologies will need to sacrifice some of the benefits? For example, when it comes to television, it is necessary to sacrifice the interests of LeTV. LeTV will have a huge resource to guide the ecology of the television. The bundled revenue LeTV will only be divided into 20%, and 8Cheng will give a TV company. If it is two companies, may it be possible? For example, TCL and iQIYI will not reach the same level of interest in the first place. We will not say that for the sake of common interests, you have more users for iQIYI and sacrifice you first. In the fourth year and the fifth year, consider your interests again. It is impossible. Iqiyi will also say that your hardware is more powerful and sacrifice your interests first. You sell 200 yuan for each TV. This kind of interest is hard to balance. However, under LeTV's system design, such sacrifices and cooperation can be completed between business segments.

Forbes: Since he entered the video industry, LeTV has taken a very different path. How are these strategies formulated?

Jia Yueting: My theory is that all strategies can only be considered by individual people. If a strategy is discussed by a group of people, it is a mediocre strategy. All consultants are summarizing past successful experiences and then telling others how Microsoft has succeeded and how Google has succeeded. These are things from the last era. The times have changed, and the Internet has changed at a faster pace. It can never be copied, or it will die.

The normal strategy is surely that the more people you discuss, the more secure and the more people you discuss, the more secure you are. When a company does not pursue subversion, it is certainly less risky, but when times change comes, when the industry enters an inflection point, these companies will collapse overnight. When the PC Internet switched to the mobile Internet, not the big companies couldn't see it, but they couldn't do it. These people were all elites. He also knew that the future wouldn't always be a computer. It was time to turn to a mobile phone. Why one by one? The failure of the earth? A company as big as Intel, the chip of the mobile Internet era has nothing to do with it, what is the reason for this deep change in the end, I think there are many reasons, one of the core reasons is the board of directors system.

This sounds a bit sensational. After all, the board of directors has been a hundred years old. How can one say failure is because of this? My view is that different stages must adopt different strategies, especially corporate governance strategies. The rise of a group of successful companies in the West is due to the board system. The failure is also due to the board system.

When the company enters a period of steady development, the board of directors is very important and will not have a major impact on the company due to one's mistakes. However, when the times change came, these people did not dare to make up their own lives, and no one had the power and ability to change their lives, because the board is not alone.

Forbes: Does it mean that in LeTV, the board is actually a decoration?

Jia Yueting: It cannot be said that it is a decoration. The board of directors has a very important mission. When a company is strategically placed, it is critical, but it is definitely not for the board of directors to make major decisions. That's not LeTV's gene. If this is the case, LeTV has long since gone or was bought by BAT.

Not to mention LeTV’s six industries spanning, LeTV’s start-up video industry now has no independent company. Several hundreds of video sites, and now independent websites that live on LeEr, regard LeEco as one of the reasons that LeTV does not decide the future of the company by the board of directors. . If the board of directors decides on the future, it will certainly choose to be bought or let the giants take shares. After all, there are huge sources of traffic after the equity participation, and there is strong capital to support it. Why not do it? In the board of directors, out of 100 reasons, 99 reasons can be said to pass them on because the members are considering the immediate interests. Or it may be the interests of the next year or two, and not the interests of the company after five or even ten years. This is my theory.

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