Chapter 49: What Must Be Done

The biggest benefit of launching the prepayment service for Legend more than two months in advance was that it put this online game on the radar of the financial industry ahead of time and proved its value.

But Gu Cheng admitted to himself that even if he hadn’t managed to pull off this introduction and didn’t get much in loans, he could still make it through. The broadband and server hosting fees that needed to be prepaid in January next year amounted to about two million. The remaining expenses for Legend in the last two months of this year—for advertising, marketing, and the development and promotion of the “Internet Café Owner Recharge System”—would only total around one million.

So, following the original trajectory, by February 2001 at the latest, Gu Cheng would have achieved break-even, no matter what. Given Legend’s inherent advantages and Gu Cheng’s outstanding strategic planning so far, even if he didn’t devote his main energy to Legend in the future and only occasionally steered the helm or fine-tuned business strategies, he could still ensure the business would snowball profits while he sat back.

Yet, the reason he insisted on moving this “break-even” point up from February 2001 to early November 2000, seizing these three months, was because there were things he absolutely had to accomplish within this window. Some opportunities, once missed, would never come again.

He confidently pitched to his cousin, “I want to start an online store selling records and legitimate games—an audio-visual e-commerce business. Then, using this as a springboard, I’ll re-enter the content distribution industry and the entertainment world. When I left S-M Company before, it wasn’t because I didn’t want to pursue music or film, but because I didn’t want to be shackled by those trainee and group contracts. Legend is just my first pot of gold. Sooner or later, I’ll span the entire content industry.”

Pan Jieying asked seriously, “But why start with audio-visual e-commerce?”

Gu Cheng analyzed, “For three reasons. First, before the bubble burst, quite a few people tried their hand at audio-visual e-commerce. Back in ’99, many e-commerce pioneers thought the market was wide open and plunged in, practically giving away CDs and videos at a loss everywhere. After the bubble burst, all but the biggest one or two companies folded, and even those saw their assets plummet. If we enter now, we can spend a little money to buy stakes several times larger than before.

Second, the audio-visual industry has been out of favor with investors ever since MP3 music emerged in ’99. Many believe digital music online will spell the end of the record industry, and this judgment has further devalued the sector. But I believe that ‘the internet winter is actually the last springtime for single-player games and legitimate audio-visual products,’ so I can pick up the bargains others have missed.

Finally, I think this year and next might be the last chance for East Asia’s music scene to produce epic megastars. In later years, when the internet industry recovers, the scene will be divided between idol groups and fleeting internet-famous singers—there will never again be a superstar who remains wildly popular for twenty years. If I seize this opportunity, I can sign distribution rights for talented artists at low cost—even if I can’t get all their rights, at least I’ll secure exclusive online distribution rights for mainland China.”

As he spoke, Gu Cheng pulled out several recent entertainment magazines he’d collected—from various East Asian countries and regions—and spread them before his cousin, showing news of several soon-to-debut newcomers.

Pan Jieying flipped through them repeatedly, then asked, “Can you tell me your target? Or have you already spotted someone worth supporting, someone likely to explode in popularity?”

Gu Cheng blushed. “How did you know?”

Pan Jieying looked at him with exasperated pride. “Don’t I know you? You always claim to be logical and give one, two, three, four reasons, when in fact you’re just making wild intuitive guesses and insisting you’re right. Think about how many times you’ve tried to argue your case with me—always sticking stubbornly to a conclusion, then scrambling to prove it afterward.”

“I just can’t tell you outright that I’m clairvoyant, can I?” Gu Cheng laughed bitterly to himself.

Since his cousin had seen through his “reckless intuition,” he didn’t bother to hide it anymore.

He turned to a certain page, pointing at a handsome young man with a cocky look. “It’s him. Alpha Music in Taiwan is debuting this new singer this month, Jay Chou. I think he’ll be huge. I want to grab his record distribution rights while he doesn’t yet have the power to demand big fees. And if I can also secure rights for other singers, so much the better.”

Pan Jieying didn’t really understand the entertainment industry, but she found the model unheard of. “Doesn’t he already have a management company? Is there really such a negotiation method in music circles?”

Gu Cheng explained, “That kind of arrangement is rare domestically. Usually, an artist signs exclusively with one company, mainly because few Chinese artists work internationally. But in Japan and Korea, this kind of thing is common. For example, I heard recently that after Xiaoya spent two months as a VJ at S-BS TV, President Lee is planning to sign a separate overseas management contract for her, entrusting her promotion and packaging in Japan to local Avex Records.

I think we can adapt that model to suit our own circumstances and negotiate with the Taiwanese, using things like guaranteed sales to buy some mainland management rights for Taiwanese artists.”

Pan Jieying pondered it and realized that once her brother set his mind to something, there was no holding him back.

Still, she couldn’t help feeling uneasy about relying so heavily on “mystical” intuition in business.

“So… how much do you need for this plan? If it’ll touch the server hosting fees for next year’s first quarter, I absolutely won’t agree!”

Gu Cheng immediately reassured her, “No, it won’t. We have two million in working capital, right? That will be enough.”

“So what’s your next step? Flying straight to Taipei these days?”

“Going straight to Taipei won’t be convincing—after all, we have no foundation in the audio-visual field. So I’m planning to negotiate a domestic partnership first, and once that’s in place, I’ll go to Taipei. That way, I can throw my weight around a bit. To be honest, I just registered a new company for this very business a few days ago.”

Registering a new company domestically only cost five hundred thousand, so even before Pan Jieying secured the bank loan from China Merchants, Gu Cheng could easily come up with that small sum. She knew about this, but hadn’t asked what the new company was for at first.

...

Early the next morning, the siblings boarded a morning flight straight to the capital.

Before Gu Cheng turned eighteen, there was really no way around this situation. The company’s legal representative had to be his sister, and for any major contract, she had to sign in person. Gu Cheng could only appear as the absolute majority shareholder.

But this time, the person they were seeking wasn’t in Zhongguancun anymore, but in the National Exhibition Center district.

From this subtle change in geography, one could glean a detail: the partner Gu Cheng was meeting today wasn’t someone who came from the internet industry per se.

Rather, it was someone who had migrated to the internet from another line of work—he was “+Internet,” not “Internet+.”

“This should be it. Yes, Dangdang.com—that’s the name.”

After a round of searching, the siblings finally found the address they were looking for among a cluster of office buildings near the National Exhibition Center, where publishing houses congregated.

They marched confidently upstairs without even an appointment.

This was Gu Cheng’s first visit to another internet company since the onset of the dot-com winter.

Just a few months ago, his experience of being blocked at the doors of WEMADE or Huang Yi’s company now felt like a lifetime ago—because this company, called Dangdang.com, couldn’t even afford a receptionist anymore.

The impact of the winter was immediate and harsh.

Gu Cheng still knocked on the glass after pushing open the door, and a woman in her thirties came over, forcing a strained smile. “Hello, who are you looking for?”

Gu Cheng took off his white gloves, glanced around the office, and said slowly, “Is Mr. Li here? Li Guoqing. I’m from an online game company and have some business to discuss with him.”

“Oh, you’re looking for my husband? He’s here, he’s here. Please wait a moment, he just went downstairs to a publishing house for some business and will be right back.”

She took their business cards and invited Gu Cheng and Pan Jieying to sit on the guest room sofa, personally making them two cups of tea.

“The boss’s wife greeting visitors herself—now that’s telling. This company must be struggling,” Pan Jieying thought as she sipped her tea.

The woman had also given Pan Jieying her card, so she learned that the lady was indeed the boss’s wife and company co-founder, named Yu Yu.

After they’d quietly enjoyed their tea for a while, Li Guoqing returned.

Yu Yu explained the situation to him, and he immediately entered the guest room, greeting Gu Cheng warmly. “Mr. Gu from Legend Entertainment? I’ve heard a lot about you. I hear that in the past couple of months, quite a few people in internet cafes around the capital have been playing ‘Legend.’ Your company has a bright future!”

Li Guoqing, about thirty-five, had striking features and a pronounced bone structure. His expression showed he’d recently weathered many hardships. But his flattery of Gu Cheng was mostly polite; after all, although he’d heard of Legend, at this point there were only about ten thousand players in the entire capital, so he wasn’t that impressed.

Gu Cheng didn’t put on airs, instead joking as he sipped his tea, “You’re too kind. I just sell games, nothing compared to you selling books. Yours is the most refined business, mine the most vulgar. As long as you don’t look down on me, I’ll be grateful.”

“Nonsense, we’re all businessmen—no need to split hairs over highbrow and lowbrow,” Li Guoqing replied cheerfully, steering the conversation to the main topic. “So, Mr. Gu, what kind of cooperation did you have in mind?”

“As far as I know, your company has so far only sold books online. But I heard that before the bubble burst, you considered branching into online audio-visual e-commerce, even trying to acquire some other audio-visual e-commerce companies. Is that true?”

“What’s the point in talking about that now? There’s no money to expand into that field at the moment anyway.”

“But I do have money, and I want to expand. And I’m willing to work with you.”