Chapter 50: Entrepreneurship is the Ultimate Infinite Flow - Part 2

A few days later, Gu Cheng finally carved out a complete schedule gap where "Yang Guo" was not needed on set. He had his driver speed back to Qiantang overnight to attend to his gaming business operations.

Seeing Gu Cheng looking slightly tanned, Pan Jieying's immediate reaction was one of heartache. Many of the agenda items she had prepared to discuss were swallowed back, and she insisted he rest for the night first.

The next day, Gu Cheng and his older cousin arrived at the company early in the morning and signed all the paperwork for the registration of the new gaming company that required his personal seal and signature.

Because the voice chat tool YY that he developed was about to be launched, the new company was directly named YY Entertainment, which would allow them to leverage the brand momentum as much as possible in the future. Gu Cheng would also cherish the reputation of YY Entertainment dearly, and would never allow it to be ruined like a mishmash stew the way Tengyun Entertainment did in another timeline.

Watching Gu Cheng sign every single document with his own eyes, Pan Jieying still felt there were many things she couldn't understand, and could not help but sigh:

"When other people run a brand, they are terrified that its lifespan isn't long enough or its brand isn't solid enough. Only after managing to build a booming reputation do they strive for a municipal famous brand in two years, a provincial famous brand in five years, and as soon as the eight-year mark passes, they aim for a national well-known trademark. You are the only weirdo who just starts all over again on a whim whenever the mood strikes."

Not long ago, Pan Jieying had even entrusted a trademark and brand agency to work on securing the municipal famous brand and renowned trademark titles this year, and exploring whether they could apply for provincial recognition ahead of time next year. With Gu Cheng changing his mind on a whim, all of those careful preparations went down the drain.

Ordinary people might think that since Gu Cheng's company had already made so much money, securing these brand-building accolades was just a matter of tossing some money at certain associations. In reality, it was not nearly that easy.

Especially at the national level when vying for a national well-known trademark, unless one resorted to some crooked judicial shortcuts, time and longevity mattered tremendously if one relied solely on standard evaluations.

Historically, the "Tengyun" trademark was not recognized as a national well-known trademark until 2008, despite the Tengyun management applying for it year after year. The "Alibaba" trademark was not recognized as a national well-known trademark until 2014, lagging far behind Alibaba's actual development speed.

Some things simply could not be obtained with money alone if the required years had not elapsed.

Pan Jieying's MBA was not just for show; she understood the difficulties involved, which was why she was even more baffled by Gu Cheng's decision.

"The problem you mentioned is something I will naturally find other ways to solve in due time, but we shouldn't give up eating for fear of choking. Setting up two different gaming company brands serves a deeper purpose of my own."

Having finished signing the documents, Gu Cheng twirled the pen in his hand, brewing the explanation in his mind.

As a time-traveler, there were some things he knew *why* he needed to do, but he couldn't explain them straightforwardly to the people around him. After pondering for a long time, he attempted to persuade her:

"Sister, I think your mindset needs to keep pace with the times. In the internet era, it is entirely possible for a person to start a business multiple times throughout their lifetime—and I don't mean only those whose previous ventures failed need to start over. Even those who have achieved successful startups can sell their businesses and start afresh.

This kind of scenario is hard to imagine in the traditional industrial era. A company engaged in manufacturing or electronics, even if family-run, could be passed down for several generations. But the internet doesn't work that way. Technological progress here is simply too fast, and bubbles are lurking everywhere. Even in areas without bubbles, certain things that currently appear to possess solid and substantial valuations might become completely worthless once the next generation of technology emerges.

In Silicon Valley, there is already a group of people taking 5 to 7 years as a cycle and embarking on a second wave of entrepreneurial booms. Those people were generally the initial trendsetters when the internet was born in '94, and then they protected themselves and exited gracefully with their achievements intact before the catastrophic stock market crash on March 13, 2000. Over the past couple of years, they've been surveying the landscape, looking for industries hitting rock bottom, absorbing advantageous resources, and then re-entering the market for a second round of entrepreneurship. Right now we might find it strange, but we won't in the future, because the cyclical laws of internet entrepreneurship will play out over and over again."

The only difference was that when these people started their first businesses, they were dirt poor, armed with nothing more than a technical proposal and a team to pitch venture capitalists for funding. By the time they finally exited, over eighty percent of the profits might have been divided among investors of various funding rounds, leaving the founding team with only a meager ten to twenty percent share of the wealth.

However, when they re-entered the market for their second round, because they had some pocket change and the capital to slowly observe and trial-and-error, they could bypass the angel round and even Series A funding where they had previously surrendered the most equity, holding out directly until Series B before letting venture capitalists in. In fact, back in the domestic market of Huaxia, Lei Jun and Zhou Hongyi, or even Zhang Long from another timeline, were all typical representatives of this kind of person.

And then, they would repeat the cycle 5 to 7 years later.

Decades from now, anyone with even a slight understanding of Silicon Valley would consider such examples completely normal. Being able to cash out one's business before a particular technology and platform depreciated was a deeply fortunate thing. Because people in that era would have witnessed this entrepreneurial cycle play out many times over.

However, in the year 2002, such insights were exceedingly rare. Globally, even in Silicon Valley, this was only playing out for the very first time, and it was far from common—only a handful of visionary pioneers caught these early signs.

In fact, "entrepreneurship" was the most wonderful "infinite flow" genre in the world, changing maps every five to seven years. Except for "capital" and "a core team with tacit understanding"—the "equipment and skills inherited from the previous map"—everything else started completely from scratch.

Regrettably, the world lacked people with both the skill set and the motivation to write them into an infinite flow novel—after all, anyone with even the investment acumen of Wang Yuquan, who had handled hundreds of millions of dollars, wouldn't bother with the meager earnings of internet literature.

...

Gu Cheng spoke very earnestly, yet Pan Jieying still felt it was thoroughly surreal: "You think the brand of an internet company has no value? You should just swap out a shingle every few years?"

"It's not that the brand of an internet company has no value, but rather that the brand of an online gaming company has virtually no value—at least it is much cheaper than any other category.

Believing that players will inevitably develop emotional attachment to a company simply because they used its products is merely a delusional illusion. Especially when you are merely a publisher rather than a developer, players will feel even less emotional attachment toward you.

Take *Miracle MU* or *Ragnarok Online*, which we are currently preparing to acquire. If two or three years from now, a publishing rights dispute breaks out and causes the game to temporarily suspend its servers, do you believe that over ninety percent of the players would condemn 'Why won't Gu Cheng surrender to the developer, why won't he quickly resolve the contract issue so we can keep playing,' rather than asking who is right and who is wrong?"

Gu Cheng's years of experience had long since allowed him to see right through all of this.

Just like in later generations, when The9 and Blizzard had a pricing dispute over the publishing rights of *World of Warcraft*, as long as it affected player logins, those players would desperately bombard The9, demanding to know why they wouldn't kneel to Blizzard or obediently accept Uncle Sam's conditions.

And when The9 finally lost the publishing rights to *World of Warcraft*, Zhu Jun had initially high-profilely rallied his own people, fantasizing that: "We at The9 have years of operational experience with *Miracle MU* and *World of Warcraft*, having accumulated tens of millions of loyal players. As long as we release a new game with decent quality, the vast majority of these accumulated players can still be funneled into our new game to continue generating profits."

As a result, subsequent history delivered a harsh reality check: after losing *World of Warcraft*, The9's operating revenue plummeted by 91.8%, its stock market value subsequently shrank by 93%, and it ultimately delisted and collapsed, to the point that even the Shenhua Football Club had to be sold off.

However, Gu Cheng possessed this foresight, whereas absolutely no one else on Earth did at the moment.

Not a single person understood the crucial joint that "the brand value of an online game publishing company is exceptionally worthless compared to other internet categories."

That was precisely why Chen Tianqiao's Shanda Interactive Entertainment in history soared to a total market capitalization of 5 billion US dollars on NASDAQ at the end of 2004 and early 2005, while Chen Tianqiao himself raised 1.5 to 2 billion US dollars through selling shares and issuing additional stock—more than five times the total revenue of operating *The Legend of Mir 2* for over three years.

It was simply because the investors of that era still naively believed that "the value per user of a game company's sticky paying user base is identical to the value per user of any other product's sticky paying user base."

As it turned out, the users of game publishing companies had exceptionally low loyalty. Those who bought Shanda's stock on NASDAQ ultimately lived to regret it.

Gu Cheng cherry-picked the things he was at liberty to say and carefully dissected this logic for his cousin.

He wouldn't dare share these words with anyone else in the world, because this directly concerned the global stock market valuations of an entire industry sector. Once leaked, and should people actually believe his analysis, the butterfly effect would be entirely too terrifying.

"Therefore, even though games like *Legend* and *Miracle MU* can continue to generate profits for many years through other models in the future, those models with 'pay-to-win' attributes will undoubtedly severely damage our brand image, and that money must not be earned by our own hands.

What we can do is to milk it dry and rake in fierce profits for two or three years. Then, before the technical and brand value of our assets depreciates, we offload them at a high valuation—if someone is willing to buy our company for a price equivalent to the game company's total projected revenue for the next 5 or even 10 years, why shouldn't we sell?

Of course, *Alipay* must never be sold, and trading platforms like *Dingdang Network*, *Dangdang Network*, and *Damai Network* must absolutely never be sold either. Our core research and development teams—whether building antivirus software or subsequently developing *Angel Online* and other games—must also never be sold. What gets sold are merely the publishing companies, the entities holding out-of-date game copyrights, the peripheral shells lacking both core technology and user big data accumulation. Trust me, Sister, my judgment will not be wrong."

Pan Jieying stared at Gu Cheng for a long time, feeling that her younger cousin was becoming increasingly difficult to comprehend.

"Fine, I'll listen to you in everything. Anyway, I never liked those violent fighting games like *Legend* anyway. Since you have no emotional attachment to them and treat them merely as cash cows whose meat should be sold once they're milked dry, I don't mind."