Finishing / Yan Jinyan

On May 31, ByteDance's game business officially announced the new business head Zhang Yunfan.

Judging from public information, this person is a serial Internet entrepreneur, who used to be the president of Perfect World's game business and the CEO of Zongheng Literature. However, since 2016, he has rarely appeared in the game industry, and then entered a state of semi-retirement.

Now, as the No. 1 position in the byte game business, his thinking and logic should affect the subsequent development of byte games to a certain extent.

In order to know him better, Grape Jun found a podcast on October 13 last year, when he was a guest and talked with the host Yubai at the "Zhixing Bistro". (Click at the end of the article to read the original article to jump to the podcast).

Although, the podcast revolves around the book "Munger's Way", the theme is not focused on the gaming vertical, and the content may feel more like chicken soup. But in the course of the dialogue, Zhang Yunfan revealed his own way of thinking, life habits, and three views, from which you may be able to find some connections with business.

For example, when talking about the topic of the circle of competence, he mentioned that investment cannot be invested in things outside the circle of competence. If you don't understand a field or a company, you will invest blindly and you are doomed to failure;

And when you are developing the circle of competence, you should make trial and error with costs, such as investing a small amount of money first, and then gradually increasing the weight, treating the cost as tuition, rather than gambling money. He also thinks that Zhang Yiming's vigorous miracle is not really all in all resources, but a mentality of going all out;

Looking back on his past career journey, Zhang Yunfan believes that compared with YY and Perfect World Games, the work of Zongheng Literature is the most meaningful, because the platform can really help novel authors earn money and change the fate of some people's lives.

At the same time, he also said that at this stage, money does not motivate him much, and there is no so-called worldly material desire, but he likes to do "mental gymnastics", simulating the business model of more than 1,000 companies in his head, and enjoying the fun of "answering the right answers" with others.

On the whole, Zhang Yunfan re-emerged to take over the byte game business, perhaps on the one hand, because this belongs to his own circle of competence, and at the same time, Byte's platform attributes and the direction of the game business that emphasizes UGC are more in line with his personal ambitions. On the other hand, it may also indicate that he had more ideas about the byte game business earlier.

Of course, this podcast only reflects Zhang Yunfan's thinking at that time, and cannot be determined as his current state. The following is the edited content of the podcast (with cuts and adjustments to take care of the reading experience):

01

Talk about the unity of knowledge and action:

How to internalize the truth and develop the circle of competence

Q: How do you understand Munger's Way?

Zhang Yunfan: For me, the ultimate philosophy of life is the unity of knowledge and action, which Munger said. One of its benefits is self-consistency, which can bring you happiness and help you get things done.

Munger has enough money to invest in a double, a hundredfold more company, but he never does it because he knows very well what his circle of competence is. Munger likes to say no the most in his life, he is good at studying why a company fails, he will use dozens of models and methodologies to repeatedly study the company, and finally decide that there is no problem, and then he will vote.

But if you want to do one thing and do another, you can't think clearly, you do it very vaguely, and your knowledge and action are chaotic, then you will make mistakes. For example, if someone tells you a reason, but you don't think and do it seriously after listening to it, and you end up failing, you can't blame others for indiscriminately instructing.

Q: Many people may understand these principles, but they can't put them into practice.

Zhang Yunfan: Most people's mentality is "satisfaction when they get it", for example, when they buy a piano, only the moment they buy it is the most satisfying, and they will not play it again, so the piano will become a garbage that occupies a space. In the same way, many people suddenly open their mouths after hearing a truth, but they will not think about it later. If so, what's the use of buying a book of famous quotes and getting 50,000 truths?

First of all, you have to internalize these principles and turn them into your own version. For example, Munger would talk about lowering expectations, and after I internalized it, it was "endure what others can't endure, and can do what others can't".

Also, lowering expectations is a bit abstract, so I'll summarize a formula to apply. Ability and desire are all quantifiable. Economists have figured out that money measures everything, and happiness has quantifiable indicators. When you are clear about your abilities and desires, you can control your desires according to your abilities.

Q: But many people will strive to improve themselves because their desire is greater than their ability.

Zhang Yunfan: Most people "I want to improve myself", but if you just want to do nothing, and you still have a lot of desire, then of course you will suffer for the rest of your life.

I have a friend who works in sales, he got several offers after graduation, and chose the highest salary, and that's no problem. But after working for a few years, accumulating business ability, becoming a backbone, and being poached, he still always chooses the highest salary, rather than picking the right one according to his own worldview and methodology.

In the last 10 years, the industry has changed dramatically, and now he is more focused on weight-based delivery, but he won't, he will still only talk about traditional drinking and eating, you say that the company is not short of such people, but he can no longer get the best treatment, and the older he gets, the worse his health is.

Q: So how would you advise him?

Zhang Yunfan: I will let him expand the circle of competence, instead of just looking for breakthroughs in the circle of competence. His problem, in essence, is to only seek to maximize benefits in the circle of ability, this thinking is wrong, because if you don't change yourself, the maximum value is extreme, and only by changing and becoming excellent can you get higher returns.

Q: This question is actually quite complicated, Munger teaches everyone to stick to the circle of competence, but everyone definitely wants to explore things outside the circle of competence, how to balance?

Zhang Yunfan: That's the truth, only half of it. When you do things outside of your ability, you are gambling on luck, but when you understand things, isn't it just expanding the circle of ability?

Originally, Munger didn't vote for Apple, and they didn't invest in high-tech because they couldn't understand it. Later, they spent a long time doing research reports on Apple, and also kept in communication with Steve Jobs and Cook, and after more than 20 years of observation, Apple was in their circle of competence.

Q: And this bet on luck, even if the bet is lost, is not a big problem? As long as you learn it, internalize it into your own experience.

Zhang Yunfan: This is also okay, it is called trial and error with a cost. Expanding your circle of competence is sometimes like that, you always have to try, and you can never learn to ski without falling. As soon as you come up, you can first take 2% or 3% of the company's money to try it, and then slowly increase the weight when you have learned a lesson, but don't come up and take all the profits to all in. You want to treat this as tuition, not as a gambling expense.

Q: So Munger will study failure more, because many people will attribute success to mistakes, for example, people will say that to do business, you have to work hard to produce miracles, that is, all in.

Zhang Yunfan: This is also obedient and half-listened, Zhang Yiming is saying that he will make miracles vigorously, but he has never been all in. Zhang Yiming invested a lot of money in Douyin, but instead of throwing all the money in Toutiao to Douyin, they also invested in education, acquired PICO, bought game companies, and had six business divisions. When Lei Jun made cars, he also said that it was all in, but when you look at the financial report, how much did they spend on making cars? None of the successful companies are truly all in.

So, we should translate that all in is a state of mind, and it's more about showing that everyone has to go all out in new growth points and not make small fights, but it doesn't mean that you stud all the chips on the table.

02

Talk about self-consistency:

There is no materialistic desire, and he likes to explore the underlying logic

Q: You mentioned that self-consistency can bring happiness.

Zhang Yunfan: Yes, Lei Jun and I have different knowledge and actions, but we are all very happy. Lei Jun's ambition is to serve the country through industry, so he enjoys working from morning to midnight every day. I'm probably a little more playful, and that's fine, because my goal is just to make myself and the people around me happy.

Moreover, I don't think there is any right or wrong in life choices, and I don't think that the so-called "rich", or successful, you have to have a sense of superiority. Find your way is very important, for example, there is a documentary filmmaker named Li Honghai, he is the first Chinese filmmaker to climb the north and south slopes of Mount Everest, he does not pursue commercial success, he does not care about how much economic value this thing can bring him, he wants to record this era, which can make him very happy.

Q: But we receive a lot of specific advice from the outside world every day, and it's hard to do it without everyone else.

Zhang Yunfan: Choose the good ones and follow them. It's not the most important thing to change it – have you internalized it into your own thing, figuring out if it's what you need, it's not within your ability.

For example, a friend bought a private jet, and the decoration was very luxurious, and it was great to fly wherever he wanted, and I didn't think there was anything wrong with it. But the aircraft plus the annual maintenance cost may cost more than 100 million US dollars, which is still a bit expensive for me, and I am not Musk, and the plane does not actually mean much to me.

When I wiped the plane off the list, the rest of the things were cheap, such as boats and motorhomes, all within the scope of the capacity, and I was still happy. Even if one day, I really need a plane, I can borrow it from a friend, and there is a solution.

So, when you buy something, think about whether you really need it. Of course, there's also the name: I know I don't need it, but I need others to see that I have it, or that others have it, and I want it.

It's a strange need. As another example, I don't mean to belittle people who buy cars, but a lot of times, people buy luxury cars and they will double some complicated colors and ask me why I always choose white. I said I was sitting in the car, and I couldn't see what color it was outside, what was the use of white? Among the rear-end collisions at night, the white car has the lowest accident rate because it is brighter.

In other words, I have my own way of thinking, which is different from everyone else.

Q: So that's why you don't have internal friction?

Zhang Yunfan: I have never known what the concept of internal friction is. As long as people keep doing things, I'm communicating and interviewing you now, at least I don't get any commercial value right away, but the communication is very interesting, and it's also doing things. Once people don't do things, it means that your body and mind have stopped, isn't it boring?

Q: A few years ago, you chose a life similar to semi-retirement, and in the process, you saw other people doing things, and you didn't want to come back?

Zhang Yunfan: I've thought about these things, so why do you want to do them?

I've heard him talk about one thing many times, and I think it's good to ask him how he did it if he did it, and then ask him how he did it, and if it was the same as what I thought. It's like doing a question and smiling at someone else's answer.

Besides, isn't it money that motivates you? But first, money has a marginal effect, and too much is useless. secondly, it is crowded out in time and space, people can only live once, and some people choose to make money today, because for him, it is a career, a way to achieve financial freedom; But for me, I don't have the money anymore, so why don't I sail and have fun?

Q: Have you never had a time when your materialistic desires are overwhelming? For example, if you have money, you want to have everything.

Zhang Yunfan: No.

Q: Not a moment?

Zhang Yunfan: No. I was brainwashed by Lei Jun early on, and he told me about the rule of one dozen, that is, you should never buy more than about 1/12 of the value of your assets. For me, until now, I have never bought more than 1/10th of my wealth.

At the same time, I also find it strange to show off. My logic is that I only make friends who are better than me, I want to learn from them, and if I show off with these friends, they may think that I am telling jokes and shaking off my baggage; If I meet someone weaker than me, I will consider whether he needs my help and I can be his sponsor.

Of course, part of people's happiness comes from being recognized, but when you show your wealth, will you really be recognized? I don't think human nature is that good.

Q: People don't agree with you just because you really drive a luxury car. There is an example in "The Psychology of Money" where passers-by see a luxury car and only think how nice it would be if the person in the car was me, and they didn't care who the person in it was.

Zhang Yunfan: So many times, people live in illusions. Really rich people don't think like that. He may still have the urge to show off on the first day, but 10 years later, it would be silly if he was still showing his wealth.

Of course, there may be people who refute it, they say that it is very happy to be envied, envied and hated, that is, the kind of happiness that you hate me, but you can't make me happy. All I can say is that I really don't understand.

Q: There are many sources of happiness.

Zhang Yunfan: From a physiological point of view, happiness is not complicated.

For example, when you see something very beautiful, you will produce dopamine, but its happiness is relatively low-level, and it will soon reach the threshold; The second is endorphins, which produce endorphins when you make a very complex math problem or exercise; Then there are adrenal hormones, such as extreme sports are used to deceive the body into secreting adrenal hormones, which have a short but strong effect; Finally, intimacy and hugging can produce serotonin, which is also a trend in the treatment of depression.

Of course, there is another way, which is to drink and lie down and numb yourself, which is similar to a sedative, removing the negative things from you and looking positive.

When you understand the underlying logic of things, it is actually easy to figure out what you want to pursue and what you should do.

For example, I asked my daughter to clean the room, and she paid for the process, and when anything was a little difficult, she would secrete endorphins, which was her first level of happiness. Then, I would praise her in words, give her a hug, and she would get serotonin. Finally, I reward her with chocolate, which crosses the blood-brain barrier and gives her energy.

So, essentially, I let my daughter do the work, but she also got a lot of joy out of it. As long as you understand the principle, you can do things great.

Q: Do you have to figure out how everything works? Even if it's just asking your daughter to clean up, in fact, these things have flashed through your mind. Aren't you tired so far?

Zhang Yunfan: I'm not tired, it's fun. This goes back to the mind gymnastics that I talked about earlier. The example just given is to simulate a complete reward loop in my head, and this set of logic can also be used for companies.

Q: You said earlier that there are probably more than 1,000 companies that you have simulated in your head.

Zhang Yunfan: Yes. I think about a company's business model, and if it's me, what do I do. It doesn't do as well as me, and I think their management isn't smart enough; As I thought, the hero sees something the same; If you're better than me, then get to know them and see how they do it. It's interesting.

You see that the Indian monk has been meditating for a long time, and others may look very boring, but in fact, his brain waves have always been in a very high state of excitement, which is higher than the radio waves when many people do extreme sports and ring the bell. I've never been religious, but what I've observed is that many masters can find joy and happiness through great wisdom.

Q: But a lot of people may not be like you to figure things out in various fields. For example, a doctor who has achieved something in his field but does not understand the logic of investment.

Zhang Yunfan: I don't want to be an expert in all fields, and I am still far from being an expert. For example, I can't build an atomic bomb, but I can understand the principles of nuclear fusion and nuclear fission; I can't burn ceramics, but I know what temperature ceramics have to be fired to get out.

Q: Where will your quest and exploration stop?

Zhang Yunfan: For me, the knowledge of this world is not infinite, it is a finite universe jigsaw puzzle. Which layer I get into depends only on which piece I just get on.

I don't get anxious, because you can't put together a whole puzzle in a lifetime, but I know how big the puzzle is, and when I get a puzzle, I know where to press it and how to connect it to the other puzzles. And some people may think that the world is an infinite puzzle, and he only does the puzzle of his own field, becomes a super expert, and stops exploring the outside world.

03

Talk about success:

Be honest with your knowledge and manage your time well

Q: You just mentioned that Lei Jun's ambition is to serve the country through industry, and you just want to make the people around you happy, so how did you succeed continuously?

Zhang Yunfan: Success is divided into sizes. I make YY, make perfect world games, but I have some success in small fields, at most I provide a tool or content for people to consume, you don't play my game, you can also play "Honor of Kings".

Among the things I have done, I think the most meaningful is probably vertical and horizontal literature, which provides a platform for book writers. In the past, they could only write novels and post them on BBS, but in Zongheng Literature, they can really earn money and become full-time writers, and their life and destiny have changed.

Compared with Mr. Lei, Xiaomi has changed the ecology of the entire Chinese copycat machine and changed the technological lifestyle of tens of millions of Chinese, which I admire, but I can't do it myself and don't want to do it. Anyway, we still have to unite knowledge and action, and do it in our own worldview, not forcibly.

Q: The problem is that many people may not have such grand ambitions, not seeking to be rich and expensive, but only seeking peace of mind and making the people around them happy, why only you Zhang Yunfan can achieve a career?

Zhang Yunfan: First, I must have encountered the dividends of the times, and if I were reborn at this moment, I might not be able to do it. Because reform and opening up is actually the largest growth in China's history, there are huge institutional dividends. So this really belongs to reincarnation, otherwise you may not be able to seize a chance once in your life.

The second is what I just said, have you established your own methodology, have you put the effort into internalizing all the truths you have read, and can you do it without swaying, tossing and tossing in the west.

The third is the easiest, which is diligence. What is Lei Jun's success? He got up at seven o'clock in the morning and worked until four or five o'clock in the evening without sleeping, and he was like a day for thirty years.

Q: Is this considered talented and energetic?

Zhang Yunfan: It has something to do with exercise, and there is also a set of scientific principles in it, after figuring it out, your daily operation will be much better. For example, after a person enters a deep sleep, the recovery speed is very fast, and it only takes two hours a day to ensure that he is full of energy.

Moreover, for many bigwigs, the time granularity will be very finely cut. Lei Jun hardly has a two-hour interview, usually half an hour or 15 minutes of time granularity, efficient management. Before I retired, I would have a granular alarm clock, which I would divide into dozens of pieces a day.

So, do most ordinary people manage themselves like this? For example, if you read a book twice a day, for 15 minutes at a time, and then exercise for half an hour a day, is it difficult? It's not difficult, it's just not possible. If you don't exercise and don't want to study and work, and then say that you didn't succeed, I really can't help it.

Q: Stop scolding, stop scolding.

Zhang Yunfan: I can responsibly say that time management is one of the most important factors in achieving worldly success.

Because I've seen too many of them, ordinary people have no concept of time management at all, and most people are just as they come. For example, very few people do time management for reading, but I buy both physical and electronic versions of a book to ensure that I can read without interruption wherever I go.

Q: You said that you started reading one book a day when you were 7 years old, do you still stick to this habit?

Zhang Yunfan: When something becomes a habit, you will forget it, and you will no longer think about whether you read one book or two books a day, just like you will not think about whether you eat three meals a day. For me, reading is like eating and brushing my teeth.

Q: Is exercise the same?

Zhang Yunfan: Exercise still needs to force yourself, because people are inert and need the power of compulsion. I'll set up a mechanism to find someone who likes sports more than me, like my dad. You can do this for all projects.

Q: However, it is a common phenomenon that many people are also very motivated, set a limit on how many books they want to read in a year, and stick to it, but the change seems to be minimal.

Zhang Yunfan: Again, have you internalized that knowledge into your own methodology? If you really pass on a sentence or falsely pass on thousands of books, quantitative changes may not necessarily lead to qualitative changes.

Munger and Warren Buffett may really internalize the truth, there are only dozens, they don't tell you to get more knowledge, but to be honest with knowledge, but if you are not honest with knowledge, there will be consequences.

Q: How do you understand honesty with knowledge?

Zhang Yunfan: When I went to Shanghai before, a friend asked me to go to his company in Qingpu for dinner, but I didn't know where Qingpu was, so I thought that Qingpu and Yangpu seemed to be similar, and the company should not be far away from home because of a big boss, so I thought it would be more than 20 minutes in the past. But as a result, his company used to be a two-hour drive near the junction of Shanghai and Suzhou, near Kunshan, and I ended up very tired.

This is dishonesty with knowledge. Knowing is knowing, not knowing is not knowing, many times, we should still check the information, seek truth from facts, instead of patting our heads. In the same way, in our dialogue today, honesty is also throughout, we must be honest about our desires, and we cannot be long-looking; Be honest with the truth and see if you really understand it.

So Munger's way is that if you want to be successful, you must first learn to internalize and form your own methodology, then be honest with it, don't pay lip service to it, do it again, and finally time management. As long as you keep doing this, after three or five years, you will have a pretty good change.

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